10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 2003

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period                to               

Commission File No. 0-16760

MGM MIRAGE

(Exact name of Registrant as specified in its charter)

DELAWARE	88-0215232
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

3600 Las Vegas Boulevard South - Las Vegas, Nevada 89109
(Address of principal executive office) (Zip Code)

(702) 693-7120
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

	Name of each exchange
Title of each class	on which registered
Common Stock, $.01 Par Value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

          Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes [X] No [   ]

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: [X]

          Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act): Yes [X] No [   ]

          The aggregate market value of the Registrant’s Common Stock held by non-affiliates of the Registrant as of June 30, 2003 (based on the closing price on the New York Stock Exchange Composite Tape on June 30, 2003 was $2,375,226,169. As of February 10, 2004, 142,607,675 shares of Registrant’s Common Stock, $.01 par value, were outstanding.

          Portions of the Registrant’s definitive Proxy Statement for its 2004 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

PART I
	ITEM 1. BUSINESS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
	ITEM 9A. CONTROLS AND PROCEDURES
PART III
	ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART IV
	ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
SIGNATURES
EX-10.1(10)
EX-21
EX-23
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I

ITEM 1. BUSINESS

General

          MGM MIRAGE is referred to as the “Company” or the “Registrant,” and may also be referred to as “we,” “us” or “our”. The Company, formerly known as MGM Grand, Inc., is one of the largest gaming companies in the world. We own what we believe to be the world’s finest collection of casino resorts. Our strategy is predicated on creating resorts of memorable character, treating our employees well and providing superior service for our guests. The Company was organized as a Delaware corporation on January 29, 1986. We have grown significantly through the March 1, 1999 acquisition of Primadonna Resorts, Inc. and the May 31, 2000 acquisition of Mirage Resorts, Incorporated (“Mirage Resorts” or “Mirage”).

Our Operating Casino Resorts

          We have provided below certain information about our casino resorts as of December 31, 2003, excluding the Golden Nugget Las Vegas and the Golden Nugget Laughlin. We completed the sale of the subsidiaries operating these resorts (the “Golden Nugget Subsidiaries”) in January 2004. Except as otherwise indicated, we wholly own and operate the resorts shown below.

						Approximate
				Number of		Casino				Gaming
Name and Location				Rooms/Suites		Square Footage		Slots (1)		Tables (2)
Domestic:
	Las Vegas Strip, Nevada
		Bellagio			3,005		155,000		2,454		143
		MGM Grand Las Vegas			5,035		171,500		2,903		154
		The Mirage			3,044		107,200		2,279		119
		Treasure Island (“TI”)			2,885		83,800		1,949		75
		New York-New York			2,023		84,000		1,955		80
		Monte Carlo (3)			3,002		102,000		1,914		74
		Boardwalk			654		32,000		542		21
			Subtotal		19,648		735,500		13,996		666
	Primm, Nevada
		Buffalo Bill’s Resort & Casino			1,240		62,100		1,242		34
		Primm Valley Resort & Casino			625		38,000		1,090		34
		Whiskey Pete’s Hotel & Casino			777		36,400		1,046		26
		Primm Center			N/A		350		7		N/A
	Detroit, Michigan
		MGM Grand Detroit			N/A		75,000		2,696		80
	Biloxi, Mississippi
		Beau Rivage			1,740		80,000		2,262		90
	Atlantic City, New Jersey
		Borgata (4)			2,002		125,000		3,650		145
			Total Domestic		26,032		1,152,350		25,989		1,075
International:
	Darwin, Northern Territory, Australia
		MGM Grand Australia (5)			107		23,800		450		26
			Grand Total		26,139		1,176,150		26,439		1,101

(1)	Includes slot machines and other coin-operated gaming devices.
(2)	Includes blackjack (“21”), baccarat, craps, roulette, pai gow, pai gow poker, Caribbean stud poker, and other table games.
(3)	Owned and operated by a 50-50 joint venture with Mandalay Resort Group.
(4)	Owned and operated by a 50-50 limited liability company with Boyd Gaming Corporation. Borgata opened on July 3, 2003.
(5)	In February 2004, we entered into an agreement to sell our subsidiaries that own and operate MGM Grand Australia.

Las Vegas Strip Resorts

     Bellagio

          Bellagio is an elegant European-style luxury resort located on an approximately 90-acre site with 1,450 feet of frontage at the center of the Las Vegas Strip. The resort overlooks an eight-acre lake inspired by Lake Como in Northern Italy. Each day, more than 1,000 fountains in the lake come alive at regular intervals in a choreographed ballet of water, music and lights. Bellagio features casual and gourmet restaurants in both indoor and outdoor settings, including the world-famous Le Cirque, Olives, Aqua and Picasso restaurants; upscale retail boutiques, including those leased to Armani, Chanel, Gucci, Hermes, Prada, Fred Leighton, Tiffany & Co. and Yves Saint Laurent; and extensive meeting, convention and banquet space. Bellagio’s specially designed theatre is home to the spectacular show “O” produced and performed by the talented Cirque du Soleil organization. Bellagio also offers Light, an upscale nightclub, Caramel, a sophisticated lounge and nightclub, as well as several other bars and lounges. The Bellagio Gallery of Fine Art features rotating exhibitions of original masterpieces from museums and private collections. The surroundings of Bellagio are lushly landscaped with classical gardens and European fountains and pools. Inside, a botanical conservatory is filled with vibrant colors and pleasing scents that change with the seasons. Bellagio has received the prestigious Five Diamond award from AAA for the last three years, as has Picasso. Le Cirque also earned the award in 2003.

          We are expanding Bellagio with the addition of a new Spa Tower, which will add 928 guest rooms and suites and new restaurant, retail and meeting space, and expand the existing spa and salon facilities. We expect to complete the expansion in late 2004. We are also in the process of remodeling all of Bellagio’s existing standard rooms.

     MGM Grand Las Vegas – The City of Entertainment

          MGM Grand Las Vegas is a destination resort located on approximately 116 acres, with over 350 feet of frontage on the Las Vegas Strip and 1,450 feet of frontage on Tropicana Avenue. MGM Grand Las Vegas includes the exclusive Mansion, a collection of 30 suites and a private dining room catering to our premium gaming customers. MGM Grand Las Vegas features an extensive array of restaurants, including Craftsteak, opened in 2002 by the James Beard award-winning chef Tom Colicchio, NOBHILL and SeaBlue by Michael Mina, Pearl, and Fiamma Trattoria, Stephen Hanson’s award-winning Italian restaurant. Other amenities include the Studio 54 nightclub, Tabu, the Ultra Lounge, several other bars and lounges, numerous retail shopping outlets, a 380,000 square foot state-of-the-art conference center, and a 6.6 acre pool and spa complex.

          Entertainment facilities at MGM Grand Las Vegas include a 746-seat showroom providing celebrity entertainment and the La Femme Theatre. The MGM Grand Garden is a special events center with a capacity of over 16,000 seats, and provides a venue for concerts by such stars as Madonna, Paul McCartney, Britney Spears, the Rolling Stones, Billy Joel and others, as well as championship boxing and other sporting events. We are currently in the process of remodeling the former EFX! Theater for a future show by Cirque du Soleil, expected to open in 2004.

          MGM Grand Las Vegas will be the south terminal stop of a four mile elevated public transit monorail currently being constructed by The Las Vegas Monorail Company, a Nevada nonprofit corporation. When completed, the monorail will connect eight hotel-casinos on the east side of the Las Vegas Strip to the Las Vegas Convention Center. The monorail is scheduled to open in March 2004.

     The Mirage

          The Mirage is a luxurious, tropically themed destination resort located on approximately 100 acres, shared with TI, with 2,200 feet of combined Strip frontage near the center of the Las Vegas Strip. The exterior of the resort is landscaped with palm trees, abundant foliage and more than four acres of lagoons and other water features centered around a 54-foot volcano and waterfall. Each evening, the volcano erupts at regular intervals, with flames that spectacularly illuminate the front of the resort. Inside the front entrance is an atrium with a tropical garden and additional water features capped by a 100-foot-high glass dome, designed to replicate the sights, sounds and fragrances of the South Seas. Located at the rear of the hotel, adjacent to the swimming pool area, is a dolphin habitat with nine Atlantic bottlenose dolphins and The Secret Garden of Siegfried & Roy, an attraction that allows guests to view the beautiful exotic animals of Siegfried & Roy, the world-famous illusionists.

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          The Mirage features a wide array of restaurants, including Renoir, a recipient of the AAA Five Diamond award for the past three years. Entertainment at The Mirage includes a show featuring Danny Gans, the renowned singer/impersonator, in The Danny Gans Theatre. The Mirage also has numerous retail shopping outlets and 170,000 square feet of convention space, including the 90,000-square foot Mirage Events Center. In 2004, The Mirage will open its newly designed buffet and a 16,000-square foot nightclub.

     Treasure Island (“TI”)

          TI is a Caribbean-themed hotel-casino resort located next to The Mirage. TI and The Mirage are connected by a monorail. TI recently launched a new branding and marketing campaign, including a new logo and new marquee sign. TI features several restaurants, bars and lounges, including the recently opened Mist. The showroom at TI features Mystère, a unique choreographic mix of magic, special effects and feats of human prowess produced and performed by Cirque du Soleil. The Sirens of TI Show is performed at the front of the resort, providing a significant presence to visitors on the Las Vegas Strip and beckoning visitors into TI. In recognition of its superior customer service and facilities, TI has been awarded the Four Diamond rating by AAA. We are planning to remodel the buffet at TI and open several new restaurants and a nightclub in 2004.

     New York-New York Hotel and Casino

          New York-New York is a themed destination resort on the Las Vegas Strip at Tropicana Avenue, covering approximately 20 acres. The architecture at New York-New York replicates many of New York City’s landmark buildings and icons, including the Statue of Liberty, the Empire State Building, Central Park, the Brooklyn Bridge and a Coney Island-style roller coaster. The casino features highly themed interiors including Park Avenue with retail shops, a Central Park setting in the central casino area, and Little Italy with its traditional food court set inside a typical residential neighborhood. New York-New York also features several specialty leased restaurants, numerous bars and lounges, including nationally-recognized Coyote Ugly and ESPNZone and the recently opened Irish pub, Nine Fine Irishmen. Entertainment includes Zumanity by Cirque du Soleil, which opened in August 2003, and Rita Rudner.

     Monte Carlo Resort & Casino

          Monte Carlo is located on approximately 46 acres with 600 feet of frontage on the Las Vegas Strip, approximately one-half mile south of Bellagio. We own 50% of this resort in a joint venture with Mandalay Resort Group, which manages the resort. Monte Carlo has a palatial style reminiscent of the Belle Époque, the French Victorian architecture of the late 19th century. The resort has amenities such as fine dining at Andre’s, a brew pub featuring live entertainment, a health spa, a beauty salon, a 1,200-seat theatre featuring the world-renowned magician Lance Burton, a large pool area and lighted tennis courts.

     Boardwalk Hotel and Casino

          The Boardwalk is located between Bellagio and Monte Carlo on the Las Vegas Strip. This facility includes 654 hotel rooms and 32,000 square feet of casino space. Other amenities at the Boardwalk include a coffee shop, a buffet, an entertainment lounge, a gift shop, interior meeting space and two outdoor swimming pools.

Other Nevada Resorts

     Primm Valley Resorts

          Primm Valley Resorts consists of three hotel-casinos and three gas stations on both sides of Interstate 15 at the California/Nevada state line in Primm, Nevada (about 40 miles south of Las Vegas) and the Primm Valley Golf Club nearby in California. Buffalo Bill’s Resort & Casino, Primm Valley Resort & Casino, Whiskey Pete’s Hotel & Casino, Primm Valley Golf Club and three gas stations including the Primm Center (collectively, the “Primm Valley Resorts”) form a major destination location and offer visitors driving from California the first opportunity to wager upon entering Nevada and the last opportunity before leaving.

          Primm Valley Resorts offer an array of amenities and attractions, including a 25,000-square foot conference center, numerous owned and leased restaurants, and a variety of amusement rides. The 6,100-seat Star of the Desert Arena hosts top-name entertainers. Connected to Primm Valley Resorts is the Fashion Outlet of Las Vegas, a shopping mall containing approximately 400,000 square feet of retail space with over 100 retail outlet stores. The Fashion Outlet is owned and operated by a third party.

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     Golf Resorts

          We own and operate an exclusive world-class golf course, Shadow Creek, located approximately ten miles north of our Las Vegas Strip resorts. Shadow Creek is ranked 7^th in Golf Digest’s ranking of America’s 100 Greatest Public Courses. We also own and operate the Primm Valley Golf Club, located four miles south of Primm in California, which includes two 18-hole championship courses. All of these golf courses were designed by renowned golf course architect Tom Fazio.

Other Resorts

     MGM Grand Detroit

          MGM Grand Detroit is our interim casino facility in Detroit, Michigan. The facility’s interior is decorated in an Art Deco motif with themed bars, a VIP lounge and several restaurants, including our signature upscale restaurant, the Hollywood Brown Derby. The site is conveniently located off the Howard Street exit from the John C. Lodge Expressway in downtown Detroit, and has parking for over 3,000 vehicles in two parking garages and additional on-site covered parking.

     Beau Rivage

          Beau Rivage is a luxurious beachfront resort located on a 41-acre site with 1,400 feet of frontage where Interstate 110 meets the Gulf Coast in Biloxi, Mississippi. The graceful driveway leading to Beau Rivage is lined with intricate gardens and stately oak trees and large trees fill the resort’s skylit atrium lobby. Distinctive restaurants offer a variety of dining experiences, including a café nestled in the atrium gardens, Port House, a steak and seafood restaurant surrounded by tropical fish and coral reefs, and Anna Mae, featuring creative and contemporary Asian cuisine. Adjoining its lavish health spa and salon is a lushly landscaped swimming pool and café overlooking the Gulf of Mexico. Beau Rivage also offers a state-of-the-art convention center, a shopping esplanade, a 1,600-seat theatre and a brew pub with live entertainment. Beau Rivage is rated as a Four Diamond resort by AAA.

     Borgata

          The Borgata Hotel Casino and Spa is located on 29 acres at Renaissance Pointe in Atlantic City, New Jersey and opened July 3, 2003. In addition to its 2,000 guest rooms and suites and extensive gaming floor, Borgata includes several specialty restaurants, retail shops, a European-style health spa, meeting space and unique entertainment venues. Borgata is the first new casino in Atlantic City in over 13 years. We own 50% of the limited liability company that owns Borgata, through our contribution of the underlying land and $133 million of cash to the venture. Boyd Gaming Corporation owns 50% of Borgata through cash contributions of $223 million and also operates the resort. Borgata obtained a $630 million secured bank credit facility, which is non-recourse to MGM MIRAGE, to fund the project costs. Borgata was completed at a cost of approximately $1.1 billion.

     MGM Grand Australia

          MGM Grand Australia is located on 18 acres of beachfront property in Darwin, Northern Territory, Australia. The resort includes a public and private casino, hotel, restaurants and other facilities. We have positioned MGM Grand Australia as a multi-faceted gaming and entertainment facility for the local market and, to a lesser extent, as an exclusive destination resort for international table game customers.

          In February 2004, we entered into an agreement to sell our subsidiaries that own and operate MGM Grand Australia for A$195 (approximately $150 million), subject to certain working capital adjustments. We expect this transaction to be completed by the third quarter of 2004, subject to customary sales conditions and regulatory approvals.

Future Development

     Detroit, Michigan

          The Michigan Gaming Control and Revenue Act provides that not more than three casinos may be licensed at any one time by the State of Michigan and that they be located only in the City of Detroit. In November 1997, MGM Grand Detroit, LLC was selected to develop one of the three authorized hotel-casino complexes. MGM Grand Detroit, Inc., our wholly owned subsidiary, holds a controlling interest in MGM Grand Detroit, LLC. A minority interest in MGM Grand Detroit, LLC is held by Partners Detroit, LLC, a Michigan limited liability company owned by residents and entities located in the Detroit metropolitan area.

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          MGM Grand Detroit, LLC has operated an interim casino facility in downtown Detroit since July 1999. In August 2002 the Detroit City Council approved revised development agreements with us and two other developers. The revised development agreement released us and the City from certain of the obligations under the original agreement and significantly changed other provisions of the original agreement.

          We are currently in the process of obtaining land and developing plans for the permanent facility, and currently expect the project to cost approximately $575 million (including land, capitalized interest and preopening expenses, but excluding approximately $115 million of payments to the City under the revised development agreement). The design, budget and schedule of the permanent facility are not finalized, and the ultimate timing, cost and scope of the facility are subject to risks attendant to large-scale projects.

          The ability to construct the permanent casino facility is currently subject to resolution of the Lac Vieux litigation – see “Item 3. Legal Proceedings”. Pending the resolution of this litigation, the 6^th Circuit Court of Appeals has issued an injunction, pending appeal, prohibiting the City and the developers from commencing construction pending further action of the 6^th Circuit Court. Therefore, we do not know when we will be able to commence construction of, or complete, the permanent facility.

     Atlantic City, New Jersey

          We own approximately 149 acres on Renaissance Pointe in Atlantic City, New Jersey. We obtained the land at Renaissance Pointe through an agreement between Mirage and the City of Atlantic City. In addition, Borgata occupies 29 acres at Renaissance Pointe, including 27 acres it owns and two acres we lease to Borgata. Of the remaining land, approximately 95 acres are suitable for development, and a portion of these acres consists of common roads, landscaping and master plan improvements which we designed and developed as required by our agreement with Boyd.

          On October 16, 2002, we announced the temporary suspension of our development activities on our wholly-owned project on the Renaissance Pointe land in Atlantic City. We must apply for and receive numerous governmental permits and satisfy other conditions before construction of a new resort on the Renaissance Pointe site could begin. No assurance can be given that we will develop a casino resort in New Jersey, or its ultimate schedule, size, configuration or cost if we do develop a casino resort.

     Las Vegas, Nevada

          We own an approximately 50-acre site for future development with over 1,200 feet of frontage on the Las Vegas Strip between Bellagio and Monte Carlo, a part of which is occupied by the Boardwalk. The design, timing and cost of any future development on the site will depend on several factors, including the market’s ability to absorb new hotel-casino resorts on the Las Vegas Strip, competition from gaming outside of Nevada and the ultimate size and scope of the project, among other factors.

          In 2002, we entered into an agreement with Turnberry Associates to develop luxury condominium towers at MGM Grand Las Vegas. We will initially contribute land and up to $3 million to the project for a 50% investment. Turnberry Associates will contribute $9 million, and up to an additional $3 million, in cash and will manage the development and sales process. The venture will obtain construction financing for the remainder of the expected $175 million to $200 million cost of the first tower once sufficient pre-sales have occurred to obtain financing. We will have the opportunity to rent the condominiums to third parties on behalf of owners who elect to have us do so. Depending on market acceptance of the initial tower, we and Turnberry Associates may develop, on similar terms, up to an additional five condominium towers.

     United Kingdom

          In anticipation of reforms to gambling legislation currently being considered by the British government, we have entered into several strategic agreements in the United Kingdom. In May 2003, we purchased a 25% interest in Metro Casinos Limited, which is developing a new casino in Bristol. Metro Casinos Limited is a subsidiary of R J Bown (Holdings) Ltd, the owner of the Westcliff Casino, one of the largest United Kingdom provincial casinos. The Bristol facility is expected to open by March 2004. We received regulatory approval for our investment from the Gaming Board for Great Britain in November 2003.

          In October 2003, we entered into an agreement with Earls Court and Olympia Group, which operates large exhibition and trade show facilities in London, to form a jointly owned company. The entity would develop a large entertainment and gaming facility, which we would operate in space leased from Earls Court and Olympia, to complement the existing Olympia facilities. The agreement is subject to implementation of proposed gaming law reforms and a tax structure acceptable to us, and obtaining required planning and other approvals. We would own 82.5% of the entity.

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          In November 2003, we entered into an agreement with Newcastle United PLC to create a 50-50 joint venture which would build a major new mixed-use development, including casino development, on a site in Newcastle’s city centre adjacent to Newcastle United’s football stadium. Newcastle United is one of the leading English Premier League (Soccer) clubs. Construction of the complex is contingent upon implementation of proposed gaming law reforms and a tax structure acceptable to us, and obtaining required planning and other approvals. Newcastle United PLC will contribute the land to the joint venture, and we will make an equity investment and develop and operate the complex, as well as own the casino development in leased premises within the complex.

          In February 2004, we announced an agreement in principle with The British Land Company PLC whereby we would operate a casino in leased premises within a newly developed leisure and entertainment complex adjacent to the Meadowhall Shopping Centre in Sheffield UK. The agreement is subject to implementation of proposed gaming law reforms and a tax structure acceptable to us, and obtaining required planning and other approvals.

     Wembley plc

          In January 2004, we reached an agreement with Wembley plc (“Wembley”) on the terms of a cash acquisition by us of Wembley. We have offered Wembley’s shareholders 750 pence per share, valuing Wembley at $490 million as of the date of the offer. Wembley has no material indebtedness. Wembley’s operations consist of greyhound racing and video lottery terminals (“VLTs”) at its Lincoln Park facility in Rhode Island, three greyhound tracks and one horse racing track in Colorado, and six greyhound tracks in the United Kingdom. A member of the Wembly plc group, Lincoln Park, Inc., and two executives of the Wembly plc group are subject to indictment in Rhode Island. We will purchase Wembley free and clear of the indictment and any related liabilities. Under an agreement with the United States Department of Justice, the indictment will proceed against a new entity funded by Wembley which we will not be acquiring. We expect the transaction to close by the third quarter of 2004, subject to requisite court and shareholder approval, the completion of the Lincoln Park reorganization and receipt of necessary regulatory approvals.

     New York Racing Association

          We have an understanding with the New York Racing Association (“NYRA”) to manage VLTs at NYRA’s Aqueduct horseracing facility in metropolitan New York. We would assist in the development of the facility, including providing project financing, and would manage the facility for a fee. The project is anticipated to cost $135 million. Work was halted on the VLT facility in August 2003 pending the outcome of an investigation of certain aspects of NYRA’s operations by Federal prosecutors. In December 2003, NYRA reached agreement with the Justice Department whereby NYRA was indicted with prosecution deferred. NYRA agreed to pay a fine and the indictment will be dismissed with prejudice upon NYRA implementing certain reforms and otherwise complying with the terms of the agreement. Our participation is subject to a definitive agreement, regulatory approvals and certain legislative changes by the State of New York.

     Other

          We regularly evaluate possible expansion and acquisition opportunities in both the domestic and international markets. These opportunities may include the ownership, management and operation of gaming and other entertainment facilities in Nevada or in states other than Nevada or outside of the United States. We may undertake these opportunities either alone or in cooperation with one or more third parties. Development and operation of any gaming facility in a new jurisdiction is subject to many contingencies. Several of these contingencies are outside of our control and may include the passage of appropriate gaming legislation, the issuance of necessary permits, licenses and approvals, the availability of appropriate financing and the satisfaction of other conditions. We cannot be sure that we will decide or be able to proceed with any acquisition or expansion opportunities.

Marketing

          All of our casino resorts operate 24 hours each day, every day of the year. We do not consider our business to be particularly seasonal. We believe that the largest portion of our Nevada customers live in Southern California, although other geographic areas are also important.

          The level of gaming activity at our casinos is the single largest factor in determining our revenues and operating income. We generate slightly over half of our net revenues from gaming activities. We also receive a large amount of revenues from room, food and beverage, entertainment and retail operations. Since we believe that the number of walk-in customers also affects the success of all of our hotel-casinos, we design our facilities to maximize their attraction to guests of other hotels.

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          The principal segments of the Nevada and Mississippi gaming markets are leisure travel, premium gaming customers, conventions, including small meetings and corporate incentive programs, and tour and travel. Bellagio, MGM Grand Las Vegas and The Mirage appeal to the upper end of each market segment, balancing their business by using the convention and tour and travel segments to fill the mid-week and off-peak periods. Our marketing strategy for TI and New York-New York is aimed at attracting middle- to upper-middle-income wagerers, largely from the leisure travel and, to a lesser extent, the tour and travel segments. Boardwalk and Primm Valley Resorts appeal primarily to middle-income customers attracted by room, food and beverage and entertainment prices that are lower than those offered by the major Las Vegas hotel-casinos.

          We utilize our world-class golf courses in marketing programs at our Las Vegas Strip and other Nevada resorts. Our major Las Vegas hotel-casinos offer luxury suite packages that include golf privileges at Shadow Creek. In connection with our marketing activities, we also invite our premium casino customers to play Shadow Creek on a complimentary basis. We use Primm Valley Golf Club for marketing purposes at our Las Vegas and Primm resorts, including offering room and golf packages at special rates.

          We believe Beau Rivage is the most luxurious hotel-casino on the Mississippi Gulf Coast. Beau Rivage seeks to attract the most affluent customers in each market segment, particularly those who live in major cities in the South, as well as customers residing in the Gulf Coast region. MGM Grand Detroit markets primarily to customers within a 150-mile radius of Detroit. Its customers are attracted by its diverse gaming and dining offerings, its convenient location and its ample onsite parking facilities. MGM Grand Australia has targeted its local Northern Territory market for its primary customer base.

          We advertise on radio, television and billboards and in newspapers and magazines in selected cities throughout the United States, as well as on the Internet and by direct mail. We also advertise through our regional marketing offices located in major United States and foreign cities. A key element of marketing to high-level wagerers is personal contact by our marketing personnel. Direct marketing is also important in the convention segment. We maintain internet websites which inform customers about our resorts and allow our customers to reserve hotel rooms and make restaurant and show reservations.

          We utilize technology to maximize revenue and efficiency in gaming as well. Our Players Club links seven of our United States resorts, and consolidates all slots and table games activity for customers with a Players Club account. Customers qualify for benefits at all of these resorts, regardless of where they play. We believe that our Players Club enables us to more effectively market to our customers. Almost all of the slot machines at our United States resorts operate with International Game Technology’s EZ-Pay™ cashless gaming system. We believe that this system enhances the customer experience and increases the revenue potential of our slot machines.

Issuance of Markers

          Marker play represents a large portion of the table games volume at Bellagio, MGM Grand Las Vegas and The Mirage. Our other facilities do not emphasize marker play to the same extent, although we offer markers to customers at those casinos as well, with the exception of MGM Grand Australia, where Northern Territory legislation prohibits marker play.

          We maintain strict controls over the issuance of markers and aggressively pursue collection from those customers who fail to pay their marker balances timely. These collection efforts are similar to those used by most large corporations when dealing with overdue customer accounts, including the mailing of statements and delinquency notices, personal contacts, the use of outside collection agencies and civil litigation. In Nevada, Mississippi and Michigan, amounts owed for markers which are not timely paid are enforceable under state laws. All other states are required to enforce a judgment for amounts owed for markers which are not timely paid, entered into in Nevada, Mississippi or Michigan, pursuant to the Full Faith and Credit Clause of the United States Constitution. Amounts owed for markers which are not timely paid are not legally enforceable in some foreign countries, but the United States assets of foreign customers may be reached to satisfy judgments entered in the United States. A significant portion of our Company’s accounts receivable, for amounts unpaid resulting from markers which are not collectible through banking channels, is owed by major casino customers from the Far East. The collectibility of unpaid markers is affected by a number of factors, including changes in currency exchange rates and economic conditions in the customers’ home countries.

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Supervision of Gaming Activities

          In connection with the supervision of gaming activities at our casinos, we maintain stringent controls on the recording of all receipts and disbursements. These audit and cash controls include:

• Locked cash boxes on the casino floor;

• Daily cash and coin counts performed by employees who are independent of casino operations;

• Constant observation and supervision of the gaming area;

• Observation and recording of gaming and other areas by closed-circuit television;

• Constant computer monitoring of our slot machines; and

• Timely analysis of deviations from expected performance.

Competition

     Las Vegas

          Our Las Vegas casino resorts compete with a large number of other hotel-casinos in the Las Vegas area, including major hotel-casinos on or near the Las Vegas Strip, major hotel-casinos in the downtown area, which is about five miles from the center of the Strip, and several major facilities elsewhere in the Las Vegas area. According to the Las Vegas Convention and Visitors Authority, there were approximately 130,000 guestrooms in Las Vegas at December 31, 2003, up from approximately 127,000 rooms at December 31, 2002. Las Vegas visitor volume was 35.5 million in 2003, a slight increase from the 35.1 million reported for 2002. Additional new hotel-casinos and expansion projects at existing Las Vegas hotel-casinos are under construction or have been proposed. In addition, further expansion of Native American gaming in California is likely. We are unable to determine to what extent increased competition will affect our future operating results.

     Primm, Nevada

          The Primm Valley Resorts compete primarily with two hotel-casinos located 11 miles north along Interstate 15 in Jean, Nevada and with the numerous other hotels and casinos in the Las Vegas area, as well as Native American gaming facilities in Southern California. Since many of our current customers stop at Primm as they are driving on Interstate 15 to and from major casino-hotels located in Las Vegas, we believe that our success at Primm is also favorably influenced by the popularity of the Las Vegas resorts. The expansion of Native American gaming has already had an impact on our Primm Valley Resorts, and the substantial expansion of Native American gaming facilities in California, which is currently anticipated, could have a further adverse effect on the Primm Valley Resorts.

     Detroit

          MGM Grand Detroit competes in this market with two other interim casinos located in Detroit, as well as a government-owned casino located nearby in Windsor, Ontario. There are Native American casinos in Michigan, but none are near the Detroit metropolitan area.

     Biloxi, Mississippi

          Beau Rivage competes with 11 other casinos in the Mississippi Gulf Coast market, nine of which offer hotel accommodations. Gulf Coast casinos also compete in the regional market with a land-based casino in New Orleans and a land-based Native American hotel-casino in central Mississippi. Casinos in the Gulf Coast market also compete for the south Florida market with casinos in the Bahamas. Gulf Coast casinos compete to a lesser extent with a number of casinos in Mississippi and Louisiana.

     Australia

          The success of MGM Grand Australia depends in part upon a balance of (i) its ability to effectively serve the local community as well as (ii) its ability to make efficient use of its strategic proximity to the Southeast Asian gaming market. The Darwin International Airport is an average of 5.5 hours away from the major Asian cities. However, frequency of scheduled air service is a limiting factor.

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          There are 13 casinos in Australia competing for the Far East market. Australian casinos operate under exclusive arrangements, which create a regional monopoly for a fixed term. As such, Australian casinos do not compete among themselves for the regional middle to low-end players. However, Far East premium players have become an increasingly important source of revenues; consequently, this market has become very competitive. Due to the competition for premium play customers, and the limitations on scheduled air service, MGM Grand Australia has targeted the local market for its customer base, which has produced relatively stable results.

     Other

          Our Company’s facilities also compete for gaming customers with hotel-casino operations located in other areas of the United States and other parts of the world, and for vacationers with non-gaming tourist destinations such as Hawaii and Florida. Our hotel-casinos compete to a lesser extent with state-sponsored lotteries, off-track wagering, card parlors, and other forms of legalized gaming in the United States. In recent years, certain states have legalized, and several other states have considered legalizing, casino gaming. We do not believe that legalization or expansion of casino gaming in those jurisdictions would have a material adverse impact on our operations. However, we do believe that the legalization of large-scale land-based casino gaming in or near certain major metropolitan areas, particularly in California, could have a material adverse effect on the Las Vegas market.

How We Compete

          Our major casino resorts compete on the basis of:

• Recruiting, training and retaining well-qualified and motivated employees who provide superior and friendly customer service;

• Offering high-quality guestrooms and dining, entertainment and retail options;

• Providing unique, “must-see” entertainment attractions;

• Our marketing and promotional programs; and

• The superior locations and sites of our resorts.

          The principal negative factors relating to our competitive position are:

• Our limited geographic diversification (our major resorts are concentrated on the Las Vegas Strip and some of our largest competitors operate in more gaming markets than we do);

• There are a number of gaming facilities located closer to where our customers live than our resorts;

• Our guestroom, dining and entertainment prices are often higher than those of most of our competitors in each market, although we believe that the quality of our facilities and services is also higher; and

• Our hotel-casinos compete to some extent with each other for customers. Bellagio, MGM Grand Las Vegas and The Mirage, in particular, compete for some of the same high-end customers.

Employees and Labor Relations

          As of December 31, 2003, we had approximately 36,000 full-time and 7,000 part-time employees, of which approximately 3,100 full-time employees and 300 part-time employees worked at the Golden Nugget Subsidiaries. At that date, we had collective bargaining contracts with unions covering approximately 17,000 of our employees, of which approximately 1,400 employees worked at the Golden Nugget Las Vegas. We do not have union contracts at Beau Rivage or the Boardwalk. We consider our employee relations to be good.

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Regulation and Licensing

     Nevada Government Regulation

          The ownership and operation of casino gaming facilities in Clark County, Nevada are subject to: (i) the Nevada Gaming Control Act and the regulations promulgated thereunder (collectively, the “Nevada Act”); and (ii) various local regulations. The Company’s gaming operations are subject to the licensing and regulatory control of the Nevada Gaming Commission (the “Nevada Commission”), the Nevada State Gaming Control Board (the “Nevada Board”) and the Clark County Liquor and Gaming Licensing Board (the “CCLGLB”). The Nevada Commission, the Nevada Board, and the CCLGLB are collectively referred to as the “Nevada Gaming Authorities.”

          The laws, regulations and supervisory procedures of the Nevada Gaming Authorities are based upon declarations of public policy that are concerned with, among other things: (i) the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity; (ii) the establishment and maintenance of responsible accounting practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues; (iii) providing reliable record keeping and requiring the filing of periodic reports with the Nevada Gaming Authorities; (iv) the prevention of cheating and fraudulent practices; and (v) providing a source of state and local revenues through taxation and licensing fees. Any change in such laws, regulations and procedures could have an adverse effect on the Company’s gaming operations.

          MGM Grand Hotel, LLC, dba MGM Grand Las Vegas, New York-New York Hotel & Casino, LLC, dba New York-New York Hotel & Casino, The Primadonna Company, LLC, dba Primm Valley Resort, Buffalo Bill’s and Whiskey Pete’s, THE MIRAGE CASINO-HOTEL, dba The Mirage, Bellagio, LLC, dba Bellagio, Treasure Island Corp., dba Treasure Island at The Mirage, Boardwalk Casino, Inc., dba Boardwalk Hotel and Casino, and Victoria Partners, dba Monte Carlo Resort & Casino (collectively referred to as the “Casino Licensees”), operate casinos and are required to be licensed by the Nevada Gaming Authorities. Each gaming license requires the periodic payment of fees and taxes and is not transferable. MGM Grand Las Vegas, New York-New York, The Primadonna Company, LLC and MGM MIRAGE Manufacturing Corp. are also licensed as manufacturers and distributors of gaming devices and the Boardwalk is licensed as a distributor of gaming devices. MGM Grand Las Vegas is also licensed to operate an International Gaming Salon. The Company and certain of its subsidiaries are also licensed as shareholders, members and/or managers of certain corporate and limited liability company Casino Licensees. The Company’s subsidiary MRGS Corp. is licensed as a 50% general partner of Victoria Partners, the joint venture with Mandalay Resort Group that owns and operates Monte Carlo.

          The Company and Mirage are also each required to be registered by the Nevada Commission as a publicly traded corporation (“Registered Corporation”) and as such, each is required periodically to submit detailed financial and operating reports to the Nevada Commission and furnish any other information that the Nevada Commission may require. No person may become a stockholder or member of, or receive any percentage of profits from, the Casino Licensees, MGM MIRAGE Manufacturing Corp., or MRGS Corp., without first obtaining licenses and approvals from the Nevada Gaming Authorities. The Company, Mirage and the foregoing subsidiaries have obtained from the Nevada Gaming Authorities the various registrations, approvals, permits and licenses required in order to engage in gaming activities in Nevada.

          The Nevada Gaming Authorities may investigate any individual who has a material relationship to, or material involvement with, the Company, Mirage, the Casino Licensees, MGM MIRAGE Manufacturing Corp. or MRGS Corp., to determine whether such individual is suitable or should be licensed as a business associate of a gaming licensee. Officers, directors and certain key employees of the foregoing subsidiaries must file applications with the Nevada Gaming Authorities and may be required to be licensed by the Nevada Gaming Authorities. Certain officers, directors and key employees of the Company and Mirage who are actively and directly involved in the gaming activities of the foregoing subsidiaries may be required to be licensed or found suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities may deny an application for licensing or a finding of suitability for any cause they deem reasonable. A finding of suitability is comparable to licensing, and both require submission of detailed personal and financial information followed by a thorough investigation. The applicant for licensing or a finding of suitability, or the gaming licensee by which the applicant is employed or for whom the applicant serves, must pay all the costs of the investigation. Changes in licensed positions must be reported to the Nevada Gaming Authorities, and in addition to their authority to deny an application for a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a change in a corporate position.

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          If the Nevada Gaming Authorities were to find an officer, director or key employee unsuitable for licensing or to continue having a relationship with the Company, Mirage, the Casino Licensees, MGM MIRAGE Manufacturing Corp., or MRGS Corp., such company or companies would have to sever all relationships with such person. In addition, the Nevada Commission may require the Company, Mirage or the foregoing subsidiaries to terminate the employment of any person who refuses to file appropriate applications. Determinations of suitability or of questions pertaining to licensing are not subject to judicial review in Nevada.

          The Company, Mirage, the Casino Licensees, MGM MIRAGE Manufacturing Corp., and MRGS Corp. are required to submit detailed financial and operating reports to the Nevada Commission. Substantially all material loans, leases, sales of securities and similar financing transactions by the Company, Mirage and the foregoing subsidiaries must be reported to or approved by the Nevada Commission.

          If it were determined that the Nevada Act was violated by the Casino Licensees, MGM MIRAGE Manufacturing Corp., or MRGS Corp., the gaming licenses they hold could be limited, conditioned, suspended or revoked, subject to compliance with certain statutory and regulatory procedures. In addition, the Company, Mirage, the foregoing subsidiaries and the persons involved could be subject to substantial fines for each separate violation of the Nevada Act at the discretion of the Nevada Commission. Further, a supervisor could be appointed by the Nevada Commission to operate the Company’s gaming properties and, under certain circumstances, earnings generated during the supervisor’s appointment (except for the reasonable rental value of the Company’s gaming properties) could be forfeited to the State of Nevada. Limitation, conditioning or suspension of any gaming license or the appointment of a supervisor could (and revocation of any gaming license would) materially adversely affect the Company’s gaming operations.

          Any beneficial holder of the Company’s voting securities, regardless of the number of shares owned, may be required to file an application, be investigated, and have his or her suitability as a beneficial holder of the Company’s voting securities determined if the Nevada Commission has reason to believe that such ownership would otherwise be inconsistent with the declared policies of the State of Nevada. The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting any such investigation.

          The Nevada Act requires any person who acquires more than 5% of any class of the Company’s voting securities to report the acquisition to the Nevada Commission. The Nevada Act requires that beneficial owners of more than 10% of any class of the Company’s voting securities apply to the Nevada Commission for a finding of suitability within thirty days after the Chairman of the Nevada Board mails the written notice requiring such filing. Under certain circumstances, an “institutional investor” as defined in the Nevada Act, which acquires more than 10% but not more than 15% of any class of the Company’s voting securities, may apply to the Nevada Commission for a waiver of such finding of suitability if such institutional investor holds the voting securities for investment purposes only. An institutional investor shall not be deemed to hold voting securities for investment purposes unless the voting securities were acquired and are held in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of the Board of Directors of the Company, any change in the corporate charter, bylaws, management, policies or operations of the Company or any of its gaming affiliates, or any other action that the Nevada Commission finds to be inconsistent with holding the Company’s voting securities for investment purposes only. Activities that are not deemed to be inconsistent with holding voting securities for investment purposes only include: (i) voting on all matters voted on by stockholders; (ii) making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in its management, policies or operations; and (iii) such other activities as the Nevada Commission may determine to be consistent with such investment intent. If the beneficial holder of voting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information including a list of beneficial owners. The applicant is required to pay all costs of investigation.

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          Under the Nevada Act and under certain circumstances, an “institutional investor,” as defined in the Nevada Act, which intends to acquire not more than 15% of any class of nonvoting securities of a privately held corporation, limited partnership or limited liability company that is also a registered holding or intermediary company or the holder of a gaming license, may apply to the Nevada Commission for a waiver of the usual prior licensing or finding of suitability requirement if such institutional investor holds such nonvoting securities for investment purposes only. An institutional investor shall not be deemed to hold nonvoting securities for investment purposes unless the nonvoting securities were acquired and are held in the ordinary course of business as an institutional investor, do not give the institutional investor management authority, and do not, directly or indirectly, allow the institutional investor to vote for the election or appointment of members of the board of directors, a general partner or manager, cause any change in the articles of organization, operating agreement, other organic document, management, policies or operations, or cause any other action that the Nevada Commission finds to be inconsistent with holding nonvoting securities for investment purposes only. Activities not deemed to be inconsistent with holding nonvoting securities for investment purposes only include: (i) nominating any candidate for election or appointment to the entity’s board of directors or equivalent in connection with a debt restructuring; (ii) making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in the entity’s management, policies or operations; and (iii) such other activities as the Nevada Commission may determine to be consistent with such investment intent. If the beneficial holder of nonvoting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information including a list of beneficial owners. The applicant is required to pay all costs of investigation.

          Any person who fails or refuses to apply for a finding of suitability or a license within 30 days after being ordered to do so by the Nevada Commission or the Chairman of the Nevada Board may be found unsuitable. The same restrictions apply to a record owner if the record owner, after request, fails to identify the beneficial owner. Any stockholder found unsuitable and who holds, directly or indirectly, any beneficial ownership of the common stock of a Registered Corporation beyond such period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense. The Company is subject to disciplinary action if, after it receives notice that a person is unsuitable to be a stockholder or to have any other relationship with the Company, Mirage, the Casino Licensees, MGM MIRAGE Manufacturing Corp., or MRGS Corp., the Company, Mirage or the foregoing subsidiaries (i) pays that person any dividend or interest upon voting securities of the Company, (ii) allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person, (iii) pays remuneration in any form to that person for services rendered or otherwise, or (iv) fails to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities for cash at fair market value. Additionally, the CCLGLB has taken the position that it has the authority to approve all persons owning or controlling the stock of any corporation controlling a gaming licensee.

          The Nevada Commission may, in its discretion, require the holder of any debt security of a Registered Corporation to file an application, be investigated and be found suitable to own the debt security of a Registered Corporation. If the Nevada Commission determines that a person is unsuitable to own such security, then pursuant to the Nevada Act, the Registered Corporation can be sanctioned, including the loss of its approvals, if without the prior approval of the Nevada Commission, it: (i) pays to the unsuitable person any dividend, interest, or any distribution whatsoever; (ii) recognizes any voting right by such unsuitable person in connection with such securities; (iii) pays the unsuitable person remuneration in any form; or (iv) makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation or similar transaction.

          The Company is required to maintain a current stock ledger in Nevada that may be examined by the Nevada Gaming Authorities at any time. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Nevada Gaming Authorities. A failure to make such disclosure may be grounds for finding the record holder unsuitable. The Company is also required to render maximum assistance in determining the identity of the beneficial owner. The Nevada Commission has the power to require the Company’s and Mirage’s stock certificates to bear a legend indicating that such securities are subject to the Nevada Act. However, to date, the Nevada Commission has not imposed such a requirement on either the Company or Mirage.

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          Neither the Company nor Mirage may make a public offering of any securities without the prior approval of the Nevada Commission if the securities or the proceeds therefrom are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for such purposes. Such approval, if given, does not constitute a finding, recommendation or approval by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the prospectus or the investment merits of the securities. Any representation to the contrary is unlawful.

          Under the Nevada Act, none of the Casino Licensees, MGM MIRAGE Manufacturing Corp., or MRGS Corp., may guarantee a security issued by the Company or Mirage pursuant to a public offering, or pledge their assets to secure the payment or performance of the obligations evidenced by such a security issued by the Company or Mirage, without the prior approval of the Nevada Commission. Similarly, neither the common stock nor other ownership interests of the Casino Licensees, MGM MIRAGE Manufacturing Corp., or MRGS Corp., may be pledged, nor may the pledge of such common stock or other ownership interests foreclose on such a pledge, without the prior approval of the Nevada Commission. Restrictions on the transfer of any equity security issued by the Casino Licensees, MGM MIRAGE Manufacturing Corp., or MRGS Corp., and agreements not to encumber such securities, are ineffective without the prior approval of the Nevada Commission.

          On January 22, 2004, the Nevada Commission granted the Company and Mirage prior approval to make public offerings for a period of 18 months, subject to certain conditions (the “Shelf Approval”). The Shelf Approval also includes approval for the Company and Mirage to place restrictions on the transfer of any equity security issued to the Casino Licensees, MGM MIRAGE Manufacturing Corp., or MRGS Corp., and to enter into agreements not to encumber such securities, pursuant to any public offering made under the Shelf Approval. However, the Shelf Approval may be rescinded for good cause without prior notice upon the issuance of an interlocutory stop order by the Chairman of the Nevada Board. The Shelf Approval does not constitute a finding, recommendation or approval by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the prospectus or the investment merits of the securities offered. Any representation to the contrary is unlawful.

          Changes in control of the Company or Mirage through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or any act or conduct by a person whereby he or she obtains control, may not occur without the prior approval of the Nevada Commission. Entities seeking to acquire control of a Registered Corporation must satisfy the Nevada Board and the Nevada Commission concerning a variety of stringent standards prior to assuming control of such Registered Corporation. The Nevada Commission may also require controlling stockholders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control to be investigated and licensed as part of the approval process of the transaction.

          The Nevada legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and corporate defensive tactics affecting Nevada gaming licensees, and Registered Corporations that are affiliated with those operations, may be injurious to stable and productive corporate gaming. The Nevada Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business practices upon Nevada’s gaming industry and to further Nevada’s policy to: (i) assure the financial stability of corporate gaming operators and their affiliates; (ii) preserve the beneficial aspects of conducting business in the corporate form; and (iii) promote a neutral environment for the orderly governance of corporate affairs. Approvals are, in certain circumstances, required from the Nevada Commission before the Company can make exceptional repurchases of voting securities above the current market price thereof and before a corporate acquisition opposed by management can be consummated.

          The Nevada Act also requires prior approval of a plan of recapitalization proposed by a Registered Corporation’s board of directors in response to a tender offer made directly to the Registered Corporation’s stockholders for the purpose of acquiring control of the Registered Corporation.

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          License fees and taxes, computed in various ways depending on the type of gaming or activity involved, are payable to the State of Nevada and to Clark County. Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon either: (i) a percentage of the gross revenues received; (ii) the number of gaming devices operated; or (iii) the number of table games operated. The tax on gross revenues received is generally 6.75%. An excise tax is also paid by the Casino Licensees on charges for admission to any facility where certain forms of live entertainment are provided. Nevada licensees that hold a license as a manufacturer or a distributor, such as MGM Grand Las Vegas, New York-New York, The Primadonna Company, LLC, the Boardwalk and MGM MIRAGE Manufacturing Corp., also pay certain fees and taxes to the State of Nevada.

          Any person who is licensed, required to be licensed, registered, required to be registered, or is under common control with such persons (collectively, “Licensees”), and who proposes to become involved in a gaming venture outside of Nevada, is required to deposit with the Nevada Board, and thereafter maintain, a revolving fund in the amount of $10,000 to pay the expenses of investigation by the Nevada Board of their participation in such foreign gaming. The revolving fund is subject to increase or decrease at the discretion of the Nevada Commission. Thereafter, Licensees are also required to comply with certain reporting requirements imposed by the Nevada Act. Licensees are also subject to disciplinary action by the Nevada Commission if they knowingly violate any laws of the foreign jurisdiction pertaining to the foreign gaming operation, fail to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations, engage in any activity or enter into any association that is unsuitable because it poses an unreasonable threat to the control of gaming in Nevada, reflects or tends to reflect discredit or disrepute upon the State of Nevada or gaming in Nevada, or is contrary to the gaming policies of Nevada, engage in any activity or enter into any association that interferes with the ability of the State of Nevada to collect gaming taxes and fees, or employ, contract with or associate with any person in the foreign gaming operation who has been denied a license or a finding of suitability in Nevada on the ground of personal unsuitability, or who has been found guilty of cheating at gambling.

          The sale of alcoholic beverages by the Casino Licensees is subject to licensing, control and regulation by the applicable local authorities. All licenses are revocable and are not transferable. The agencies involved have full power to limit, condition, suspend or revoke any such license, and any such disciplinary action could (and revocation would) have a material adverse effect upon the Company’s operations.

          Pursuant to a 1985 agreement with the United States Department of the Treasury (the “Treasury”) and provisions of the Money Laundering Suppression Act of 1994, the Nevada Commission and the Nevada Board have authority, under Regulation 6A of the Nevada Act, to enforce their own cash transaction reporting laws applicable to casinos which substantially parallel the federal Bank Secrecy Act. The Nevada Act requires gaming licensees to monitor receipts and disbursements of currency related to cash purchases of chips, cash wagers, cash deposits or cash payment of gaming debts in excess of $10,000 in a 24-hour period, and file reports of such transactions with the United States Internal Revenue Service. Casinos are required to file suspicious activity reports with the Treasury and provide copies thereof to the Nevada Board. Nevada casinos are required to meet the reporting and record keeping requirements of Treasury regulations recently amended by the USA PATRIOT Act of 2001.

     Michigan Government Regulation and Taxation

          The Michigan Gaming Control and Revenue Act subjects the ownership and operation of casino gaming facilities to extensive state licensing and regulatory requirements. The Michigan Act also authorizes local regulation of casino gaming facilities by the City of Detroit, provided that any such local ordinances regulating casino gaming are consistent with the Michigan Act and rules promulgated to implement it.

          The Michigan Act creates the Michigan Gaming Control Board and authorizes it to grant casino licenses to not more than three applicants who have entered into development agreements with the City of Detroit. The Michigan Board is granted extensive authority to conduct background investigations and determine the suitability of casino license applicants, affiliated companies, officers, directors, or managerial employees of applicants and affiliated companies and persons or entities holding a one percent or greater direct or indirect interest in an applicant or affiliated company. Institutional investors holding less than certain specified amounts of debt or equity securities are exempted from meeting the suitability requirements of the Michigan Act, provided such securities are issued by a publicly traded corporation, such as MGM MIRAGE, and the securities were purchased for investment purposes only and not for the purpose of influencing or affecting the affairs of the issuer. Any person who supplies goods or services to a casino licensee which are directly related to, used in connection with, or affecting gaming, and any person who supplies other goods or services to a casino licensee

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on a regular and continuing basis, must obtain a supplier’s license from the Michigan Board. In addition, any individual employed by a casino licensee or by a supplier licensee whose work duties are related to or involved in the gambling operation or are performed in a restricted area or a gaming area of a casino must obtain an occupational license from the Michigan Board.

          The Michigan Act imposes the burden of proof on the applicant for a casino license to establish its suitability to receive and hold the license. The applicant must establish its suitability as to integrity, moral character and reputation, business probity, financial ability and experience, responsibility, and other criteria deemed appropriate by the Michigan Board. A casino license is valid for a period of one year and the Michigan Board may refuse to renew it upon a determination that the licensee no longer meets the requirements for licensure.

          The Michigan Board may, among other things, revoke, suspend or restrict a casino license. Substantial fines or forfeiture of assets for violations of gaming or liquor control laws or rules may also be levied against a casino licensee. In the event that a casino license is revoked or suspended for more than 120 days, the Michigan Act provides for the appointment of a conservator who, among other things, is required to sell or otherwise transfer the assets of the casino licensee or former licensee to another person or entity who meets the requirements of the Michigan Act for licensure, subject to certain approvals and consultations.

          The Michigan Board has adopted administrative rules, which became effective on June 23, 1998, to implement the terms of the Michigan Act. Among other things, the rules impose more detailed substantive and procedural requirements with respect to casino licensing and operations. Included are requirements regarding such things as licensing investigations and hearings, record keeping and retention, contracting, reports to the Michigan Board, internal control and accounting procedures, security and surveillance, extensions of credit to gaming patrons, conduct of gaming, and transfers of ownership interests in licensed casinos. The rules also establish numerous Michigan Board procedures regarding licensing, disciplinary and other hearings, and similar matters. The rules have the force of law and are binding on the Michigan Board as well as on applicants for or holders of casino licenses.

          The Michigan Liquor Control Commission licenses, controls and regulates the sale of alcoholic beverages by the MGM Grand Detroit casino pursuant to the Michigan Liquor Control Act. The Michigan Act also requires that casinos sell and distribute alcoholic beverages in a manner consistent with the Michigan Liquor Control Act.

          The Detroit City Council enacted an ordinance entitled “Casino Gaming Authorization and Casino Development Agreement Certification and Compliance.” The ordinance authorizes casino gaming only by operators who are licensed by the Michigan Board and are parties to a development agreement which has been approved and certified by the City Council and is currently in effect, or are acting on behalf of such parties. The development agreement among the City of Detroit, MGM Grand Detroit, LLC and the Economic Development Corporation of Detroit has been so approved and certified and is currently in effect. The ordinance requires each casino operator to submit to the Mayor of Detroit and to the City Council periodic reports regarding the operator’s compliance with its development agreement or, in the event of non-compliance, reasons for non-compliance and an explanation of efforts to comply. The ordinance requires the Mayor of Detroit to monitor each casino operator’s compliance with its development agreement, to take appropriate enforcement action in the event of default and to notify the City Council of defaults and enforcement action taken; and, if a development agreement is terminated, it requires the City Council to transmit notice of such action to the Michigan Board within five business days along with Detroit’s request that the Michigan Board revoke the relevant operator’s certificate of suitability or casino license. If a development agreement is terminated, the Michigan Act requires the Michigan Board to revoke the relevant operator’s casino license upon the request of Detroit.

          The administrative rules of the Michigan Board prohibit a casino licensee or a holding company or affiliate that has control of a casino licensee in Michigan from entering into a debt transaction affecting the capitalization or financial viability of its Michigan casino operation without prior approval from the Michigan Board. On October 14, 2003, the Michigan Board authorized MGM Grand Detroit, LLC to borrow under the Company’s credit facilities for the purpose of financing the development of its permanent casino and the future expansion thereof, maintenance capital expenditures for its temporary and permanent casinos and the cost of renovating the temporary casino facility for adaptive re-use and/or sale following the completion of the permanent casino, and to secure such borrowings with liens upon substantially all of its assets. In the same order, the Michigan Board authorized MGM Grand Detroit, Inc. to pledge its equity interest in MGM Grand Detroit, LLC to secure such borrowings.

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          The Michigan Act effectively provides that each of the three casinos in Detroit shall pay a wagering tax equal to 18% of its adjusted gross receipts, to be paid 8.1% to Michigan and 9.9% to Detroit, an annual municipal service fee equal to the greater of $4 million or 1.25% of its adjusted gross receipts to be paid to Detroit to defray its cost of hosting casinos and an annual assessment, as adjusted based upon a consumer price index, in the initial amount of approximately $8.3 million to be paid by each casino to Michigan to defray its regulatory enforcement and other casino-related costs. These payments are in addition to the taxes, fees and assessments customarily paid by business entities situated in Detroit.

     Mississippi Government Regulation

          We conduct our Mississippi gaming operations through an indirect subsidiary, Beau Rivage Resorts, Inc., which owns and operates Beau Rivage in Biloxi, Mississippi. The ownership and operation of casino facilities in Mississippi are subject to extensive state and local regulation, but primarily the licensing and regulatory control of the Mississippi Gaming Commission and the Mississippi State Tax Commission.

          The Mississippi Gaming Control Act, which legalized dockside casino gaming in Mississippi, was enacted on June 29, 1990. Although not identical, the Mississippi Act is similar to the Nevada Gaming Control Act. Effective October 29, 1991, the Mississippi Gaming Commission adopted regulations in furtherance of the Mississippi Act which are also similar in many respects to the Nevada gaming regulations. The laws, regulations and supervisory procedures of Mississippi and the Mississippi Gaming Commission seek to:

• prevent unsavory or unsuitable persons from having any direct or indirect involvement with gaming at any time or in any capacity;

• establish and maintain responsible accounting practices and procedures;

• maintain effective control over the financial practices of licensees, including establishing minimum procedures for internal fiscal affairs and safeguarding of assets and revenues, providing reliable record keeping and making periodic reports to the Mississippi Gaming Commission;

• prevent cheating and fraudulent practices;

• provide a source of state and local revenues through taxation and licensing fees; and

• ensure that gaming licensees, to the extent practicable, employ Mississippi residents.

          The regulations are subject to amendment and interpretation by the Mississippi Gaming Commission. Changes in Mississippi law or the regulations or the Mississippi Gaming Commission’s interpretations thereof may limit or otherwise materially affect the types of gaming that may be conducted, and could have a material adverse effect on us and our Mississippi gaming operations.

          The Mississippi Act provides for legalized dockside gaming at the discretion of the 14 counties that either border the Gulf Coast or the Mississippi River, but only if the voters in such counties have not voted to prohibit gaming in that county. As of January 1, 2004, dockside gaming was permissible in nine of the 14 eligible counties in the state and gaming operations had commenced in Adams, Coahoma, Hancock, Harrison, Tunica, Warren and Washington counties. Under Mississippi law, gaming vessels must be located on the Mississippi River or on navigable waters in eligible counties along the Mississippi River, or in the waters of the State of Mississippi lying south of the state in eligible counties along the Mississippi Gulf Coast. The law permits unlimited stakes gaming on permanently moored vessels on a 24-hour basis and does not restrict the percentage of space which may be utilized for gaming. There are no limitations on the number of gaming licenses which may be issued in Mississippi.

          Beau Rivage Resorts and Beau Rivage Distribution Corp. (“BRDC”), a subsidiary of Beau Rivage Resorts, are subject to the licensing and regulatory control of the Mississippi Gaming Commission. Beau Rivage Resorts is licensed as a Mississippi gaming operator, and BRDC is licensed as a Mississippi distributor of gaming devices. Gaming licenses require the periodic payment of fees and taxes and are not transferable. Gaming licenses are issued for a maximum term of three years and must be renewed periodically thereafter. Beau Rivage Resorts received its Mississippi gaming license on June 20, 1996 and a renewal on June 21, 1998. BRDC received its Mississippi distributor’s license on August 20, 1998. On May 18, 2000, the Mississippi Gaming Commission renewed the licenses of both Beau Rivage Resorts and BRDC for terms of three years each, effective June 22, 2000. On May 21, 2003, the Mississippi Gaming Commission renewed the licenses of Beau Rivage Resorts and BRDC effective June 23, 2003 through June 22, 2006.

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          On May 18, 2000, the Mississippi Gaming Commission registered MGM MIRAGE under the Mississippi Act as a publicly traded holding company of Beau Rivage Resorts and BRDC. As a registered publicly traded corporation, MGM MIRAGE is subject to the licensing and regulatory control of the Mississippi Gaming Commission, and is required to periodically submit detailed financial, operating and other reports to the Mississippi Gaming Commission and furnish any other information which the Mississippi Gaming Commission may require. If MGM MIRAGE is unable to satisfy the registration requirements of the Mississippi Act, MGM MIRAGE and its licensed subsidiaries cannot own or operate gaming facilities in Mississippi. Beau Rivage Resorts and BRDC are also required to periodically submit detailed financial, operating and other reports to the Mississippi Gaming Commission and the Mississippi State Tax Commission and to furnish any other information required thereby. No person may become a stockholder of or receive any percentage of profits from a licensed subsidiary of a holding company without first obtaining licenses and approvals from the Mississippi Gaming Commission.

          Certain of our officers, directors and employees must be found suitable or be licensed by the Mississippi Gaming Commission. We believe that we have applied for all necessary findings of suitability with respect to these persons, although the Mississippi Gaming Commission, in its discretion, may require additional persons to file applications for findings of suitability. In addition, any person having a material relationship or involvement with us may be required to be found suitable, in which case those persons must pay the costs and fees associated with the investigation. A finding of suitability requires submission of detailed personal and financial information followed by a thorough investigation. There can be no assurance that a person who is subject to a finding of suitability will be found suitable by the Mississippi Gaming Commission. The Mississippi Gaming Commission may deny an application for a finding of suitability for any cause that it deems reasonable. Findings of suitability must be periodically renewed.

          Changes in certain licensed positions must be reported to the Mississippi Gaming Commission. In addition to its authority to deny an application for a finding of suitability, the Mississippi Gaming Commission has jurisdiction to disapprove a change in a licensed position. The Mississippi Gaming Commission has the power to require us to suspend or dismiss officers, directors and other key employees or sever relationships with other persons who refuse to file appropriate applications or whom the authorities find unsuitable to act in their capacities.

          Employees associated with gaming must obtain work permits that are subject to immediate suspension. The Mississippi Gaming Commission will refuse to issue a work permit to a person convicted of a felony and it may refuse to issue a work permit to a gaming employee if the employee has committed various misdemeanors or knowingly violated the Mississippi Act or for any other reasonable cause.

          At any time, the Mississippi Gaming Commission has the power to investigate and require a finding of suitability of any record or beneficial stockholders of a publicly traded corporation registered with the Mississippi Gaming Commission, regardless of the percentage of ownership. Mississippi law requires any person who acquires more than 5% of the voting securities of a publicly traded corporation registered with the Mississippi Gaming Commission to report the acquisition to the Mississippi Gaming Commission, and that person may be required to be found suitable. Also, any person who becomes a beneficial owner of more than 10% of the voting securities of such a company, as reported to the Mississippi Gaming Commission, must apply for a finding of suitability by the Mississippi Gaming Commission. An applicant for finding of suitability must pay the costs and fees that the Mississippi Gaming Commission incurs in conducting the investigation. The Mississippi Gaming Commission has generally exercised its discretion to require a finding of suitability of any beneficial owner of more than 5% of a registered public or private company’s voting securities. However, the Mississippi Gaming Commission has adopted a regulation that permits certain institutional investors to own beneficially up to 15% and, under certain circumstances, up to 19%, of a registered or licensed company’s voting securities without a finding of suitability.

          Under the regulations, an “institutional investor,” as defined therein, may apply to the Executive Director of the Mississippi Gaming Commission for a waiver of a finding of suitability if such institutional investor (i) beneficially owns up to 15% (or, in certain circumstances, up to 19%) of the voting securities of a registered or licensed company, and (ii) holds the voting securities for investment purposes only. An institutional investor shall not be deemed to hold voting securities for investment purposes unless the voting securities were acquired and are held in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of the board of directors of the registered or licensed company, any change in the registered or licensed company’s corporate charter, bylaws, management, policies or operations of the registered public or private company or any of its gaming affiliates, or any other action which the Mississippi Gaming Commission finds to be inconsistent with holding the registered or licensed company’s voting securities for investment purposes only.

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          Activities that are not deemed to be inconsistent with holding voting securities for investment purposes only include:

• voting, directly or indirectly through the delivery of a proxy furnished by the board of directors, on all matters voted upon by the holders of such voting securities;

• serving as a member of any committee of creditors or security holders formed in connection with a debt restructuring;

• nominating any candidate for election or appointment to the board of directors in connection with a debt restructuring;

• accepting appointment or election (or having a representative accept appointment or election) as a member of the board of directors in connection with a debt restructuring and serving in that capacity until the conclusion of the member’s term;

• making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in management, policies or operations; and

• such other activities as the Mississippi Gaming Commission may determine to be consistent with such investment intent.

          If a stockholder who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information including a list of beneficial owners. The Mississippi Gaming Commission may at any time dissolve, suspend, condition, limit or restrict a finding of suitability to own a registered public company’s equity interests for any cause it deems reasonable.

          We may be required to disclose to the Mississippi Gaming Commission upon request the identities of the holders of any debt or other securities. In addition, under the Mississippi Act, the Mississippi Gaming Commission may, in its discretion, require holders of debt securities of registered corporations to file applications, investigate the holders, and require the holders to be found suitable to own the debt securities.

          Although the Mississippi Gaming Commission generally does not require the individual holders of obligations such as notes to be investigated and found suitable, the Mississippi Gaming Commission retains the discretion to do so for any reason, including but not limited to a default, or where the holder of the debt instrument exercises a material influence over the gaming operations of the entity in question. Any holder of debt securities required to apply for a finding of suitability must pay all investigative fees and costs of the Mississippi Gaming Commission in connection with the investigation.

          Any person who fails or refuses to apply for a finding of suitability or a license within 30 days after being ordered to do so by the Mississippi Gaming Commission may be found unsuitable. Any person found unsuitable and who holds, directly or indirectly, any beneficial ownership of our securities beyond the time that the Mississippi Gaming Commission prescribes, may be guilty of a misdemeanor. We will be subject to disciplinary action if, after receiving notice that a person is unsuitable to be a stockholder, a holder of our debt securities or to have any other relationship with us, we:

• pay the unsuitable person any dividend, interest or other distribution whatsoever;

• recognize the exercise, directly or indirectly, of any voting rights conferred through such securities held by the unsuitable person;

• pay the unsuitable person any remuneration in any form for services rendered or otherwise, except in limited and specific circumstances;

• make any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation or similar transaction; or

• fail to pursue all lawful efforts to require the unsuitable person to divest himself or herself of the securities, including, if necessary, the immediate purchase of the securities for cash at a fair market value.

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          Beau Rivage Resorts and BRDC must maintain in Mississippi a current ledger with respect to the ownership of their equity securities and MGM MIRAGE must maintain in Mississippi a current list of its stockholders which must reflect the record ownership of each outstanding share of any equity security issued by MGM MIRAGE. The ledger and stockholder lists must be available for inspection by the Mississippi Gaming Commission at any time. If any of our securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Mississippi Gaming Commission. A failure to make that disclosure may be grounds for finding the record holder unsuitable. The Company must also render maximum assistance in determining the identity of the beneficial owner.

          The Mississippi Act requires that the certificates representing securities of a registered publicly traded corporation bear a legend to the general effect that the securities are subject to the Mississippi Act and the regulations of the Mississippi Gaming Commission. On May 18, 2000, the Mississippi Gaming Commission granted us a waiver of this legend requirement. The Mississippi Gaming Commission has the power to impose additional restrictions on us and the holders of our securities at any time.

          Substantially all loans, leases, sales of securities and similar financing transactions by a licensed gaming subsidiary must be reported to or approved by the Mississippi Gaming Commission. A licensed gaming subsidiary may not make a public offering of its securities, but may pledge or mortgage casino facilities if it obtains the prior approval of the Mississippi Gaming Commission. We may not make a public offering of our securities without the prior approval of the Mississippi Gaming Commission if any part of the proceeds of the offering is to be used to finance the construction, acquisition or operation of gaming facilities in Mississippi or to retire or extend obligations incurred for those purposes. The approval, if given, does not constitute a recommendation or approval of the accuracy or adequacy of the prospectus or the investment merits of the securities subject to the offering. On September 24, 2003, the Mississippi Gaming Commission granted us a waiver of the prior approval requirement for our securities offerings for a period of two years, subject to certain conditions. The waiver may be rescinded for good cause without prior notice upon the issuance of an interlocutory stop order by the Executive Director of the Mississippi Gaming Commission.

          Under the regulations of the Mississippi Gaming Commission, Beau Rivage Resorts and BRDC may not guarantee a security issued by MGM MIRAGE pursuant to a public offering, or pledge their assets to secure payment or performance of the obligations evidenced by such a security issued by MGM MIRAGE, without the prior approval of the Mississippi Gaming Commission. Similarly, MGM MIRAGE may not pledge the stock or other ownership interests of Beau Rivage Resorts or BRDC, nor may the pledgee of such ownership interests foreclose on such a pledge, without the prior approval of the Mississippi Gaming Commission. Moreover, restrictions on the transfer of an equity security issued by Beau Rivage Resorts or BRDC and agreements not to encumber such securities granted by MGM MIRAGE are ineffective without the prior approval of the Mississippi Gaming Commission. The waiver of the prior approval requirement for MGM MIRAGE’s securities offerings received from the Mississippi Gaming Commission on October 15, 2001 includes a waiver of the prior approval requirement for such guarantees, pledges and restrictions of Beau Rivage Resorts and BRDC, subject to certain conditions.

          MGM MIRAGE cannot change its control through merger, consolidation, acquisition of assets, management or consulting agreements or any form of takeover without the prior approval of the Mississippi Gaming Commission. The Mississippi Gaming Commission may also require controlling stockholders, officers, directors, and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction.

          The Mississippi Legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and other corporate defensive tactics that affect corporate gaming licensees in Mississippi and corporations whose stock is publicly traded that are affiliated with those licensees may be injurious to stable and productive corporate gaming. The Mississippi Gaming Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business practices upon Mississippi’s gaming industry and to further Mississippi’s policy to assure the financial stability of corporate gaming operators and their affiliates, preserve the beneficial aspects of conducting business in the corporate form, and promote a neutral environment for the orderly governance of corporate affairs.

          MGM MIRAGE may be required to obtain approval from the Mississippi Gaming Commission before it may make exceptional repurchases of voting securities in excess of the current market price of its common stock (commonly called “greenmail”) or before it may consummate a corporate acquisition opposed by management. The regulations also require prior approval by the Mississippi Gaming Commission if MGM MIRAGE adopts a plan of recapitalization proposed by its Board of Directors opposing a tender offer made directly to the stockholders for the purpose of acquiring control of MGM MIRAGE.

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          Neither MGM MIRAGE nor Beau Rivage Resorts may engage in gaming activities in Mississippi while MGM MIRAGE, Beau Rivage Resorts and/or persons found suitable to be associated with the gaming license of Beau Rivage Resorts conduct gaming operations outside of Mississippi without approval of the Mississippi Gaming Commission. The Mississippi Gaming Commission may require that it have access to information concerning MGM MIRAGE’s and its affiliates’ out-of-state gaming operations. Gaming operations in Nevada were approved when Beau Rivage Resorts was first licensed in Mississippi. MGM MIRAGE has received waivers of foreign gaming approval from the Mississippi Gaming Commission for the conduct of gaming operations in Michigan, New Jersey, Northern Territory – Australia, Mpumalanga and Gauteng Provinces – Republic of South Africa (where we no longer engage in gaming operations), California, New York and the United Kingdom, and for cruises with Royal Caribbean Cruise Lines or Carnival Cruise Lines which originate from the United States, and may be required to obtain the approval or a waiver of such approval from the Mississippi Gaming Commission before engaging in any additional future gaming operations outside of Mississippi.

          If the Mississippi Gaming Commission decides that a licensed gaming subsidiary violated a gaming law or regulation, the Mississippi Gaming Commission could limit, condition, suspend or revoke the license of the subsidiary. In addition, we, the licensed subsidiary and the persons involved could be subject to substantial fines for each separate violation. A violation under any of MGM MIRAGE’s other operating subsidiaries’ gaming licenses may be deemed a violation of Beau Rivage Resorts’ gaming license. Because of a violation, the Mississippi Gaming Commission could attempt to appoint a supervisor to operate the casino facilities. Limitation, conditioning or suspension of Beau Rivage Resorts’ gaming license or MGM MIRAGE’s registration as a publicly traded holding company of Beau Rivage Resorts, or the appointment of a supervisor could, and the revocation of any gaming license or registration would, materially adversely affect our Mississippi gaming operations.

          A licensed gaming subsidiary must pay license fees and taxes, computed in various ways depending on the type of gaming involved, to the State of Mississippi and to the county or city in which the licensed gaming subsidiary conducts operations. Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon a percentage of gross gaming revenues, the number of slot machines operated by the casino, and the number of table games operated by the casino.

          The license fee payable to the State of Mississippi is based upon “gaming receipts,” generally defined as gross receipts less payouts to customers as winnings, and generally equals 8% of gaming receipts. These license fees are allowed as a credit against our Mississippi income tax liability for the year paid. The gross revenue fee imposed by the Mississippi cities and counties in which casino operations are located is in addition to the fees payable to the State of Mississippi and equals approximately 4% of the gaming receipts.

          The Mississippi Gaming Commission adopted a regulation in 1994 requiring as a condition of licensure or license renewal that a gaming establishment’s plan include a 500-car parking facility in close proximity to the casino complex and infrastructure facilities which will amount to at least 25% of the casino cost. Infrastructure facilities are defined in the regulation to include a hotel with at least 250 rooms, theme park, golf course and other similar facilities. With the opening of its resort hotel and other amenities, Beau Rivage Resorts is in compliance with this requirement. On January 21, 1999, the Mississippi Gaming Commission adopted an amendment to this regulation which increased the infrastructure requirement to 100% from the existing 25%; however, the regulation grandfathers existing licensees and applies only to new casino projects and casinos that are not operating at the time of acquisition or purchase, and would therefore not apply to Beau Rivage Resorts. In any event, Beau Rivage would comply with such requirement.

          Both the local jurisdiction and the Alcoholic Beverage Control Division of the Mississippi State Tax Commission license, control and regulate the sale of alcoholic beverages by Beau Rivage Resorts. Beau Rivage is in an area designated as a special resort area, which allows casinos located therein to serve alcoholic beverages on a 24-hour basis. The Alcoholic Beverage Control Division requires that the key officers and managers of MGM MIRAGE and Beau Rivage Resorts and all owners of more than 5% of Beau Rivage Resorts’ equity submit detailed personal, and in some instances, financial information to the Alcoholic Beverage Control Division and be investigated and licensed. All such licenses are non-transferable. The Alcohol Beverage Control Division has the full power to limit, condition, suspend or revoke any license for the service of alcoholic beverages or to place a licensee on probation with or without conditions. Any disciplinary action could, and revocation would, have a material adverse effect upon the casino’s operations.

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     Australia Government Regulation

          The Northern Territory of Australia has comprehensive laws and regulations governing the conduct of gaming. Our Australian operations are subject to the Northern Territory Gaming Control Act and regulations promulgated thereunder and to the licensing and general control of the Minister for Racing, Gaming and Licensing and the Director of Licensing. MGM Grand Australia Pty Ltd. and Diamond Leisure Pty Ltd (a subsidiary of MGM Grand Australia Pty Ltd operating as MGM Grand Darwin) have entered into a casino operator’s agreement with the Minister pursuant to which Diamond Leisure Pty Ltd was granted a license to conduct casino gaming on an exclusive basis through June 30, 2015 in the northern half of the Northern Territory (which includes Darwin, its largest city, where MGM Grand Australia is located). The license provides for a tax payable to the Northern Territory government on gross profits derived from gaming, including gaming devices. The license is not exclusive with respect to gaming devices, and the Minister may permit such devices to be placed in limited numbers in locations not operated by Diamond Leisure Pty Ltd or MGM Grand Australia. However, under the license, through June 30, 2005 a portion of the operators’ win on such gaming devices is to be offset against gaming tax otherwise payable by MGM Grand Australia.

          The license may be terminated if Diamond Leisure Pty Ltd breaches the casino operator’s agreement or the Northern Territory law or fails to operate in accordance with the requirements of the license. The Northern Territory authorities have the right under the Northern Territory law, the casino operator’s agreement and the license to monitor and approve virtually all aspects of the conduct of gaming by Diamond Leisure Pty Ltd.

          Additionally, under the terms of the license, the Minister has the right to approve the directors and corporate secretary of MGM MIRAGE and its subsidiaries that own or operate the MGM Grand Darwin Casino, as well as changes in the ownership or corporate structure of such subsidiaries. Diamond Leisure Pty Ltd is required to file with the Northern Territory authorities copies of all documents required to be filed by MGM MIRAGE or any of its subsidiaries with the Nevada gaming authorities, if the documents relate in any way to the MGM Grand Darwin Casino, Diamond Leisure’s conduct of the casino or the casino site. In the event of any person becoming the beneficial owner of 10% or more of our stock, the Minister must be so notified and may investigate the suitability of such person. If the Minister determines such person to be unsuitable, and following such determination such person remains the beneficial owner of 10% or more of our stock, that circumstance would constitute a default under the license.

     New Jersey Government Regulation

          The ownership and operation of hotel-casino facilities and gaming activities in Atlantic City, New Jersey are subject to extensive state regulation under the New Jersey Casino Control Act and the regulations of the New Jersey Casino Control Commission and other applicable laws. The New Jersey Act also established the New Jersey Division of Gaming Enforcement to investigate all license applications, enforce the provisions of the New Jersey Act and regulations and prosecute all proceedings for violations of the New Jersey Act and regulations before the New Jersey Commission. In order to own or operate a hotel-casino property in New Jersey, a company must obtain a license or other approvals from the New Jersey Commission and obtain numerous other licenses, permits and approvals from other state as well as local governmental authorities.

          The New Jersey Commission has broad discretion regarding the issuance, renewal, revocation and suspension of casino licenses. The New Jersey Act and regulations concern primarily the good character, honesty, integrity and financial stability of casino licensees, their intermediary and holding companies, their employees, their security holders and others financially interested in casino operations; financial and accounting practices used in connection with casino operations; rules of games, levels of supervision of games and methods of selling and redeeming chips; manner of granting credit, duration of credit and enforceability of gaming debts; and distribution of alcoholic beverages.

          On June 11, 2003, the New Jersey Commission issued a casino license to the Borgata Hotel Casino & Spa and found MGM MIRAGE and certain of our wholly-owned subsidiaries, and their then officers, directors, and 5% or greater shareholders suitable.

          The New Jersey Act further provides that each person who directly or indirectly holds any beneficial interest in or ownership of the securities issued by a casino licensee or any of its intermediary or holding companies, those persons who, in the opinion of the New Jersey Commission, have the ability to control the casino licensee or its intermediary or holding companies or elect a majority of the board of directors of such companies, other than a banking or other licensed lending institution which makes a loan or holds a mortgage or other lien acquired in the ordinary course of business, lenders and underwriters of such companies are required to be qualified by the New Jersey Commission. However, with respect to a holding company such as MGM MIRAGE, a waiver of qualification may be granted by the New Jersey Commission, with the concurrence of the Director of the New Jersey Division, if the New Jersey Commission determines that such persons or entities are not significantly involved in the activities of a casino licensee and in the case of security holders, do not

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have the ability to control MGM MIRAGE or elect one or more of its directors. There exists a rebuttable presumption that any person holding 5% or more of the equity securities of a casino licensee’s intermediary or holding company or a person having the ability to elect one or more of the directors of such a company has the ability to control the company and thus must obtain qualification from the New Jersey Commission.

          Notwithstanding this presumption of control, the New Jersey Act provides for a waiver of qualification for passive “institutional investors,” as defined by the New Jersey Act, if the institutional investor purchased publicly traded securities for investment purposes only and where such securities constitute less than 10% of the equity securities of a casino licensee’s holding or intermediary company or debt securities of a casino licensee’s holding or intermediary company representing a percentage of the outstanding debt of such company not exceeding 20% or a percentage of any issue of the outstanding debt of such company not exceeding 50%. The waiver of qualification is subject to certain conditions including, upon request of the New Jersey Commission, filing a certified statement that the institutional investor has no intention of influencing or affecting the affairs of the issuer, except that an institutional investor holding voting securities shall be permitted to vote on matters put to a vote of the holders of outstanding voting securities. Additionally, a waiver of qualification may also be granted to institutional investors holding a higher percentage of securities of a casino licensee’s holding or intermediary company upon a showing of good cause.

          The New Jersey Act requires the certificate of incorporation of a publicly traded holding company to provide that any securities of such a corporation are held subject to the condition that if a holder is found to be disqualified by the New Jersey Commission pursuant to the New Jersey Act, such holder shall dispose of his interest in such company. Accordingly, we amended our certificate of incorporation to provide that a holder of our securities must dispose of such securities if the holder is found disqualified under the New Jersey Act. In addition, we amended our certificate of incorporation to provide that we may redeem the stock of any holder found to be disqualified.

          If the New Jersey Commission should find a security holder to be unqualified to be a holder of securities of a casino licensee or holding company, not only must the disqualified holder dispose of such securities but in addition, commencing on the date the New Jersey Commission serves notice upon such a company of the determination of disqualification, it shall be unlawful for the disqualified holder to:

• receive any dividends or interest upon any such securities;

• exercise, directly or through any trustee or nominee, any right conferred by such securities; or

• receive any remuneration in any form from the licensee for services rendered or otherwise.

          If the New Jersey Commission should find a security holder to be unqualified to be a holder of securities of a casino licensee or holding company, the New Jersey Commission shall take any necessary action to protect the public interest, including the suspension or revocation of the casino license, except that if the disqualified person is the holder of securities of a publicly traded holding company, the New Jersey Commission shall not take action against the casino license if:

• the holding company has the corporate charter provisions concerning divestiture of securities by disqualified owners required by the New Jersey Act;

• the holding company has made good faith efforts, including the pursuit of legal remedies, to comply with any order of the New Jersey Commission; and

• the disqualified holder does not have the ability to control the company or elect one or more members of the company’s board of directors.

          If the New Jersey Commission determines that a casino licensee has violated the New Jersey Act or regulations, or if any security holder of MGM MIRAGE or a casino licensee who is required to be qualified under the New Jersey Act is found to be disqualified but does not dispose of the securities, a casino licensee could be subject to fines or its license could be suspended or revoked. If a casino licensee’s license is revoked after issuance, the New Jersey Commission could appoint a conservator to operate and to dispose of the hotel-casino facilities operated by such casino licensee. Net proceeds of a sale by a conservator and net profits of operations by a conservator, at least up to an amount equal to a fair return on investment which is reasonable for casinos or hotels, would be paid to us.

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          The New Jersey Act imposes an annual tax of 8% on gross casino revenues, as defined in the New Jersey Act, a 4.25% tax on the value of rooms, food beverage or entertainment provided at no cost or a reduced price, a $3 tax per day on each occupied hotel room, a $3 parking tax per day and, through June 30, 2006, a 7.5% tax on “adjusted net income”, as defined in the New Jersey Act, subject to certain minimums and limitations. In addition, casino licensees are required to invest 1.25% of gross casino revenues for the purchase of bonds to be issued by the Casino Reinvestment Development Authority or make other approved investments equal to that amount. In the event the investment requirement is not met, the casino licensee is subject to a tax in the amount of 2.5% on gross casino revenues. The New Jersey Commission has established fees for the issuance or renewal of casino licenses and hotel-casino alcoholic beverage licenses and an annual license fee on each slot machine.

          In addition to compliance with the New Jersey Act and regulations relating to gaming, any property built in Atlantic City by us must comply with the New Jersey and Atlantic City laws and regulations relating to, among other things, the Coastal Area Facilities Review Act, construction of buildings, environmental considerations and the operation of hotels. Any changes to such laws or the laws regarding gaming could have an adverse effect on the Company.

Factors that May Affect Our Future Results

(Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

          This Form 10-K and our 2003 Annual Report to Stockholders contain some forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “could,” “might” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, new projects, future performance, the outcome of contingencies such as legal proceedings and future financial results. From time to time, we also provide oral or written forward-looking statements in our Forms 10-Q and 8-K, press releases and other materials we release to the public. Any or all of our forward-looking statements in this Form 10-K, in our 2003 Annual Report to Stockholders and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in this Form 10-K — for example, government regulation and the competitive environment — will be important in determining our future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may differ materially.

          We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Form 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission. Also note that we provide the following discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business. These are factors that we think could cause our actual results to differ materially from expected and historical results. Other factors in addition to those listed here could also adversely affect us. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.

• We have significant indebtedness. At December 31, 2003, we had approximately $5.5 billion of indebtedness, which increased from approximately $5.2 billion at December 31, 2002. The interest rate on a large portion of our long-term debt is subject to fluctuation based on changes in short-term interest rates and the ratings which national rating agencies assign to our outstanding debt securities. Our bank credit agreements and the indentures governing our debt securities do not prohibit us from borrowing additional funds in the future. Our interest expense could increase as a result of these factors. Additionally, our indebtedness could increase our vulnerability to general adverse economic and industry conditions, limit our flexibility in planning for or reacting to changes in our business and industry, limit our ability to borrow additional funds and place us at a competitive disadvantage compared to other less leveraged competitors. Our ability to reduce our outstanding debt will be subject to our future cash flows, other capital requirements and other factors, some of which are not within our control.

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• We operate in a very competitive environment, particularly in Las Vegas. To the extent that hotel room capacity is expanded by others in a market where our hotel-casinos are located, competition will increase. A new casino resort is under construction on the Las Vegas Strip and is scheduled to open in 2005, which will likely increase competition for our Las Vegas Strip resorts. The business of our Nevada hotel-casinos might also be adversely affected if gaming operations of the type conducted in Nevada were to be permitted under the laws of other states, particularly California. Similarly, legalization of gaming in any jurisdiction located near Detroit or Atlantic City, or the establishment of new large-scale gaming operations on nearby Native American reservations, could adversely affect MGM Grand Detroit, Borgata or any future planned Atlantic City operations. Expansion of gaming activities in the Gulf Coast region, such as the planned Hard Rock Casino in Biloxi, could have an adverse effect on Beau Rivage.

• Voters in California approved an amendment to the California constitution in March 2000 that gave Native American tribes in California the right to offer a limited number of slot machines and a range of house-banked card games. More than 60 compacts had been approved by the federal government as of December 31, 2003, and casino-style gaming is legal in California on those tribal lands. According to the California Gambling Control Commission, there were more than 50 operating tribal casinos in California at November 19, 2003. The expansion of Native American gaming in California has already impacted our Primm Valley Resorts. Several initiatives have been proposed which would, if approved, expand the scope of gaming in California. Such expansion of gaming in California could have an adverse impact on our results of operations.

• The ownership and operation of gaming facilities are subject to extensive federal, state, provincial and local laws, regulations and ordinances, which are administered by the relevant regulatory agencies in each jurisdiction. Changes in applicable laws, regulations or ordinances could have a significant effect on our operations. In addition, we are subject to various gaming taxes, which are subject to possible increase at any time. For instance, legislatures in Nevada and New Jersey recently approved measures to increase taxes on gaming companies in those states.

• We operate an interim casino in Detroit, Michigan under a revised development agreement with the City. We are committed to building a larger permanent hotel/casino facility. The revised development agreement contemplates that our permanent casino facility will open by January 2006. We are currently in the process of obtaining land and developing plans for the permanent facility, and currently expect the project to cost approximately $575 million (including land, capitalized interest and preopening expenses, but excluding approximately $115 million of payments to the City under the revised development agreement). The design, budget and schedule of the permanent facility are not finalized, and the ultimate timing, cost and scope of the facility is subject to risks attendant to large-scale projects. The ability to construct the permanent casino facility is currently subject to resolution of the Lac Vieux litigation. Pending the resolution of this litigation, the 6^th Circuit Court of Appeals has issued an injunction, pending appeal, prohibiting the City and the developers from commencing construction pending further action of the 6^th Circuit Court. Therefore, we do not know when we will be able to commence construction of, or complete, the permanent facility.

• Our business is affected by general economic and market conditions, both in the markets in which we operate and in the locations our customers reside. Bellagio, MGM Grand Las Vegas and The Mirage are particularly affected by economic conditions in the Far East, and all of our Nevada resorts are affected by economic conditions in the United States, and California in particular. A recession or economic slowdown could cause a reduction in visitation to our resorts, which would adversely affect our operating results.

• We are a large consumer of electricity and other energy. Accordingly, increases in energy costs, such as those experienced recently in Nevada, have a negative impact on our operating results. Additionally, higher energy and gasoline prices which affect our customers may result in reduced visitation to our resorts and a reduction in our revenues.

• Many of our customers travel by air. As a result, the cost and availability of air service and the impact of events like those of September 11, 2001, can affect our business. Additionally, there is one principal interstate highway between Las Vegas and Southern California, where a large number of our customers reside. Capacity restraints of that highway or any other traffic disruptions may affect the number of customers who visit our facilities.

• The events of September 11, 2001, and the potential for future terrorist attacks or acts of war or hostility, have created many economic and political uncertainties that could adversely impact our business levels and results of operations. Leisure and business travel, especially travel by air, remain particularly susceptible to global geopolitical events. Furthermore, although we have been able to purchase some insurance coverage for certain types of terrorist acts, insurance coverage against loss or business interruption resulting from war and some forms of terrorism continues to be unavailable.

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• Our plans for future construction can be affected by a number of factors, including time delays in obtaining necessary governmental permits and approvals and legal challenges. We may make changes in project scope, budgets and schedules for competitive, aesthetic or other reasons, and these changes may also result from circumstances beyond our control. These circumstances include weather interference, shortages of materials and labor, work stoppages, labor disputes, unforeseen engineering, environmental or geological problems and unanticipated cost increases. Any of these circumstances could give rise to delays or cost overruns. Major expansion projects at our existing resorts can also result in disruption of our business during the construction period.

• Claims have been brought against us and our subsidiaries in various legal proceedings, and additional legal and tax claims arise from time to time. It is possible that our cash flows and results of operations could be affected by the resolution of these claims. We believe that the ultimate disposition of current matters will not have a material impact on our financial condition or results of operations. Please see the further discussion under “Legal Proceedings” in Item 3 of this Form 10-K.

• There is intense competition to attract and retain qualified management and other employees in the gaming industry. Our inability to recruit or retain personnel could adversely affect our business.

• Tracinda Corporation beneficially owns approximately 57% of our outstanding common stock as of December 31, 2003. As a result, Tracinda Corporation has the ability to elect our entire Board of Directors and determine the outcome of other matters submitted to our stockholders, such as the approval of significant transactions.

          You should also be aware that while we from time to time communicate with securities analysts, we do not disclose to them any material non-public information, internal forecasts or other confidential business information. Therefore, you should not assume that we agree with any statement or report issued by any analyst, irrespective of the content of the statement or report. To the extent that reports issued by securities analysts contain projections, forecasts or opinions, those reports are not our responsibility.

Executive Officers of the Registrant

          The following table sets forth, as of February 13, 2004, the name, age and position of each of our executive officers. Executive officers are elected by and serve at the pleasure of the Board of Directors.

Name	Age		Position
J. Terrence Lanni		60	Chairman and Chief Executive Officer
James J. Murren		42	President, Chief Financial Officer, Treasurer and Director
John T. Redmond		45	President and Chief Executive Officer of MGM Grand Resorts, LLC and Director
Robert H. Baldwin		53	President and Chief Executive Officer of Mirage Resorts, Incorporated and Director
Gary N. Jacobs		58	Executive Vice President, General Counsel, Secretary and Director
William J. Hornbuckle		46	Executive Vice President—Marketing
Alan Feldman		45	Senior Vice President—Public Affairs
Phyllis A. James		51	Senior Vice President and Senior Counsel
Cynthia Kiser Murphey		46	Senior Vice President—Human Resources
Glenn D. Bonner		52	Vice President—Chief Information Officer
Daniel J. D’Arrigo		35	Vice President—Finance
Kyle Edwards		51	Vice President—Security
Anthony Gladney		39	Vice President—National Diversity Relations
Shelley A. Mansholt		41	Vice President—Corporate Communications
Punam Mathur		43	Vice President—Corporate Diversity and Community Affairs
Jennifer D. Michaels		35	Vice President—Public Relations
Robert W. Rudloff		45	Vice President—Internal Audit
Shawn T. Sani		38	Vice President—Taxes
Robert C. Selwood		48	Vice President—Accounting
Bryan L. Wright		40	Vice President, Assistant General Counsel and Assistant Secretary

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          Mr. Lanni has served as Chairman of the Company since July 1995. He served as Chief Executive Officer of the Company from June 1995 to December 1999, and since March 2001.

          Mr. Murren has served as President of the Company since December 1999, as Chief Financial Officer since January 1998 and as Treasurer since November 2001. He served as Executive Vice President of the Company from January 1998 to December 1999. Prior thereto, he was Managing Director and Co-Director of Research for Deutsche Morgan Grenfell, having served that firm in various other capacities since 1984.

          Mr. Redmond has served as President and Chief Executive Officer of MGM Grand Resorts, LLC since March 2001. He served as Co-Chief Executive Officer of the Company from December 1999 to March 2001. He served as President and Chief Operating Officer of Primadonna Resorts from March 1999 to December 1999. He served as Vice Chairman of MGM Grand Detroit, LLC from April 1998 to February 2000, and as its Chairman since February 2000. He served as Senior Vice President of MGM Grand Development, Inc. from August 1996 to September 1998. Prior thereto, he was Senior Vice President and Chief Financial Officer of Caesars World, Inc.’s Caesars Palace and Desert Inn hotel-casinos and served in various other senior operational and development positions with Caesars World, Inc.

          Mr. Baldwin has served as President and Chief Executive Officer of Mirage since June 2000. He served as Chief Financial Officer and Treasurer of Mirage from September 1999 to June 2000. He has been President and Chief Executive Officer of Bellagio, LLC or its predecessor since June 1996. He served as President and Chief Executive Officer of The Mirage from August 1987 to April 1997.

          Mr. Jacobs has served as Executive Vice President and General Counsel of the Company since June 2000 and as Secretary since January 2002. Prior thereto, he was a partner with the law firm of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, and is currently of counsel to that firm.

          Mr. Hornbuckle has served as Executive Vice President—Marketing of the Company since July 2001. He served as President and Chief Operating Officer of MGM Grand Las Vegas from October 1998 to July 2001. He served as Executive Vice President of Operations of MGM Grand Las Vegas from April 1998 to October 1998. Prior thereto, he served as President and Chief Operating Officer of Planet Hollywood Hotel and served in various other senior operational positions with Caesars World, Inc. and TI.

          Mr. Feldman has served as Senior Vice President—Public Affairs of the Company since September 2001. He served as Vice President — Public Affairs of the Company from June 2000 to September 2001, and served as Vice President of Public Affairs for Mirage from March 1990 through May 2000.

          Ms. James has served as Senior Vice President and Senior Counsel of the Company since March 2002. From 1994 through 2001 she served as Corporation (General) Counsel and Law Department Director for the City of Detroit. In that capacity she also served on various public and quasi-public boards and commissions on behalf of the City, including the Election Commission, the Detroit Building Authority and the Board of Ethics. Prior thereto, from 1985 until 1994, she practiced law as a partner with the firm of Pillsbury, Madison & Sutro.

          Ms. Murphey has served as Senior Vice President—Human Resources of the Company since November 2000. She served as Senior Vice President—Human Resources and Administration of MGM Grand Las Vegas from November 1995 through October 2000.

          Mr. Bonner has served as Vice President—Chief Information Officer of the Company since June 2000. He served as Chief Information Officer of Mirage from January 1997 through May 2000. Prior thereto, he was a Managing Consultant with Microsoft Corporation from October 1994 through January 1997.

          Mr. D’Arrigo has served as Vice President—Finance of the Company since December 2000. He served as Assistant Vice President of the Company from January 2000 through December 2000. Prior thereto, he served as Director of Corporate Finance of the Company from January 1997 through January 2000 and as Manager of Corporate Finance of the Company from October 1995 through January 1997.

          Mr. Edwards has served as Vice President—Security of the Company since December 1999. Prior thereto, he served as Deputy Chief of the Patrol Division and Investigative Services Division of the Las Vegas Metropolitan Police Department (“LVMPD”), having served in various other senior capacities with the LVMPD since 1973.

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          Mr. Gladney has served as Vice President—National Diversity Relations of the Company since December 2001. He served as Vice President—Corporate Diversity of the Company from August 2000 through December 2001 and as Vice President of Community Affairs of MGM Grand Las Vegas from March 1999 through August 2000. Prior thereto, he served as Executive Director of Community Affairs of MGM Grand Las Vegas from February 1997 through March 1999, and as Director of Community Affairs of MGM Grand Las Vegas from January 1996 through February 1997.

          Ms. Mansholt has served as Vice President—Corporate Communications of the Company since December 2001. She was Assistant Vice President of Public Relations of the Company from June 2000 to December 2001. She served as Assistant Vice President of Public Relations for MGM Grand Las Vegas from 1997 through May 2000 and was Assistant Vice President of Entertainment Sales & Marketing for MGM Grand Las Vegas from 1996 to 1997.

          Ms. Mathur has served as Vice President—Corporate Diversity and Community Affairs of the Company since December 2001. She served as Vice President—Community Affairs of the Company from November 2000 through December 2001 and as Director of Community Affairs of the Company from June 2000 through October 2000. She served as Director of Community Affairs of Mirage from April 1996 through May 2000.

          Ms. Michaels has served as Vice President—Public Relations of the Company since November 2001. She was Assistant Vice President of Public Relations from June 2000 through November 2001 and Director of Public Relations for Mirage from 1998 through May 2000. Prior thereto, she had been the Assistant Director of Public Relations for Mirage since 1995.

          Mr. Rudloff has served as Vice President—Internal Audit of the Company since June 2003. Prior thereto, he served as a Director of Internal Audit Services for PricewaterhouseCoopers, LLP from January 1998 to June 2003 and as Corporate Director of Internal Audit for Trump Hotels & Casino Resorts, Inc. from June 1996 to January 1998.

          Mr. Sani has served as Vice President—Taxes of the Company since June 2002. Prior thereto he was a Partner in the Transaction Advisory Services practice of Arthur Andersen LLP, having served that firm in various other capacities since 1988.

          Mr. Selwood has served as Vice President—Accounting of the Company since December 2000. He served as Director of Corporate Finance of Mirage from April 1993 through December 2000.

          Mr. Wright has served as Vice President and Assistant General Counsel of the Company since July 2001 and as its Assistant Secretary since January 2002. Prior thereto, he served as Vice President and Assistant General Counsel of Boyd Gaming Corporation from February 2000 to July 2001 and as Associate General Counsel of Boyd Gaming Corporation from September 1993 to February 2000.

Available Information

          We maintain a website, www.mgmmirage.com, which includes financial and other information for investors. We provide access to our SEC filings on our website, free of charge, through a link to the SEC’s EDGAR database. Through that link, our filings are available as soon as reasonably practicable after we file the documents.

ITEM 2. PROPERTIES

          Substantially all of the Company’s assets other than assets of its foreign subsidiaries and certain assets in use at MGM Grand Detroit have been pledged as collateral for our senior notes and principal credit facilities. These notes and facilities had outstanding balances of approximately $4.4 billion at December 31, 2003.

          Bellagio occupies an approximately 90-acre site. We own the entire site except for one acre which we lease under a ground lease that expires (giving effect to our options to renew) in 2073. Our principal executive offices are located at Bellagio. MGM Grand Las Vegas occupies an approximately 116-acre site which we own – we will contribute 3 acres to the venture formed with Turnberry Associates to develop luxury condominium towers. The Mirage and TI share an approximately 100-acre site which we own. New York-New York occupies an approximately 20-acre site which we own.

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          The Primm Valley Resorts are located on approximately 143 acres. We lease substantially all of the land under a ground lease that expires (giving effect to our renewal option) in 2068. We own approximately 16 acres immediately north of Buffalo Bill’s. We also own approximately 573 acres in California, four miles south of Primm, which is the location of the Primm Valley Golf Club. Approximately 125 of these acres remain available for future development. Primm Valley Resorts are not served by a municipal water system. We have rights to water in various wells located on federal land in the vicinity of the Primm Valley Resorts and have received permits to pipe the water to the Primm Valley Resorts. These permits and rights are subject to the jurisdiction and ongoing regulatory authority of the U.S. Bureau of Land Management, the States of Nevada and California and local governmental units. We believe that adequate water for the Primm Valley Resorts is available; however, we cannot be certain that the future needs will be within the permitted allowance. Also, we can give no assurance that any future requests for additional water will be approved or that no further requirements will be imposed by governmental agencies on our use and delivery of water for the Primm Valley Resorts.

          The Boardwalk occupies an approximately nine-acre site which we own. We also own approximately 40 acres of property adjacent to the Boardwalk which is available for future development. Monte Carlo occupies approximately 46 acres owned by Victoria Partners (the joint venture that owns and operates Monte Carlo). We own approximately 306 acres of land in North Las Vegas, including 240 acres occupied by Shadow Creek.

          MGM Grand Detroit is located on approximately 8 acres which we own. Beau Rivage occupies approximately 41 acres (including 10 acres of tidelands) in Biloxi, Mississippi. We own the land and we lease the tidelands from the State of Mississippi under a lease that expires (giving effect to our option to renew) in 2049. We also own approximately 508 acres in the Biloxi area for future development.

          MGM Grand Australia occupies an approximately 18-acre site which we own. At December 31, 2003, MGM Grand Australia was subject to a mortgage securing bank financing of approximately $12 million.

          We own approximately 185 acres in Atlantic City consisting principally of three different parcels in casino-zoned areas. Borgata occupies 29 acres at Renaissance Pointe, including two acres we lease to Borgata and on which Borgata constructed its employee parking garage. The remaining 27 acres Borgata occupies is owned by the venture and collateralized by a mortgage securing bank credit facilities in the amount of up to $630 million. As of December 31, 2003, $606 million was outstanding under the bank credit facility.

          We also own or lease various other improved and unimproved property in Las Vegas and other locations in the United States and certain foreign countries.

ITEM 3. LEGAL PROCEEDINGS

     Poulos Slot Machine Litigation

          On April 26, 1994, an individual filed a complaint in a class action lawsuit in the United States District Court for the Middle District of Florida against 41 manufacturers, distributors and casino operators of video poker and electronic slot machines, including the Company. On May 10, 1994, another plaintiff filed a complaint in a class action lawsuit alleging substantially the same claims in the same court against 48 defendants, including the Company. On September 26, 1995, another plaintiff filed a complaint in a class action lawsuit alleging substantially the same claims in the United States District Court for the District of Nevada against 45 defendants, including the Company. The court consolidated the three cases in the United States District Court for the District of Nevada.

          The consolidated complaint claims that we and the other defendants have engaged in a course of fraudulent and misleading conduct intended to induce people to play video poker and electronic slot machines based on a false belief concerning how the gaming machines operate, as well as the chances of winning. Specifically, the plaintiffs allege that the gaming machines are not truly random as advertised to the public, but are pre-programmed in a predictable and manipulative manner. The complaint alleges violations of the Racketeer Influenced and Corrupt Organizations Act, as well as claims of common law fraud, unjust enrichment and negligent misrepresentation, and asks for unspecified compensatory and punitive damages. In December 1997, the court granted in part and denied in part the defendants’ motions to dismiss the complaint for failure to state a claim and ordered the plaintiffs to file an amended complaint, which they filed in February 1998. We, along with most of the other defendants, answered the amended complaint and continue to deny the allegations contained in the amended complaint. The parties have fully briefed the issues regarding class certification, which are currently pending before the court.

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          In June 2002, the U.S. District Court in Nevada ruled that the plaintiffs met the prerequisite requirements for class-action status, but the Court denied the plaintiff’s motion for class action certification, saying that the proposed class lacked the cohesiveness required to settle common claims against the casino industry. The court had previously stayed discovery pending resolution of these class certification issues. In August 2002, the 9^th Circuit Court of Appeals granted the plaintiffs the right to appeal the district court’s order denying the motion for class certification. Briefings before the 9^th Circuit Court have been completed and oral arguments were presented in January 2004. A ruling from the 9^th Circuit Court is expected sometime in 2004.

     Boardwalk Shareholder Litigation

          On September 28, 1999, a former stockholder of our subsidiary which owns and operates the Boardwalk Hotel and Casino filed a first amended complaint in a putative class action lawsuit in District Court for Clark County, Nevada against Mirage and certain former directors and principal stockholders of the Boardwalk subsidiary. The complaint alleged that Mirage induced the other defendants to breach their fiduciary duties to Boardwalk’s minority stockholders by devising and implementing a scheme by which Mirage acquired Boardwalk at significantly less than the true value of its shares. The complaint sought an unspecified amount of compensatory damages from Mirage and punitive damages from the other defendants, whom we are required to defend and indemnify.

          In June 2000, the court granted our motion to dismiss the complaint for failure to state a claim upon which relief may be granted. The plaintiff appealed the ruling to the Nevada Supreme Court. The parties filed briefs with the Nevada Supreme Court, and oral arguments were conducted in October 2001. In February 2003, the Nevada Supreme Court overturned the District Court’s order granting our motion to dismiss the complaint and remanded the case to the District Court for further proceedings on the elements of the lawsuit involving wrongful conduct in approving the merger and/or in the valuation of the merged corporation’s shares. The Nevada Supreme Court affirmed the District Court’s dismissal of the plaintiff’s claims for lost profits and mismanagement. The Nevada Supreme Court’s ruling relates only to the District Court’s ruling on our motion to dismiss and is not a determination of the merits of the plaintiff’s case. The plaintiff filed an amended complaint, and in October 2003, the District Court certified the action as a class action. Written discovery is underway, and depositions are expected to occur sometime in 2004. We will continue to vigorously defend our position that the plaintiff’s claims are without merit.

     Detroit Slot Machine Litigation

          On July 18, 2001, an individual, Mary Kraft, filed a complaint in the Wayne County Circuit Court in Detroit, Michigan, against International Game Technology, Anchor Gaming, Inc. and the three operators of casinos in Detroit, Michigan, including a subsidiary of the Company. The plaintiff claims the bonus wheel feature of the Wheel of Fortune® and I Dream of Jeannie™ slot machines, which are manufactured, designed and programmed by International Game Technology and/or Anchor Gaming, Inc., are deceptive and misleading. Specifically, plaintiff alleges that the bonus wheels on these games do not randomly land on a given dollar amount but are programmed to provide a predetermined frequency of pay-outs. The complaint alleges violations of the Michigan Consumer Protection Act, common law fraud and unjust enrichment and asks for unspecified compensatory and punitive damages, disgorgement of profits, injunctive and other equitable relief, and costs and attorney’s fees. The plaintiff seeks to certify a class of any individual in Michigan who has played either of these games since June of 1999. The machines and their programs were approved for use by the Michigan Gaming Control Board, the administrative agency responsible for policing the Detroit casinos.

          We, along with the other casino operators, filed a motion for summary disposition arguing that the plaintiff’s complaint fails to state a claim as a matter of law. Additionally, we, along with the other casino operators, filed motions for summary disposition arguing that the plaintiff’s common law claims are preempted by the Michigan Act, that the court has no jurisdiction to decide this matter and that all the allegations in the complaint regarding the alleged deceptive nature of the machines are directed to the manufacturers of the machines and are not the casinos’ responsibility. In April 2002, the Wayne County Circuit Court granted the motion for summary disposition. The plaintiff appealed and, after a full briefing of the case, oral argument was held in November 2003. The Michigan Court of Appeals has not yet issued a decision on the appeal.

     Lac Vieux Litigation

          In January 2002, the 6^th Circuit Court of Appeals ruled, in the case of Lac Vieux Desert Band of Lake Superior Chippewa Indians v. Michigan Gaming Control Board, et. al., that a preference contained in the Detroit Casino Selection Process Ordinance, in Detroit, Michigan, violated the First Amendment to the United States Constitution. The 6^th Circuit Court remanded the case to the Federal District Court to determine what relief was appropriate. The Company’s operating subsidiary had not been granted a preference by the City of Detroit, and was not originally a party to the Lac Vieux litigation. In April 2002, such subsidiary intervened in the Lac Vieux litigation in order to protect its interest.

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          In July 2002, the District Court denied the Lac Vieux Tribe’s request for a new casino development selection process in the City of Detroit, finding that the magnitude of such relief was not warranted and that the harm to the casino licensees and the City would be manifestly worse than any benefit the Tribe might receive. The District Court declared that our subsidiary did not receive a preference and, in fact, was injured by the preference. The Federal District Court determined that the only relief that it could equitably grant to the Tribe was declaring the ordinance unconstitutional. Our subsidiary had previously petitioned the Court for a ruling that its selection was valid in that it did not receive any preferences in the selection process. In light of the ruling that no further relief would be granted to the Tribe, the Court denied this motion on the ground of mootness. The Tribe appealed the District Court’s ruling, and the Tribe requested that the District Court enjoin the City from approving new development agreements with the three casino developers until resolution of the appeal by the 6^th Circuit Court. The District Court denied the request for the injunction, and the appeal is pending. Our subsidiary filed a cross appeal of the District Court’s denial of the subsidiary’s motion.

          In September 2002, the 6^th Circuit Court issued an injunction, pending appeal, prohibiting the City from issuing construction permits to the developers and prohibiting the developers from commencing construction pending further action of the 6^th Circuit Court. The parties completed briefings of the case in August 2003. We argued, among other things, that the preference provisions of the ordinance found unconstitutional are severable from the valid provisions of the ordinance, and that our subsidiary was not eligible for and did not seek or receive a preference in the selection process. The 6^th Circuit Court has not set a schedule for argument of the appeal.

          In December 2003, the Tribe and the owners of the two other casinos filed a joint motion with the 6^th Circuit Court requesting approval of the terms of a partial settlement, asserted to have resolved the case among the filing parties. The settlement calls for exemption of those developers from a reselection process and other related relief, in exchange for cash payments to the Tribe, but purports to continue the Tribe’s appeal as it relates to our subsidiary. In a subsequent filing, the settling parties requested that issues pertaining to this partial settlement be remanded to the District Court for consideration. We filed a responsive motion with the 6^th Circuit Court requesting dismissal of the appeal as moot, or, upon denial of such relief, expedited decision of our cross appeal and a full briefing on the issues surrounding the proposed partial settlement. These motions remain pending.

     Other

          We and our subsidiaries are also defendants in various other lawsuits, most of which relate to routine matters incidental to our business. We do not believe that the outcome of this other pending litigation, considered in the aggregate, will have a material adverse effect on the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          There were no matters submitted to a vote of our security holders during the fourth quarter of 2003.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

          Our common stock is traded on the New York Stock Exchange under the symbol “MGG.” The following table sets forth, for the calendar quarters indicated, the high and low sale prices of our common stock on the New York Stock Exchange Composite Tape.

	2003				2002
	High		Low		High		Low
First quarter	$	34.45	$	24.09	$	37.20	$	28.00
Second quarter		35.50		26.40		42.00		32.55
Third quarter		38.59		32.03		37.85		27.80
Fourth quarter		38.20		34.05		38.80		29.85

          There were approximately 3,538 record holders of our common stock as of February 4, 2004.

          We have not paid dividends on our common stock in the last two fiscal years. We intend to retain our earnings to fund the operation of our business, to service and repay our debt, to make strategic investments in high return growth projects at our proven resorts, to repurchase shares of common stock and to reserve our capital to raise our capacity to capture investment opportunities overseas and in emerging domestic markets. Furthermore, as a holding company with no independent operations, our ability to pay dividends will depend upon the receipt of dividends and other payment from our subsidiaries. Our senior credit facility contains financial covenants that could restrict our ability to pay dividends. Our Board of Directors periodically reviews our policy with respect to dividends, and any determination to pay dividends in the future will be at the sole discretion of the Board of Directors.

          The following table includes information about our stock option plans at December 31, 2003:

	Number of securities				Number of securities
	to be issued upon		Weighted average		remaining available
	exercise of		exercise price of		for future issuance
	outstanding options,		outstanding options,		under equity
	warrants and rights		warrants and rights		compensation plans
	(in thousands, except per share data)
Equity compensation plans approved by security holders		20,867	$	27.37		2,038
Equity compensation plans not approved by security holders (1)		—		—		—

(1) In May 2002, the Board of Directors approved a restricted stock plan, not approved by security holders, under which 903,000 shares were issued and 887,000 shares remained outstanding at December 31, 2003. In November 2002, the Board of Directors determined that no more restricted stock awards would be granted.

          Our share repurchases are only conducted under repurchase programs approved by our Board of Directors and publicly announced. The following table includes information about our share repurchases for the quarter ended December 31, 2003:

					Shares Purchased		Maximum
	Total		Average		As Part of a		Shares Still
	Shares		Price Per		Publicly-Announced		Available for
	Purchased		Share		Program		Repurchase
October 1 – October 31, 2003		3,849,200	$	36.03		3,849,200		114,800	(1)
November 1 – November 30, 2003		2,028,200		35.37		2,028,200		8,086,600	(2)
December 1 – December 31, 2003		86,600		37.21		86,600		8,000,000	(2)
		5,964,000		35.82		5,964,000

(1)	The February 2003 repurchase program was announced in February 2003 for up to 10 million shares with no expiration. The February 2003 program was completed in November 2003.
(2)	The November 2003 repurchase program was announced in November 2003 for up to 10 million shares with no expiration.

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ITEM 6. SELECTED FINANCIAL DATA

		For the Years Ended December 31,
		2003		2002		2001		2000		1999
		(In thousands, except per share data)
Net revenues		$	3,908,816	$	3,792,248	$	3,731,636	$	2,947,221	$	1,330,853
Operating income			713,069		757,747		609,693		527,686		209,868
Income from continuing operations			237,112		295,200		165,188		159,819		94,226
Income before cumulative effect of change in accounting principle			243,697		292,435		169,815		160,744		94,226
Net income			243,697		292,435		169,815		160,744		86,058
Basic earnings per share
	Income from continuing operations	$	1.59	$	1.87	$	1.04	$	1.10	$	0.81
	Income before cumulative effect of change in accounting principle	$	1.64	$	1.85	$	1.07	$	1.11	$	0.81
	Net income per share	$	1.64	$	1.85	$	1.07	$	1.11	$	0.74
	Weighted average number of shares		148,930		157,809		158,771		145,300		116,580
Diluted earnings per share
	Income from continuing operations	$	1.56	$	1.85	$	1.03	$	1.08	$	0.78
	Income before cumulative effect of change in accounting principle	$	1.61	$	1.83	$	1.06	$	1.09	$	0.78
	Net income per share	$	1.61	$	1.83	$	1.06	$	1.09	$	0.72
	Weighted average number of shares		151,592		159,940		160,822		147,901		120,086
Cash dividends per share (1)		$	—	$	—	$	—	$	0.10	$	—
At year-end
	Total assets	$	10,709,710	$	10,504,985	$	10,497,443	$	10,734,601	$	2,743,454
	Total debt, including capital leases		5,533,462		5,222,195		5,465,608		5,880,819		1,330,206
	Stockholders’ equity		2,533,788		2,664,144		2,510,700		2,382,445		1,023,201
	Stockholders’ equity per share	$	17.71	$	17.24	$	15.95	$	14.97	$	8.98
	Number of shares outstanding		143,096		154,574		157,396		159,130		113,880

(1) On December 13, 1999 the Board of Directors approved an initial quarterly cash dividend of $0.10 per share to stockholders of record on February 10, 2000. The dividend was paid on March 1, 2000. As a result of the acquisition of Mirage Resorts, Incorporated, we announced on April 19, 2000 that the quarterly dividend policy was discontinued.

          New York-New York was 50% owned until March 1, 1999 when the Company acquired the remaining 50%. The Primm Valley Resorts were acquired on March 1, 1999. MGM Grand South Africa managed casinos in the Republic of South Africa from October 1997 through May 2002. MGM Grand Detroit commenced operations in July 1999. The Mirage acquisition occurred on May 31, 2000.

          In June 2003, we entered into an agreement to sell our Golden Nugget Subsidiaries, including substantially all of the assets and liabilities of those resorts. This transaction closed in January 2004. Also in June 2003, we ceased operations of PLAYMGMMIRAGE.com, our online gaming website (“Online”). The results of the Golden Nugget Subsidiaries and Online are classified as discontinued operations for all periods presented.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Our Current Operations

          Our operations consist of 12 wholly-owned casino resorts and 50% investments in two other casino resorts, including:

Las Vegas, Nevada:	Bellagio, MGM Grand Las Vegas, The Mirage, TI, New York-New York, Boardwalk, and Monte Carlo (50% owned).
Other domestic:	The Primm Valley Resorts (Buffalo Bill’s, Primm Valley Resort and Whiskey Pete’s) in Primm, Nevada; Beau Rivage in Biloxi, Mississippi; MGM Grand Detroit; Borgata (50% owned) in Atlantic City, New Jersey.
International:	MGM Grand Australia in Darwin, Northern Territory, Australia

          We operate in one segment, the operation of casino resorts, which includes offering gaming, hotel, dining, entertainment, retail and other resort amenities. Slightly over half of our net revenues are derived from gaming activities, a lower percentage than many of our competitors, as our operating philosophy is to provide a complete resort experience for our guests, including non-gaming amenities which command a premium price based on their quality.

          We generate a majority of our net revenues and operating income from our Las Vegas Strip resorts. In 2003, over 75% of our net revenues and operating income was generated by wholly-owned Las Vegas Strip resorts. We believe that we own the premier casino resorts on the Las Vegas Strip, and a main focus of our strategy is to continually reinvest in these resorts to maintain that competitive advantage. Our concentration on the Las Vegas Strip exposes us to certain risks outside of our control, such as competition from other Las Vegas Strip resorts, including a major new competitor expected to open in 2005, and the impact from potential expansion of gaming in California. This concentration also exposes us to risks related to tourism and the general economy, including national and global economic conditions and terrorist attacks or other global events.

     Key Performance Indicators

          As a resort-based company, our operating results are highly dependent on the volume of customers at our resorts, which in turn impacts the price we can charge for our hotel rooms and other amenities. We also generate a significant portion of our operating income from the high-end gaming segment, which can cause variability in our results. Key performance indicators related to revenue are:

• Gaming revenue indicators – table games drop and slot handle (volume indicators); “win” or “hold” percentage, which is not fully controllable by us. Our normal table games win percentage is in the range of 18% to 22% of table games drop and our normal slot win percentage is in the range of 6% to 7% of slot handle;

• Hotel revenue indicators – hotel occupancy (volume indicator); average daily rate (“ADR”, price indicator); revenue per available room (“REVPAR”), a summary measure of hotel results, combining ADR and occupancy rate.

          Most of our revenue is essentially cash-based, through customers wagering with cash or paying for non-gaming services with cash or credit cards. Our resorts, like many in the industry, generate significant operating cash flow. Our industry is capital intensive and we rely heavily on the ability of our resorts to generate operating cash flow to repay debt financing, fund maintenance capital expenditures and provide excess cash for future development.

          Our results of operations do not tend to be seasonal in nature, though a variety of factors can affect the results of any interim period, including the timing of major Las Vegas conventions, the amount and timing of marketing and special events for our high-end customers, and the level of play during major holidays, including New Year and Chinese New Year.

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     Overall Outlook

          We have invested heavily in our existing operations in 2002 and 2003, and expect to continue to do so in 2004. Our Las Vegas Strip resorts require ongoing capital investment to maintain their competitive advantages. We believe the investments in additional non-gaming amenities we made in 2003 and our planned spending in 2004 will further position our resorts to capitalize on the expected continued economic recovery. Borgata, which opened in July 2003, will have a more meaningful impact on our operating results in 2004, given a full year of operations.

          MGM Grand Detroit operates in an interim casino facility, and we have plans to develop a permanent casino resort, though our ability to do so is currently limited pending resolution of certain litigation. We expect the permanent casino resort to cost approximately $575 million, a significant amount of which may be invested in 2004 and 2005.

          We have made several strategic agreements to take advantage of currently proposed gaming law reforms in the United Kingdom. The timing of adoption of these reforms, if they are adopted at all, is uncertain. However, we believe that the gaming market in the UK would be profitable assuming a reasonable tax and regulatory structure, and a market in which our style of resorts and our management expertise would provide us with a competitive advantage.

          In January 2004, we announced the proposed acquisition of Wembley plc. If completed, this acquisition would provide us with a gaming facility in Rhode Island, allowing us to further diversify into the northeast United States, a gaming market we consider to be under-served. Wembley also owns several greyhound tracks in the United Kingdom, which could provide sites for additional casino development, subject to the same risks and uncertainties as our other potential investments in the United Kingdom.

          We also own two premium casino development sites in existing markets, one on the Las Vegas Strip between Bellagio and Monte Carlo and one at Renaissance Pointe in Atlantic City, adjacent to Borgata. The timing or extent of any development on these sites is uncertain.

     Summary Financial Results

          The following table summarizes our results of operations:

	Year Ended December 31,
			Percentage					Percentage
	2003		Change			2002		Change			2001
	(In thousands, except per share data)
Net revenues	$	3,908,816		3	%	$	3,792,248		2	%	$	3,731,636
Operating income		713,069		(6	%)		757,747		24	%		609,693
Income from continuing operations		237,112		(20	%)		295,200		79	%		165,188
Diluted income from continuing operations per share	$	1.56		(16	%)	$	1.85		80	%	$	1.03

          Income from continuing operations decreased in 2003 due to lower operating income and higher interest expense resulting from lower capitalized interest and, to a lesser extent, increased borrowings. Our long-term debt increased approximately 6%, primarily in the fourth quarter, in order to fund capital investments and share repurchases. In 2002, income from continuing operations increased as a result of the significant one-time expenses incurred in 2001, along with stable payroll expenses as a result of restructuring activity in late 2001 and a significantly lower provision for doubtful accounts. Also contributing to the increase in 2002 was significantly lower interest expense, as variable interest rates decreased in 2002 and we reduced long-term debt by approximately 4% in 2002.

          Results on a per share basis were positively impacted by a lower weighted average number of shares outstanding, particularly in 2003. This is the result of share repurchases throughout 2002 and 2003.

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     Operating Results

          The following table includes key information about our operating results:

				Year Ended December 31,
						Percentage					Percentage
			2003			Change			2002		Change			2001
									(In thousands)
Net revenues				$	3,908,816		3	%	$	3,792,248		2	%	$	3,731,636
Operating expenses:
		Casino and hotel operations			2,174,539		6	%		2,060,204		(3	%)		2,118,687
		General and administrative			591,155		4	%		566,080		2	%		552,916
		Corporate expense			61,541		40	%		43,856		17	%		37,637
		Preopening, restructuring and property transactions, net			17,527		48	%		11,832		(84	%)		73,574
		Depreciation and amortization			404,597		5	%		384,890		2	%		375,945
					3,249,359		6	%		3,066,862		(3	%)		3,158,759
Income from unconsolidated affiliates					53,612		66	%		32,361		(12	%)		36,816
	Operating income			$	713,069		(6	%)	$	757,747		24	%	$	609,693

          On a consolidated basis, the most important factors and trends contributing to our operating performance over the last three years have been:

• The significant impacts of the attacks of September 11, 2001. Business levels before the attacks were very strong, despite a weakening United States economy. The impact of the attacks caused a significant drop in leisure travel and contributed to the weakening economy and stock market declines experienced in 2002 and into 2003;

• The restructuring of operations in response to the attacks, which positively impacted 2002 operating results due to generally lower staffing levels;

• The war with Iraq and the outbreak of SARS in Asia, both of which negatively impacted leisure travel and our high-end gaming business in late 2002 and early 2003;

• The new labor contract covering our Las Vegas Strip employees since mid-2002, which calls for significant annual wage and benefits increases through 2007;

• The current economic recovery in the United States, which began to impact our operations in the latter half of 2003 and should continue to positively affect our results in 2004.

          As a result of the above trends, our net revenues increased 3% in 2003, including a higher percentage increase in the second half of the year, while increasing only 2% in 2002. New York-New York experienced a 23% increase in net revenues due to the addition of Zumanity, the newest show from Cirque du Soleil, which opened in August 2003 and other amenities, including a new Irish pub, Nine Fine Irishmen, which opened in July 2003. Bellagio’s revenues were flat despite the negative effects of SARS and the Iraq war in early 2003 and having 17% of its standard rooms out of service in the fourth quarter. Bellagio’s REVPAR increased 7% for the year, but on a base of fewer rooms due to an ongoing project to remodel all of Bellagio’s standard rooms. Bellagio’s other indicators were also strong, including a 5% increase in slot revenues. Similarly, net revenues increased 3% at MGM Grand Las Vegas, with a higher rate of increase in the second half of 2003 due to increased non-gaming spending and the addition of several new food and beverage outlets.

          Our operating income in 2003 decreased 6%, due primarily to higher payroll and benefits expenses, which constitutes slightly over half of our casino and hotel operations and general and administrative expenses. Total payroll and benefits was up 6%, largely due to a 19% increase in health insurance costs, along with 3% higher salaries and wages. Our contract with the Culinary Union covering approximately 13,000 of our Las Vegas employees became effective June 1, 2002. The contract calls for increases in wages and health and welfare contributions of 4-5% per year over the five year term of the contract. The increase in payroll and benefits was partially offset by higher income from unconsolidated affiliates after Borgata opened in July 2003.

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          Operating income at Bellagio decreased 22% in 2003 due to the additional impact of the standard room remodel project. New York-New York’s operating income increased as a result of the contribution of Zumanity and other new amenities. MGM Grand Las Vegas experienced a 5% decline in operating income in 2003. However, excluding restructuring charges related to restaurant leases, preopening and start-up expenses related to new amenities, and property transactions related to the construction of a new theatre, this resort’s operating income would have increased 6%. MGM Grand Las Vegas’ 2004 results will benefit from the theatre, which will house a show by Cirque du Soleil opening in mid-2004. Beau Rivage’s operating income increased significantly over 2002 due to the positive impact of a remodeled and expanded buffet as well as several other new restaurants opened during 2003 and the conversion of a floor of standard rooms into suites. Also, Beau Rivage recorded a charge of $8 million in 2002 for property damage related to Tropical Storm Isidore, while no such costs were incurred in 2003. Corporate expense increased in 2003 due primarily to increased development activities and increased property taxes on the Renaissance Pointe land in Atlantic City, New Jersey.

          In 2002, our operating income increased 24%. A large factor in the increase was the significant one-time expenses incurred in 2001 in relation to the September 11, 2001 attacks, including restructuring charges and asset impairment charges. Excluding the impact of these charges and preopening and start-up expenses, operating income increased 13%, largely due to stable payroll expenses as a result of restructuring activity in late 2001, and a significantly lower provision for doubtful accounts.

     Operating Results – Detailed Revenue Information

          The following table presents detail of our net revenues:

			Year Ended December 31,
						Percentage						Percentage
			2003			Change			2002			Change			2001
			(In thousands)
Casino revenues, net:
	Table games		$	866,106			(3	%)	$	893,836			(2	%)	$	908,418
	Slots			1,115,029			5	%		1,064,491			4	%		1,025,843
	Other			94,434			12	%		84,299			3	%		81,699
		Casino revenues, net		2,075,569			2	%		2,042,626			1	%		2,015,960
Non-casino revenue:
	Rooms			835,938			5	%		798,562			1	%		793,321
	Food and beverage			765,242			8	%		711,373			5	%		680,538
	Entertainment, retail and other			647,710			2	%		637,791			3	%		620,523
		Non-casino revenues		2,248,890			5	%		2,147,726			3	%		2,094,382
				4,324,459			3	%		4,190,352			2	%		4,110,342
Less: Promotional allowances				(415,643	)		4	%		(398,104	)		5	%		(378,706	)
			$	3,908,816			3	%	$	3,792,248			2	%	$	3,731,636

          Table games revenues decreased 2% in 2002, even with a slightly higher hold percentage, resulting from the impacts of the September 11 attacks on our foreign high-end customers and the impacts of the United States economy on our national customers. Table games revenues decreased 3% in 2003, as a slightly lower hold percentage and the impact of the Iraq war and SARS outbreak in early 2003 were not fully offset by strong volume levels over the latter half of 2003.

          Slot revenues increased substantially in both 2002 and 2003. Improvements were the result of enhanced marketing programs, the impact of our Players Club rewards program, which was implemented in our major resorts over 2002 and 2003, and the implementation of cashless gaming technology in 2003. A majority of slot machines at our major resorts now offer ticket-in, ticket-out technology through International Game Technology’s EZ-Pay™ system. Slot win percentages were consistent among all three periods.

          Non-casino revenue increased in 2003 primarily due to increased occupancy at our resorts, which also drives the level of spending at food and beverage, entertainment and retail outlets. In addition, we were able to increase the pricing for our rooms and other non-gaming amenities. Our hotel results began to improve notably in the latter half of 2003, particularly at our Las Vegas Strip resorts. For the year ended December 31, 2003 REVPAR at our Las Vegas Strip resorts was $126 compared to $119 in 2002, an increase of 6%. In 2002, other revenues included proceeds of $11 million for the termination of our management agreement covering four casinos in the Republic of South Africa.

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     Operating Results – Details of Certain Charges

          Preopening and start-up expenses consisted of the following:

	Year Ended December 31,
	2003		2002		2001
			(In thousands)
Borgata	$	19,326	$	7,757	$	2,376
New York-New York (Zumanity, Nine Fine Irishmen)		4,310		—		—
Players Club		3,051		5,117		—
MGM Grand Las Vegas (new restaurants, nightclubs)		1,731		369		745
Other		848		898		1,009
	$	29,266	$	14,141	$	4,130

          Preopening and start-up expenses related to Borgata represent our share of the operating results of Borgata prior to its July 2003 opening. We expect preopening expenses to decrease in 2004 since there will be no preopening expenses related to Borgata.

          Restructuring costs (credit) consisted of the following:

	Year Ended December 31,
	2003		2002			2001
			(In thousands)
Contract termination costs	$	4,049	$	3,257		$	1,880
September 11 attacks		—		(10,421	)		21,502
Siegfried & Roy show closure – The Mirage		1,623		—			—
Reversal of 2000 contract termination costs		—		(9,857	)		—
Other		925		—			—
	$	6,597	$	(17,021	)	$	23,382

          In 2003, our primary restructuring activities included closing two marketing offices and terminating the related leases, terminating a lease agreement with a restaurant tenant at MGM Grand Las Vegas, and closing the Siegfried & Roy show, which resulted in a charge for employee severance costs.

          In December 2002, we recorded a restructuring credit of $10 million related to a lease contract termination accrual originally recorded in June 2000 as we determined that payment under this obligation was not probable. We recorded $3 million of restructuring charges in December 2002 related to contract termination costs for a restaurant lease and the EFX! show at MGM Grand Las Vegas.

          During the third and fourth quarters of 2001, management responded to a decline in business volumes caused by the September 11 attacks by implementing cost containment strategies which included a significant reduction in payroll and a refocusing of several of our marketing programs. Approximately 6,700 employees (on a full-time equivalent basis) were laid off or terminated, resulting in a $22 million charge against earnings, primarily related to the accrual of severance pay, extended health care coverage and other related costs in connection with these personnel reductions. As a result of improving business levels and our success at re-hiring a substantial number of previously laid off or terminated employees, management determined in the second quarter of 2002 that a portion of the remaining accrual was no longer necessary. This resulted in a restructuring credit of $10 million in 2002.

          Property transactions, net consisted of the following:

	Year Ended December 31,
	2003			2002		2001
	(In thousands)
Gain on sale of North Las Vegas land	$	(36,776	)	$	—	$	—
Siegfried & Roy theatre write-down – The Mirage		1,408			—		—
Write-down of Atlantic City Boardwalk land held for sale		—			—		31,501
Tropical Storm Isidore damage – Beau Rivage		—			7,824		—
Write-off of Detroit development costs		—			4,754		—
Impairment of assets to be disposed of		5,764			2,134		14,561
Demolition costs		6,614			—		—
Other net losses on asset sales or disposals		4,654			—		—
	$	(18,336	)	$	14,712	$	46,062

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          In 2003, we sold 315 acres of land in North Las Vegas, Nevada near Shadow Creek for approximately $55 million, resulting in the $37 million gain reflected above. Prior to 2003, we classified gains and losses on routine assets sales or disposals as a non-operating item at some resorts and as an operating item at other resorts. We believe the preferable presentation of these items is as an element of operating income. Prior period statements have not been reclassified as such transactions were not material in the prior periods. Until 2003, demolition costs were typically capitalized as part of new construction. We began expensing demolition costs on major construction projects as incurred on January 1, 2003, and are accounting for this change in policy prospectively. Demolition costs were not material in prior periods. Demolition costs in 2003 relate to preparation for the Bellagio standard room remodel, Bellagio expansion and new theatre at MGM Grand Las Vegas. Impairments of assets to be disposed of in 2003 consisted primarily of assets related to the former EFX! Show and restaurants closed during 2003 at MGM Grand Las Vegas.

          In 2002, Tropical Storm Isidore caused property damage at Beau Rivage totaling $8 million, including clean-up costs. The amount of the write-down for damaged assets was determined based on the net book value of the assets and engineering estimates. In connection with the revised development agreement in Detroit, we wrote off $5 million, which was the net book value of previously incurred development costs associated with the riverfront permanent casino site ($9 million), offset by previously accrued obligations no longer required under the revised development agreement ($4 million).

          The 2001 write-down of the Atlantic City Boardwalk land resulted from a reassessment of the fair value of the land subsequent to the September 11 attacks. The revised carrying value was based on comparable sales data adjusted for the impact of legislation authorizing large-scale gaming in the state of New York, which we believe had a negative impact on real estate values on the Atlantic City Boardwalk. The remaining 2001 charge of $15 million relates to several assets abandoned during the quarter in response to the September 11 attacks, primarily in-progress construction projects which we terminated after the attacks.

     Non-operating Results

          The following table summarizes information related to interest on our long-term debt:

		Year Ended December 31,
		2003			2002			2001
					(In thousands)
Interest cost		$	356,348		$	348,348		$	417,391
Less: Capitalized interest			(15,234	)		(61,712	)		(78,608	)
	Interest expense, net	$	341,114		$	286,636		$	338,783
Cash paid for interest, net of amounts capitalized		$	308,198		$	266,071		$	317,773
Average total debt balance		$	5.2 billion		$	5.2 billion		$	5.7 billion
Weighted average interest rate			6.9	%		6.8	%		7.9	%

          Interest cost decreased in 2002 from 2001 due to lower debt balances in 2002 and lower market interest rates, which affect the rate we pay on our credit facilities. Interest capitalized declined from $79 million in 2001 to $62 million in 2002, due to the lower debt balances and interest rates described above, and due to our October 2002 decision to suspend development of our wholly-owned Atlantic City development project.

          Capitalized interest decreased in 2003 due to the suspension of development in Atlantic City in late 2002 and the mid-2003 cessation of interest capitalization on the Company’s investment in Borgata, which opened on July 3, 2003.

          The following table summarizes information related to our income taxes:

	Year Ended December 31,
	2003			2002			2001
				(In thousands)
Income from continuing operations before income tax	$	353,704		$	466,471		$	269,590
Income tax provision		116,592			171,271			104,402
Effective income tax rate		33.0	%		36.7	%		38.7	%
Cash paid for income taxes	$	94,932		$	44,579		$	19,342

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          The effective income tax rate in 2003 was lower than in 2002 due to the reversal of certain tax reserves as a result of completion of IRS audits for certain prior tax years and expiration of the IRS statutes of limitations on other years. Excluding the reversal, our effective income tax rate was 36.7% in both periods. The decrease in our effective income tax rate in 2002 was the result of higher income before taxes. The items causing a difference between the Federal statutory rate and our effective income tax rate, primarily non-deductible expenses and state and foreign income taxes, have not varied significantly between years.

          In 2003, taxes paid increased from prior years, primarily due to payments made to settle IRS audits of prior years. Excluding these payments, our taxes paid have generally been significantly lower than our income tax provision. This is primarily due to accelerated tax depreciation and the utilization of tax credits, primarily for alternative minimum tax paid in prior years. We utilized the last of these credits in 2003, and we expect that our cash paid for taxes will increase accordingly in 2004.

Liquidity and Capital Resources

     Cash Flows – Summary

          Our cash flows consisted of the following:

			Year Ended December 31,
			2003			2002			2001
						(In thousands)
Net cash provided by operations			$	702,966		$	827,958		$	795,883
Investing cash flows:
	Capital expenditures			(550,232	)		(300,039	)		(327,936	)
	Investments in unconsolidated affiliates			(41,350	)		(80,314	)		(38,250	)
	Other			35,894			9,143			13,981
		Net cash used in investing activities		(555,688	)		(371,210	)		(352,205	)
Financing cash flows:
	Net borrowing (repayment) under bank credit facilities			(285,087	)		(270,126	)		(819,704	)
	Issuance of long-term debt			600,000			—			400,000
	Purchase of treasury stock			(442,864	)		(207,590	)		(45,716	)
	Other			(37,284	)		23,231			2,745
		Net cash used in financing activities		(165,235	)		(454,485	)		(462,675	)
Net increase (decrease) in cash and cash equivalents			$	(17,957	)	$	2,263		$	(18,997	)

     Cash Flows – Operating Activities

          Trends in our operating cash flows tend to follow trends in our operating income, excluding non-cash charges, since our business is primarily cash-based. Cash flow from operations in 2003 decreased from 2002, resulting from the decrease in operating income and higher cash paid for taxes. In 2002, cash flow from operations increased, but not to the same extent as operating income, primarily because operating income in 2001 included significant non-cash charges.

          At December 31, 2003 and 2002, we held cash and cash equivalents of $178 million and $211 million. We require a certain amount of cash on hand to operate our resorts. Beyond our cash on hand, we utilize a company-wide cash management system to minimize the amount of cash held in banks. Funds are swept from accounts at our resorts daily into central bank accounts, and excess funds are invested overnight or are used to repay borrowings under our bank credit facilities.

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     Cash Flows – Investing Activities

          2003 capital expenditures were significantly higher than 2002, due largely to major projects at our existing resorts. These projects included:

• The theatre for Zumanity at New York-New York, started in 2002 and completed in 2003;

• The theatre at MGM Grand Las Vegas for a new show by Cirque du Soleil, started in 2003 with an expected mid-2004 completion;

• The Bellagio standard room remodel, started in 2003 and to be completed in early 2004; and

• The Bellagio expansion, started in 2003 and expected to be completed in late 2004. The Bellagio expansion consists of a new 928-room tower, along with expanded retail, convention, spa and food and beverage facilities. The project budget is approximately $375 million. The project is designed to complement the existing, newly remodeled standard rooms, and cause minimal business interruption during construction.

          Expenditures on these four projects totaled approximately $275 million (including capitalized interest). Costs related to implementing new slot technology, including IGT’s EZ-Pay^™ system, Players Club and other slot technology totaled approximately $42 million. Remaining expenditures were for general property improvements, which amounts were consistent with prior year expenditures.

          Capital expenditures in 2002 were not significantly different than 2001. 2002 expenditures included general property improvements at our resorts, such as room remodel projects at The Mirage and Golden Nugget-Las Vegas, new restaurant and nightclub development at several of our resorts, and various other remodeling projects. Other capital expenditures included costs for new slot technology, as well as pre-construction activities, including capitalized interest, in Atlantic City.

          A large portion of the 2001 capital expenditures related to general property improvements at our resorts, such as the ongoing room refurbishment program at The Mirage and restaurant and entertainment enhancements at MGM Grand Las Vegas and New York-New York. Other capital expenditures included the construction of the Primm Center at the Primm Valley Resorts, the completion of the Mirage Events Center, the acquisition of the building housing MGM Grand Detroit, the acquisition of a new corporate aircraft and costs, including capitalized interest, associated with ongoing development projects.

          Investments in unconsolidated affiliates primarily represent required contributions to Borgata. Through December 31, 2003, we had made $133 million of our required $136 million in cash contributions. In 2002, we also contributed $44 million to Monte Carlo in connection with the joint venture’s retirement of the final $87 million of its outstanding debt.

     Cash Flows – Financing Activities

          In 2003, we issued $600 million of 6% Senior Notes, due 2009 and repaid a net $285 million on our bank credit facilities. The net proceeds of these financing activities were used to supplement operating cash flows fund capital expenditures and share repurchases. In 2002 and 2001, we utilized our operating cash flow to reduce outstanding indebtedness by $270 million and $420 million, while still funding significant capital expenditures and share repurchases.

          Our share repurchases are only conducted under repurchase programs approved by our Board of Directors and publicly announced. Our share repurchase activity was as follows:

	Year Ended December 31,
	2003		2002		2001
			(In thousands)
August 2001 authorization (1.4 million, 6.4 million, and 2.2 million shares purchased)	$	36,034	$	207,590	$	45,716
February 2003 authorization (10 million shares purchased)		335,911		—		—
November 2003 authorization (2 million shares purchased)		70,919		—		—
	$	442,864	$	207,590	$	45,716
Average price of shares repurchased	$	33.17	$	32.28	$	20.47

          At December 31, 2003, we had 8 million shares available for repurchase under the November 2003 authorization.

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     Principal Debt Arrangements

          Our long-term debt consists of publicly held senior and subordinated notes and bank credit facilities. We pay fixed rates of interest ranging from 6% to 9.75% on the senior and subordinated notes. We pay variable interest based on LIBOR on the bank credit facilities. We amended our bank credit facilities in November 2003, and our current senior credit facility is a $2.5 billion, five-year facility with a syndicate of banks led by Bank of America, N.A. Our senior credit facility consists of a $1.5 billion revolving credit facility due November 2008 and a $1.0 billion term loan that will be paid down 20% over the final three years of the loan, with the remainder due November 2008. Our previous bank credit facilities consisted of a $2.0 billion credit facility maturing in May 2005 and a $525 million revolving credit facility due April 2, 2004.

          As of December 31, 2003, we had approximately $885 million of available liquidity under our bank credit facilities, and our next maturity of public debt is $500 million due in February 2005. We can raise additional capital through our shelf registration statement, declared effective by the Securities and Exchange Commission in 2000, which originally allowed us to issue up to a total of $2.75 billion of debt and equity securities from time to time in public offerings. At December 31, 2003, the shelf registration statement has $190 million in remaining capacity for the issuance of future debt or equity securities. Any future public offering of securities under the shelf registration statement will only be made by means of a prospectus supplement.

     Other Factors Affecting Liquidity

          In January 2004, we completed the sale of the Golden Nugget Subsidiaries, resulting in net cash proceeds to us of $213 million. The proceeds were used to repay borrowings under our senior credit facility. In February 2004, we entered into an agreement to sell our subsidiaries that own and operate MGM Grand Australia for A$195 (approximately $150 million), subject to certain working capital adjustments. We expect this transaction to be completed by the third quarter of 2004, subject to customary sales conditions and regulatory approvals.

          In September 2003, Standard & Poor’s Rating Service lowered its rating on us, including our corporate credit rating, to one level below investment grade, to ‘BB+’ from ‘BBB-’. In January 2002, Moody’s Investment Services lowered its rating on our senior notes to one level below investment grade (Bal). As a result of the Moody’s downgrade, substantially all of our assets other than assets of our foreign subsidiaries and certain assets in use at MGM Grand Detroit are pledged as collateral for our senior notes, excluding subordinated notes, and our bank credit facilities. We do not believe the downgrades have had, or will have, a significant effect on our liquidity or our ability to secure short-term or long-term financing. Subsequent to the downgrades, we successfully amended our bank credit facilities and issued the $600 million senior notes, both on pricing and other terms which were favorable and consistent with similar arrangements before the downgrades.

     Future Developments

          Detroit, Michigan. MGM Grand Detroit, LLC, in which we hold a controlling interest, has operated an interim casino facility in Detroit, Michigan since July 1999. In August 2002, the Detroit City Council approved revised development agreements with us and two other developers. The revised development agreement released us and the City from certain of the obligations under the original agreement and significantly changed other provisions of the original agreement. We are currently in the process of obtaining land and developing plans for the permanent facility, and currently expect the project to cost approximately $575 million (including land, capitalized interest and preopening expenses, but excluding approximately $115 million of payments to the City under the revised development agreement). The design, budget and schedule of the permanent facility are not finalized, and the ultimate timing, cost and scope of the facility are subject to risks attendant to large-scale projects.

          The ability to construct the permanent casino facility is currently subject to resolution of the Lac Vieux litigation. Pending resolution of this litigation, the 6th Circuit Court of Appeals has issued an injunction prohibiting the City and the developers from commencing construction pending further action of the 6th Circuit Court. Therefore, we do not know when we will be able to commence construction of, or complete, the permanent facility.

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          Atlantic City, New Jersey. We own approximately 149 acres on Renaissance Pointe in Atlantic City, New Jersey. We obtained the land at Renaissance Pointe through an agreement between Mirage and the City of Atlantic City. In addition, Borgata occupies 29 acres at Renaissance Pointe, including 27 acres it owns and two acres we lease to Borgata. Of the remaining land, approximately 95 acres are suitable for development, and a portion of these acres consists of common roads, landscaping and master plan improvements which we designed and developed as required by our agreement with Boyd.

          In October 2002, we announced the temporary suspension of our development activities on our wholly-owned project on the Renaissance Pointe land in Atlantic City. We must apply for and receive numerous governmental permits and satisfy other conditions before construction of a new resort on the Renaissance Pointe site could begin. No assurance can be given that we will develop a casino resort in New Jersey, or its ultimate schedule, size, configuration or cost if we do develop a casino resort.

          Las Vegas, Nevada. We own an approximately 50-acre site for future development, with over 1,200 feet of frontage on the Las Vegas Strip, between Bellagio and Monte Carlo, part of which is occupied by our Boardwalk. The design, timing and cost of any future development on the site will depend on several factors, including the market’s ability to absorb new development on the Las Vegas Strip, competition from gaming outside of Nevada and the ultimate size and scope of the project, among other factors.

          In 2002, we entered into an agreement with Turnberry Associates to develop luxury condominium towers at MGM Grand Las Vegas. We will initially contribute land and up to $3 million to the project for a 50% investment. Turnberry Associates will contribute $9 million, and up to an additional $3 million, in cash and will manage the development and sales process. The venture will obtain construction financing for the remainder of the expected $175 million to $200 million cost of the first tower once sufficient pre-sales have occurred to obtain financing. We will have the opportunity to rent the condominiums to third parties on behalf of owners who elect to have us do so. Depending on market acceptance of the initial tower, we and Turnberry Associates may develop, on similar terms, up to an additional five condominium towers.

          United Kingdom. In anticipation of reforms to gambling legislation currently being considered by the British government, we have made several strategic agreements in the United Kingdom.

          In May 2003, we purchased a 25% interest in Metro Casinos Limited, a company which is developing a new casino in Bristol. Metro Casinos Limited is a subsidiary of R J Bown (Holdings) Ltd, the owner of the Westcliff Casino, one of the largest United Kingdom provincial casinos. The Bristol facility is expected to open by March 2004. Our purchase of this interest received regulatory approval from the Gaming Board for Great Britain in November 2003.

          In October 2003, we entered into an agreement with Earls Court and Olympia Group, which operates large exhibition and trade show facilities in London, to form a jointly owned company which would develop a large entertainment and gaming facility, which we would operate in space leased from Earls Court and Olympia, to complement the existing Olympia facilities. We made a deposit of £2 million ($3 million based on exchange rates at December 31, 2003), which is refundable if proposed gaming law reforms are not implemented by December 2005. Otherwise, the deposit will be applied to the first year’s rent on a lease between the new company and Earls Court and Olympia. We would make a nominal equity investment and would provide a loan for half of the estimated £130 million ($232 million based on exchange rates at December 31, 2003) of development costs. The agreement is subject to implementation of proposed gaming law reforms and a tax structure acceptable to us, and obtaining required planning and other approvals. We would own 82.5% of the entity.

          In November 2003, we entered into an agreement with Newcastle United PLC to create a 50-50 joint venture which would build a major new mixed-use development, including casino development, on a site adjacent to Newcastle’s football stadium. Newcastle United PLC will contribute the land to the joint venture, and we will make an equity investment of £5 million ($9 million based on exchange rates at December 31, 2003), which is refundable if certain conditions have not been met by January 2008. We would develop and operate the complex, as well as own the casino development in leased premises within the complex. The complex is expected to be financed through project-specific borrowings. The agreement is subject to implementation of proposed gaming law reforms and a tax structure acceptable to us, and obtaining required planning and other approvals.

          In February 2004, we announced an agreement in principle with The British Land Company PLC whereby we would operate a casino in leased premises within a newly developed leisure and entertainment complex adjacent to the Meadowhall Shopping Centre in Sheffield UK. The agreement is subject to implementation of proposed gaming law reforms and a tax structure acceptable to us, and obtaining required planning and other approvals.

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          Wembley plc. In January 2004, we reached an agreement with Wembley plc (“Wembley”) on the terms of a cash acquisition by us of Wembley. We have offered Wembley’s shareholders 750 pence per share, valuing Wembley at $490 million as of the date of the offer. Wembley has no material indebtedness. Wembley’s operations consist of greyhound racing and video lottery terminals (“VLTs”) at its Lincoln Park facility in Rhode Island, three greyhound tracks and one horse racing track in Colorado, and six greyhound tracks in the United Kingdom. A member of the Wembley plc group, Lincoln Park, Inc., and two executive of the Wembley plc group are subject to indictment in Rhode Island. We will purchase Wembley free and clear of the indictment and any related liabilities. Under an agreement with the United States Department of Justice, the indictment will proceed against a new entity funded by Wembley which we will not be acquiring. We expect the transaction to close by the third quarter of 2004, subject to requisite court and shareholder approval, the completion of the Lincoln Park reorganization and receipt of necessary regulatory approvals.

          New York Racing Association. We have an understanding with the New York Racing Association (“NYRA”) to manage VLTs at NYRA’s Aqueduct horseracing facility in metropolitan New York. We would assist in the development of the facility, including providing project financing, and would manage the facility for a fee. The project is anticipated to cost $135 million. Work was halted on the VLT facility in August 2003 pending the outcome of an investigation of certain aspects of NYRA’s operations by Federal prosecutors. In December 2003, NYRA reached agreement with the Justice Department whereby NYRA was indicted with prosecution deferred. NYRA agreed to pay a fine and the indictment will be dismissed with prejudice upon NYRA implementing certain reforms and otherwise complying with the terms of the agreement. Our participation is subject to a definitive agreement, regulatory approvals and certain legislative changes by the State of New York.

     Off Balance Sheet Arrangements

          Our off balance sheet arrangements consist primarily of investments in unconsolidated affiliates, which currently consist of our investments in Monte Carlo and Borgata. We have not entered into any transactions with special purpose entities, nor have we engaged in any derivative transactions other than straightforward interest rate swaps. Our joint venture and unconsolidated affiliate investments allow us to realize the benefits of owning a full-scale resort in a manner that minimizes our initial investment. We have not guaranteed financing obtained by the ventures, nor are there any other provisions of the venture agreements which are unusual or subject us to risks to which we would not be subjected if we had full ownership of the resort.

          At December 31, 2003, we had outstanding letters of credit totaling $52 million, of which $50 million support the bonds issued by the Economic Development Corporation of the City of Detroit. These bonds are recorded as a liability in our consolidated balance sheets. This obligation was undertaken to secure our right to develop a permanent casino in Detroit.

     Commitments and Contractual Obligations

          The following table summarizes our scheduled contractual commitments as of December 31, 2003:

		2004		2005		2006		2007		2008		Thereafter
						(In millions)
Long-term debt		$	97	$	503	$	250	$	910	$	1,925	$	1,925
Capital leases			1		1		1		—		—		—
Operating leases			10		9		8		7		7		311
Long-term liabilities (1)			26		3		6		3		3		53
Other purchase obligations:
	Construction commitments		381		25		—		—		—		—
	Employment agreements		79		57		27		1		—		—
	Entertainment agreements (2)		83		2		—		—		—		—
	Other (3)		81		5		4		1		1		2
		$	758	$	605	$	296	$	922	$	1,936	$	2,291

(1)	Includes our obligation to support $50 million of bonds issued by the Economic Development Corporation of the City of Detroit as part of our development agreement with the City. The bonds mature in 2009. Also includes the estimated payments of obligations under our deferred compensation and supplemental executive retirement plans, based on balances as of December 31, 2003 and assumptions of retirement based on plan provisions.
(2)	Our largest entertainment commitments consist of minimum contractual payments to Cirque du Soleil, which performs shows at several of our resorts. We are generally contractually committed for a period of 12 months based on our ability to exercise certain termination rights; however, we expect these shows to continue for longer periods. Commitments for 2004 also include our obligations to complete the theatre construction and contribute to the show production costs for the new Cirque du Soleil show at MGM Grand Las Vegas.
(3)	The amount for 2004 includes approximately $57 million of open purchase orders. Other commitments are for various contracts, including maintenance and other service agreements and advertising commitments.

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          Other significant operating uses of cash in 2004 include interest and tax payments. Our cash payments for interest ranged from $266 million to $318 million over the past three years, and we would expect similar levels of cash payments for interest in 2004. As discussed earlier, our cash paid for income taxes in 2004 will likely increase over 2003. Other significant investing uses of cash flow in 2004 include uncommitted capital expenditures, expected to be approximately $300 million exclusive of any spending on a permanent casino in Detroit, and the proposed Wembley acquisition, valued at $490 million on the date we made the offer.

          We plan to fund our contractual obligations and other estimated spending through a combination of operating cash flow, proceeds from known or expected sales of businesses and available borrowings under our senior credit facility. We have generated over $700 million in operating cash flow in each of the past three years, which included deductions for interest payments, tax payments and certain contractually committed payments reflected in the above table, including operating leases, employment agreements and entertainment agreements. We expect to generate a similar level of operating cash flow in 2004. Assuming operating cash flow is used to fund the remaining contractual commitments of approximately $500 million to $600 million, we would have at least $100 million of operating cash flow available for other planned expenditures.

          Other sources of cash include the net proceeds of $213 million received in January 2004 upon closing the sale of the Golden Nugget Subsidiaries, the net proceeds of $150 million from the sale of MGM Grand Australia, if the sale closes as expected by the third quarter of 2004, and the $885 million of available borrowings under our senior credit facility.

Critical Accounting Policies and Estimates

          Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements. To prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, we must make estimates and assumptions that affect the amounts reported in the consolidated financial statements. We regularly evaluate these estimates and assumptions, particularly in areas we consider to be critical accounting estimates, where changes in the estimates and assumptions could have a material impact on our results of operations, financial position and, generally to a lesser extent, cash flows. Senior management and the Audit Committee of the Board of Directors have reviewed the disclosures included herein about our critical accounting estimates, and have reviewed the processes to determine those estimates.

     Allowance for Doubtful Casino Accounts Receivable

          Marker play represents a significant portion of the table games volume at Bellagio, MGM Grand Las Vegas and The Mirage. Our other facilities do not emphasize marker play to the same extent, although we offer markers to customers at those casinos as well, with the exception of MGM Grand Australia, where Northern Territory legislation prohibits marker play.

          We maintain strict controls over the issuance of markers and aggressively pursue collection from those customers who fail to pay their marker balances timely. These collection efforts are similar to those used by most large corporations when dealing with overdue customer accounts, including the mailing of statements and delinquency notices, personal contacts, the use of outside collection agencies and civil litigation. Markers are generally legally enforceable instruments in the United States. At December 31, 2003 and 2002, approximately 53% and 57%, respectively, of our casino accounts receivable was owed by customers from the United States. Markers are not legally enforceable instruments in some foreign countries, but the United States assets of foreign customers may be reached to satisfy judgments entered in the United States. A significant portion of our casino accounts receivable is owed by casino customers from the Far East. At December 31, 2003 and 2002, approximately 30% and 28%, respectively, of our casino accounts receivable was owed by customers from the Far East.

          We maintain an allowance, or reserve, for doubtful casino accounts at all of our operating casino resorts. The provision for doubtful accounts, an operating expense, increases the allowance for doubtful accounts. We regularly evaluate the allowance for doubtful casino accounts. At resorts where marker play is not significant, the allowance is generally established by applying standard reserve percentages to aged account balances. At resorts where marker play is significant, we apply standard reserve percentages to aged account balances under a specified dollar amount and specifically analyze the collectibility of each account with a balance over the specified dollar amount, based on the age of the account, the customer’s financial condition, collection history and any other known information. We also monitor regional and global economic conditions and forecasts to determine if reserve levels are adequate.

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          The collectibility of unpaid markers is affected by a number of factors, including changes in currency exchange rates and economic conditions in the customers’ home countries. Because individual customer account balances can be significant, the allowance and the provision can change significantly between periods, as information about a certain customer becomes known or as changes in a region’s economy occur.

          The following table shows key statistics related to our casino receivables:

	At December 31,
	2003			2002			2001
				(In thousands)
Casino accounts receivable	$	159,569		$	166,612		$	189,434
Allowance for doubtful casino accounts receivable		75,265			85,504			98,648
Allowance as a percentage of casino accounts receivable		47	%		51	%		52	%
Median age of casino accounts receivable	43 days			50 days			84 days
Percentage of casino accounts outstanding over 180 days		23	%		27	%		30	%

          The allowance percentage increased in 2001 as a result of the impact of the September 11 attacks on our customers’ traveling patterns and the global economy, as well as the impacts of declines in the United States stock markets through 2000 and 2001. During 2002, the United States stock markets continued to decline, but we experienced better than anticipated receivable collections on certain customer accounts during 2002, which resulted in a reversal of previously recorded bad debt provision in the third quarter of 2002.

          In the fourth quarter of 2003 we recorded an additional reversal of bad debt provision as we again experienced better than expected collections. The current strength in the United States economy and recent United States stock market gains have also caused us to positively adjust our outlook on collectibility of domestic accounts receivable. The above economic and collection trends are reflected in the improved quality of our receivables statistics in the above table. Our reserve percentage at December 31, 2003 is lower than it has been since the events of September 11, 2001, though still higher than the periods preceding September 11, 2001.

          At December 31, 2003, a 100 basis-point change in the allowance for doubtful accounts as a percentage of casino accounts receivable would change net income by $2 million, or $0.01 per share.

     Fixed asset capitalization and depreciation policies

          Property and equipment are stated at cost. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets. We account for construction projects in accordance with Statement of Financial Accounting Standards No. 67, “Accounting for Costs and Initial Rental Operations of Real Estate Projects”. When we construct assets, we capitalize direct costs of the project, including fees paid to architects and contractors, property taxes, and certain costs of our design and construction subsidiary, MGM MIRAGE Design Group.

          We must make estimates and assumptions when accounting for capital expenditures. Whether an expenditure is considered a maintenance expense or a capital asset is a matter of judgment. When constructing or purchasing assets, we must determine whether existing assets are being replaced or otherwise impaired, which also may be a matter of judgment. Our depreciation expense is highly dependent on the assumptions we make about our assets’ estimated useful lives. We determine the estimated useful lives based on our experience with similar assets, engineering studies, and our estimate of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, we account for the change prospectively.

          In accordance with Statement of Financial Accounting Standards No. 34, “Capitalization of Interest Cost” (“SFAS 34”), interest cost associated with major development and construction projects is capitalized as part of the cost of the project. Interest is typically capitalized on amounts expended on the project using the weighted-average cost of our outstanding borrowings, since we typically do not borrow funds directly related to a development project. Capitalization of interest starts when construction activities, as defined in SFAS 34, begin and ceases when construction is substantially complete or development activity is suspended for more than a brief period.

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          Whether we capitalize interest on a project depends in part on management’s actions. In January 2001, we announced that our near-term development focus would be on the Atlantic City market. As a result, we suspended the capitalization of interest on our Las Vegas Strip project until the development process for that project is further advanced. Interest capitalized on this project was $3 million in 2001. In October 2002, we announced the suspension of development activities on our wholly-owned project on the Renaissance Pointe land in Atlantic City. In connection with that announcement, we stopped capitalizing interest associated with the project. Interest capitalized on this project for the years ended December 31, 2001 and 2002 was $60 million and $41 million, respectively.

     Impairment of Long-lived Assets

          We evaluate our property and equipment and other long-lived assets for impairment in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). For assets to be disposed of, we recognize the asset at the lower of carrying value or fair market value less costs of disposal, as estimated based on comparable asset sales, solicited offers, or a discounted cash flow model. For assets to be held and used, we review for impairment whenever indicators of impairment exist. We then compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is recorded based on the fair value of the asset, typically measured using a discounted cash flow model. If an asset is still under development, future cash flows include remaining construction costs. All recognized impairment losses, whether for assets to be disposed of or assets to be held and used, are recorded as operating expenses.

          There are several estimates, assumptions and decisions in measuring impairments of long-lived assets. First, management must determine the usage of the asset. To the extent management decides that an asset will be sold, it is more likely that an impairment may be recognized. Assets must be tested at the lowest level for which identifiable cash flows exist. This means that some assets must be grouped, and management has some discretion in the grouping of assets. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from our estimates.

          On a quarterly basis, we review our major long-lived assets to determine if events have occurred or circumstances exist that indicate a potential impairment. We estimate future cash flows using our internal budgets. When appropriate, we discount future cash flows using our weighted-average cost of capital, developed using a standard capital asset pricing model. Whenever an impairment loss is recorded, or a test for impairment is made, we discuss the facts and circumstances with the audit committee.

          See “Results of Operations” for discussion of write-downs and impairments recorded in 2001, 2002 and 2003. In October 2002, we announced the temporary suspension of our development activities on our wholly-owned project on the Renaissance Pointe land in Atlantic City. In connection therewith, we reviewed the land for potential impairment, and determined no impairment was indicated. In December 2002, in connection with our agreement with Turnberry Associates whereby we are required to contribute land to the venture, we reviewed the land for potential impairment, and determined no impairment was indicated. In June 2003, we entered into an agreement to sell the Golden Nugget Subsidiaries. The fair value less costs to sell exceeds the carrying value, therefore no impairment was indicated. In February 2004, we entered into an agreement to sell MGM Grand Australia. The fair value less costs to sell exceeds the carrying value, therefore no impairment was indicated.

          Other than the above items, we are not aware of events or circumstances that would cause us to review any material long-lived assets for impairment.

     Income taxes

          We are subject to income taxes in the United States, and in several states and foreign jurisdictions in which we operate. We account for income taxes according to Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). SFAS 109 requires the recognition of deferred tax assets, net of applicable reserves, related to net operating loss carryforwards and certain temporary differences. The standard requires recognition of a future tax benefit to the extent that realization of such benefit is more likely than not. Otherwise, a valuation allowance is applied.

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          At December 31, 2003, we had $90 million of deferred tax assets and $1.8 billion of deferred tax liabilities. Except for certain New Jersey state net operating losses and certain other New Jersey state deferred tax assets, we believe that it is more likely than not that our deferred tax assets are fully realizable because of the future reversal of existing taxable temporary differences and future projected taxable income. The valuation allowance at December 31, 2003 related to the New Jersey deferred tax assets was $10 million.

          Our income tax returns are subject to examination by the Internal Revenue Service (“IRS”) and other tax authorities. We regularly assess the potential outcomes of these examinations in determining the adequacy of our provision for income taxes and our income tax liabilities. To determine necessary reserves, we must make assumptions and judgments about potential actions by taxing authorities, partially based on past experiences. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental, and we believe we have adequately provided for any reasonable and foreseeable outcomes related to uncertain tax matters.

          When actual results of tax examinations differ from our estimates, we adjust the income tax provision and our tax reserves in the period in which the examination issues are settled. In December 2002, we settled the IRS audit of the Company’s 1995 and 1996 tax returns, which did not result in a material impact on our results of operations or financial position. During 2003, we filed amended returns for tax years subsequent to 1996 to reflect the impact of the IRS audits of the 1993 through 1996 tax years on those subsequent years. In the fourth quarter of 2003, the statutes of limitations expired for the 1997 through 1999 tax years, resulting in a reduction of our tax reserves of $13 million and a corresponding reduction in our provision for income taxes. The tax returns for years after 1999 are subject to possible future examination.

          A portion of our tax reserves was assumed in the Mirage Acquisition. The IRS audit of the tax returns of Mirage through the merger date was settled in August 2003, resulting in a payment to the IRS of $45 million, including interest. These matters had been previously reserved for, so the settlement had no impact on our income tax provision or our results of operations. Any future adjustments to the acquired Mirage tax reserves will be recorded as an adjustment to goodwill.

Accounting Principles Adopted in 2003

     Classification of Gains and Losses as Extraordinary Items

          In April 2002, the FASB issued Statement of Financial Accounting Standards No. 145, “Rescission of FASB Statements 4, 44, and 64, Amendment of FASB Statement 13, and Technical Corrections as of April 2002” (“SFAS 145”). The key provision of SFAS 145 that affects us rescinds the existing rule that all gains or losses from the extinguishment of debt should be classified as extraordinary items. Instead, such gains and losses must be analyzed to determine if they meet the criteria for extraordinary item classification based on the event being both unusual and infrequent.

          We adopted SFAS 145 beginning January 1, 2003. Prior period losses were analyzed to determine if they met the criteria to be classified as extraordinary items. Our prior period losses were reclassified as an element of income from continuing operations.

     Costs Associated with Exit or Disposal Activities

          In June 2002, the FASB issued Statement of Financial Accounting Standards No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”). SFAS 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan, as previously required under EITF Issue 94-3. Examples of costs covered by the standard include lease termination costs and certain employee severance costs associated with a restructuring, discontinued operation, plant closing, or other exit or disposal activity. SFAS 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002.

          We adopted SFAS 146 beginning January 1, 2003. The adoption of this statement did not have a material impact on our results of operations or financial position. The time between our commitment to an exit or disposal plan and when costs are actually incurred is typically short.

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     Guarantee Obligations

          In November 2002, the FASB issued its Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 requires that future guarantee obligations be recognized as liabilities at inception of the guarantee contract. It also increases the disclosures required for current and future guarantee obligations.

          We have included the disclosures required by FIN 45 in the accompanying notes to consolidated financial statements. We adopted the initial recognition provisions of FIN 45 beginning January 1, 2003. The adoption of this interpretation did not have a material impact on our results of operation or financial position.

     Stock-based Compensation

          In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure” (“SFAS 148”). SFAS 148 increases the disclosure requirements for companies which do not voluntarily adopt the fair value based accounting for employee stock compensation prescribed in Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” on a retroactive basis. SFAS 148 also requires companies to present the pro forma disclosures in interim financial statements.

          We have included the annual disclosures required by SFAS 148 in the accompanying notes to consolidated financial statements, and began presenting the required interim disclosures in 2003.

Recently Issued Accounting Standards

          There are no accounting standards issued before December 31, 2003 but effective after December 31, 2003 which are expected to have a material impact on our financial reporting.

Market Risk

          Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposure to market risk is interest rate risk associated with our long-term debt. We attempt to limit our exposure to interest rate risk by managing the mix of our long-term fixed rate borrowings and short-term borrowings under our bank credit facilities and commercial paper program.

          In the third quarter of 2003, we entered into three interest rate swap agreements, designated as fair value hedges, which effectively convert $400 million of our fixed rate debt to floating rate debt. Under the terms of these agreements, we make payments based on specified spreads over six-month LIBOR, and receive payments equal to the interest payments due on the fixed rate debt. The interest rate swap agreements qualify for the “shortcut method” allowed under Statement of Financial Accounting Standards No. 133, which allows an assumption of no ineffectiveness in the hedging relationship. As such, there is no income statement impact from changes in the fair value of the hedging instruments.

          The following table provides information about our interest rate swaps as of December 31, 2003:

Maturity Date		August 1, 2007		February 1, 2008
Notional Value	$	200 million	$	200 million
Estimated Fair Value	$	—	$	—
Average Pay Rate*		4.31%		4.09%
Average Receive Rate		6.75%		6.75%

* Interest rates are determined in arrears. These rates have been estimated based on implied forward rates in the yield curve.

          As of December 31, 2003, after giving effect to the interest rate swaps discussed above, long-term fixed rate borrowings represented approximately 64% of our total borrowings. Assuming a 100 basis-point change in LIBOR, our annual interest cost would change by approximately $20 million.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          We incorporate by reference the information appearing under “Market Risk” in Item 7 of this Form 10-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          Our Consolidated Financial Statements and Notes to Consolidated Financial Statements, referred to in Item 15(a)(1) of this Form 10-K, are included at pages 57 to 82 of this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

          There were no disagreements with accountants on accounting or financial disclosures during the last three fiscal years. On May 15, 2002, the Company dismissed Arthur Andersen LLP as the Company’s independent public accountants and engaged Deloitte & Touche LLP to serve as the Company’s independent public accountant for 2002. For more information with respect to this matter, see the Company’s Current Report on Form 8-K filed on May 15, 2002.

ITEM 9A. CONTROLS AND PROCEDURES

          Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) have concluded that the design and operation of our disclosure controls and procedures are effective as of December 31, 2003. This conclusion is based on an evaluation conducted under the supervision and with the participation of Company management. Disclosure controls and procedures are those controls and procedures which ensure that information required to be disclosed in this filing is accumulated and communicated to management and is recorded, processed, summarized and reported in a timely manner and in accordance with Securities and Exchange Commission rules and regulations.

          During the quarter ended December 31, 2003, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to affect, our internal control over financial reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          We incorporate by reference the information appearing under “Executive Officers of the Registrant” in Item 1 of this Form 10-K and under “Election of Directors” in our definitive Proxy Statement for our 2004 Annual Meeting of Stockholders, which we expect to file with the Securities and Exchange Commission on or about April 5, 2004 (the “Proxy Statement”).

ITEM 11. EXECUTIVE COMPENSATION

          We incorporate by reference the information appearing under “Executive Compensation and Other Information” in the Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          We incorporate by reference the information appearing under “Principal Stockholders” in the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          We incorporate by reference the information appearing under “Certain Transactions” in the Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

          We incorporate by reference the information appearing under “Audit Committee Report” in the Proxy Statement.

49

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (a)(1). Financial Statements.

Included in Part II of this Report:
	Independent Auditors’ Report
	Consolidated Balance Sheets — December 31, 2003 and 2002
	Years Ended December 31, 2003, 2002 and 2001
		Consolidated Statements of Income
		Consolidated Statements of Stockholders’ Equity
		Consolidated Statements of Cash Flows
	Notes to Consolidated Financial Statements

     (a)(2). Financial Statement Schedules.

Included in Part IV of this Report:
	Years Ended December 31, 2003, 2002 and 2001
		Schedule II — Valuation and Qualifying Accounts

     We have omitted schedules other than the one listed above because they are not required or are not applicable, or the required information is shown in the financial statements or notes to the financial statements.

     (a)(3). Exhibits.

Exhibit
Number	Description
2	Agreement and Plan of Merger, dated as of March 6, 2000, among Mirage Resorts, Incorporated (“MRI”), the Company and MGMGMR Acquisition, Inc. (incorporated by reference to Exhibit 2 to the Company’s Current Report on Form 8-K dated March 6, 2000).
3(1)	Certificate of Incorporation of the Company, as amended through 1997 (incorporated by reference to Exhibit 3(1) to Registration Statement No. 33-3305 and to Exhibit 3(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997).
3(2)	Certificate of Amendment to Certificate of Incorporation of the Company, dated January 7, 2000, relating to an increase in the authorized shares of common stock (incorporated by reference to Exhibit 3(2) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (the “1999 10-K”)).
3(3)	Certificate of Amendment to Certificate of Incorporation of the Company, dated January 7, 2000, relating to a 2-for-1 stock split (incorporated by reference to Exhibit 3(3) to the 1999 10-K).
3(4)	Certificate of Amendment to Certificate of Incorporation of the Company, dated August 1, 2000 (incorporated by reference to Exhibit 3(i).4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000 (the “September 2000 10-Q”)).
3(5)	Certificate of Amendment to Certificate of Incorporation of the Company, dated June 3, 2003, relating to compliance with provisions of the New Jersey Casino Control Act relating to holders of Company securities (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2003 (the “June 2003 10-Q”)).

50

Exhibit
Number	Description
3(6)	Amended and Restated Bylaws of the Company, effective March 6, 2001 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002 (the “June 2002 10-Q”).
4(1)	Indenture, dated as October 15, 1996, between MRI and Firstar Bank of Minnesota, N.A., as trustee (the “MRI 1996 Indenture”) (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of MRI (Commission File No. 01-6697) for the fiscal quarter ended September 30, 1996 (the “MRI September 1996 10-Q”)).
4(2)	Supplemental Indenture, dated as October 15, 1996, to the MRI 1996 Indenture (incorporated by reference to Exhibit 4.2 to the MRI September 1996 10-Q).
4(3)	Indenture, dated as of August 1, 1997, between MRI and First Security Bank, National Association, as trustee (the “MRI 1997 Indenture”) (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of MRI for the fiscal quarter ended June 30, 1997 (the “MRI June 1997 10-Q”)).
4(4)	Supplemental Indenture, dated as of August 1, 1997, to the MRI 1997 Indenture (incorporated by reference to Exhibit 4.2 to the MRI June 1997 10-Q).
4(5)	Indenture, dated as of February 2, 1998, among the Company, as issuer, the Guarantors parties thereto, as guarantors, and PNC Bank, National Association, as trustee (incorporated by reference to Exhibit 4(1) to the Company’s Current Report on Form 8-K, dated February 23, 1998 (the “February 1998 8-K”)).
4(6)	Indenture, dated as of February 4, 1998, between MRI and PNC Bank, National Association, as trustee (the “MRI 1998 Indenture”) (incorporated by reference to Exhibit 4(e) to the Annual Report on Form 10-K of MRI for the fiscal year ended December 31, 1997 (the “MRI 1997 10-K”)).
4(7)	Supplemental Indenture, dated as of February 4, 1998, to the MRI 1998 Indenture (incorporated by reference to Exhibit 4(f) to the MRI 1997 10-K).
4(8)	Schedule setting forth material details of the Indenture, dated as of February 6, 1998, among the Company, as issuer, the Guarantors parties thereto, as guarantors, and U.S. Trust Company of California, N.A., as trustee (incorporated by reference to Exhibit 4(2) to the February 1998 8-K).
4(9)	Indenture, dated as of May 31, 2000, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and The Bank of New York, as trustee (incorporated by reference to Exhibit 4 to the Company’s Current Report on Form 8-K dated May 22, 2000 (the “May 2000 8-K”)).
4(10)	Indenture, dated as of September 15, 2000, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and U.S. Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4 to the Company’s Amended Current Report on Form 8-K/A dated September 12, 2000).
4(11)	First Supplemental Indenture, dated as of September 15, 2000, among the Company, Bellagio Merger Sub, LLC and U.S. Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4(11) to the 2000 10-K).
4(12)	First Supplemental Indenture, dated as of September 30, 2000, among the Company, Bellagio Merger Sub, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(12) to the 2000 10-K).
4(13)	Second Supplemental Indenture, dated as of October 10, 2000, to the MRI 1996 Indenture (incorporated by reference to Exhibit 4(13) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the “2000 10-K”)).

51

Exhibit
Number	Description
4(14)	Second Supplemental Indenture, dated as of October 10, 2000, to the MRI 1997 Indenture (incorporated by reference to Exhibit 4(14) to the 2000 10-K).
4(15)	Second Supplemental Indenture, dated as of October 10, 2000, to the MRI 1998 Indenture (incorporated by reference to Exhibit 4(15) to the 2000 10-K).
4(16)	Second Supplemental Indenture, dated as of December 31, 2000, among the Company, MGM Grand Hotel & Casino Merger Sub, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(16) to the 2000 10-K).
4(17)	Second Supplemental Indenture, dated as of December 31, 2000, among the Company, MGM Grand Hotel & Casino Merger Sub, LLC and U.S. Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4(17) to the 2000 10-K).
4(18)	Indenture, dated as of January 23, 2001, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and United States Trust Company of New York, as trustee (incorporated by reference to Exhibit 4 to the Company’s Current Report on Form 8-K dated January 18, 2001).
4(19)	Indenture, dated as of September 17, 2003, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 11, 2003).
10.1(1)	Loan Agreement, dated September 6, 1995, among MGM Grand Australia Pty Ltd., as Borrower, each Guarantor named therein, the banks named therein and Bank of America Australia Limited, as Agent (incorporated by reference to Exhibit 10(22) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995 (the “1995 10-K”)).
10.1(2)	MGM Grand, Inc. Continuing Guaranty, dated as of September 1, 1995 (incorporated by reference to Exhibit 10(23) to the 1995 10-K).
10.1(3)	Guarantee, dated as of May 31, 2000, by certain subsidiaries of the Company, in favor of The Chase Manhattan Bank, as successor in interest to PNC Bank, National Association, as trustee for the benefit of the holders of Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.4 to the May 2000 8-K).
10.1(4)	Schedule setting forth material details of the Guarantee, dated as of May 31, 2000, by certain subsidiaries of the Company, in favor of U.S. Trust Company, National Association (formerly known as U.S. Trust Company of California, N.A.), as trustee for the benefit of the holders of Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.5 to the May 2000 8-K).
10.1(5)	Guarantee (Mirage Resorts, Incorporated 7.25% Senior Notes Due October 15, 2006), dated as of May 31, 2000, by the Company and certain of its subsidiaries, in favor of Firstar Bank of Minnesota, N.A., as trustee for the benefit of the holders of Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.6 to the May 2000 8-K).
10.1(6)	Schedule setting forth material details of the Guarantee (Mirage Resorts, Incorporated 6.625% Notes Due February 1, 2005 and 6.75% Notes Due February 1, 2008), dated as of May 31, 2000, by the Company and certain of its subsidiaries, in favor of The Chase Manhattan Bank, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.7 to the May 2000 8-K).

52

Exhibit
Number	Description
10.1(7)	Schedule setting forth material details of the Guarantee (Mirage Resorts, Incorporated 6.75% Notes Due August 1, 2007 and 7.25% Debentures Due August 1, 2017), dated as of May 31, 2000, by the Company and certain of its subsidiaries, in favor of First Security Bank, National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.8 to the May 2000 8-K).
10.1(8)	Instrument of Joinder, dated as of May 31, 2000, by MRI and certain of its wholly owned subsidiaries, in favor of the beneficiaries of the Guarantees referred to therein (incorporated by reference to Exhibit 10.9 to the May 2000 8-K).
10.1(9)	Optional Advance Unsecured Promissory Note, dated as of September 5, 2002, among the Company and U.S. Bank National Association (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002).
10.1(10)	Third Amended and Restated Loan Agreement, dated as of November 24, 2003, among the Company, as Borrower, and MGM Grand Detroit, LLC, as Co-Borrower, the Lenders, Co-Documentation Agents and Co-Syndication Agents therein named and 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.
10.2(1)	Lease, dated September 4, 1962, and Agreement, dated March 25, 1975, between the Trustees of the Fraternal Order of Eagles, Las Vegas Aerie 1213, and MRI (incorporated by reference to Exhibit 10(c) to Registration Statement No. 33-5694 filed by GNLV FINANCE CORP. and GNLV, CORP. (the “GNLV Registration Statement”)).
10.2(2)	Lease Agreement, dated July 1, 1973, and Amendment to Lease, dated February 27, 1979, between First National Bank of Nevada, Trustee under Private Trust No. 87, and MRI (incorporated by reference to Exhibit 10(d) to the GNLV Registration Statement).
10.2(3)	Lease, dated April 30, 1976, between Elizabeth Properties Trust, Elizabeth Zahn, Trustee, and MRI (the “Elizabeth Properties Trust Lease”) (incorporated by reference to Exhibit 10(e) to the GNLV Registration Statement).
10.2(4)	Amended and Restated Ground Lease Agreement, dated July 1, 1993, between Primm South Real Estate Company and The Primadonna Corporation (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Primadonna Resorts, Inc. (Commission File No. 0-21732) for the fiscal quarter ended September 30, 1993).
10.2(5)	First Amendment to the Amended and Restated Ground Lease Agreement and Consent and Waiver, dated as of August 25, 1997, between The Primadonna Corporation and Primm South Real Estate Company (incorporated by reference to Exhibit 10.31 to the Annual Report on Form 10-K of Primadonna Resorts, Inc. for the fiscal year ended December 31, 1997).
10.2(6)	Public Trust Tidelands Lease, dated February 4, 1999, between the State of Mississippi and Beau Rivage Resorts, Inc. (without exhibits) (incorporated by reference to Exhibit 10.73 to the Annual Report on Form 10-K of MRI for the fiscal year ended December 31, 1999).
10.2(7)	Letter agreement, dated March 21, 2000, amending the Elizabeth Properties Trust Lease (incorporated by reference to Exhibit 10.2(7) to the 2000 10-K).
10.2(8)	Stock Purchase Agreement, by and among MGM MIRAGE, Mirage Resorts, Incorporated, GNLV, CORP., GNL, CORP., Golden Nugget Experience, LLC and Poster Financial Group, Inc., dated as of June 24, 2003 (incorporated by reference to the June 2003 10-Q).

53

Exhibit
Number	Description
*10.3(1)	Nonqualified Stock Option Plan (incorporated by reference to Exhibit 10(1) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (the “1996 10-K”)).
*10.3(2)	Incentive Stock Option Plan (incorporated by reference to Exhibit 10(2) to the 1996 10-K).
*10.3(3)	1997 Nonqualified Stock Option Plan, giving effect to amendment
	approved by the Company’s shareholders on May 13, 2003 (incorporated by reference to Appendix A to the Company’s definitive Proxy Statement filed under cover of Schedule 14A on April 14, 2003 (the “2003 Proxy Statement”)).
*10.3(4)	1997 Incentive Stock Option Plan, giving effect to amendment
	approved by the Company’s shareholders on August 1, 2000 (incorporated by reference to Exhibit 10.4 to the September 2000 10-Q).
*10.3(5)	Amended and Restated Annual Performance Based Incentive Plan for Executive Officers, giving effect to amendment approved by the Company’s shareholders on May 13, 2003 (incorporated by reference to Appendix B to the 2003 Proxy Statement).
*10.3(6)	Non-Qualified Deferred Compensation Plan, dated as of January 1, 2001 (incorporated by reference to Exhibit 10.3(12) to the 2000 10-K).
*10.3(7)	Supplemental Executive Retirement Plan, dated as of January 1, 2001 (incorporated by reference to Exhibit 10.3(13) to the 2000 10-K).
*10.3(8)	Employment Agreement, dated as of July 9, 2001, between the Company and William J. Hornbuckle (incorporated by reference to Exhibit 10.3(14) to the 2001 10-K).
*10.3(9)	Employment agreement, dated June 1, 2002, between the Company and J. Terrence Lanni (incorporated by reference to Exhibit 10.1 to the June 2002 10-Q).
*10.3(10)	Employment agreement, dated June 1, 2002, between the Company and James J. Murren (incorporated by reference to Exhibit 10.2 to the June 2002 10-Q).
*10.3(11)	Employment agreement, dated June 1, 2002, between the Company and John T. Redmond (incorporated by reference to Exhibit 10.3 to the June 2002 10-Q).
*10.3(12)	Employment agreement, dated June 1, 2002, between the Company and Robert H. Baldwin (incorporated by reference to Exhibit 10.4 to the June 2002 10-Q).
*10.3(13)	Employment agreement, dated June 1, 2002, between the Company and Gary N. Jacobs (incorporated by reference to Exhibit 10.5 to the June 2002 10-Q).
*10.3(14)	Employment agreement, dated June 1, 2002, between the Company and Kenneth Rosevear (incorporated by reference to Exhibit 10.6 to the June 2002 10-Q).
10.4(1)	An Agreement Between the City of Atlantic City and Mirage Resorts, Incorporated for the Development of the Huron North Redevelopment Area, dated May 3, 1996 (without exhibits) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of MRI for the fiscal quarter ended March 31, 1996 (the “MRI March 1996 10-Q”)).
10.4(2)	Completion Guaranty, dated as of May 3, 1996, by MRI in favor of the City of Atlantic City (incorporated by reference to Exhibit 10.2 to the MRI March 1996 10-Q).

54

Exhibit
Number	Description
10.4(3)	An Amendment to the May 3, 1996 Agreement Between the City of Atlantic City and Mirage Resorts, Incorporated for the Development of the Huron North Redevelopment Area, dated January 8, 1998 (without exhibits) (incorporated by reference to Exhibit 10(nnn) to the MRI 1997 10-K).
10.4(4)	A Second Amendment to the May 3, 1996 Agreement Between the City of Atlantic City and Mirage Resorts, Incorporated for the Development of the Huron North Redevelopment Area, dated December 15, 1998 (incorporated by reference to Exhibit 10.77 to the Annual Report on Form 10-K of MRI for the fiscal year ended December 31, 1998 (the “MRI 1998 10-K”)).
10.4(5)	A Third Amendment to the May 3, 1996 Agreement Between the City of Atlantic City and Mirage Resorts, Incorporated for the Development of the Huron North Redevelopment Area, dated January 13, 1999 (without exhibits) (incorporated by reference to Exhibit 10.80 to the MRI 1998 10-K).
10.4(6)	Second Amended and Restated Joint Venture Agreement of Marina District Development Company, dated as of August 31, 2000, between MAC, CORP. and Boyd Atlantic City, Inc. (without exhibits) (incorporated by reference to Exhibit 10.2 to the September 2000 10-Q).
10.4(7)	H-Tract Tri-Party Agreement, dated October 18, 2000, among Marina District Development Company, MAC, CORP. and the City of Atlantic City (without exhibits) (incorporated by reference to Exhibit 10.4(13) to the 2000 10-K).
10.4(8)	A Fourth Amendment to the May 3, 1996 Agreement Between the City of Atlantic City and Mirage Resorts, Incorporated for the Development of the Huron North Redevelopment Area, dated October 18, 2000 (without exhibits) (incorporated by reference to Exhibit 10.4(14) to the 2000 10-K).
10.4(9)	Contribution and Adoption Agreement, dated as of December 13, 2000, among Marina District Development Holding Co., LLC, MAC, CORP. and Boyd Atlantic City, Inc. (incorporated by reference to Exhibit 10.4(15) to the 2000 10-K).
10.5(1)	Revised Development Agreement among the City of Detroit, The Economic Development Corporation of the City of Detroit and MGM Grand Detroit, LLC (incorporated by reference to Exhibit 10.10 to the June 2002 10-Q).
10.6(1)	Joint Venture Agreement of Victoria Partners, dated as of December 9, 1994, among MRGS Corp., Gold Strike L.V. and MRI (without exhibit) (the “Joint Venture Agreement”) (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of MRI dated December 9, 1994).
10.6(2)	Amendment No. 1 to the Joint Venture Agreement, dated as of April 17, 1995 (incorporated by reference to Exhibit 10(c) to the Quarterly Report on Form 10-Q of MRI for the fiscal quarter ended March 31, 1995).
10.6(3)	Amendment No. 2 to the Joint Venture Agreement, dated as of September 25, 1995 (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of MRI for the fiscal quarter ended September 30, 1995).
10.6(4)	Amendment No. 3 to the Joint Venture Agreement, dated as of February 28, 1996 (incorporated by reference to Exhibit 10(nnn) to the Annual Report on Form 10-K of MRI for the fiscal year ended December 31, 1995).
10.6(5)	Amendment No. 4 to the Joint Venture Agreement, dated as of May 29, 1996 (incorporated by reference to Exhibit 10(b) to the Quarterly Report on Form 10-Q of Mandalay Resort Group (Commission File No. 01-8570) for the fiscal quarter ended April 30, 1996).

55

Exhibit
Number	Description
10.7	Stock Purchase Agreement, dated as of April 14, 2000, between the Company and the Purchasers named therein (incorporated by reference to Exhibit 10.6 to the June 2000 10-Q).
10.8	Casino Operator’s Agreement, dated March 12, 2001, between Timothy Denney Baldwin, Minister for Racing, Gaming and Licensing, Diamond Leisure Pty. Limited and MGM Grand Australia Pty Ltd. (incorporated by reference to Exhibit 10.1 to the March 2001 10-Q).
21	List of subsidiaries of the Company.
23	Consent of Deloitte & Touche LLP.
31.1	Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a – 14(a) and Rule 15d – 14(a).
31.2	Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a – 14(a) and Rule 15d – 14(a).
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

* Management contract or compensatory plan or arrangement.

(b)	Reports on Form 8-K.
	The Company filed the following Current Reports of Form 8-K during the quarter ended December 31, 2003.
	Current Report on Form 8-K, filed by the Company on October 21, 2003, for the purpose of furnishing our earnings press release for the quarter ended September 30, 2003.
	Current Report on Form 8-K, filed by the Company on November 13, 2003, for the purpose of filing our press release announcing the approval by our Board of Directors of a 10 million share repurchase program.

56

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Stockholders
of MGM MIRAGE

     We have audited the accompanying consolidated balance sheets of MGM MIRAGE (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2003 and 2002, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2003. Our audits also included the financial statement schedule of Valuation and Qualifying Accounts included in Item 15(a)(2). These financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

     We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of MGM MIRAGE and subsidiaries as of December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

DELOITTE & TOUCHE LLP

Las Vegas, Nevada
January 28, 2004, except for
Note 18, as to which the
date is February 10, 2004

57

MGM MIRAGE AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

				At December 31,
				2003			2002
ASSETS
Current assets
	Cash and cash equivalents			$	178,047		$	211,234
	Accounts receivable, net				139,475			139,935
	Inventories				65,189			68,001
	Income tax receivable				9,901			—
	Deferred income taxes				49,286			84,348
	Prepaid expenses and other				89,641			86,311
	Assets held for sale				226,082			—
		Total current assets			757,621			589,829
Property and equipment, net					8,681,339			8,762,445
Other assets
	Investment in unconsolidated affiliates				756,012			710,802
	Goodwill and other intangible assets, net				267,668			256,108
	Deposits and other assets, net				247,070			185,801
		Total other assets			1,270,750			1,152,711
				$	10,709,710		$	10,504,985
			LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
	Accounts payable			$	85,439		$	69,959
	Income taxes payable				—			637
	Current portion of long-term debt				9,008			6,956
	Accrued interest on long-term debt				87,711			80,310
	Other accrued liabilities				559,445			592,206
	Liabilities related to assets held for sale				23,456			—
		Total current liabilities			765,059			750,068
Deferred income taxes					1,765,426			1,769,431
Long-term debt					5,521,890			5,213,778
Other long-term obligations					123,547			107,564
Commitments and contingencies (Note 10)
Stockholders’ equity
	Common stock, $.01 par value: authorized 300,000,000 shares, issued 168,268,213 and 166,393,025 shares; outstanding 143,096,213 and 154,574,225 shares				1,683			1,664
	Capital in excess of par value				2,171,625			2,125,626
	Deferred compensation				(19,174	)		(27,034	)
	Treasury stock, at cost (25,172,000 and 11,818,800 shares)				(760,594	)		(317,432	)
	Retained earnings				1,133,903			890,206
	Accumulated other comprehensive income (loss)				6,345			(8,886	)
		Total stockholders’ equity			2,533,788			2,664,144
				$	10,709,710		$	10,504,985

The accompanying notes are an integral part of these consolidated financial statements.

58

MGM MIRAGE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

		Year Ended December 31,
		2003			2002			2001
Revenues
	Casino	$	2,075,569		$	2,042,626		$	2,015,960
	Rooms		835,938			798,562			793,321
	Food and beverage		765,242			711,373			680,538
	Entertainment, retail and other		647,710			637,791			620,523
			4,324,459			4,190,352			4,110,342
	Less: Promotional allowances		(415,643	)		(398,104	)		(378,706	)
			3,908,816			3,792,248			3,731,636
Expenses
	Casino		1,055,536			1,019,761			1,042,011
	Rooms		236,050			212,337			216,548
	Food and beverage		441,549			396,273			379,313
	Entertainment, retail and other		428,834			404,158			410,125
	Provision for doubtful accounts		12,570			27,675			70,690
	General and administrative		591,155			566,080			552,916
	Corporate expense		61,541			43,856			37,637
	Preopening and start-up expenses		29,266			14,141			4,130
	Restructuring costs (credit)		6,597			(17,021	)		23,382
	Property transactions, net		(18,336	)		14,712			46,062
	Depreciation and amortization		404,597			384,890			375,945
			3,249,359			3,066,862			3,158,759
Income from unconsolidated affiliates			53,612			32,361			36,816
Operating income			713,069			757,747			609,693
Non-operating income (expense)
	Interest income		4,310			4,306			5,630
	Interest expense, net		(341,114	)		(286,636	)		(338,783	)
	Non-operating items from unconsolidated affiliates		(10,401	)		(1,335	)		(914	)
	Other, net		(12,160	)		(7,611	)		(6,036	)
			(359,365	)		(291,276	)		(340,103	)
Income from continuing operations before income taxes			353,704			466,471			269,590
	Provision for income taxes		(116,592	)		(171,271	)		(104,402	)
Income from continuing operations			237,112			295,200			165,188
Discontinued operations
	Income (loss) from discontinued operations, including loss on disposal of $6,735 (2003)		6,031			(661	)		6,803
	Benefit (provision) for income taxes		554			(2,104	)		(2,176	)
			6,585			(2,765	)		4,627
Net income		$	243,697		$	292,435		$	169,815
Basic income per share of common stock
	Income from continuing operations	$	1.59		$	1.87		$	1.04
	Discontinued operations		0.05			(0.02	)		0.03
	Net income per share	$	1.64		$	1.85		$	1.07
Diluted income per share of common stock
	Income from continuing operations	$	1.56		$	1.85		$	1.03
	Discontinued operations		0.05			(0.02	)		0.03
	Net income per share	$	1.61		$	1.83		$	1.06

The accompanying notes are an integral part of these consolidated financial statements.

59

MGM MIRAGE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

					Year Ended December 31,
					2003			2002			2001
Cash flows from operating activities
	Net income				$	243,697		$	292,435		$	169,815
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				412,937			398,623			390,726
		Amortization of debt discount and issuance costs				35,826			28,527			30,505
		Provision for doubtful accounts				13,668			28,352			71,244
		Property transactions, net				(18,336	)		14,712			47,955
		Loss on early retirements of debt				3,244			504			1,197
		Loss on disposal of discontinued operations				6,735			—			—
		Income from unconsolidated affiliates				(43,211	)		(31,765	)		(34,446	)
		Distributions from unconsolidated affiliates				38,000			37,000			36,000
		Deferred income taxes				28,362			90,852			65,619
		Tax benefit from stock option exercises				9,505			18,050			2,137
		Changes in assets and liabilities:
			Accounts receivable			(14,330	)		(24,107	)		23,726
			Inventories			(2,205	)		(5,685	)		7,464
			Income taxes receivable and payable			(10,538	)		12,714			(8,512	)
			Prepaid expenses and other			(8,500	)		(16,142	)		1,070
			Accounts payable and accrued liabilities			16,125			(18,863	)		(5,528	)
		Other				(8,013	)		2,751			(3,089	)
				Net cash provided by operating activities		702,966			827,958			795,883
Cash flows from investing activities
	Purchases of property and equipment					(550,232	)		(300,039	)		(327,936	)
	Dispositions of property and equipment					56,614			20,340			26,840
	Investments in unconsolidated affiliates					(41,350	)		(80,314	)		(38,250	)
	Change in construction payable					12,953			6,313			3,368
	Other					(33,673	)		(17,510	)		(16,227	)
				Net cash used in investing activities		(555,688	)		(371,210	)		(352,205	)
Cash flows from financing activities
	Net borrowing (repayment) under bank credit facilities					(285,087	)		(270,126	)		(819,704	)
	Issuance of long-term debt					600,000			—			400,000
	Repurchase of senior notes					(28,011	)		—			—
	Debt issuance costs					(25,374	)		(848	)		(8,529	)
	Issuance of common stock					36,254			45,985			7,837
	Purchases of treasury stock					(442,864	)		(207,590	)		(45,716	)
	Other					(20,153	)		(21,906	)		3,437
				Net cash used in financing activities		(165,235	)		(454,485	)		(462,675	)
Cash and cash equivalents
	Net increase (decrease) for the year					(17,957	)		2,263			(18,997	)
	Cash related to discontinued operations					(15,230	)		—			—
	Balance, beginning of year					211,234			208,971			227,968
	Balance, end of year				$	178,047		$	211,234		$	208,971
Supplemental cash flow disclosures
	Interest paid, net of amounts capitalized				$	308,198		$	266,071		$	317,773
	State, federal and foreign income taxes paid					94,932			44,579			19,342
Non-cash investing and financing transactions
	Acquisition of Detroit development rights				$	—		$	115,055		$	—

The accompanying notes are an integral part of these consolidated financial statements.

60

MGM MIRAGE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)

For the Years Ended December 31, 2003, 2002 and 2001

		Common Stock
							Capital in
		Shares			Par		Excess of			Deferred
		Outstanding			Value		Par Value			Compensation
Balances, January 1, 2001			159,130		$	1,632	$	2,041,820		$	—
	Net income		—			—		—			—
	Currency translation adjustment		—			—		—			—
	Derivative loss from unconsolidated affiliate, net		—			—		—			—
	Total comprehensive income		—			—		—			—
	Issuance of common stock pursuant to stock option grants		497			5		5,884			—
	Purchases of treasury stock		(2,231	)		—		—			—
	Tax benefit from stock option exercises		—			—		2,137			—
Balances, December 31, 2001			157,396			1,637		2,049,841			—
	Net income		—			—		—			—
	Currency translation adjustment		—			—		—			—
	Derivative loss from unconsolidated affiliate, net		—			—		—			—
	Total comprehensive income		—			—		—			—
	Issuance of restricted stock		903			—		12,000			(31,769	)
	Cancellation of restricted stock		(6	)		—		—			212
	Amortization of deferred compensation		—			—		—			4,523
	Issuance of common stock pursuant to stock option grants		2,707			27		45,735			—
	Purchases of treasury stock		(6,426	)		—		—			—
	Tax benefit from stock option exercises		—			—		18,050			—
Balances, December 31, 2002			154,574			1,664		2,125,626			(27,034	)
	Net income		—			—		—			—
	Currency translation adjustment		—			—		—			—
	Derivative income from unconsolidated affiliate, net		—			—		—			—
	Total comprehensive income		—			—		—			—
	Cancellation of restricted stock		(10	)		—		(54	)		352
	Issuance of stock options to non-employees		—			—		313			(313	)
	Amortization of deferred compensation		—			—		—			7,821
	Issuance of common stock pursuant to stock option grants		1,875			19		36,235			—
	Purchases of treasury stock		(13,343	)		—		—			—
	Tax benefit from stock option exercises		—			—		9,505			—
Balances, December 31, 2003			143,096		$	1,683	$	2,171,625		$	(19,174	)

[Additional columns below]

[Continued from above table, first column(s) repeated]

							Other
							Comprehensive			Total
		Treasury			Retained		Income			Stockholders’
		Stock			Earnings		(Loss)			Equity
Balances, January 1, 2001		$	(83,683	)	$	427,956	$	(5,280	)	$	2,382,445
	Net income		—			169,815		—			169,815
	Currency translation adjustment		—			—		(2,086	)		(2,086	)
	Derivative loss from unconsolidated affiliate, net		—			—		(1,784	)		(1,784	)
	Total comprehensive income		—			—		—			165,945
	Issuance of common stock pursuant to stock option grants		—			—		—			5,889
	Purchases of treasury stock		(45,716	)		—		—			(45,716	)
	Tax benefit from stock option exercises		—			—		—			2,137
Balances, December 31, 2001			(129,399	)		597,771		(9,150	)		2,510,700
	Net income		—			292,435		—			292,435
	Currency translation adjustment		—			—		6,085			6,085
	Derivative loss from unconsolidated affiliate, net		—			—		(5,821	)		(5,821	)
	Total comprehensive income		—			—		—			292,699
	Issuance of restricted stock		19,769			—		—			—
	Cancellation of restricted stock		(212	)		—		—			—
	Amortization of deferred compensation		—			—		—			4,523
	Issuance of common stock pursuant to stock option grants		—			—		—			45,762
	Purchases of treasury stock		(207,590	)		—		—			(207,590	)
	Tax benefit from stock option exercises		—			—		—			18,050
Balances, December 31, 2002			(317,432	)		890,206		(8,886	)		2,664,144
	Net income		—			243,697		—			243,697
	Currency translation adjustment		—			—		12,313			12,313
	Derivative income from unconsolidated affiliate, net		—			—		2,918			2,918
	Total comprehensive income		—			—		—			258,928
	Cancellation of restricted stock		(298	)		—		—			—
	Issuance of stock options to non-employees		—			—		—			—
	Amortization of deferred compensation		—			—		—			7,821
	Issuance of common stock pursuant to stock option grants		—			—		—			36,254
	Purchases of treasury stock		(442,864	)		—		—			(442,864	)
	Tax benefit from stock option exercises		—			—		—			9,505
Balances, December 31, 2003		$	(760,594	)	$	1,133,903	$	6,345		$	2,533,788

The accompanying notes are an integral part of these consolidated financial statements.

61

MGM MIRAGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — ORGANIZATION

     MGM MIRAGE (the “Company”), formerly MGM Grand, Inc., is a Delaware corporation, incorporated on January 29, 1986. As of December 31, 2003 approximately 57% of the outstanding shares of the Company’s common stock were owned by Tracinda Corporation, a Nevada corporation wholly owned by Kirk Kerkorian. MGM MIRAGE acts largely as a holding company and, through wholly-owned subsidiaries, operates hotel, casino and entertainment resorts.

     The Company owns and operates the following hotel, casino and entertainment resorts on the Las Vegas Strip in Las Vegas, Nevada: Bellagio, MGM Grand Las Vegas, The Mirage, Treasure Island (“TI”), New York-New York and the Boardwalk Hotel and Casino. The Company owns a 50% interest in the joint venture that owns and operates the Monte Carlo Resort & Casino, also located on the Las Vegas Strip.

     The Company owns three resorts in Primm, Nevada at the California/Nevada state line – Whiskey Pete’s, Buffalo Bill’s and the Primm Valley Resort – as well as two championship golf courses located near the resorts. The Company also owns Shadow Creek, an exclusive world-class golf course located approximately ten miles north of its Las Vegas Strip resorts. Until January 2004, the Company owned and operated the Golden Nugget Las Vegas in downtown Las Vegas and the Golden Nugget Laughlin in Laughlin, Nevada (the “Golden Nugget Subsidiaries”). See Note 3 for information regarding the sale of these resorts.

     The Company, through its wholly owned subsidiary, MGM Grand Detroit, Inc., and its local partners formed MGM Grand Detroit, LLC, to develop a hotel, casino and entertainment complex in Detroit, Michigan. MGM Grand Detroit, LLC operates a casino in an interim facility in downtown Detroit. See Note 10 for discussion of the revised development agreement with the City of Detroit and plans for a permanent casino resort.

     The Company owns and operates Beau Rivage, a beachfront resort located in Biloxi, Mississippi, and MGM Grand Hotel and Casino in Darwin, Australia – see Note 18 for information regarding the proposed sale of this resort. The Company also owns a 50% interest in a limited liability company that owns Borgata, a casino resort at Renaissance Pointe, located in the Marina area of Atlantic City, New Jersey. Boyd Gaming Corporation owns the other 50% of Borgata and also operates the resort. Borgata opened in July 2003. The Company owns approximately 95 developable acres adjacent to Borgata, a portion of which consists of common roads, landscaping and master plan improvements which the Company designed and developed as required under the agreement with Boyd.

     In the second quarter of 2002, the Company received proceeds of $11 million upon termination of management agreements covering four casinos in the Republic of South Africa. Prior to the termination, the Company managed three permanent casinos and one interim casino and received management fees from its partner, Tsogo Sun Gaming & Entertainment. The termination fee was recorded as part of entertainment, retail and other revenues in the accompanying consolidated statements of income.

     Until June 30, 2003, the Company operated PLAYMGMMIRAGE.com, the Company’s online gaming website based in the Isle of Man. PLAYMGMMIRAGE.com became operational on September 26, 2002. It was initially not actively marketed, and was in the start-up phase through January 31, 2003. The Company ceased operations of the website as of June 30, 2003. See Note 3 for further information.

     The Company is actively seeking future development opportunities in the United Kingdom. In May 2003, the Company acquired a 25% interest in Metro Casinos Limited, a United Kingdom gaming company which is developing a new casino in Bristol. See Note 10 for discussion of other potential developments in the United Kingdom.

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NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

     Principles of consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries. Investments in unconsolidated affiliates which are 50% or less owned are accounted for under the equity method. All significant intercompany balances and transactions have been eliminated in consolidation. The Company’s operations are primarily in one segment – operation of casino resorts. Other operations, and foreign operations, are not material.

     Management’s use of estimates. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. Those principles require the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

     Cash and cash equivalents. Cash and cash equivalents include investments and interest bearing instruments with maturities of three months or less at the date of acquisition. Such investments are carried at cost which approximates market value.

     Accounts receivable and credit risk. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of casino accounts receivable. The Company issues markers to approved casino customers following background checks and investigations of creditworthiness. At December 31, 2003, a substantial portion of the Company’s receivables were due from customers residing in foreign countries. Business or economic conditions or other significant events in these countries could affect the collectibility of such receivables.

     Trade receivables, including casino and hotel receivables, are typically non-interest bearing and are initially recorded at cost. Accounts are written off when management deems the account to be uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for doubtful accounts is maintained to reduce the Company’s receivables to their carrying amount, which approximates fair value. The allowance is estimated based on specific review of customer accounts as well as historical collection experience and current economic and business conditions. Management believes that as of December 31, 2003, no significant concentrations of credit risk existed for which an allowance had not already been recorded.

     Inventories. Inventories consist of food and beverage, retail merchandise and operating supplies, and are stated at the lower of cost or market. Cost is determined by the first-in, first-out method.

     Property and equipment. Property and equipment are stated at cost. Gains or losses on dispositions of property and equipment are included in the determination of income. Property and equipment are generally depreciated over the following estimated useful lives on a straight-line basis:

Buildings	40 years
Building improvements	15 to 40 years
Land improvements	15 to 40 years
Equipment, furniture, fixtures, and leasehold improvements	5 to 20 years

     We evaluate our property and equipment and other long-lived assets for impairment in accordance with the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). For assets to be disposed of, we recognize the asset to be sold at the lower of carrying value or fair value less costs of disposal. Fair value for assets to be disposed of is estimated based on comparable asset sales, solicited offers, or a discounted cash flow model.

     For assets to be held and used, we review fixed assets for impairment whenever indicators of impairment exist. If an indicator of impairment exists, we compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model. If an asset is still under development, future cash flows include remaining construction costs.

63

     For a discussion of recognized impairment losses, see Note 14. In October 2002, the Company announced the suspension of development activities on its wholly-owned project on the Renaissance Pointe land in Atlantic City. In connection therewith, the Company reviewed the land for potential impairment, and determined that no impairment was indicated. In December 2002, the Company entered into an agreement with Turnberry Associates to form a venture which will construct condominium residences behind MGM Grand Las Vegas. As part of the agreement, the Company will contribute land to the venture. The Company reviewed the land for potential impairment, and determined no impairment was indicated. In June 2003, the Company entered into an agreement to sell the Golden Nugget Subsidiaries. The fair value less costs to sell exceeded the carrying value, therefore no impairment was indicated.

     Capitalized interest. The interest cost associated with major development and construction projects is capitalized and included in the cost of the project. When no debt is incurred specifically for a project, interest is capitalized on amounts expended on the project using the weighted-average cost of the Company’s outstanding borrowings. Capitalization of interest ceases when the project is substantially complete or development activity is suspended for more than a brief period.

     Goodwill and other intangible assets. The Company adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), on January 1, 2002. The statement provides that goodwill and indefinite-lived intangible assets are no longer amortized, but are instead reviewed for impairment at least annually and between annual test dates in certain circumstances.

As of December 31, 2003 and 2002 goodwill and intangible assets consisted of the following:

		At December 31,
		2003		2002
		(In thousands)
Goodwill:
	Mirage acquisition (2000)	$	76,342	$	79,678
	MGM Grand Darwin acquisition (1995)		34,259		25,826
	Other		7,833		—
			118,434		105,504
Indefinite-lived intangible assets:
	Detroit development rights		115,056		115,056
	Trademarks and license rights		17,554		17,554
			132,610		132,610
Other intangible assets			16,624		17,994
		$	267,668	$	256,108

     Goodwill represents the excess of purchase price over fair market value of net assets acquired in business combinations. Goodwill related to the Mirage acquisition was assigned to Bellagio, The Mirage, TI and Golden Nugget Las Vegas. Other goodwill relates to the Company’s 2003 acquisition for $9 million of majority interests in the entities that operate the nightclubs Light and Caramel, located in Bellagio, and Mist, located in TI. Changes in the recorded balances of goodwill are as follows:

		Year Ended December 31,
		2003			2002
		(In thousands)
Balance, beginning of period		$	105,504		$	103,059
	Currency translation adjustment		8,433			2,445
	Goodwill assigned to discontinued operations		(3,336	)		—
	Goodwill acquired during the period		7,833			—
Balance, end of the period		$	118,434		$	105,504

     The Company’s indefinite-lived intangible assets consist primarily of development rights in Detroit (see Note 10) and trademarks. The Company’s finite–lived intangible assets consist primarily of lease acquisition costs, amortized over the life of the related leases, and certain license rights with contractually limited terms, amortized over their contractual life.

64

     The Company completed the necessary transition impairment reviews for goodwill and indefinite-lived intangible assets in 2002, and no impairments were indicated. The Company performs its annual impairment test for goodwill and indefinite-lived intangible assets in the fourth quarter of each fiscal year. No impairments were indicated as a result of the annual impairment reviews for goodwill and indefinite-lived intangible assets in 2003 or 2002. Amortization of goodwill and indefinite–lived intangible assets totaled $3 million for the year ended 2001. Had SFAS 142 been in effect, the Company’s results would have been as follows:

	December 31, 2001
	As Reported		Adjusted
	(In thousands, except per share amounts)
Net income	$	169,815	$	172,484
Basic earnings per share	$	1.07	$	1.09
Diluted earnings per share		1.06		1.07

     Revenue recognition and promotional allowances. Casino revenue is the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs (“casino front money”) and for chips in the customers’ possession (“outstanding chip liability”). Hotel, food and beverage, entertainment and other operating revenues are recognized as services are performed. Advance deposits on rooms and advance ticket sales are recorded as accrued liabilities until services are provided to the customer.

     Revenues are recognized net of certain sales incentives in accordance with the Emerging Issues Task Force (“EITF”) consensus on Issue 01-9, “Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor ´s Products).” The consensus in EITF 01-9 requires that sales incentives be recorded as a reduction of revenue and that points earned in point-loyalty programs, such as our Players Club loyalty program, must be recorded as a reduction of revenue. The Company recognizes incentives related to casino play and points earned in Players Club as a direct reduction of casino revenue.

     Existing industry practice related to non-gaming revenues already complied with EITF 01-9. The retail value of accommodations, food and beverage, and other services furnished to guests without charge is included in gross revenue and then deducted as promotional allowances. The estimated cost of providing such promotional allowances is primarily included in casino expenses as follows:

	Year Ended December 31,
	2003		2002		2001
			(In thousands)
Rooms	$	64,163	$	60,589	$	60,961
Food and beverage		180,327		170,916		166,835
Other		21,560		19,924		18,403
	$	266,050	$	251,429	$	246,199

     Advertising. The Company expenses advertising costs the first time the advertising takes place. Advertising expense, which is generally included in general and administrative expenses, was $56 million, $54 million and $51 million for 2003, 2002 and 2001, respectively.

     Corporate expense. Corporate expense represents unallocated payroll and aircraft costs, professional fees and various other expenses not directly related to the Company’s casino resort operations. In addition, corporate expense includes the costs associated with the Company’s evaluation and pursuit of new business opportunities, which are expensed as incurred until development of a specific project has become probable.

     Preopening and start-up expenses. The Company accounts for costs incurred during the preopening and start-up phases of operations in accordance with Statement of Position 98-5, “Reporting on the Costs of Start-up Activities”. Preopening and start-up costs, including organizational costs, are expensed as incurred. Costs classified as preopening and start-up expenses include payroll, outside services, advertising, and other expenses related to new or start-up operations and customer initiatives.

65

     Income per share of common stock. The weighted-average number of common and common equivalent shares used in the calculation of basic and diluted earnings per share consisted of the following:

	Year Ended December 31,
	2003		2002		2001
			(In thousands)
Weighted-average common shares outstanding used in the calculation of basic earnings per share		148,930		157,809		158,771
Potential dilution from stock options and restricted stock		2,662		2,131		2,051
Weighted-average common and common equivalent shares used in the calculation of diluted earnings per share		151,592		159,940		160,822

     Stock-based compensation. The Company accounts for stock-based compensation, including employee stock option plans, in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” and the Financial Accounting Standards Board’s Interpretation No. 44, “Accounting for Certain Transactions involving Stock Compensation, an interpretation of APB Opinion No. 25”, and discloses supplemental information in accordance with Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), as amended by Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure” (“SFAS 148”). The Company does not incur compensation expense for employee stock options when the exercise price is at least 100% of the market value of the Company’s common stock on the date of grant. For disclosure purposes, employee stock options are measured at fair value, compensation is assumed to be amortized over the vesting periods of the options, and pro forma results are disclosed as if the Company had applied SFAS 123.

     The Company has adopted nonqualified stock option plans and incentive stock option plans which provide for the granting of stock options to eligible directors, officers and employees. The plans are administered by the Compensation and Stock Option Committee of the Board of Directors. Salaried officers, directors and other key employees of the Company and its subsidiaries are eligible to receive options. The exercise price in each instance is 100% of the fair market value of the Company’s common stock on the date of grant. The options have 10-year terms and in most cases are exercisable in either four or five equal annual installments.

     In November 2001, the Company offered its employees and members of its Board of Directors the opportunity to surrender certain stock options in exchange for the issuance of options equal in number to 90% of the options surrendered. The replacement options were to be granted no earlier than 6 months and one day after the options were surrendered, at an exercise price equal to the market price of the Company’s common stock on the date the replacement options were granted. In connection with the November 2001 offer, 5.7 million options with an average exercise price of $32.57 were surrendered in December 2001 and 5.2 million replacement options with an exercise price of $34.15 were granted in June 2002.

     As of December 31, 2003, the aggregate number of shares subject to options available for grant under all of the plans was 2.0 million. A summary of the status of the Company’s nonqualified stock option and incentive stock option plans for each of the years ended December 31, 2003, 2002 and 2001 is presented below:

	2003					2002					2001
				Weighted					Weighted					Weighted
				Average					Average					Average
	Shares			Exercise		Shares			Exercise		Shares			Exercise
	(000’s)			Price		(000’s)			Price		(000’s)			Price
Outstanding at beginning of year		14,323		$	27.18		11,049		$	20.67		17,567		$	24.22
Granted		8,691			26.11		6,484			34.17		905			29.41
Exercised		(1,875	)		19.33		(2,707	)		16.99		(759	)		17.23
Terminated		(272	)		32.76		(503	)		29.51		(6,664	)		31.49
Outstanding at end of year		20,867			27.37		14,323			27.18		11,049			20.67
Exercisable at end of year		8,835			27.01		7,582			24.90		5,664			18.10

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     The following table summarizes information about stock options outstanding at December 31, 2003:

	Options Outstanding						Options Exercisable
			Weighted
			Average		Weighted				Weighted
	Number		Remaining		Average		Number		Average
	Outstanding		Contractual		Exercise		Exercisable		Exercise
Range of Exercise Prices	(000’s)		Life (Years)		Price		(000’s)		Price
$10.99 - $14.69		1,750		3.8	$	13.13		1,750	$	13.13
$16.53 - $24.70		2,478		5.8		21.88		1,878		21.74
$25.16 - $37.73		16,531		8.6		29.61		5,180		33.54
$40.22 - $40.33		108		8.3		40.27		27		40.27
		20,867		7.9		27.37		8,835		27.01

     Had the Company accounted for these plans under the fair value method allowed by SFAS 123, the Company’s net income and earnings per share would have been reduced to recognize the fair value of employee stock options. The following are required disclosures under SFAS 123 and SFAS 148:

		Year Ended December 31,
		2003			2002			2001
		(In thousands, except per share amounts)
Net income
	As reported	$	243,697		$	292,435		$	169,815
	Stock-based compensation under SFAS 123		(43,310	)		(47,761	)		(12,784	)
	Pro forma	$	200,387		$	244,674		$	157,031
Basic earnings per share
	As reported	$	1.64		$	1.85		$	1.07
	Stock-based compensation under SFAS 123		(0.29	)		(0.30	)		(0.08	)
	Pro forma	$	1.35		$	1.55		$	0.99
Diluted earnings per share
	As reported	$	1.61		$	1.83		$	1.06
	Stock-based compensation under SFAS 123		(0.29	)		(0.30	)		(0.08	)
	Pro forma	$	1.32		$	1.53		$	0.98

     Reported net income includes $5 million and $3 million, net of tax, of amortization of restricted stock and non-employee stock option compensation for the years ended December 31, 2003 and 2002, respectively. For purposes of computing the pro forma compensation, the fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: risk-free interest rates of 3% in 2003, and 4% in 2002 and 2001; no expected dividend yields for the years presented; expected lives of 5 years for the years presented; and expected volatility of 42% in 2003, 50% in 2002 and 40% in 2001. The estimated weighted average fair value of options granted in 2003, 2002 and 2001 was $10.64, $16.32 and $12.23, respectively.

     Currency translation. The Company accounts for currency translation in accordance with Statement of Financial Accounting Standards No. 52, “Foreign Currency Translation”. Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date. Income statement accounts are translated at the average rate of exchange prevailing during the period. Translation adjustments resulting from this process are charged or credited to other comprehensive income (loss).

     Comprehensive income. Comprehensive income includes net income and all other non-stockholder changes in equity, or other comprehensive income. Elements of the Company’s other comprehensive income are reported in the accompanying consolidated statement of stockholders’ equity, and the cumulative balance of these elements consisted of the following:

	At December 31,
	2003			2002
	(In thousands)
Foreign currency translation adjustments	$	11,032		$	(1,281	)
Derivative loss from unconsolidated affiliate, net		(4,687	)		(7,605	)
	$	6,345		$	(8,886	)

     Reclassifications. The consolidated financial statements for prior years reflect certain reclassifications, which have no effect on previously reported net income, to conform to the current year presentation. See Note 14 for information on classification of “Property transactions, net” in the accompanying consolidated statements of income.

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NOTE 3 — DISCONTINUED OPERATIONS

     In June 2003, the Company entered into an agreement to sell the Golden Nugget Subsidiaries, including substantially all of the assets and liabilities of those resorts, for approximately $215 million, subject to certain working capital adjustments. This transaction closed in January 2004. Also in June 2003, the Company ceased operations of PLAYMGMMIRAGE.com, its online gaming website (“Online”).

     The results of the Golden Nugget Subsidiaries and Online are classified as discontinued operations in the accompanying consolidated statements of income for all periods presented. Net revenues of discontinued operations were $231 million, $222 million and $223 million, respectively, for the years ended December 31, 2003, 2002 and 2001. Included in the income (loss) from discontinued operations is an allocation of interest expense based on the ratio of the net assets of the discontinued operations to the total consolidated net assets and debt of the Company. Interest allocated to discontinued operations was $9 million, $9 million and $11 million for the years ended December 31, 2003, 2002 and 2001, respectively. Also included in discontinued operations for the year ended December 31, 2003 is a loss on disposal of Online of $7 million relating primarily to unrecoverable costs of computer hardware and software. The estimated fair value less costs to sell the Golden Nugget Subsidiaries exceeds the carrying value, therefore no impairment was recognized as of December 31, 2003. Included in the tax benefit from discontinued operations for the year ended December 31, 2003 is $2 million of previously unrecognized tax benefits relating to prior year operating losses of Online.

     The following table summarizes the assets and liabilities of the Golden Nugget Subsidiaries and Online as of December 31, 2003, included as assets and liabilities held for sale in the accompanying consolidated balance sheet:

		At December 31,
		2003
		(In thousands)
Cash		$	15,230
Accounts receivable, net			6,024
Inventories			4,321
Prepaid expenses and other			5,174
	Total current assets		30,749
Property and equipment, net			185,516
Other assets, net			9,817
	Total assets		226,082
Accounts payable			2,180
Other current liabilities			20,885
	Total current liabilities		23,065
Long-term debt			391
	Total liabilities		23,456
Net assets		$	202,626

NOTE 4 — ACCOUNTS RECEIVABLE, NET

     Accounts receivable consisted of the following:

	At December 31,
	2003			2002
	(In thousands)
Casino	$	159,569		$	166,612
Hotel		36,376			50,024
Other		22,617			13,770
		218,562			230,406
Less: Allowance for doubtful accounts		(79,087	)		(90,471	)
	$	139,475		$	139,935

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NOTE 5 — PROPERTY AND EQUIPMENT, NET

     Property and equipment consisted of the following:

	At December 31,
	2003			2002
	(In thousands)
Land	$	4,103,693		$	4,113,622
Buildings, building improvements and land improvements		3,798,143			3,807,228
Equipment, furniture, fixtures and leasehold improvements		1,960,094			1,934,147
Construction in progress		465,471			298,809
		10,327,401			10,153,806
Less: Accumulated depreciation and amortization		(1,646,062	)		(1,391,361	)
	$	8,681,339		$	8,762,445

NOTE 6 — INVESTMENTS IN UNCONSOLIDATED AFFILIATES

     The Company has investments in unconsolidated affiliates accounted for under the equity method. Under the equity method, carrying value is adjusted for the Company’s share of the investees’ earnings and losses, as well as capital contributions to and distributions from these companies. Investments in unconsolidated affiliates consisted of the following:

	At December 31,
	2003		2002
	(In thousands)
Victoria Partners – Monte Carlo (50%)	$	420,853	$	421,483
Marina District Development Company - Borgata (50%)		335,159		289,319
	$	756,012	$	710,802

     The Company’s investments in unconsolidated affiliates were recorded at their estimated fair value at the date of the Mirage Acquisition, which value exceeded the Company’s share of the net assets of the unconsolidated affiliates by approximately $361 million. Substantially all of this difference relates to the excess of the fair value of land owned by the affiliates over its pre-existing carrying value. The investment balance also includes interest capitalized on the Borgata investment, which is being amortized over 40 years.

     The Company recorded its share of the results of operations of the unconsolidated affiliates as follows:

	Year Ended December 31,
	2003			2002			2001
	(In thousands)
Income from unconsolidated affiliates	$	53,612		$	32,361		$	36,816
Preopening and start-up expenses		(19,326	)		(7,757	)		(2,376	)
Non-operating items from unconsolidated affiliates		(10,401	)		(1,335	)		(914	)
Net income	$	23,885		$	23,269		$	33,526

     Summarized balance sheet information of the unconsolidated affiliates is as follows:

	At December 31,
	2003		2002
	(In thousands)
Current assets	$	81,193	$	57,033
Property and other assets, net		1,309,242		1,036,895
Current liabilities		81,526		145,119
Long-term debt and other liabilities		622,701		331,241
Equity		686,208		617,568

     Summarized results of operations of the unconsolidated affiliates are as follows:

	Year Ended December 31,
	2003			2002			2001
				(In thousands)
Net revenues	$	551,669		$	250,317		$	256,586
Operating expenses, except preopening expenses		(441,526	)		(184,268	)		(189,738	)
Preopening and start-up expenses		(39,186	)		(15,514	)		(4,899	)
Operating income		70,957			50,535			61,949
Interest expense		(21,700	)		(1,212	)		(4,684	)
Other nonoperating income (expense)		4,297			(1,336	)		3,469
Net income	$	53,554		$	47,987		$	60,734

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NOTE 7 — OTHER ACCRUED LIABILITIES

     Other accrued liabilities consisted of the following:

	At December 31,
	2003		2002
	(In thousands)
Salaries and related	$	165,211	$	173,047
Casino outstanding chip liability		75,280		62,690
Taxes, other than income taxes		40,189		44,168
Casino front money		45,642		42,803
Advance deposits and ticket sales		39,499		39,601
Amounts due to City of Detroit		22,344		37,760
Other liabilities		171,280		192,137
	$	559,445	$	592,206

NOTE 8 — LONG-TERM DEBT

     Long-term debt consisted of the following:

		At December 31,
		2003			2002
		(In thousands)
Senior Credit Facility:
	$1.5 Billion Revolving Credit Facility	$	525,000		$	—
	$1.0 Billion Term Loan		1,000,000			—
$2.0 Billion Revolving Credit Facility			—			1,800,000
$525 Million Revolving Credit Facility			—			—
$50 Million Revolving Line of Credit			50,000			50,000
Australian Bank Facility, due 2004			11,868			15,726
Other Note due to Bank			38,000			40,000
$300 Million 6.95% Senior Notes, due 2005, net			301,128			302,169
$200 Million 6.625% Senior Notes, due 2005, net			196,029			192,830
$250 Million 7.25% Senior Notes, due 2006, net			236,294			232,176
$710 Million 9.75% Senior Subordinated Notes, due 2007, net			705,713			704,459
$200 Million 6.75% Senior Notes, due 2007, net			183,405			179,603
$200 Million 6.75% Senior Notes, due 2008, net			181,517			177,698
$200 Million 6.875% Senior Notes, due 2008, net			198,802			198,509
$600 Million 6% Senior Notes, due 2009			600,000			—
$825 Million ($850 Million in 2002) 8.5% Senior Notes, due 2010, net			821,722			846,116
$400 Million 8.375% Senior Subordinated Notes, due 2011			400,000			400,000
$100 Million 7.25% Senior Debentures, due 2017, net			81,211			80,567
Other Notes			209			881
			5,530,898			5,220,734
Less: Current portion			(9,008	)		(6,956	)
		$	5,521,890		$	5,213,778

     Total interest incurred during 2003, 2002 and 2001 was $356 million, $349 million and $418 million, respectively, of which $15 million, $62 million and $79 million, respectively, was capitalized.

     On November 24, 2003, the Company entered into the Third Amended and Restated Loan Agreement providing for bank financing totaling $2.5 billion from a syndicate of banks each led by Bank of America, N.A. (collectively, the “Senior Credit Facility”). The Senior Credit Facility consists of (1) a $1.5 billion senior revolving credit facility which matures on November 24, 2008 (the “$1.5 billion Revolving Credit Facility”); and (2) a $1.0 billion term loan, which matures on November 24, 2008 (the “$1.0 billion Term Loan”). The $1.0 billion Term Loan reduces by 20% over the final three years of the loan. The Senior Credit Facility replaced the previous senior credit facilities, which were also provided by syndicates of banks each led by Bank of America, N.A. and, as amended, consisted of a $2.0 billion senior revolving credit facility and a $525 million senior revolving credit facility.

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     Interest on the Senior Credit Facility is based on the bank reference rate or Eurodollar rate. The Company’s borrowing rate on the Senior Credit Facility (or previous credit facilities in 2002) was approximately 2.8% in both 2003 and 2002. Stand-by letters of credit totaling $52 million were outstanding as of December 31, 2003 under the Senior Credit Facility.

     In September 2003, the Company issued $600 million of 6% Senior Notes due 2009. The proceeds were used to reduce the amount outstanding under the Company’s $2.0 billion revolving credit facility. In August 2003, the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s public debt securities. Subsequently, the Company repurchased $25 million of the Company’s $850 Million 8.50% Senior Notes, due 2010. The Company recorded a loss of $3.2 million related to repurchase premiums and unamortized debt issue costs.

     The Company established a commercial paper program during 2001 that provides for the issuance, on a revolving basis, of up to $500 million of uncollateralized short-term notes. The Company is required to maintain credit availability under its Senior Credit Facility equal to the outstanding principal amount of commercial paper borrowings. No commercial paper borrowings were outstanding at December 31, 2003 or 2002.

     In September 2002, the Company entered into a $50 million unsecured revolving line of credit with a bank. The Company is in the process of amending this line of credit to increase the capacity to $100 million on terms similar to the Company’s Senior Credit Facility. In August 2002, the Company terminated its MGM Grand Detroit, LLC credit facility, originally due in 2003. The early termination resulted in a loss of $0.5 million for the write-off of unamortized debt issuance costs.

     The Company has a shelf registration statement declared effective by the Securities and Exchange Commission in May 2000. The shelf registration statement originally allowed the Company to issue a total of up to $2.75 billion of debt and equity securities from time to time in public offerings. As of December 31, 2003, the Company had remaining capacity under the shelf registration statement of $190 million. Any future public offering of securities under the shelf registration statement will only be made by means of a prospectus supplement.

     The Company attempts to limit its exposure to interest rate risk by managing the mix of its long-term fixed rate borrowings and short-term borrowings under its bank credit facilities and commercial paper program. In August 2003, the Company entered into three interest rate swap agreements, designated as fair value hedges, which effectively convert $400 million of the Company’s fixed rate debt to floating rate debt. Under the terms of these agreements, the Company makes payments based on specified spreads over six-month LIBOR, and receives payments equal to the interest payments due on the fixed rate debt. The interest rate swap agreements qualify for the “shortcut method” allowed under Statement of Financial Accounting Standards No. 133, which allows an assumption of no ineffectiveness in the hedging relationship. As such, there is no income statement impact from changes in the fair value of the hedging instruments. Instead, the fair value of the instruments is recorded as an asset or liability on the Company’s balance sheet, with an offsetting adjustment to the carrying value of the related debt. At December 31, 2003, the fair value of the interest rate swap agreements was not material.

     During 2001 and 2002, the Company entered into several interest rate swap agreements, designated as fair value hedges, which effectively converted a portion of the Company’s fixed rate debt to floating rate debt. By the second quarter of 2002, the Company had terminated these interest rate swap agreements. The Company received net payments totaling $11 million during 2001 and 2002 upon the termination of these swap agreements. These amounts have been added to the carrying value of the related debt obligations and are being amortized and recorded as a reduction of interest expense over the remaining life of that debt.

     The Company and each of its material subsidiaries, excluding MGM Grand Detroit, LLC and the Company’s foreign subsidiaries, are directly liable for or unconditionally guarantee the Senior Credit Facility, senior notes, senior debentures, and senior subordinated notes. MGM Grand Detroit, LLC is a guarantor under the Senior Credit Facility, but only to the extent that the proceeds of borrowings under such facilities are made available to MGM Grand Detroit, LLC. Substantially all of the Company’s assets, other than assets of foreign subsidiaries and certain assets in use at MGM Grand Detroit, are pledged as collateral for the Company’s senior notes, excluding subordinated notes, and the Company’s bank credit facilities.

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     The Company’s long-term debt obligations contain certain customary covenants. The Company’s Senior Credit Facility contains covenants that require the Company to maintain certain financial ratios. At December 31, 2003, the Company was required to maintain a maximum leverage ratio (average debt to EBITDA, as defined) of 5.5:1, which decreases periodically to 4.75:1 by December 2007. The Company must also maintain a minimum coverage ratio (EBITDA to interest charges, as defined) of 2.75:1. As of December 31, 2003, the Company’s leverage and interest coverage ratios were 4.6 and 3.6, respectively.

     Maturities of the Company’s long-term debt as of December 31, 2003 are as follows:

Years ending December 31,	(In thousands)
2004	$	97,019
2005		502,900
2006		250,027
2007		910,028
2008		1,925,028
Thereafter		1,925,075
		5,610,077
Debt discount		(82,994	)
Swap deferred gain		3,815
	$	5,530,898

     Amounts due in 2004 intended to be refinanced through available capacity under the Company’s Senior Credit Facility have been excluded from current liabilities in the accompanying consolidated balance sheet.

     The estimated fair value of the Company’s long-term debt at December 31, 2003 was approximately $6.0 billion, versus its book value of $5.6 billion. At December 31, 2002, the estimated fair value of the Company’s long-term debt was approximately $5.6 billion, versus its book value of $5.2 billion. The estimated fair value of the Company’s public debt securities was based on quoted market prices on or about December 31, 2003 and 2002. The estimated fair value of the Company’s outstanding credit facility borrowings was assumed to approximate book value due to the short-term nature of the borrowings.

NOTE 9 — INCOME TAXES

     The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). SFAS 109 requires the recognition of deferred income tax assets, net of applicable reserves, related to net operating loss carryforwards and certain temporary differences. The standard requires recognition of a future tax benefit to the extent that realization of such benefit is more likely than not. Otherwise, a valuation allowance is applied.

     The income tax provision attributable to continuing operations and discontinued operations is as follows:

	Year Ended December 31,
	2003			2002		2001
	(In thousands)
Continuing operations	$	116,592		$	171,271	$	104,402
Discontinued operations		(554	)		2,104		2,176
	$	116,038		$	173,375	$	106,578

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     The income tax provision attributable to income from continuing operations before income taxes is as follows:

		Year Ended December 31,
		2003			2002			2001
		(In thousands)
Current — federal		$	67,840		$	49,706		$	25,650
Deferred — federal			40,142			111,981			69,385
	Provision for federal income taxes		107,982			161,687			95,035
Current — state			5,167			6,169			6,156
Deferred — state			(682	)		(51	)		366
	Provision for state income taxes		4,485			6,118			6,522
Current — foreign			2,654			6,379			3,436
Deferred — foreign			1,471			(2,913	)		(591	)
	Provision for foreign income taxes		4,125			3,466			2,845
		$	116,592		$	171,271		$	104,402

     Reconciliation of the federal income tax statutory rate and the Company’s effective tax rate is as follows:

	Year Ended December 31,
	2003			2002			2001
Federal income tax statutory rate		35.0	%		35.0	%		35.0	%
State income tax (net of federal benefit)		0.8			0.9			1.5
Reversal of reserves for prior tax years		(3.8	)		—			—
Permanent and other items		1.0			0.8			2.2
		33.0	%		36.7	%		38.7	%

     The major tax effected components of the Company’s net deferred tax liability are as follows:

		At December 31,
		2003			2002
		(In thousands)
Deferred tax assets — federal and state
	Bad debt reserve	$	34,502		$	44,648
	Tax credit carryforwards		—			17,694
	Net operating loss carryforward		9,929			9,575
	Preopening and start-up costs		20,232			26,497
	Accruals, reserves and other		35,058			28,390
			99,721			126,804
	Less: Valuation allowance		(9,682	)		(7,073	)
			90,039			119,731
Deferred tax liabilities — federal and state
	Property and equipment		(1,680,918	)		(1,675,251	)
	Other		(125,407	)		(131,180	)
			(1,806,325	)		(1,806,431	)
Deferred taxes — foreign			146			1,617
	Net deferred tax liability	$	(1,716,140	)	$	(1,685,083	)

     For U.S. federal income tax return purposes, the Company has a net operating loss carryforward of $6 million, which will begin to expire in 2009. For state income tax purposes, the Company has a New Jersey net operating loss carryforward of $133 million, which equates to a deferred tax asset of $8 million, after federal tax effect, and before valuation allowance. The New Jersey net operating loss carryforwards begin to expire in 2004.

     At December 31, 2003, there is a $10 million valuation allowance provided on certain New Jersey state net operating loss carryforwards and other New Jersey state deferred tax assets because management believes these assets do not meet the “more likely than not” criteria for recognition under SFAS 109. Management believes all other deferred tax assets are more likely than not to be realized because of the future reversal of existing taxable temporary differences and expected future taxable income. Accordingly, there are no other valuation allowances provided at December 31, 2003.

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NOTE 10 — COMMITMENTS AND CONTINGENCIES

     Leases. The Company leases real estate and various equipment under operating and, to a lesser extent, capital lease arrangements. Certain real estate leases provide for escalation of rent based upon a specified price index and/or based upon periodic appraisals.

     At December 31, 2003, the Company was obligated under non-cancelable operating leases and capital leases to make future minimum lease payments as follows:

		Operating		Capital
		Leases		Leases
		(In thousands)
Years ending December 31,
	2004	$	9,735	$	666
	2005		8,848		666
	2006		8,462		667
	2007		7,315		593
	2008		6,580		259
	Thereafter		310,878		—
	Total minimum lease payments	$	351,818		2,851
	Less: Amounts representing interest				(287	)
	Total obligations under capital leases				2,564
	Less: Amounts due within one year				(578	)
	Amounts due after one year			$	1,986

     The current and long-term obligations under capital leases are included in the “Other accrued liabilities” and “Other long-term obligations” captions, respectively, in the accompanying consolidated balance sheets. Rental expense for operating leases was $19 million, $20 million and $23 million for the years ended December 31, 2003, 2002 and 2001, respectively.

     Detroit Development Agreement. Under the August 2002 revised development agreement with the City of Detroit, MGM Grand Detroit, LLC and the Company are subject to certain obligations. The City of Detroit required payments of $44 million, of which $38 million had been made as of December 31, 2003; the transfer of assets of $3 million; indemnification of up to $20 million related to the Lac Vieux and certain other litigation, of which $2 million has been paid as of December 31, 2003; and continued letter of credit support for $50 million of bonds issued by the Economic Development Corporation of the City of Detroit for land purchases along the Detroit River. The letter of credit will be drawn on to make interest and principal payments on the bonds, which mature in 2009. The remaining obligations have been classified as other accrued liabilities or other long-term obligations, depending on the expected payment date.

     The Company recorded an intangible asset (development rights, deemed to have an indefinite life) of approximately $115 million in connection with its obligations under the revised development agreement. In addition to the above obligations, the Company will pay the City 1% of gaming revenues (2% if annual revenues exceed $400 million) beginning January 1, 2006.

     The Company is currently in the process of obtaining land and developing plans for the permanent casino facility, and currently expects the project to cost approximately $575 million (including land, capitalized interest and preopening expenses, but excluding approximately $115 million of payments to the City discussed above). The design, budget and schedule of the permanent facility are not finalized, and the ultimate timing, cost and scope of the project are subject to risks attendant to large-scale projects.

     The ability to construct the permanent casino facility is currently subject to resolution of the Lac Vieux litigation. In January 2002, the 6^th Circuit Court of Appeals ruled that the ordinance governing the casino developer selection process in Detroit violated the First Amendment to the United States Constitution, because of preference given to certain bidders. The Company’s operating subsidiary did not receive preference in the selection process. The 6^th Circuit Court remanded the case to the Federal District Court, which rejected the plaintiff’s request for a re-bidding process and determined that the only suitable remedy to the plaintiff was declaring the ordinance unconstitutional. The plaintiff has appealed, and the 6^th Circuit Court has issued an injunction, pending appeal, prohibiting the City and the developers from commencing construction pending further action of the 6^th Circuit Court. Therefore, it is unknown when construction of the permanent facility will commence or when the permanent facility will open.

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     Borgata. The Company initially contributed 27 acres of land for its ownership interest in Borgata. Boyd Gaming Corporation contributed $223 million of cash and Borgata obtained a $630 million secured bank credit facility, which is non-recourse to the Company. The Company is required to contribute an additional $136 million in cash to the venture to fund the project, of which $133 million of such contributions, including contributions made by Mirage before the Mirage Acquisition, have been made as of December 31, 2003.

     United Kingdom. In October 2003, the Company entered into an agreement with Earls Court and Olympia Group, which operates large exhibition and trade show facilities in London, to form a jointly owned company which would develop a large entertainment and gaming facility, which the Company would operate in space leased from Earls Court and Olympia, to complement the existing Olympia facilities. The Company made a deposit of £2 million ($3 million based on exchange rates at December 31, 2003), which is refundable if proposed gaming law reforms are not implemented by December 2005. Otherwise, the deposit will be applied to the first year’s rent on a lease between the new company and Earls Court and Olympia. The Company would make a nominal equity investment and would provide a loan for half of the estimated £130 million ($232 million based on exchange rates at December 31, 2003) of development costs. The agreement is subject to implementation of proposed gaming law reforms and a tax structure acceptable to the Company, and obtaining required planning and other approvals. The Company would own 82.5% of the entity.

     In November 2003, the Company entered into an agreement with Newcastle United PLC to create a 50-50 joint venture which would build a major new mixed-use development, including casino development, on a site adjacent to Newcastle’s football stadium. Newcastle United PLC will contribute the land to the joint venture, and the Company will make an equity investment of £5 million ($9 million based on exchange rates at December 31, 2003), which is refundable if certain conditions have not been met by January 2008. The Company would develop and operate the complex, as well as own the casino development in leased premises within the complex. The complex is expected to be financed through project-specific borrowings. The agreement is subject to implementation of proposed gaming law reforms and a tax structure acceptable to the Company, and obtaining required planning and other approvals.

     New York Racing Association. The Company has an understanding with the New York Racing Association (“NYRA”) to manage video lottery terminals (“VLTs”) at NYRA’s Aqueduct horseracing facility in metropolitan New York. The Company would assist in the development of the facility, including providing project financing, and would manage the facility for a fee. The project is anticipated to cost $135 million. Work was halted on the VLT facility in August 2003 pending the outcome of an investigation of certain aspects of NYRA’s operations by Federal prosecutors. In December 2003, NYRA reached agreement with the Justice Department whereby NYRA was indicted with prosecution deferred. NYRA agreed to pay a fine and the indictment will be dismissed with prejudice upon NYRA implementing certain reforms and otherwise complying with the terms of the agreement. The Company’s participation is subject to a definitive agreement, regulatory approvals and certain legislative changes by the State of New York.

     Guarantees. The Company is party to various guarantee contracts in the normal course of business, which are generally supported by letters of credit issued by financial institutions. The Company’s Senior Credit Facility limits the amount of letters of credit that can be issued to $200 million, and the amount of available borrowings under the Senior Credit Facility is reduced by any outstanding letters of credit. At December 31, 2003, the Company had provided a $50 million letter of credit to support the Economic Development Corporation bonds referred to above, which are a liability of the Company.

     Litigation. The Company is a party to various legal proceedings, most of which relate to routine matters incidental to its business. Management does not believe that the outcome of such proceedings will have a material adverse effect on the Company’s financial position or results of operations.

75

NOTE 11 — STOCKHOLDERS’ EQUITY

     Share repurchases are only conducted under repurchase programs approved by the Board of Directors and publicly announced. Share repurchase activity was as follows:

		Year Ended December 31,
		2003		2002		2001
		(In thousands)
	August 2001 authorization (1.4 million, 6.4 million, and 2.2 million shares purchased)	$	36,034	$	207,590	$	45,716
	February 2003 authorization (10 million shares purchased)		335,911		—		—
	November 2003 authorization (2 million shares purchased)		70,919		—		—
		$	442,864	$	207,590	$	45,716
Average price of shares repurchased		$	33.17	$	32.28	$	20.47

     At December 31, 2003, there were 8 million shares available for repurchase under the November 2003 authorization.

     In May 2002, the Board of Directors approved a restricted stock plan. The plan allowed for the issuance of up to 1,000,000 shares of Company common stock to certain key employees. The restrictions on selling these shares lapse 50% on the third anniversary date from the grant date and 50% on the fourth anniversary date after the grant date. Through December 31, 2003, 903,000 shares were issued, with an aggregate value of $32 million. This amount was recorded as deferred compensation in the accompanying consolidated balance sheet and is being amortized to operating expenses on a straight-line basis through the period in which the restrictions fully lapse. Amortization of deferred compensation was $8 million and $5 million for the years ended December 31, 2003 and 2002, respectively, and 887,000 shares were outstanding under the plan at December 31, 2003. In November 2002, the Board of Directors determined that no more awards would be granted under the restricted stock plan.

NOTE 12 — EMPLOYEE BENEFIT PLANS

     Employees of the Company who are members of various unions are covered by union-sponsored, collectively bargained, multi-employer health and welfare and defined benefit pension plans. The Company recorded an expense of $77 million in 2003, $66 million in 2002 and $54 million in 2001 under such plans. The plans’ sponsors have not provided sufficient information to permit the Company to determine its share of unfunded vested benefits, if any.

     The Company is self-insured for most health care benefits for its non-union employees. The liability for claims filed and estimates of claims incurred but not reported is included in the “Other accrued liabilities” caption in the accompanying consolidated balance sheets.

     The Company has a retirement savings plan under Section 401(k) of the Internal Revenue Code covering its non-union employees. The plans allow employees to defer, within prescribed limits, up to 20% of their income on a pre-tax basis through contributions to the plans. The Company matches, within prescribed limits, a portion of eligible employees’ contributions. The Company recorded charges for matching contributions of $10 million in 2003, $12 million in 2002 and $14 million in 2001.

     The Company maintains a nonqualified deferred retirement plan for certain key employees. The plan allows participants to defer, on a pre-tax basis, a portion of their salary and bonus and accumulate tax deferred earnings, plus investment earnings on the deferred balances, as a retirement fund. Participants receive a Company match of up to 4% of salary, net of any Company match received under the Company’s 401(k) plan. All employee deferrals vest immediately. The Company matching contributions vest ratably over a three-year period. The Company recorded charges for matching contributions of $2 million in 2003, $1 million in 2002 and $1 million in 2001.

     The Company implemented a supplemental executive retirement plan (“SERP”) for certain key employees effective January 1, 2001. The SERP is a nonqualified plan under which the Company makes quarterly contributions which are intended to provide a retirement benefit that is a fixed percentage of a participant’s estimated final five-year average annual salary, up to a maximum of 65%. Company contributions and investment earnings on the contributions are tax-deferred and accumulate as a retirement fund. Employees do not make contributions under this plan. A portion of the Company contributions and investment earnings thereon vests after three years of SERP participation and the remaining portion vests after both five years of SERP participation and 10 years of continuous service. The Company recorded expense of $5 million, $5 million and $4 million under this plan in 2003, 2002 and 2001, respectively.

76

NOTE 13 — RESTRUCTURING COSTS

     In connection with the Mirage Acquisition, management initiated a comprehensive restructuring plan designed to reduce costs and improve efficiencies of the combined operations of the Company. This restructuring resulted in a charge against earnings in the second quarter of 2000 totaling $18 million, primarily related to the accrual of costs associated with contract terminations and staffing reductions of approximately $6 million, the buyout of various leases of approximately $11 million and other related restructuring costs of $1 million. Approximately 125 people were affected by the reductions, primarily at the Company’s operating resorts (excluding the Mirage properties). In December 2002, the Company recorded a restructuring credit of $10 million related to a lease contract termination accrual originally recorded in June 2000. In December 2002 management determined that payment under this obligation was not probable.

     In 2001, management responded to a decline in business volumes caused by the September 11 attacks by implementing cost containment strategies which included a significant reduction in payroll and a refocusing of several of the Company’s marketing programs. Approximately 6,700 employees (on a full-time equivalent basis) were laid off or terminated, resulting in a $22 million charge against earnings, primarily related to the accrual of severance pay, extended health care coverage and other related costs in connection with these personnel reductions. As a result of improving business levels and the Company’s success at re-hiring a substantial number of previously laid off or terminated employees, management determined in 2002 that a portion of the remaining accrual would now not be necessary. This resulted in a restructuring credit of $10 million. An additional $2 million restructuring charge related to the termination of the Holiday Inn franchise agreement at the Boardwalk Hotel and Casino was incurred in 2001.

     The Company recorded $3 million of restructuring charges in December 2002 related to contract termination costs for a restaurant and the EFX! show at MGM Grand Las Vegas.

     2003 restructuring costs included $2 million related to the closure of the Siegfried & Roy show, primarily for severance costs of employees involved in the show’s production. Also, we terminated a restaurant lease and closed two marketing offices, resulting in $4 million of contract termination charges. Other severance of $1 million in 2003 related primarily to restructuring of table games staffing at several resorts.

     The following table summarizes restructuring costs and period-end restructuring accruals:

									Balance at
	Initial		Cash			Non-cash			December 31,
	Provision		Payments			reductions			2003
	(In thousands)
2000 restructuring in connection with the Mirage Acquisition	$	18,040	$	(8,134	)	$	(9,857	)	$	49
2001 restructuring in response to the events of September 11, 2001		21,841		(11,420	)		(10,421	)		—
2001 franchise termination costs		1,880		(1,880	)		—			—
2002 lease and show termination costs		3,257		(3,257	)		—			—
2003 lease termination costs		4,049		(798	)		—			3,251
2003 Siegfried & Roy show closure — The Mirage		1,623		(910	)		—			713
2003 other severance		925		(654	)		—			271
	$	51,615	$	(27,053	)	$	(20,278	)	$	4,284

NOTE 14 — PROPERTY TRANSACTIONS, NET

     Property transactions, net consisted of the following:

	Year Ended December 31,
	2003			2002		2001
	(In thousands)
Gain on sale of North Las Vegas land	$	(36,776	)	$	—	$	—
Siegfried & Roy theatre write-down – The Mirage		1,408			—		—
Write-down of Atlantic City Boardwalk land held for sale		—			—		31,501
Tropical Storm Isidore damage – Beau Rivage		—			7,824		—
Write-off of Detroit development costs		—			4,754		—
Impairment of assets to be disposed of		5,764			2,134		14,561
Demolition costs		6,614			—		—
Other net losses on asset sales or disposals		4,654			—		—
	$	(18,336	)	$	14,712	$	46,062

77

     Prior to 2003, the Company classified gains and losses on routine asset sales or disposals as a non-operating item at some resorts and as an operating item at other resorts. Management believes the preferable presentation of these items is as an element of operating income. Prior period statements have not been reclassified as such transactions were not material in the prior periods. Until 2003, demolition costs were typically capitalized as part of new construction. The Company began expensing demolition costs on major construction projects as incurred on January 1, 2003, and is accounting for this change in policy prospectively. Demolition costs were not material in prior periods. Demolition costs in 2003 relate to preparation for the Bellagio standard room remodel, Bellagio expansion and new theatre at MGM Grand Las Vegas.

     In October 2003 the Company sold 315 acres of land in North Las Vegas, Nevada near Shadow Creek for approximately $55 million, which resulted in a pretax gain of approximately $37 million. Also in 2003, the Company recorded write-downs and impairments of assets abandoned or replaced with new construction, primarily at MGM Grand Las Vegas in preparation for new restaurants and the new theatre.

     In 2002, Tropical Storm Isidore caused property damage at Beau Rivage totaling $8 million, including clean-up costs. The amount of the write-down for damaged assets was determined based on the net book value of the assets and engineering estimates. In connection with the revised development agreement in Detroit, we wrote off $5 million, which was the net book value of previously incurred development costs associated with the riverfront permanent casino site ($9 million), offset by previously accrued obligations no longer required under the revised development agreement ($4 million). Also in 2002, the Company recorded write-downs and impairments of assets abandoned or replaced with new construction.

     The 2001 write-down of the Atlantic City Boardwalk land resulted from a reassessment of the fair value of the land subsequent to the September 11 attacks. The revised carrying value was based on comparable sales data adjusted for the impact of legislation authorizing large-scale gaming in the state of New York, which management believes had a negative impact on real estate values on the Atlantic City Boardwalk. The remaining 2001 charge relates to several assets abandoned during the quarter in response to the September 11 attacks, primarily in-progress construction projects which management terminated after the attacks.

NOTE 15 — RELATED PARTY TRANSACTIONS

     The Company’s related party transactions consisted of the following revenues (expenses):

	Year Ended December 31,
	2003			2002			2001
	(In thousands)
Hotel and other revenue from related parties	$	871		$	764		$	409
License fees to entities under common ownership		(1,000	)		(1,000	)		(1,200	)
Professional fees to directors or firms affiliated with directors		(1,551	)		(1,815	)		(1,021	)
Other related party expenses		(468	)		(224	)		(1,133	)
	$	(2,148	)	$	(2,275	)	$	(2,945	)

     In addition, the Company engaged in transactions with its unconsolidated affiliates. In 2003, the Company paid Monte Carlo $4 million as a result of closing the tram between Bellagio and Monte Carlo in preparation for the Bellagio expansion. The Company leases two acres of land to Borgata and received $1 million in 2003 and 2002 under this lease. Borgata is required to pay for a portion of the masterplan improvements at Renaissance Pointe, and the Company is responsible for environmental cleanup costs incurred by Borgata. The net amount reimbursed to the Company under these arrangements for the years ended December 31, 2003, 2002 and 2001 was $10 million, $8 million and $9 million, respectively. At December 31, 2003, Borgata owes the Company an additional $3 million under these arrangements.

78

NOTE 16 — CONSOLIDATING CONDENSED FINANCIAL INFORMATION

     The Company’s subsidiaries (excluding MGM Grand Detroit, LLC and certain minor subsidiaries) have fully and unconditionally guaranteed, on a joint and several basis, payment of the Senior Credit Facility, the senior notes and the senior subordinated notes. Separate condensed financial statement information for the subsidiary guarantors and non-guarantors as of December 31, 2003 and 2002 and for the years ended December 31, 2003, 2002 and 2001 is as follows:

		As of and for the Year Ended December 31, 2003
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Elimination			Consolidated
		(In thousands)
Balance Sheet
Current assets		$	63,085		$	608,549		$	85,987		$	—		$	757,621
Property and equipment, net			9,373			8,525,531			158,407			(11,972	)		8,681,339
Investment in subsidiaries			8,023,527			186,114			—			(8,209,641	)		—
Investment in unconsolidated affiliates			127,902			970,275			—			(342,165	)		756,012
Other non-current assets			47,251			312,699			154,788			—			514,738
		$	8,271,138		$	10,603,168		$	399,182		$	(8,563,778	)	$	10,709,710
Current liabilities		$	116,734		$	585,316		$	63,009		$	—		$	765,059
Intercompany accounts			(781,455	)		756,181			25,274			—			—
Deferred income taxes			1,761,706			—			3,720			—			1,765,426
Long-term debt			4,640,365			878,651			2,874			—			5,521,890
Other non-current liabilities			—			71,702			51,845			—			123,547
Stockholders’ equity			2,533,788			8,311,318			252,460			(8,563,778	)		2,533,788
		$	8,271,138		$	10,603,168		$	399,182		$	(8,563,778	)	$	10,709,710
Statement of Operations
Net revenues		$	—		$	3,466,394		$	442,422		$	—		$	3,908,816
Equity in subsidiaries earnings			646,997			110,528			—			(757,525	)		—
Expenses:
	Casino and hotel operations		—			1,945,203			216,766			—			2,161,969
	Provision for doubtful accounts		—			13,188			(618	)		—			12,570
	General and administrative		—			532,591			58,564			—			591,155
	Corporate expense		5,892			55,649			—			—			61,541
	Preopening and start-up expenses		105			28,711			450			—			29,266
	Restructuring costs (credit)		248			6,349			—			—			6,597
	Property transactions, net		363			(19,855	)		1,156			—			(18,336	)
	Depreciation and amortization		1,081			367,030			36,486			—			404,597
			7,689			2,928,866			312,804			—			3,249,359
Income from unconsolidated affiliates			—			53,612			—			—			53,612
Operating income			639,308			701,668			129,618			(757,525	)		713,069
Interest expense, net			(280,752	)		(53,378	)		(2,674	)		—			(336,804	)
Other, net			(6,134	)		(16,427	)		—			—			(22,561	)
Income from continuing operations before income taxes			352,422			631,863			126,944			(757,525	)		353,704
Provision for income taxes			(108,725	)		—			(7,867	)		—			(116,592	)
Income from continuing operations			243,697			631,863			119,077			(757,525	)		237,112
Discontinued operations			—			6,585			—			—			6,585
Net income		$	243,697		$	638,448		$	119,077		$	(757,525	)	$	243,697

Statement of Cash Flows
Net cash provided by (used in) operating activities	$	(307,999	)	$	868,231		$	142,681		$	53		$	702,966
Net cash provided by (used in) investing activities		(5,000	)		(525,983	)		(20,658	)		(4,047	)		(555,688	)
Net cash provided by (used in) financing activities		310,575			(385,004	)		(94,800	)		3,994			(165,235	)

79

		As of and for the Year Ended December 31, 2002
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Elimination			Consolidated
		(In thousands)
Balance Sheet
Current assets		$	92,459		$	442,231		$	55,139		$	—		$	589,829
Property and equipment, net			10,375			8,597,957			166,085			(11,972	)		8,762,445
Investment in subsidiaries			7,490,107			122,897			—			(7,613,004	)		—
Investment in unconsolidated affiliates			127,902			925,065			—			(342,165	)		710,802
Other non-current assets			39,037			261,768			141,104			—			441,909
		$	7,759,880		$	10,349,918		$	362,328		$	(7,967,141	)	$	10,504,985
Current liabilities		$	131,589		$	548,801		$	69,678		$	—		$	750,068
Intercompany accounts			(1,147,323	)		1,147,867			(544	)		—			—
Deferred income taxes			1,769,017			—			414			—			1,769,431
Long-term debt			4,341,253			863,579			8,946			—			5,213,778
Other non-current liabilities			1,200			50,074			56,290			—			107,564
Stockholders’ equity			2,664,144			7,739,597			227,544			(7,967,141	)		2,664,144
		$	7,759,880		$	10,349,918		$	362,328		$	(7,967,141	)	$	10,504,985
Statement of Operations
Net revenues		$	—		$	3,353,772		$	438,476		$	—		$	3,792,248
Equity in subsidiaries earnings			671,076			108,361			—			(779,437	)		—
Expenses:
	Casino and hotel operations		—			1,828,744			203,785			—			2,032,529
	Provision for doubtful accounts		—			27,317			358			—			27,675
	General and administrative		—			515,682			50,398			—			566,080
	Corporate expense		3,268			40,588			—			—			43,856
	Preopening and start-up expenses		403			13,738			—			—			14,141
	Restructuring costs (credit)		—			(17,021	)		—			—			(17,021	)
	Write-downs and impairments		—			9,958			4,754			—			14,712
	Depreciation and amortization		2,683			352,910			26,239			3,058			384,890
			6,354			2,771,916			285,534			3,058			3,066,862
Income from unconsolidated affiliates			—			32,361			—			—			32,361
Operating income			664,722			722,578			152,942			(782,495	)		757,747
Interest expense, net			(239,510	)		(26,347	)		(16,473	)		—			(282,330	)
Other, net			—			(10,370	)		(1,634	)		3,058			(8,946	)
Income from continuing operations before income taxes			425,212			685,861			134,835			(779,437	)		466,471
Provision for income taxes			(132,777	)		(31,022	)		(7,472	)		—			(171,271	)
Income from continuing operations			292,435			654,839			127,363			(779,437	)		295,200
Discontinued operations			—			(2,765	)		—			—			(2,765	)
Net income		$	292,435		$	652,074		$	127,363		$	(779,437	)	$	292,435
Statement of Cash Flows
Net cash provided by (used in) operating activities		$	1,206,670		$	(530,952	)	$	151,443		$	797		$	827,958
Net cash provided by (used in) investing activities			(3,588	)		(339,380	)		(27,179	)		(1,063	)		(371,210	)
Net cash provided by (used in) financing activities			(1,212,536	)		896,900			(139,114	)		265			(454,485	)

80

		For the Year Ended December 31, 2001
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Elimination			Consolidated
		(In thousands)
Statement of Operations
Net revenues		$	—		$	3,335,249		$	396,387		$	—		$	3,731,636
Equity in subsidiaries earnings			556,780			92,007			—			(648,787	)		—
Expenses:
	Casino and hotel operations		—			1,860,234			187,763			—			2,047,997
	Provision for doubtful accounts		—			69,930			760			—			70,690
	General and administrative		—			507,317			45,599			—			552,916
	Corporate expense		10,073			27,564			—			—			37,637
	Preopening and start-up expenses		—			4,030			100			—			4,130
	Restructuring costs		—			23,410			(28	)		—			23,382
	Write-downs and impairments		—			45,827			235			—			46,062
	Depreciation and amortization		1,079			346,643			28,223			—			375,945
			11,152			2,884,955			262,652			—			3,158,759
Income from unconsolidated affiliates			—			36,816			—			—			36,816
Operating income			545,628			579,117			133,735			(648,787	)		609,693
Interest expense, net			(286,231	)		(28,170	)		(18,752	)		—			(333,153	)
Other, net			1,493			(8,323	)		(120	)		—			(6,950	)
Income from continuing operations before income taxes			260,890			542,624			114,863			(648,787	)		269,590
Provision for income taxes			(91,075	)		(537	)		(12,790	)		—			(104,402	)
Income from continuing operations			169,815			542,087			102,073			(648,787	)		165,188
Discontinued operations			—			4,627			—			—			4,627
Net income		$	169,815		$	546,714		$	102,073		$	(648,787	)	$	169,815
Statement of Cash Flows
Net cash provided by (used in) operating activities		$	(310,773	)	$	979,451		$	123,180		$	4,025		$	795,883
Net cash provided by (used in) investing activities			(80	)		(314,219	)		(37,783	)		(123	)		(352,205	)
Net cash provided by (used in) financing activities			324,830			(712,425	)		(71,178	)		(3,902	)		(462,675	)

81

NOTE 17 — SELECTED QUARTERLY FINANCIAL RESULTS (UNAUDITED)

		Quarter
		First		Second		Third		Fourth		Total
		(In thousands, except per share amounts)
2003
Net revenues		$	960,244	$	985,344	$	989,645	$	973,583	$	3,908,816
Operating income			161,411		174,557		162,680		214,421		713,069
Income from continuing operations			49,548		55,852		43,687		88,025		237,112
Net income			51,003		53,750		47,209		91,735		243,697
Basic income per share:
	Income from continuing operations	$	0.33	$	0.37	$	0.29	$	0.61	$	1.59
	Net income		0.34		0.36		0.32		0.64		1.64
Diluted income per share:
	Income from continuing operations	$	0.32	$	0.36	$	0.29	$	0.60	$	1.56
	Net income		0.33		0.35		0.31		0.62		1.61
2002
Net revenues		$	950,005	$	970,924	$	948,920	$	922,399	$	3,792,248
Operating income			202,114		228,507		183,111		144,015		757,747
Income from continuing operations			79,997		100,380		72,937		41,886		295,200
Net income			81,956		101,875		69,560		39,044		292,435
Basic income per share:
	Income from continuing operations	$	0.51	$	0.63	$	0.46	$	0.27	$	1.87
	Net income		0.52		0.64		0.44		0.25		1.85
Diluted income per share:
	Income from continuing operations	$	0.50	$	0.62	$	0.45	$	0.27	$	1.85
	Net income		0.51		0.63		0.43		0.25		1.83

     Because income per share amounts are calculated using the weighted average number of common and dilutive common equivalent shares outstanding during each quarter, the sum of the per share amounts for the four quarters may not equal the total income per share amounts for the year.

     As described in Note 3, the results of the Golden Nugget Subsidiaries and MGM MIRAGE Online are classified as discontinued operations for all periods presented. Since the transactions occurred in June 2003, the amounts previously reported in the March 31, 2003 Form 10-Q did not reflect the results of these operations as discontinued. The amounts presented above for the quarters ended March 31, 2003 and 2002 reflect the reclassification.

NOTE 18 — SUBSEQUENT EVENTS

     Proposed Acquisition of Wembley plc. In January 2004, the Company reached an agreement with Wembley plc (“Wembley”) on the terms of a cash acquisition by the Company of Wembley. The Company has offered Wembley’s shareholders 750 pence per share, valuing Wembley at $490 million as of the date of the offer. Wembley has no material indebtedness. Wembley’s operations consist of greyhound racing and video lottery terminals at its Lincoln Park facility in Rhode Island, three greyhound tracks and one horse racing track in Colorado, and six greyhound tracks in the United Kingdom. A member of the Wembley plc group, Lincoln Park, Inc., and two executives of the Wempley plc group are subject to indictment in Rhode Island. The Company will purchase Wembley free and clear of the indictment and any related liabilities. Under an agreement with the United States Department of Justice, the indictment will proceed against a new entity funded by Wembley which the Company will not be acquiring. The transaction is expected to close by the third quarter of 2004, subject to requisite court and shareholder approval, the completion of the Lincoln Park reorganization and receipt of necessary regulatory approvals.

     Agreement with The British Land Company PLC. In February 2004, the Company announced an agreement in principle with The British Land Company PLC whereby the Company would operate a casino in leased premises within a newly developed leisure and entertainment complex adjacent to the Meadowhall Shopping Centre in Sheffield UK. The agreement is subject to implementation of proposed gaming law reforms and a tax structure acceptable to the Company, and obtaining required planning and other approvals.

     Proposed Sale of MGM Grand Australia. In February 2004, the Company entered into an agreement to sell the subsidiaries that own and operate MGM Grand Australia for A$195 (approximately $150 million), subject to certain working capital adjustments. This transaction is expected to be completed by the third quarter of 2004, subject to customary sales conditions and regulatory approval. The results of MGM Grand Australia will be reclassified as discontinued operations beginning in the first quarter of 2004. The subsidiaries being sold had approximately $89 million of total assets at December 31, 2003, of which $40 million was property and equipment, net and $34 million was goodwill. These subsidiaries had total liabilities of $11 million at December 31, 2003.

82

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MGM MIRAGE
By:	/s/ J. TERRENCE LANNI
	J. Terrence Lanni, Chairman and Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ JAMES J. MURREN
	James J. Murren, President, Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

Dated: February 13, 2004

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ J. TERRENCE LANNI	Chairman and Chief Executive Officer	February 13, 2004
	(Principal Executive Officer)
J. Terrence Lanni
/s/ JAMES J. MURREN	President, Chief Financial Officer,	February 13, 2004
	Treasurer and Director
James J. Murren	(Principal Financial and Accounting Officer)
/s/ JOHN T. REDMOND	President and Chief Executive Officer —	February 13, 2004
	MGM Grand Resorts, LLC and Director
John T. Redmond
/s/ ROBERT H. BALDWIN	President and Chief Executive Officer —	February 13, 2004
	Mirage Resorts, Incorporated and Director
Robert H. Baldwin
/s/ GARY N. JACOBS	Executive Vice President, General	February 13, 2004
	Counsel, Secretary and Director
Gary N. Jacobs
/s/ JAMES D. ALJIAN	Director	February 13, 2004
James D. Aljian
/s/ FRED BENNINGER	Director	February 13, 2004
Fred Benninger
/s/ TERRY N. CHRISTENSEN	Director	February 13, 2004
Terry N. Christensen

83

Signature	Title	Date
/s/ WILLIE D. DAVIS	Director	February 13, 2004
Willie D. Davis
/s/ ALEXANDER M. HAIG, JR.	Director	February 13, 2004
Alexander M. Haig, Jr.
/s/ ALEXIS M. HERMAN	Director	February 13, 2004
Alexis M. Herman
/s/ ROLAND HERNANDEZ	Director	February 13, 2004
Roland Hernandez
/s/ KIRK KERKORIAN	Director	February 13, 2004
Kirk Kerkorian
/s/ GEORGE MASON	Director	February 13, 2004
George Mason
/s/ RONALD M. POPEIL	Director	February 13, 2004
Ronald M. Popeil
/s/ DANIEL M. WADE	Director	February 13, 2004
Daniel M. Wade
/s/ MELVIN B. WOLZINGER	Director	February 13, 2004
Melvin B. Wolzinger
/s/ ALEX YEMENIDJIAN	Director	February 13, 2004
Alex Yemenidjian

84

MGM MIRAGE

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
(In thousands)

									Deductions
		Balance at		Provision for		Write-offs,			related to			Balance at
		Beginning of		Doubtful		net of			Discontinued			End of
Description		Period		Accounts		Recoveries			Operations			Period
Allowance for Doubtful Accounts
	Year Ended December 31, 2003	$	90,471	$	12,570	$	(23,072	)	$	(882	)	$	79,087
	Year Ended December 31, 2002 (1)		102,972		28,352		(40,853	)		—			90,471
	Year Ended December 31, 2001 (1)		83,390		71,244		(51,662	)		—			102,972

(1) Provision for doubtful accounts includes $677 and $554 related to discontinued operations for the years ended December 31, 2002 and 2001, respectively.

85 EX-10.1(10) 3 p68776exv10w1x10y.txt EX-10.1(10) EXHIBIT 10.1(10) EXECUTION THIRD AMENDED AND RESTATED LOAN AGREEMENT Dated as of November 24, 2003 among MGM MIRAGE, as Borrower and MGM GRAND DETROIT, LLC as Co-Borrower The Lenders, and Co-Documentation Agents and Co-Syndication Agents herein named 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

Page ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS........................................................................ 1 1.1 Defined Terms................................................................................... 1 1.2 Use of Defined Terms............................................................................ 26 1.3 Accounting Terms - Fiscal Periods............................................................... 26 1.4 Rounding........................................................................................ 27 1.5 Exhibits and Schedules.......................................................................... 27 1.6 Miscellaneous Terms............................................................................. 27 1.7 Letter of Credit Amounts........................................................................ 27 ARTICLE 2 LOANS AND LETTERS OF CREDIT............................................................................. 28 2.1 Committed Loans-General......................................................................... 28 2.2 Base Rate Loans................................................................................. 29 2.3 LIBOR Loans..................................................................................... 30 2.4 Letters of Credit............................................................................... 30 2.5 Competitive Advances............................................................................ 36 2.6 Swing Line...................................................................................... 39 2.7 Co-Borrowers.................................................................................... 40 2.8 Mandatory Reductions of the Term Commitment..................................................... 41 2.9 Voluntary Reduction of the Commitments.......................................................... 41 2.10 Optional Termination of Commitments............................................................. 41 2.11 Administrative Agent's Right to Assume Funds Available for Advances............................. 41 2.12 Release and Reattachment of Collateral.......................................................... 42 2.13 Senior Indebtedness............................................................................. 43 2.14 Collateral...................................................................................... 43 ARTICLE 3 PAYMENTS AND FEES....................................................................................... 44 3.1 Principal and Interest.......................................................................... 44

-i- 3.2 Joint Lead Arranger's Fees...................................................................... 45 3.3 Upfront Fees.................................................................................... 45 3.4 Unused Fees..................................................................................... 45 3.5 Letter of Credit Fees........................................................................... 45 3.6 Agency Fees..................................................................................... 46 3.7 Increased Commitment Costs...................................................................... 46 3.8 LIBOR Costs and Related Matters................................................................. 47 3.9 Late Payments................................................................................... 50 3.10 Computation of Interest and Fees................................................................ 50 3.11 Non-Business Days............................................................................... 50 3.12 Manner and Treatment of Payments................................................................ 50 3.13 Funding Sources................................................................................. 51 3.14 Failure to Charge Not Subsequent Waiver......................................................... 52 3.15 Administrative Agent's Right to Assume Payments Will be Made.................................... 52 3.16 Fee Determination Detail........................................................................ 52 3.17 Survivability................................................................................... 52 ARTICLE 4 REPRESENTATIONS AND WARRANTIES.......................................................................... 54 4.1 Existence and Qualification; Power; Compliance With Laws........................................ 54 4.2 Authority; Compliance With Other Agreements and Instruments and Government Regulations.......... 54 4.3 No Governmental Approvals Required.............................................................. 55 4.4 Subsidiaries.................................................................................... 55 4.5 Financial Statements............................................................................ 55 4.6 No Other Liabilities; No Material Adverse Changes............................................... 56 4.7 Title to Property............................................................................... 56 4.8 Public Utility Holding Company Act.............................................................. 56 4.9 Litigation...................................................................................... 56 4.10 Binding Obligations............................................................................. 56 -ii- 4.11 No Default...................................................................................... 56 4.12 ERISA........................................................................................... 56 4.13 Regulations T, U and X; Investment Company Act.................................................. 57 4.14 Disclosure...................................................................................... 57 4.15 Tax Liability................................................................................... 57 4.16 Projections..................................................................................... 57 4.17 Hazardous Materials............................................................................. 57 4.18 Tax Shelter Regulations......................................................................... 57 ARTICLE 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)............................... 59 5.1 Preservation of Existence....................................................................... 59 5.2 Maintenance of Properties....................................................................... 59 5.3 Maintenance of Insurance........................................................................ 59 5.4 Compliance With Laws............................................................................ 59 5.5 Inspection Rights............................................................................... 59 5.6 Keeping of Records and Books of Account......................................................... 60 5.7 Use of Proceeds................................................................................. 60 5.8 New Restricted Subsidiaries..................................................................... 60 ARTICLE 6 NEGATIVE COVENANTS...................................................................................... 61 6.1 Payment of Subordinated Obligations............................................................. 61 6.2 Disposition of Property......................................................................... 61 6.3 Mergers......................................................................................... 61 6.4 Hostile Acquisitions............................................................................ 62 6.5 Change in Nature of Business.................................................................... 62 6.6 Liens and Negative Pledges...................................................................... 62 6.7 Leverage Ratio.................................................................................. 63 6.8 Interest Charge Coverage Ratio.................................................................. 63 6.9 Investments in Insurance Subsidiary............................................................. 63 -iii- ARTICLE 7 INFORMATION AND REPORTING REQUIREMENTS.................................................................. 64 7.1 Financial and Business Information.............................................................. 64 7.2 Compliance Certificates......................................................................... 65 ARTICLE 8 CONDITIONS.............................................................................................. 67 8.1 Initial Advances on the Closing Date............................................................ 67 8.2 Any Increasing Advance.......................................................................... 68 8.3 Any Letter of Credit............................................................................ 69 ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT.................................................... 70 9.1 Events of Default............................................................................... 70 9.2 Remedies Upon Event of Default.................................................................. 72 ARTICLE 10 THE ADMINISTRATIVE AGENT............................................................................... 74 10.1 Appointment and Authorization of Administrative Agent........................................... 74 10.2 Delegation of Duties............................................................................ 74 10.3 Liability of Administrative Agent............................................................... 74 10.4 Reliance by Administrative Agent................................................................ 75 10.5 Notice of Default............................................................................... 75 10.6 Credit Decision; Disclosure of Information by Administrative Agent.............................. 75 10.7 Indemnification of Administrative Agent......................................................... 76 10.8 Administrative Agent in its Individual Capacity................................................. 76 10.9 Successor Administrative Agent.................................................................. 76 10.10 Administrative Agent May File Proofs of Claim................................................... 77 10.11 Other Agents; Arrangers and Managers............................................................ 78 10.12 Proportionate Interest in any Collateral........................................................ 78 10.13 Foreclosure on Collateral....................................................................... 78 10.14 Intercreditor Arrangements; Attornment Agreements............................................... 78 10.15 No Obligations of Borrower and the Co-Borrowers................................................. 79 -iv- ARTICLE 11 MISCELLANEOUS.......................................................................................... 80 11.1 Cumulative Remedies; No Waiver.................................................................. 80 11.2 Amendments; Consents............................................................................ 80 11.3 Attorney Costs, Expenses and Taxes.............................................................. 81 11.4 Nature of Lenders' Obligations.................................................................. 82 11.5 Survival of Representations and Warranties...................................................... 82 11.6 Notices......................................................................................... 82 11.7 Execution of Loan Documents..................................................................... 84 11.8 Binding Effect; Assignment...................................................................... 84 11.9 Right of Setoff................................................................................. 87 11.10 Sharing of Setoffs.............................................................................. 87 11.11 Indemnification by Borrower and the Co-Borrowers................................................ 88 11.12 Nonliability of the Lenders..................................................................... 88 11.13 No Third Parties Benefited...................................................................... 89 11.14 Confidentiality................................................................................. 89 11.15 Further Assurances.............................................................................. 90 11.16 Integration..................................................................................... 90 11.17 Governing Law................................................................................... 90 11.18 Severability of Provisions...................................................................... 90 11.19 Headings........................................................................................ 90 11.20 Time of the Essence............................................................................. 90 11.21 Foreign Lenders and Participants................................................................ 90 11.22 Hazardous Material Indemnity.................................................................... 92 11.23 Gaming Boards................................................................................... 93 11.24 Lien Releases................................................................................... 93 11.25 Termination; Release of Liens................................................................... 93 11.26 Removal of a Lender............................................................................. 93 -v- 11.27 Joint and Several............................................................................... 94 11.28 Non-Involvement of Tracinda..................................................................... 94 11.29 Pledged Stock in Gaming Companies............................................................... 94 11.30 Payments Set Aside.............................................................................. 95 11.31 Waiver of Right to Trial by Jury................................................................ 95 11.32 Purported Oral Amendments....................................................................... 95 Exhibits A - Assignment Agreement B - Assumption Agreement C - Committed Revolving Note D - Competitive Bid E - Competitive Bid Request F - Competitive Revolving Note G - Compliance Certificate H - Pricing Certificate I - Request for Loan J - Term Note K - Joint Borrower Provisions Schedules 1.1 Theme Park Property 4.3 Governmental Approvals 4.4 Subsidiaries 4.7 Existing Liens and Negative Pledges 11.6 Notice Addresses -vi- THIRD AMENDED AND RESTATED LOAN AGREEMENT Dated as of November 24, 2003 This Third Amended and Restated Loan Agreement ("Agreement") is entered into by and among MGM MIRAGE, a Delaware corporation formerly known as MGM Grand, Inc. ("Borrower") and MGM Grand Detroit, LLC, a Delaware limited liability company ("Detroit"), as initial Co-Borrower, each Guarantor which may hereafter be designated as an additional Co-Borrower pursuant to Section 2.7, each lender whose name is set forth on the signature pages of this Agreement and each lender which may hereafter become a party to this Agreement pursuant to Section 11.8 (collectively, the "Lenders" and individually, a "Lender"), Deutsche Bank Trust Company Americas and JPMorgan Chase Bank, as Co-Syndication Agents, Citicorp USA, Inc. and Wells Fargo Bank, N.A., as Co-Documentation Agents, and Bank of America, N.A., as Administrative Agent. Borrower, Detroit and each Co-Borrower which hereafter becomes a Party hereto pursuant to Section 2.7, the Administrative Agent and the other Creditors, covenant and agree with reference to the following facts: A. Borrower, MGM Grand Atlantic City, Inc., a New Jersey corporation ("Atlantic City") and Detroit have previously entered into the Existing Multi-Year Agreement and the Existing Short Term Agreement described herein. B. Effective on the Closing Date, Borrower, Detroit (as a Co-Borrower), the Administrative Agent and the Lenders desire to amend and restate the Existing Multi-Year Agreement in its entirety by this Agreement, and to provide, inter alia (and subject to the terms and conditions set forth herein), for an increase in the amount of the credit facilities provided by the Existing Multi-Year Agreement, an extension of the maturity thereof and revisions to the covenants of Borrower set forth therein. C. Atlantic City shall no longer be a Co-Borrower under this Agreement, and by its execution of the Subsidiary Guaranty, consents to the amendment and restatement of the Existing Multi-Year Agreement as set forth herein without its being a Co-Borrower. D. Effective on the Closing Date, the Existing Short Term Agreement shall be terminated. E. While not parties hereto, Banc of America Securities LLC and J.P. Morgan Securities Inc. have served as Joint Lead Arrangers and Joint Book Managers for the credit facilities described herein. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements herein contained, Borrower, Detroit, each Co-Borrower which hereafter becomes a Party hereto pursuant to Section 2.7, and each of the Creditors, hereby amend and restate the Existing Multi-Year Agreement as of the Closing Date, and covenant and agree as follows: ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS 1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below: "Absolute Rate Bid" means a Competitive Bid to provide Competitive Advances on the basis of a fixed interest rate. -1- "Acquisition" means any transaction, or any series of related transactions, by which Borrower or its Restricted Subsidiaries directly or indirectly (i) acquire any going business or all or substantially all of the assets of any Person, or any division thereof, whether through purchase of assets, merger or otherwise, or (ii) acquire (in one transaction or as the most recent transaction in a series of transactions) control of at least a majority in ordinary voting power of the securities of a corporation which have ordinary voting power for the election of directors, or (iii) acquire control of a majority ownership interest in any partnership, joint venture, limited liability company or any other Person. "Administrative Agent" means Bank of America, when acting in its capacity as the Administrative Agent under any of the Loan Documents, or any successor Administrative Agent. "Administrative Agent's Office" means the Administrative Agent's address as set forth on Schedule 11.6, or such other address as the Administrative Agent hereafter may designate by written notice to Borrower and the Lenders. "Advance" means any advance made or to be made by any Lender to Borrower or any Co-Borrower as provided in Article 2, and includes each Base Rate Advance, LIBOR Advance, Committed Advance, Competitive Advance and Swing Line Advance. "Affiliate" means, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition, "control" (and the correlative terms, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person that owns, directly or indirectly, 10% 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 10% 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 presumed (subject to rebuttal by a preponderance of the evidence) to control such corporation, partnership 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 and as a Joint Lead Arranger), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates. "Agreement" means this Third Amended and Restated Loan Agreement, either as originally executed, or as it may from time to time be supplemented, modified, amended, restated or extended. "Applicable Leverage Ratio" means, as of each date of determination, the Leverage Ratio in effect as of the last day of the Fiscal Quarter ending approximately 45 days prior to the first day of the Pricing Period in which the date of determination occurs. "Applicable Rates" means, as of any date of determination, the following percentages per annum, based upon the Pricing Level on that date: -2-

LIBOR BASE RATE UNUSED FEE STANDBY LETTER OF PRICING LEVEL MARGIN MARGIN RATE CREDIT FEE - ------------------------------------------------------------------------ I 1.000% 0.000% 0.200% 1.000% II 1.250% 0.250% 0.250% 1.250% III 1.500% 0.500% 0.250% 1.500% IV 1.625% 0.625% 0.300% 1.625% V 1.750% 0.750% 0.300% 1.750%

"Assignment and Assumption" means an Assignment Agreement substantially in the form of Exhibit A. "Assumption Agreement" means each Assumption Agreement hereafter executed by a Co-Borrower pursuant to Section 2.7, substantially in the form of Exhibit B either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or supplanted. "Atlantic City" means MGM Grand Atlantic City, Inc., a New Jersey corporation, its successors and permitted assigns. "Attorney Costs" means and includes all fees, expenses and disbursements of any law firm or other external counsel and, without duplication, the allocated cost of internal legal services and all expenses and disbursements of internal counsel. "Average Quarterly Funded Debt" means, as of the last day of each Fiscal Quarter, the average of the principal amount of Funded Debt outstanding on the last day of each of the three calendar months comprising such Fiscal Quarter, provided that if any Material Transaction occurs during the relevant Fiscal Quarter, Average Quarterly Funded Debt shall be adjusted on a pro forma basis (a) in the case of any Material Transaction which is a Disposition, to exclude Funded Debt in an amount equal to the consideration received by Borrower and its Restricted Subsidiaries in the form of Cash and Cash Equivalents in connection with such Disposition from each of the constituent calendar months ending prior to the receipt of such consideration, and (b) in the case of any Material Transaction which is an Acquisition, to increase Funded Debt for each of the constituent calendar months ending prior to the payment of such consideration by the amount of the consideration paid by Borrower and its Restricted Subsidiaries in Cash and Cash Equivalents in connection with such Acquisition. "Bank of America" means Bank of America, N.A., its successors and assigns. "Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate." The "prime rate" is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. "Base Rate Advance" means an Advance made hereunder and specified to be a Base Rate Advance in accordance with Article 2. -3- "Base Rate Loan" means a Loan made hereunder and specified to be a Base Rate Loan in accordance with Article 2. "Base Rate Margin" means the applicable per annum percentage set forth in the definition of "Applicable Rates". "Borrower" means MGM MIRAGE, a Delaware corporation, its successors and permitted assigns. "Borrower Group EBITDA" means, for any fiscal period, the EBITDA of Borrower and its Restricted Subsidiaries for that fiscal period. "Business Day" and "Banking Day" mean any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in the State of New York or the state where the Administrative Agent's Office is located and, if such day relates to any LIBOR Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar Market. "Capital Expenditure" means any expenditure for or related to fixed assets or purchased intangibles that is treated as a capital expenditure under GAAP, including any amount which is required to be treated as an asset subject to a Capital Lease Obligation. "Capital Lease Obligations" means all monetary obligations of a Person under any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease. "Cash" means, when used in connection with any Person, all monetary and non-monetary items owned by that Person that are treated as cash in accordance with GAAP, consistently applied. "Cash Equivalents" means, when used in connection with any Person, that Person's Investments in: (a) Government Securities due within one year after the date of the making of the Investment; (b) readily marketable direct obligations of any State of the United States of America or any political subdivision of any such State or any public agency or instrumentality thereof given on the date of such Investment a credit rating of at least Aa by Moody's or AA by S&P in each case due within one year from the making of the Investment; (c) certificates of deposit issued by, bank deposits in, eurodollar deposits through, bankers' acceptances of, and repurchase agreements covering Government Securities executed by any Bank or by any bank incorporated under the Laws of the United States of America, any State thereof or the District of Columbia and having on the date of such Investment combined capital, surplus and undivided profits of at least $250,000,000, or total assets of at least $5,000,000,000, in each case due within one year after the date of the making of the Investment; (d) certificates of deposit issued by, bank deposits in, eurodollar deposits through, bankers' acceptances of, and repurchase agreements covering Government Securities executed by any branch or office located in the United States of America of a bank incorporated under the Laws of any jurisdiction outside the United States of America having on the date of -4- such Investment combined capital, surplus and undivided profits of at least $500,000,000, or total assets of at least $15,000,000,000, in each case due within one year after the date of the making of the Investment; (e) repurchase agreements covering Government Securities executed by a broker or dealer registered under Section 15(b) of the Securities Exchange Act of 1934, as amended, having on the date of the Investment capital of at least $50,000,000, due within 90 days after the date of the making of the Investment; provided that the maker of the Investment receives written confirmation of the transfer to it of record ownership of the Government Securities on the books of a "primary dealer" in such Government Securities or on the books of such registered broker or dealer, as soon as practicable after the making of the Investment; (f) readily marketable commercial paper or other debt securities issued by corporations doing business in and incorporated under the Laws of the United States of America or any State thereof or of any corporation that is the holding company for a bank described in clause (c) or (d) above given on the date of such Investment a credit rating of at least P-1 by Moody's or A-1 by S&P, in each case due within one year after the date of the making of the Investment; (g) "money market preferred stock" issued by a corporation incorporated under the Laws of the United States of America or any State thereof (i) given on the date of such Investment a credit rating of at least Aa by Moody's Investors Service, Inc. and AA by S&P, in each case having an investment period not exceeding 50 days or (ii) to the extent that investors therein have the benefit of a standby letter of credit issued by a Lender or a bank described in clauses (c) or (d) above; (h) a readily redeemable "money market mutual fund" sponsored by a bank described in clause (c) or (d) hereof, or a registered broker or dealer described in clause (e) hereof, that has and maintains an investment policy limiting its investments primarily to instruments of the types described in clauses (a) through (g) hereof and given on the date of such Investment a credit rating of at least Aa by Moody's and AA by S & P; and (i) corporate notes or bonds having an original term to maturity of not more than one year issued by a corporation incorporated under the Laws of the United States of America or any State thereof, or a participation interest therein; provided that any commercial paper issued by such corporation is given on the date of such Investment a credit rating of at least Aa by Moody's and AA by S&P. "Cash Flow" means, for any period, and without duplication, the sum of (a) Borrower Group EBITDA for that period, plus (b) Other Available EBITDA for that period, plus (c) New Project Annualized EBITDA, provided that if any Material Transaction occurs during that period, Cash Flow shall be adjusted on a pro forma basis (i) in the case of any Material Transaction which is a Disposition, to exclude for the entire period the results of operation of any Person or assets which are the subject of such Disposition, and (ii) in the case of any Material Transaction which is an Acquisition, to include for the entire period the results of operation of any Person or assets which are the subject of such Acquisition. "Cash Interest Charges" means, for any period, that portion of Interest Charges of Borrower and its Restricted Subsidiaries which are paid or currently payable in Cash during that period excluding intercompany accounts, provided that if any Material Transaction occurs during that period, Cash Interest Charges shall be adjusted on a pro forma basis (a) in the case of any -5- Material Transaction which is a Disposition, to exclude Interest Charges associated with Funded Debt in an amount equal to the consideration received by Borrower and its Restricted Subsidiaries in the form of cash and Cash Equivalents in connection with such Disposition, and (b) in the case of any Material Transaction which is an Acquisition, to increase Interest Charges by the amount of Interest Charges which would be associated with Funded Debt in an amount equal to the consideration paid by Borrower and its Restricted Subsidiaries in the form of cash and Cash Equivalents in connection with such Acquisition (in each case, for that portion of the period occurring prior to the receipt of such consideration, and at an interest rate which is equal, as of the time of calculation, to the rate of interest associated with LIBOR Loans under this Agreement). "Change in Control" means (a) any transaction or series of related transactions in which any Unrelated Person or two or more Unrelated Persons acting in concert acquire beneficial ownership (within the meaning of Rule 13d-3(a)(1) under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 25% or more of the outstanding common stock of Borrower or (b) during any period of 24 consecutive months, individuals who at the beginning of such period constituted the board of directors of Borrower (together with any new or replacement directors whose election by the board of directors, or whose nomination for election, was approved by a vote of at least 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 reelection was previously so approved) cease for any reason to constitute a majority of the directors then in office, provided, however, that no Change in Control shall exist for so long as Tracinda Corporation, a Nevada corporation, and its Affiliates continue to be the beneficial owner of 25% or more of the common stock of Borrower and no other Person is the owner of more of the common stock of Borrower than Tracinda Corporation and its Affiliates. "Closing Date" means the time and Business Day on which the conditions set forth in Section 8.1 are satisfied or waived. The Administrative Agent shall notify Borrower and the Creditors of the date that is the Closing Date. "Co-Borrowers" means, collectively, Detroit and each other Guarantor which is hereafter designated as a Co-Borrower pursuant to Section 2.7. "Code" means the Internal Revenue Code of 1986, as amended or replaced and as in effect from time to time. "Co-Documentation Agents" and "Co-Syndication Agents" means the Persons identified in the preamble to this Agreement as such. "Collateral Agent" means U.S. Bank, National Association, or any successor Collateral Agent under the Intercreditor Agreement. "Collateral Documents" means each mortgage, deed of trust, ship mortgage, aircraft chattel mortgage, pledge agreement, security agreement or other instrument, document or agreement now or hereafter executed pursuant to the Intercreditor Agreement or otherwise to secure the Obligations or any of the Qualified Obligations. "Collateral Event" means any event or circumstance which entitles the holders of any class of Senior Indebtedness of the Borrower and its Restricted Subsidiaries to receive the benefit of Liens on all or any part of the Property of the Borrower or its Restricted Subsidiaries, which Liens would be prohibited hereunder but for the provisions of Section 6.6(g). -6- "Collateral Release" has the meaning set forth for that term in Section 2.12. "Commercial Letter of Credit" means each Letter of Credit issued to support the purchase of goods by Borrower or any Co-Borrower which is determined to be a commercial letter of credit by the Issuing Lender. "Commitments" means, collectively, the Revolving Commitment and the Term Commitment. "Committed Advances" means an Advance by a Lender as a ratable part of a Committed Loan pursuant to such Lender's Pro Rata Share of the applicable Commitment. "Committed Loan" means a Loan consisting of ratable Advances by the Lenders pursuant to their respective Pro Rata Shares of the relevant Commitment. "Committed Revolving Note" means each promissory note made by Borrower and each Co-Borrower to a Lender evidencing the Advances made by that Lender under its Pro Rata Share of the Revolving Commitment, substantially in the form of Exhibit C, either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or supplanted. "Competitive Advance" means an Advance made to Borrower or any Co-Borrower under the Revolving Commitment by any Lender not determined by that Lender's Pro Rata Share of the Revolving Commitment pursuant to Section 2.5. "Competitive Bid" means (a) a written bid to provide a Competitive Advance substantially in the form of Exhibit D, signed by a Responsible Official of a Lender and properly completed to provide all information required to be included therein or (b) at the election of any Lender, a telephonic bid by that Lender to provide a Competitive Advance which, if so made, shall be made by a Responsible Official of that Lender and deemed to have been made incorporating the substance of Exhibit D, and shall promptly be confirmed by a written Competitive Bid. "Competitive Bid Request" means (a) a written request submitted by Borrower or any Co-Borrower to the Administrative Agent to provide a Competitive Bid, substantially in the form of Exhibit E, signed by a Responsible Official of Borrower and any relevant Co-Borrower and properly completed to provide all information required to be included therein or (b) at the election of Borrower, a telephonic request by Borrower to the Administrative Agent to provide a Competitive Bid which, if so made, shall be made by a Responsible Official of Borrower and deemed to have been made incorporating the substance of Exhibit E, and shall promptly be confirmed by a written Competitive Bid Request. "Competitive Revolving Note" means each promissory note made by Borrower and each Co-Borrower to a Lender evidencing the Competitive Advances made under the Revolving Commitment by that Lender, substantially in the form of Exhibit F, either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or supplanted. "Compliance Certificate" means a certificate substantially in the form of Exhibit G, properly completed and signed by a Senior Officer of Borrower and each Co-Borrower. -7- "Contractual Obligation" means, as to any Person, any provision of any outstanding security issued by that Person or of any material agreement, instrument or undertaking to which that Person is a party or by which it or any of its Property is bound. "Creditors" means, collectively, the Administrative Agent, the Issuing Lender, the Swing Line Lender, each Lender and, where the context requires, any one or more of them. "Debt Rating" means, as of any date of determination, the credit rating assigned to the credit facilities provided hereunder whether senior secured or senior unsecured (or, if the facilities hereunder are not rated, the corporate rating assigned to Borrower's most senior indebtedness), by a nationally recognized credit reporting agency selected by the Borrower, reasonably approved by the Administrative Agent, and not objected to by the Requisite Lenders within five Business Days following notice of such designation). "Debtor Relief Laws" means the Bankruptcy Code of the United States of America, as amended from time to time, and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws from time to time in effect affecting the rights of creditors generally. "Default" means any event that, with the giving of any applicable notice or passage of time specified in Section 9.1, or both, would be an Event of Default. "Default Rate" means the interest rate prescribed in Section 3.9. "Defaulting Lender" means any Lender that (a) has failed to fund any portion of the Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding. "Deposit Account" means separate accounts located at Bank of America as to Borrower and each Co-Borrower designated by Borrower or such Co-Borrower with the reasonable approval of the Administrative Agent. "Designated Market" means, with respect to any LIBOR Loan, (a) the London Eurodollar Market, (b) if prime banks in the London Eurodollar Market are at the relevant time not accepting deposits of Dollars or if the Administrative Agent determines in good faith that the London Eurodollar Market does not represent at the relevant time the effective pricing to the Lenders for deposits of Dollars in the London Eurodollar Market, the Cayman Islands Eurodollar Market or (c) if prime banks in the Cayman Islands Eurodollar Market are at the relevant time not accepting deposits of Dollars or if the Administrative Agent determines in good faith that the Cayman Islands Eurodollar Market does not represent at the relevant time the effective pricing to the Lenders for deposits of Dollars in the Cayman Islands Eurodollar Market, such other Eurodollar Market as may from time to time be selected by the Administrative Agent with the approval of Borrower, the Co-Borrowers and the Requisite Lenders. The Administrative Agent will endeavor to provide prompt notice to Borrower and the Co-Borrowers of any change in the location of the Designated Market. -8- "Detroit" means MGM Grand Detroit, LLC, a Delaware limited liability company, it successors and permitted assigns. "Disposition" means the voluntary sale, transfer or other disposition, in one transaction or any series of related transactions, of any asset. "Disqualification" means, with respect to any Creditor or any holder of Subordinated Obligations: (a) the failure of that Person timely to file pursuant to applicable Gaming Laws (i) any application requested of that Person by any Gaming Board in connection with any licensing required of that Person as a lender to Borrower or a Co-Borrower or (ii) any required application or other papers in connection with determination of the suitability of that Person as a lender to Borrower or a Co-Borrower; (b) the withdrawal by that Person (except where requested or permitted by the Gaming Board) of any such application or other required papers; or (c) any final determination by a Gaming Board pursuant to applicable Gaming Laws (i) that such Person is "unsuitable" as a lender to Borrower or a Co-Borrower, (ii) that such Person shall be "disqualified" as a lender to Borrower or a Co-Borrower or (iii) denying the issuance to that Person of any license required under applicable Gaming Laws to be held by all lenders to Borrower or any Co-Borrower. "Distribution" means, with respect to any shares of capital stock or any warrant or option to purchase an equity security or other equity security issued by a Person, (a) the retirement, redemption, purchase or other acquisition for Cash or for Property (other than capital stock, or any warrants or options to purchase an equity security or other security of such Person) by such Person of any such security, (b) the declaration or (without duplication) payment by such Person of any dividend in Cash or in Property (other than capital stock, or any warrants or options to purchase an equity security or other security of such Person) on or with respect to any such security, (c) any Investment by such Person in the holder of 5% or more of any such security if a purpose of such Investment is to avoid characterization of the transaction as a Distribution and (d) any other payment in Cash or Property (other than capital stock, or any warrants or options to purchase an equity security or other security of such Person) by such Person constituting a distribution under applicable Laws with respect to such security. "Dollars" or "$" means United States dollars. "EBITDA" means, with respect to any fiscal period and with respect to any Person, the sum of (a) Net Income of such Person for that period, plus (b) any extraordinary loss reflected in such Net Income and, without duplication, any loss associated with the early retirement of Indebtedness, minus (c) any extraordinary gain reflected in such Net Income, plus (d) Interest Charges of such Person for that period, plus (e) the aggregate amount of federal, state and local taxes on or measured by income of such Person for that period (whether or not payable during that period) plus (f) depreciation, amortization and all non-recurring and/or other non-cash expenses to the extent deducted in arriving at Net Income for that period, plus (g) expenses classified as "pre-opening and start-up expenses" on the applicable financial statements of that Person for that fiscal period, plus (h) minority interest, in each case as determined in accordance with GAAP. -9- "Eligible Assignee" means (a) another Lender, (b) with respect to any Lender, any Affiliate of that Lender having combined capital and surplus of $100,000,000 or more, (c) any commercial bank having a combined capital and surplus of $100,000,000 or more, (d) any insurance company engaged in the business of writing insurance which (i) has a net worth of $200,000,000 or more, (ii) is engaged in the business of lending money and extending credit under credit facilities substantially similar to those extended under this Agreement and (iii) is operationally and procedurally able to meet the obligations of a Lender hereunder to the same degree as a commercial bank and (e) any other financial institution (including a mutual fund or other fund) having total assets of $100,000,000 or more which meets the requirements set forth in subclauses (ii) and (iii) of clause (d) above; provided that each Eligible Assignee must either (a) be organized under the Laws of the United States of America, any State thereof or the District of Columbia or (b) be organized under the Laws of the Cayman Islands or any country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of such a country, and (i) act hereunder through a branch, agency or funding office located in the United States of America, (ii) be exempt from withholding of tax on interest and deliver the documents related thereto pursuant to Section 11.21, and (iii) to the extent required under applicable Gaming Laws, each Eligible Assignee must not be the subject of a Disqualification. "Enhanced LIBOR Margin" means, for any period, the sum of (i) the LIBOR Margin then in effect plus (ii) such interest rate margin as the Requisite Lenders specify is necessary to adjust LIBOR to a rate which represents the effective pricing to such Lenders for deposits of Dollars in the Designated Market in the relevant amount for the applicable Interest Period and which adequately and fairly reflects the cost to such Lenders of making the applicable LIBOR Advances. "ERISA" means the Employee Retirement Income Security Act of 1974, and any regulations issued pursuant thereto, as amended or replaced and as in effect from time to time. "ERISA Affiliate" means, with respect to any Person, any other Person (or any trade or business, whether or not incorporated) that is under common control with that Person within the meaning of Section 414 of the Code. "Eurodollar Market" means a regular established market located outside the United States of America by and among banks for the solicitation, offer and acceptance of Dollar deposits in such banks. "Event of Default" shall have the meaning provided in Section 9.1. "Existing Letters of Credit" means the letters of credit issued under the Existing Multi-Year Agreement and outstanding as of the Closing Date. "Existing Multi-Year Agreement" means the Second Amended and Restated Loan Agreement dated as of April 10, 2000 among Borrower, the lenders referred to therein, and the Administrative Agent, as amended, to which Atlantic City and Detroit are parties as additional Co-Borrowers, as heretofore amended. "Existing Short Term Agreement" means the Third Amended and Restated 364-Day Loan Agreement dated as of April 4, 2003 among Borrower, the lenders referred to therein, and the Administrative Agent, as amended, to which Atlantic City and Detroit are parties as additional Co-Borrowers. -10- "Existing Subordinated Obligations" means, collectively, (a) the Borrower's $710,000,000 of 9 3/4 % senior subordinated notes due 2007, issued pursuant to the Indenture dated as of May 31, 2000 between the Borrower and The Bank of New York, as Trustee, and (b) the Borrower' $400,000,000 of 8 3/8% senior subordinated notes due 2011 issued pursuant to the Indenture dated as of January 23, 2001 between the Borrower and United States Trust Company of New York, as Trustee. "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 Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent. "Fiscal Quarter" means the fiscal quarter of Borrower consisting, subject to Section 1.3, of the three calendar month periods ending on each March 31, June 30, September 30 and December 31. "Fiscal Year" means the fiscal year of Borrower consisting, subject to Section 1.3, of the twelve month period ending on each December 31. "Foreign Lender" has the meaning specified in Section 11.21(a)(1). "Funded Debt" means, as of any date of determination, the sum (without duplication) of (a) all principal Indebtedness of Borrower and its Restricted Subsidiaries for borrowed money (including debt securities issued by Borrower or any of its Restricted Subsidiaries) on that date (other than any such Indebtedness to the extent it has been legally or contractually defeased or is the subject of a deposit in Cash or Cash Equivalents for the purpose of defeasing the same in accordance with its terms), plus (b) the aggregate amount of all Capital Lease Obligations of Borrower and its Restricted Subsidiaries on that date, plus (c) all Guaranty Obligations issued by Borrower and its Restricted Subsidiaries, provided that the amount of any Guaranty Obligation or letter of credit shall be deemed to be zero unless and until (i) in the case of Guaranty Obligations in respect of letters of credit, a drawing is made with respect thereto, and (ii) in the case of any other Guaranty Obligations, demand for payment is made with respect thereto. "GAAP" means, as of any date of determination, accounting principles (a) set forth as generally accepted in then currently effective Opinions of the Accounting Principles Board of the American Institute of Certified Public Accountants, (b) set forth as generally accepted in then currently effective statements of the Financial Accounting Standards Board or (c) that are then approved by such other entity as may be approved by a significant segment of the accounting profession in the United States of America. The term "consistently applied," as used in connection therewith, means that the accounting principles applied are consistent in all material respects with those applied at prior dates or for prior periods. "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, (f) the -11- Michigan Gaming Control Board, and (g) any other Governmental Agency (including Governmental Agencies associated with foreign governments) that holds regulatory, licensing or permit authority over gambling, gaming or casino activities conducted by Borrower, any Co-Borrower or any Restricted Subsidiary 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 Borrower and its Subsidiaries within its jurisdiction, in each case to the extent applicable to Borrower and its Restricted Subsidiaries. "Golden Nugget Properties" means, collectively (i) the shares of the capital stock of GNLV, Corp., GNL, Corp. and the membership interests in Golden Nugget Experience, LLC, (ii) the Golden Nugget Hotel and Casino in Las Vegas, Nevada, the Golden Nugget Hotel and Casino in Laughlin, Nevada, and the Nevada Club Inn in Bullhead City, Arizona, and (iii) all Property used in connection with the operation of the businesses associated therewith. "Government Securities" means readily marketable (a) direct full faith and credit obligations of the United States of America or obligations guaranteed by the full faith and credit of the United States of America and (b) obligations of an agency or instrumentality of, or corporation owned, controlled or sponsored by, the United States of America that are generally considered in the securities industry to be implicit obligations of the United States of America. "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 or (c) any court or administrative tribunal of competent jurisdiction. "Guarantors" means, collectively, each Restricted Subsidiary of Borrower which exists as of the Closing Date, and each other Restricted Subsidiary of Borrower which hereafter becomes a Guarantor pursuant to Section 5.8, provided that any Guarantor which is sold or otherwise transferred in a Disposition permitted by Section 6.2 may be released from the Guaranty in accordance with Section 11.2(d)(iii). "Guaranty" means each of the continuing guaranties of the Obligations (or, in the case of Detroit, of the portion of the Obligations which are actually borrowed or received by Detroit) executed and delivered by the Guarantors on the Closing Date, substantially in the form of the Subsidiary Guaranty executed in connection with the Existing Multi-Year Agreement. "Guaranty Obligation" means, as to any Person (without duplication), any (a) guarantee by that Person of Indebtedness of, or other obligation performable by, any other Person or (b) assurance given by that Person to an obligee of any other Person with respect to the performance of an obligation by, or the financial condition of, such other Person, whether direct, indirect or contingent, including any purchase or repurchase agreement covering such obligation or any collateral security therefor, any agreement to provide funds (by means of loans, capital contributions or otherwise) to such other Person, any agreement to support the solvency or level of any balance sheet or income statement item of such other Person or any "keep-well" or other arrangement of whatever nature given for the purpose of assuring or holding harmless such obligee against loss with respect to any obligation of such other Person; provided, however, that the term Guaranty Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. -12- "Hazardous Materials" means substances defined as "hazardous substances" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., or as "hazardous", "toxic" or "pollutant" substances or as "solid waste" pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or as "friable asbestos" pursuant to the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., in each case as such Laws are amended from time to time. "Hazardous Materials Laws" means all Laws governing the treatment, transportation or disposal of Hazardous Materials applicable to any of the Real Property. "Indebtedness" means, as to any Person (without duplication), (a) indebtedness of such Person for borrowed money or for the deferred purchase price of Property (excluding trade and other accounts payable in the ordinary course of business in accordance with ordinary trade terms), including any Guaranty Obligation for any such indebtedness, (b) indebtedness of such Person of the nature described in clause (a) that is non-recourse to the credit of such Person but is secured by assets of such Person, to the extent of the value of such assets, (c) Capital Lease Obligations of such Person, (d) indebtedness of such Person arising under bankers' acceptance facilities or under facilities for the discount of accounts receivable of such Person, (e) any direct or contingent obligations of such Person under letters of credit issued for the account of such Person, and (f) any net obligations of such Person under Swap Agreements. "Indemnified Liabilities" has the meaning set forth in Section 11.11. "Indemnitees" has the meaning set forth in Section 11.11. "Insurance Subsidiary" means MGMM Insurance Company, a Vermont corporation, which is a captive insurance company approved by the Vermont Department of Banking, Insurance, Securities and Health Care Administration engaging solely in the business of facilitating and providing insurance coverage and claims services for Borrower, Co-Borrowers or the Subsidiaries. "Intercreditor Agreement" means the Collateral Agent and Intercreditor Agreement dated as of February 13, 2002, among U.S. Bank, National Association, as Collateral Agent; Borrower, Mirage; the Restricted Subsidiaries referred to therein, and Bank of America, N.A., as Administrative Agent and each of the other Creditor Representatives referred to therein, including any subsequent joinders thereto by which additional Creditor Representatives or Restricted Subsidiaries become party thereto, and as the same may be amended from time to time. "Interest Charge Coverage Ratio" means, as of the last day of each Fiscal Quarter, the ratio of (a) Cash Flow for the period of four Fiscal Quarters ending on that date, to (b) Cash Interest Charges of Borrower and its Restricted Subsidiaries for the same period. "Interest Charges" means, for any Person, as of the last day of any fiscal period, the sum of (a) all interest, fees, charges and related expenses paid or payable (without duplication) for that fiscal period by that Person to a lender in connection with borrowed money (including any obligations for fees, charges and related expenses payable to the issuer of any letter of credit) or the deferred purchase price of assets that are considered "interest expense" under GAAP, plus (b) the portion of rent paid or payable (without duplication) for that fiscal period by that Person under Capital Lease Obligations that should be treated as interest in accordance with Financial Accounting Standards Board Statement No. 13. -13- "Interest Differential" means, with respect to any prepayment of a LIBOR Loan on a day other than the last day of the applicable Interest Period and with respect to any failure to borrow a LIBOR Loan on the date or in the amount specified in any Request for Loan, (a) LIBOR payable (or, with respect to a failure to borrow, LIBOR which would have been payable) with respect to the LIBOR Loan minus (b) LIBOR on, or as near as practicable to, the date of the prepayment or failure to borrow for a LIBOR Loan with an Interest Period commencing on such date and ending on the last day of the Interest Period of the LIBOR Loan so prepaid or which would have been borrowed on such date. "Interest Period" means, as to each LIBOR Loan, a period of one week, or of 1, 2, 3, 6 or 9 months (or, with the written consent of all of the Lenders, any other period) as designated by Borrower; provided that (a) the first day of each Interest Period must be a Business Day, (b) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day, unless such Business Day falls in the next calendar month, in which case the Interest Period shall end on the next preceding Business Day, and (c) no Interest Period may extend beyond the Maturity Date. "Investment" means, when used in connection with any Person, any investment by or of that Person, whether by means of purchase or other acquisition of stock or other securities of any other Person or by means of a loan, advance creating a debt, capital contribution, guaranty or other debt or equity participation or interest in any other Person, including any partnership and joint venture interests of such Person. The amount of any Investment shall be the amount actually invested (minus any return of capital with respect to such Investment which has actually been received in Cash or Cash Equivalents or has been converted into Cash or Cash Equivalents), without adjustment for subsequent increases or decreases in the value of such Investment. "Investment Grade" means that the Debt Rating assigned is a rating which, as reasonably determined by the Administrative Agent, would be the lowest rating granted by the relevant credit rating agency which is generally treated as "investment grade" in the ratings regime of that credit rating agency. "Issuing Lender" means Bank of America, N.A. "Joint Lead Arrangers" means Banc of America Securities LLC and J. P. Morgan Securities, Inc. in their capacities as joint lead arrangers and joint book managers of the credit facilities described herein. "L/C Advance" means, with respect to each Lender, such Lender's funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share of the Revolving Commitment. "L/C Borrowing" means an extension of credit resulting from a drawing under a Letter of Credit which has not been reimbursed on the date when made or refinanced as a Loan. "L/C Obligations" means, as at any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. "Laws" means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, regulations, ordinances, codes and administrative or judicial precedents. -14- "Lender" means each lender whose name is set forth in the signature pages of this Agreement and each lender which may hereafter become a party to this Agreement pursuant to Section 11.8 (and to the extent a party to a Related Swap Agreement, any Affiliate of a Lender). Each reference to a "Bank" or "Banks" in any Loan Document or Collateral Document shall be deemed to be a reference to the Lenders. "Lending Office" means, as to any Lender, the office or offices of such Lender described as such in such Lender's Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify Borrower and the Administrative Agent. "Letter of Credit Application" means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the Issuing Lender. "Letter of Credit Expiration Date" means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day). "Letter of Credit Usage" means, as of any date of determination, the aggregate undrawn face amount of outstanding Letters of Credit plus the aggregate amount of all Unreimbursed Amounts, including all L/C Borrowings. "Letters of Credit" means any of the Standby Letters of Credit or Commercial Letters of Credit issued by the Issuing Lender under the Revolving Commitment pursuant to Section 2.4, including the Existing Letters of Credit, either as originally issued or as the same may be supplemented, modified, amended, renewed, extended or supplanted. "Leverage Ratio" means, as of the last day of each Fiscal Quarter, the ratio of (a) Average Quarterly Funded Debt as of that date to (b) Cash Flow for the four Fiscal Quarter period then ended. "LIBOR" means for any Interest Period with respect to any LIBOR Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula: LIBOR = LIBO Base Rate ------------------------- 1.00 - Reserve Percentage Where, "LIBO Base Rate" means, for such Interest Period: (a) the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) 2 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 -15- such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) 2 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 LIBOR 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) 2 Business Days prior to the first day of such Interest Period. "LIBOR Advance" means an Advance made hereunder and specified to be a LIBOR Advance in accordance with Article 2. "LIBOR Lending Office" means, as to each Lender, its office or branch so designated by written notice to Borrower and the Administrative Agent as its LIBOR Lending Office. If no LIBOR Lending Office is designated by a Lender, its LIBOR Lending Office shall be its office at its address for purposes of notices hereunder. "LIBOR Loan" means a Loan made hereunder and specified to be a LIBOR Loan in accordance with Article 2. "LIBOR Margin" means the applicable per annum percentage set forth in the definition of "Applicable Rates". "LIBOR Margin Bid" means a Competitive Bid to provide a Competitive Advance on the basis of a margin over the LIBOR. "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. "Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance or lien of any kind, whether voluntarily incurred or arising by operation of Law or otherwise, affecting any Property, including any agreement to grant any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature of a security interest, and/or the filing of or agreement to give any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the Uniform Commercial Code or comparable Law of any jurisdiction with respect to any Property. "Loan" means the aggregate of the Advances made at any one time by the Lenders pursuant to Article 2. "Loan Documents" means, collectively, this Agreement, the Notes, the Swing Line Documents, the Guaranty, each Request for Loan, each Competitive Bid Request, each Letter of Credit Application, each Pricing Certificate, each Compliance Certificate, any Related Swap Agreement and any other agreements of any type or nature hereafter executed and delivered by -16- Borrower or any of its Restricted Subsidiaries to the Administrative Agent or to any Lender in any way relating to or in furtherance of this Agreement, in each case either as originally executed or as the same may from time to time be supplemented, modified, amended, restated, extended or supplanted. "Margin Stock" means "margin stock" as such term is defined in Regulation U. "Material Adverse Effect" means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any Loan Document, (b) is or could reasonably be expected to be material and adverse to the condition or prospects (financial or otherwise), assets, business or operations of Borrower and its Restricted Subsidiaries, taken as a whole, or (c) materially impairs or could reasonably be expected to materially impair the ability of Borrower or Guarantors (taken as a whole) to perform the Obligations. "Material Transaction" means (a) each Acquisition made by the Borrower or any of its Restricted Subsidiaries following the Closing Date pursuant to which the aggregate consideration paid by the Borrower and its Restricted Subsidiaries (whether in Cash or other Property, or by means of the assumption of any liabilities) is in excess of $250,000,000, and (b) each Disposition made by the Borrower or any of its Restricted Subsidiaries following the Closing Date pursuant to which the aggregate consideration received by the Borrower and its Restricted Subsidiaries (whether in Cash or other Property, or by means of the assumption of any liabilities) is in excess of $250,000,000. "Maturity Date" means November 24, 2008. "Maximum Competitive Advance" means, with respect to any Competitive Bid made by a Lender, the amount set forth therein as the maximum Competitive Advance which that Lender is willing to make in response to the related Competitive Bid Request. "Maximum Competitive Outstandings Amount" means, as of each date of determination, one half of the then effective amount of the Revolving Commitment. "MGM Grand Detroit II" means MGM Grand Detroit II, LLC, a Delaware limited liability company, and its successors. "Mirage" means Mirage Resorts, Incorporated, a Nevada corporation. "Moody's" means Moody's Investors Service, Inc., and any successor thereto. "Multiemployer Plan" means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA to which Borrower or any of its ERISA Affiliates contribute or are obligated to contribute. "Negative Pledge" means a Contractual Obligation that contains a covenant binding on Borrower or any of its Restricted Subsidiaries that prohibits Liens on any of its or their Property, other than (a) any such covenant contained in a Contractual Obligation granting a Lien permitted under Section 6.6 which affects only the Property that is the subject of such permitted Lien and (b) any such covenant that does not apply to Liens securing the Obligations or any indebtedness which is used, directly or indirectly, to refinance the Obligations. -17- "Net Income" means, with respect to any fiscal period and with respect to any Person, the consolidated net income of that Person from continuing operations for that period, determined in accordance with GAAP, consistently applied. "New Project" means each free-standing hotel, casino or other development commenced by Borrower and its Restricted Subsidiaries following the Closing Date having an aggregate construction budget in excess of $250,000,000. "New Project Annualized EBITDA" means, as of each date of determination which occurs during the one year period following the opening of any New Project for business, the EBITDA associated with that New Project for the fiscal period following such opening, annualized on the following basis: (a) where the period from the opening is less than one full Fiscal Quarter, such EBITDA times four; and (b) where the period from the opening is one full Fiscal Quarter or more, such EBITDA annualized on a straight-line basis. "New York" means New York-New York Hotel & Casino LLC, a Nevada limited liability company, its successors and permitted assigns. "Notes" means, collectively, the Competitive Revolving Notes, the Committed Revolving Notes and the Term Notes. "Obligations" means all present and future obligations of every kind or nature of Borrower, the Co-Borrowers or the Guarantors at any time and from time to time owed to the Administrative Agent, the Issuing Lender, the Swing Line Lender or the Lenders or any one or more of them, under any one or more of the Loan Documents, whether due or to become due, matured or unmatured, liquidated or unliquidated, or contingent or noncontingent, including obligations of performance as well as obligations of payment, and including interest that accrues after the commencement of any proceeding under any Debtor Relief Law by or against Borrower or Affiliate of Borrower, whether or not allowed as a claim in such proceeding. "Opinions" means the favorable written legal opinions of (a) Christensen, Miller, Fink, Jacobs, Glaser, Weil and Shapiro, LLP, counsel to Borrower, (b) Lionel Sawyer & Collins, Nevada counsel to Borrower, (c) Sterns & Weinroth, a professional corporation, New Jersey counsel to Borrower, (d) Butler, Snow, et. al., Mississippi counsel to Borrower, and (e) Dickinson Wright PLLC, Michigan counsel to Borrower, together with copies of all factual certificates and legal opinions upon which such counsel has relied. "Other Available EBITDA" means, for any fiscal period, that portion of the EBITDA of (a) any Unrestricted Subsidiaries for that fiscal period, and (b) any other joint venture or other Person in which Borrower or its Restricted Subsidiaries have any Investment for that fiscal period, in each case to the extent that the same may be distributed in Cash to Borrower and its Restricted Subsidiaries during that fiscal period in accordance with applicable Law and subject to any Contractual Obligations (including credit documents) which are binding upon such Unrestricted Subsidiary or Person or their respective Properties (whether or not so distributed). "Outstanding Obligations" means, as of each date of determination, and giving effect to the making of any such credit accommodations requested on that date, the sum of (i) the -18- aggregate principal amount of the outstanding Committed Loans, plus (ii) the aggregate principal amount of the outstanding Competitive Advances, plus (iii) the Swing Line Outstandings, plus (iv) the Letter of Credit Usage. "Party" means any Person other than the Creditors which now or hereafter is a party to any of the Loan Documents. "Pension Plan" means any "employee pension benefit plan" (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, which is subject to Title IV of ERISA and is maintained by Borrower or any of its Subsidiaries or to which Borrower or any of its Subsidiaries contributes or has an obligation to contribute. "Permitted Encumbrances" means: (a) inchoate Liens incident to construction on or maintenance of Property; or Liens incident to construction on or maintenance of Property now or hereafter filed of record for which adequate reserves have been set aside (or deposits made pursuant to applicable Law) and which are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to a material risk of loss or forfeiture; (b) Liens for taxes and assessments on Property which are not yet past due; or Liens for taxes and assessments on Property for which adequate reserves have been set aside and are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to a material risk of loss or forfeiture; (c) minor defects and irregularities in title to any Property which in the aggregate do not materially impair the fair market value or use of the Property for the purposes for which it is or may reasonably be expected to be held; (d) easements, exceptions, reservations, or other agreements for the purpose of pipelines, conduits, cables, wire communication lines, power lines and substations, streets, trails, walkways, drainage, irrigation, water, and sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or other minerals, and other like purposes affecting Property, facilities, or equipment which in the aggregate do not materially burden or impair the fair market value or use of such Property for the purposes for which it is or may reasonably be expected to be held; (e) easements, exceptions, reservations, or other agreements for the purpose of facilitating the joint or common use of Property in or adjacent to a shopping center or similar project affecting Property which in the aggregate do not materially burden or impair the fair market value or use of such Property for the purposes for which it is or may reasonably be expected to be held; (f) rights reserved to or vested in any Governmental Agency to control or regulate, or obligations or duties to any Governmental Agency with respect to, the use of any Property; (g) rights reserved to or vested in any Governmental Agency to control or regulate, or obligations or duties to any Governmental Agency with respect to, any right, power, franchise, grant, license, or permit; -19- (h) present or future zoning laws and ordinances or other laws and ordinances restricting the occupancy, use, or enjoyment of Property; (i) statutory Liens, other than those described in clauses (a) or (b) above, arising in the ordinary course of business with respect to obligations which are not delinquent or are being contested in good faith, provided that, if delinquent, adequate reserves have been set aside with respect thereto and, by reason of nonpayment, no Property is subject to a material risk of loss or forfeiture; (j) covenants, conditions, and restrictions affecting the use of Property which in the aggregate do not materially impair the fair market value or use of the Property for the purposes for which it is or may reasonably be expected to be held; (k) rights of tenants under leases and rental agreements covering Property entered into in the ordinary course of business of the Person owning such Property; (l) Liens consisting of pledges or deposits to secure obligations under workers' compensation laws or similar legislation, including Liens of judgments thereunder which are not currently dischargeable; (m) Liens consisting of pledges or deposits of Property to secure performance in connection with operating leases made in the ordinary course of business to which Borrower or a Restricted Subsidiary of Borrower is a party as lessee, provided the aggregate value of all such pledges and deposits in connection with any such lease does not at any time exceed 20% of the annual fixed rentals payable under such lease; (n) Liens consisting of deposits of Property to secure bids made with respect to, or performance of, contracts (other than contracts creating or evidencing an extension of credit to the depositor); (o) Liens consisting of any right of offset, or statutory bankers' lien, on bank deposit accounts maintained in the ordinary course of business so long as such bank deposit accounts are not established or maintained for the purpose of providing such right of offset or bankers' lien; (p) Liens consisting of deposits of Property to secure statutory obligations of Borrower or a Restricted Subsidiary of Borrower; (q) Liens consisting of deposits of Property to secure (or in lieu of) surety, appeal or customs bonds in proceedings to which Borrower or a Restricted Subsidiary of Borrower is a party; (r) Liens created by or resulting from any litigation or legal proceeding involving Borrower or a Restricted Subsidiary of Borrower in the ordinary course of its business which is currently being contested in good faith by appropriate proceedings, provided that adequate reserves have been set aside by Borrower or the relevant Restricted Subsidiary and no material Property is subject to a material risk of loss or forfeiture; and (s) other non-consensual Liens incurred in the ordinary course of business but not in connection with an extension of credit, which do not in the aggregate, when taken -20- together with all other Liens, materially impair the value or use of the Property of Borrower and the Restricted Subsidiaries of Borrower, taken as a whole. "Person" means any individual or entity, including a trustee, corporation, limited liability company, general partnership, limited partnership, joint stock company, trust, estate, unincorporated organization, business association, firm, joint venture, Governmental Agency, or other entity. "Pricing Certificate" means a certificate substantially in the form of Exhibit H, properly completed and signed by a Senior Officer of Borrower and each Co-Borrower. "Pricing Level" means, as of each date of determination, the pricing level set forth below opposite (a) the Applicable Leverage Ratio, or (b) at such times when the Debt Rating is Investment Grade or Superior Investment Grade, the Debt Rating, provided that if the Applicable Leverage Ratio and the Debt Rating are at different Pricing Levels, then the Pricing Level which yields the lowest LIBOR Margin shall apply:

Pricing Level Pricing Criteria - ------------- ------------------------------------------------------------------- Leverage Ratio Debt Rating -------------- ----------- I Less than 3.50 to 1.00 Superior Investment Grade II Equal to or greater than 3.50 to 1.00 but Investment Grade less than 4.00 to 1.00 III Equal to or greater than 4.00 to 1.00 but N/A less than 4.50 to 1.00 IV Equal to or greater than 4.50 to 1.00 but N/A less than 5.00 to 1.00 V Equal to or greater than 5.00 to 1.00 N/A

"Pricing Period" means (a) the period commencing on the date hereof and ending on February 15, 2003, and (b) the subsequent concurrent quarterly periods of approximately 90 days each commencing on each May 16, August 16, November 16 and February 16. "Principal Resort Casino Properties" means The MGM Grand Hotel and Casino, the Bellagio Hotel and Casino, and the Mirage Hotel and Casino. "Pro Rata Share" means, with respect to each Lender, the percentage of the relevant Commitment, the Loans (except for Competitive Advances) thereunder (and in the case of the Revolving Commitment, the Letters of Credit and the Swing Line Advances) held by that Lender (or by a SPC for which that Lender is the Granting Lender). As of the Closing Date, each Lender has been informed by the Lead Arranger of the amount and percentage of its Pro Rata Share of each of the Commitments. The percentage Pro Rata Shares of each Lender in the Commitments is subject to adjustment pursuant to any Assignment Agreement executed in accordance with Section 11.8. -21- "Projections" means the financial projections for Borrower and its Subsidiaries prepared on behalf of Borrower and heretofore distributed to the Lenders. "Property" means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. "Qualified Obligations" means (a) the Indebtedness of the Borrower and its Restricted Subsidiaries which is now entitled to the benefits of the collateral security contemplated by the Intercreditor Agreement, including the Obligations under this Agreement and (b) each additional class of Indebtedness of Borrower which hereafter is properly treated as a Qualified Obligation pursuant to the terms of the Intercreditor Agreement. "Qualified Subordinated Obligations" means unsecured Indebtedness of Borrower which (a) have no principal payments which are due prior to the earlier of (i) the Maturity Date, or (ii) the scheduled maturity date of any Subordinated Obligations which are, directly or indirectly, repaid or otherwise retired using the proceeds of such Indebtedness, (b) are subject to representations, covenants, defaults and other provisions which are not, taken as a whole, more burdensome upon Borrower and its Subsidiaries than those set forth in the Existing Subordinated Obligations, and (c) are subject to subordination to the Obligations in a manner which is at least as favorable to the Lenders as the subordination provisions contained in the Existing Subordinated Obligations. "Quarterly Payment Date" means the last Business Day of each December, March, June and September following the Closing Date. "Real Property" means, as of any date of determination, all real Property then or theretofore owned, leased or occupied by Borrower or any of its Restricted Subsidiaries. "Regulations T, U and X" means Regulations T, U and X, as at any time amended, of the Board of Governors of the Federal Reserve System, or any other regulations in substance substituted therefor. "Related Swap Agreement" means a Swap Agreement between Borrower and a Lender or an Affiliate of a Lender. Each Related Swap Agreement is a secured "Swap Agreement" as described and defined in the Intercreditor Agreement and is entitled to the benefits of the Liens provided in the Collateral Documents. "Request for Loan" means a written request for a Loan substantially in the form of Exhibit I, signed by a Responsible Official of Borrower or a Co-Borrower, on its behalf, and properly completed to provide all information required to be included therein. "Requirement of Law" means, as to any Person, the articles or certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any Law, or judgment, award, decree, writ or determination of a Governmental Agency, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject. "Requisite Lenders" means (a) as of any date of determination if the Commitments are then in effect, Lenders having Pro Rata Shares of the Commitments which are, in the aggregate, a majority of the Pro Rata Shares of the Commitments then in effect, and (b) as of any date of determination if the Commitments have then been terminated and there are then any Obligations -22- outstanding, Lenders or other creditors holding a majority of the Outstanding Obligations; provided that the Pro Rata Shares of the Commitments of, and the portion of the Outstanding Obligations held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Requisite Lenders. "Reserve Percentage" means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Board of Governors of the Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently referred to as "eurocurrency liabilities"). LIBOR for each outstanding LIBOR Loan shall be adjusted automatically as of the effective date of any change in the Reserve Percentage. "Responsible Official" means when used with reference to any Person, any officer or manager of such Person, general partner of such Person, officer of a corporate or limited liability company general partner of such Person, officer of a corporate or limited liability company general partner of a partnership that is a general partner of such Person, or any other responsible official thereof duly acting on behalf thereof. The Lenders shall be entitled to conclusively rely upon any document or certificate that is signed or executed by a Responsible Official of Borrower or any of its Restricted Subsidiaries as having been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of Borrower or such Restricted Subsidiary. "Restricted Subsidiary" means each Subsidiary of Borrower other than: (a) Subsidiaries formed under the Laws of foreign nations whose only tangible assets are located in foreign nations, and pure holding companies for such foreign Subsidiaries owning as their sole asset the stock or other securities and obligations thereof; (b) MGM Grand Detroit II and the Insurance Subsidiary; and (c) any Subsidiary of Borrower formed or acquired after the date of this Agreement that is designated in writing by Borrower to the Administrative Agent, but only so long as such Subsidiary of Borrower does not, and is not required to, guarantee or otherwise be liable for any of the Senior Indebtedness. "Revolving Commitment" means, subject to any decrease in the amount thereof pursuant to Sections 2.9, 2.10 or 11.26, $1,500,000,000. "Revolving Lender" means each Lender having a Pro Rata Share of the Revolving Loans, the Letters of Credit, the Swing Line Loans and the Revolving Commitment. "Revolving Loans" means the aggregate of the Advances made at any one time by the Revolving Lenders under the Revolving Commitment. "S&P" means Standard & Poor's Ratings Services, a division of McGraw Hill Companies, Inc., and any successor thereto. "Senior Indebtedness" means, collectively (a) any present or future Qualified Obligations, and (b) each other issue, item or class of Indebtedness of the Borrower or any of its Restricted -23- Subsidiaries which is in the principal amount of $50,000,000 or more and which is not a Subordinated Obligation. "Senior Officer" means the (a) chief executive officer or manager, (b) president, (c) executive vice president, (d) senior vice president, (e) chief financial officer, (f) treasurer, (g) assistant treasurer, (h) secretary, or (i) assistant secretary of Borrower or any Co-Borrower. "SPC" means, as to each Lender, one or more special purpose funding vehicles maintained or established by that Lender. "Special Eurodollar Circumstance" means the application or adoption after the Closing Date of any Law or interpretation, or any change therein or thereof, or any change in the interpretation or administration thereof by any Governmental Agency, central bank or comparable authority charged with the interpretation or administration thereof, or compliance by any Lender or its LIBOR Lending Office with any request or directive (whether or not having the force of Law) of any such Governmental Agency, central bank or comparable authority, or the existence or occurrence of circumstances affecting the Designated Market generally that are beyond the reasonable control of the Lenders. "Standby Letter of Credit" means each Letter of Credit that is not a Commercial Letter of Credit. "Standby Letter of Credit Fee" means the applicable per annum percentage set forth in the definition of "Applicable Rates". "Subordinated Obligations" means, collectively, the Existing Subordinated Obligations and any future class of Indebtedness of Borrower or any of its Subsidiaries which, by its terms, at any time purports to be subordinated in right of payment to the Obligations or any other class of Indebtedness of the Borrower or any of its Subsidiaries in any manner. "Subsidiary" means, as of any date of determination and with respect to any Person, any corporation, limited liability company or partnership (whether or not, in either case, characterized as such or as a "joint venture"), whether now existing or hereafter organized or acquired: (a) in the case of a corporation or limited liability company, of which a majority of the securities having ordinary voting power for the election of directors or other governing body (other than securities having such power only by reason of the happening of a contingency) are at the time beneficially owned by such Person and/or one or more Subsidiaries of such Person, or (b) in the case of a partnership, of which a majority of the partnership or other ownership interests are at the time beneficially owned by such Person and/or one or more of its Subsidiaries. For the avoidance of doubt, and only by way of example, as of the Closing Date, (a) Victoria Partners, a Nevada general partnership, and (b) Marina District Development Holding Co., LLC, a New Jersey limited liability company, the 100% owner of Marina District Development Company, LLC, a New Jersey limited liability company doing business as "The Borgata," are each only 50% owned by Borrower and therefore are not Subsidiaries of Borrower. "Superior Investment Grade" means that the Debt Rating assigned is a rating which, as reasonably determined by the Administrative Agent, would be a rating which is higher than the minimum Investment Grade rating in the ratings regime of that credit rating agency. -24- "Swap Agreement" means a written agreement between Borrower and one or more financial institutions providing for "swap", "cap", "collar" or other interest rate protection with respect to any Indebtedness. "Swing Line" means the revolving line of credit established by the Swing Line Lender in favor of Borrower and the Co-Borrowers pursuant to Section 2.6. "Swing Line Documents" means the promissory note and any other documents executed by Borrower and each Co-Borrower in favor of the Swing Line Lender in connection with the Swing Line. "Swing Line Lender" means Bank of America, acting through its Las Vegas Commercial Banking Division. "Swing Line Loans" and "Swing Line Advances" mean loans made by the Swing Line Lender to Borrower or the Co-Borrowers pursuant to Section 2.6. "Swing Line Outstandings" means, as of any date of determination, the aggregate principal Indebtedness of Borrower and the Co-Borrowers on all Swing Line Loans then outstanding. "Term Amortization Amount" means, as to each Quarterly Payment Date, the amount set forth opposite that Quarterly Payment Date in the matrix set forth below:

Quarterly Payment Dates Term Amortization Amount ----------------------- ------------------------ December 31, 2003 through September None 30, 2004 December 31, 2004 through September None 30, 2005 December 31, 2005 through September $ 5,000,000 30, 2006 December 31, 2006 through September $ 7,500,000 30, 2007 December 31, 2007 through September $37,500,000 30, 2008

"Term Commitment" means subject to any decrease in the amount thereof pursuant to Sections 2.8, 2.9, 2.10 or 11.26, $1,000,000,000. "Term Lender" means each Lender having a Pro Rata Share of the Term Loans and the Term Commitment. "Term Loans" means the aggregate of the Advances made at any one time by the Term Lenders under the Term Commitment. "Term Note" means each promissory note made by Borrower and each Co-Borrower to a Lender evidencing the Advances made by that Lender under its Pro Rata Share of the Term -25- Commitment, substantially in the form of Exhibit J, either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or supplanted. "Theme Park Property" means the former site of the MGM Grand Theme Park, consisting of the real property consisting of 18.49 acres which is shown in crosshatch on Schedule 1.1 hereto, provided that the Theme Park Property shall not include any portion of the casino or hotel improvements associated with the MGM Grand Hotel and Casino. "to the best knowledge of" means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by a Responsible Official of that Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by a Responsible Official of that Person). "type", when used with respect to any Loan or Advance, means the designation of whether such Loan or Advance is a Base Rate Loan or Advance, or a LIBOR Loan or Advance. "Unreimbursed Amount" has the meaning set forth in Section 2.4(c)(1). "Unrelated Person" means any Person other than (i) an employee stock ownership plan or other employee benefit plan covering the employees of Borrower and its Subsidiaries or (ii) an Affiliate of any Person or group of related Persons which as of the date of this Agreement is the beneficial owner of 25% or more (in the aggregate) of the outstanding common stock of Borrower. "Unrestricted Subsidiary" means each Subsidiary of Borrower which is not a Restricted Subsidiary. "Unused Fee" has the meaning set forth in Section 3.4. "Unused Fee Rate" means the applicable per annum percentage set forth in the definition of "Applicable Rates". 1.2 Use of Defined Terms. Any defined term used in the plural shall refer to all members of the relevant class, and any defined term used in the singular shall refer to any one or more of the members of the relevant class. 1.3 Accounting Terms - Fiscal Periods. All accounting terms not specifically defined in this Agreement shall be construed in conformity with, and all financial data required to be submitted by this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, except as otherwise specifically prescribed herein. In the event that GAAP or Borrower's Fiscal Year or Fiscal Quarters change during the term of this Agreement such that the covenants contained in Sections 6.7 and 6.8 would then be calculated for different periods, in a different manner or with different components, (a) Borrower, the Co-Borrowers and the Lenders agree to amend this Agreement in such respects as are necessary to conform those covenants as criteria for evaluating Borrower's financial condition to substantially the same criteria as were effective prior to such change in Fiscal Year, Fiscal Quarters or in GAAP and (b) Borrower and the Co-Borrowers shall be deemed to be in compliance with the covenants contained in the aforesaid Sections if and to the extent that Borrower and the Co-Borrowers would have -26- been in compliance therewith for the pre-existing fiscal periods and under GAAP as in effect immediately prior to such change, but shall have the obligation to deliver each of the materials described in Article 7 to the Creditors, on the dates therein specified, with financial data presented for its pre-existing fiscal periods and in a manner which conforms with GAAP as in effect immediately prior to such change. 1.4 Rounding. Any financial ratios required to be maintained by Borrower and the Co-Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed in this Agreement and rounding the result up or down to the nearest number (with a round-up if there is no nearest number) to the number of places by which such ratio is expressed in this Agreement. 1.5 Exhibits and Schedules. All Exhibits and Schedules to this Agreement, either as originally existing or as the same may from time to time be supplemented, modified or amended, are incorporated herein by this reference. A matter disclosed on any Schedule shall be deemed disclosed on all Schedules. 1.6 Miscellaneous Terms. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) The words "herein," "hereto," "hereof" and "hereunder" and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof. (c) Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears. (d) The term "including" is by way of example and not limitation. (e) The term "or" is not exclusive. (f) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form. (g) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including;" the words "to" and "until" each mean "to but excluding;" and the word "through" means "to and including." 1.7 Letter of Credit Amounts. Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor, whether or not such maximum face amount is in effect at such time. -27- ARTICLE 2 LOANS AND LETTERS OF CREDIT 2.1 Committed Loans-General. (a) Subject to the terms and conditions set forth in this Agreement, at any time and from time to time from the Closing Date through the Business Day immediately prior to the Maturity Date, each Revolving Lender shall, pro rata according to that Revolving Lender's Pro Rata Share of the then applicable Revolving Commitment, make Committed Advances to Borrower or to any Co-Borrower under the Revolving Commitment in Dollars in such amounts as Borrower or any Co-Borrower may request that (i) do not result in the sum of the Indebtedness evidenced by the Committed Revolving Notes and the Competitive Revolving Notes plus the Letters of Credit Usage plus the Swing Line Outstandings (after giving effect to any concurrent payment thereof with the proceeds of such Advances) exceeding the then effective Revolving Commitment, and (ii) in the case of Committed Advances made to a Co-Borrower, are directly used to finance the development, construction or operation of hotel/casino properties owned by that Co-Borrower. Subject to the limitations set forth herein, the Committed Advances by each Revolving Lender under its Pro Rata Share of the Revolving Commitment may be prepaid without premium or penalty. The Administrative Agent shall promptly provide Borrower or the relevant Co-Borrower with a written report allocating the Obligations under the Revolving Commitment if requested by Borrower or such Co-Borrower. (b) Subject to the terms and conditions set forth in this Agreement, on the Closing Date, each Term Lender shall make an Advance to Borrower or to any Co-Borrower under the Term Commitment in Dollars in the full amount of that Term Lender's Pro Rata Share of the Term Commitment. Thereafter, through the Business Day immediately prior to the Maturity Date, each Term Lender shall refinance its outstanding Advances, pro rata according to that Term Lender's Pro Rata Share of the then applicable Term Commitment, in such amounts as Borrower or the relevant Co-Borrower may request that do not result in the Indebtedness evidenced by the Term Notes being in excess of the then effective Term Commitment. No Term Loan which is repaid (rather than refinanced with the making of new Term Loans) may be reborrowed. Subject to the limitations set forth herein, the Advances by each Term Lender under its Pro Rata Share of the Term Commitment may be prepaid without premium or penalty. (c) Subject to the next sentence, each Loan consisting of Committed Advances shall be made pursuant to a Request for Loan which shall specify the requested (i) date of such Loan, (ii) type of Loan, (iii) amount of such Loan, (iv) in the case of a LIBOR Loan, the Interest Period for such Loan, and (v) whether the Loan is requested under the Term Commitment or the Revolving Commitment. Unless the Administrative Agent, in its sole and absolute discretion, has notified Borrower or the relevant Co-Borrower to the contrary, a Loan consisting of Committed Advances may be requested by telephone by a Responsible Official of Borrower or the relevant Co-Borrower, in which case Borrower or the relevant Co-Borrower shall confirm such request by promptly delivering a Request for Loan in person or by telecopier conforming to the preceding sentence to the Administrative Agent. The Administrative Agent shall incur no liability whatsoever hereunder in acting upon any telephonic request purportedly made by a Responsible Official of Borrower or the relevant Co-Borrower, and Borrower and the Co-Borrowers hereby agree to indemnify each Creditor from any loss, cost, expense or liability as a result of so acting. -28- (d) Promptly following receipt of a Request for Loan in respect of a Revolving Loan, the Administrative Agent shall notify each Revolving Lender by telephone or telecopier (and if by telephone, promptly confirmed by telecopier) of the date and type of the Revolving Loan, any applicable Interest Period, and that Revolving Lender's Pro Rata Share of the Loan. (e) Not later than 11:00 a.m., Los Angeles time, on the date specified for any Committed Loan (which must be a Business Day), each Lender having a Pro Rata Share of the relevant Commitment shall make its Pro Rata Share of the Committed Loan in immediately available funds available to the Administrative Agent at the Administrative Agent's Office. Upon satisfaction or waiver of the applicable conditions set forth in Article 8, all Committed Advances shall be credited on that date in immediately available funds to the Deposit Account for Borrower or that Co-Borrower. (f) Unless the Requisite Lenders otherwise consent, each Committed Loan shall be in an integral multiple of $1,000,000 which is not less than $5,000,000. (g) The Committed Advances made by each Revolving Lender under the Revolving Commitment shall be evidenced by that Lender's Committed Revolving Note, and the Committed Advances made by each Term Lender under the Term Commitment shall be evidenced by that Lender's Term Note. (h) A Request for Loan shall be irrevocable upon the Administrative Agent's first notification thereof. (i) If no Request for Loan (or telephonic request for Loan referred to in the second sentence of Section 2.1(c), if applicable) has been made within the requisite notice periods set forth in Section 2.2 or 2.3 prior to the end of the Interest Period for any LIBOR Loan, then on the last day of such Interest Period, such LIBOR Loan shall be automatically converted into a Base Rate Loan in the same amount. (j) If a Loan is to be made on the same date that another Loan is due and payable: (i) the Lenders shall make available to the Administrative Agent (or the Administrative Agent shall make available to the Lenders) the net amount of funds giving effect to both such Loans and the effect for purposes of this Agreement shall be the same as if separate transfers of funds had been made with respect to each such Loan; and (ii) in the case where the same Party is the primary borrower of both such Loans, Borrower or the relevant Co-Borrower shall make available to the Administrative Agent (or the Administrative Agent shall make available to such Party) the net amount of funds giving effect to both such Loans and the effect for purposes of this Agreement shall be the same as if separate transfers of funds had been made with respect to each such Loan . 2.2 Base Rate Loans. Each request by Borrower or any Co-Borrower for a Base Rate Loan shall be made pursuant to a Request for Loan (or telephonic or other request for loan referred to in the second sentence of Section 2.1(c), if applicable) received by the Administrative Agent, at the Administrative Agent's Office, not later than 9:15 a.m. Los Angeles time, on the date (which must be a -29- Business Day) of the requested Base Rate Loan. All Committed Loans shall constitute Base Rate Loans unless properly designated as a LIBOR Loan pursuant to Section 2.3. 2.3 LIBOR Loans. (a) Each request by Borrower or any Co-Borrower for a LIBOR Loan (including any conversion or continuation thereof) shall be made pursuant to a Request for Loan (or telephonic or other request for Loan referred to in the second sentence of Section 2.1(c), if applicable) received by the Administrative Agent, at the Administrative Agent's Office, not later than 10:00 a.m., Los Angeles time, at least three Business Days before the first day of the applicable Interest Period. (b) On the date which is two Business Days before the first day of the applicable Interest Period, the Administrative Agent shall confirm its determination of the applicable LIBOR (which determination shall be conclusive in the absence of manifest error) and promptly shall give notice of the same to Borrower and any relevant Co-Borrowers and the Lenders by telephone or telecopier (and if by telephone, promptly confirmed by telecopier). (c) Unless the Administrative Agent and the Requisite Lenders otherwise consent, no more than twenty-five LIBOR Loans shall be outstanding at any one time. (d) No LIBOR Loan may be requested during the continuation of a Default or Event of Default. (e) Nothing contained herein shall require any Lender to fund any LIBOR Advance in the Designated Market. 2.4 Letters of Credit. (a) Letter of Credit Subfacility. Subject to the terms and conditions of this Agreement (including Section 8.3), Borrower or any Co-Borrower may request from time to time during the period from the Closing Date through the day prior to the Letter of Credit Expiration Date that the Issuing Lender, in reliance upon the agreements of the other Lenders set forth in this Section 2.4, issue Letters of Credit for the account of Borrower or the relevant Co-Borrower, and the Issuing Lender agrees to issue for the account of Borrower or the relevant Co-Borrower one or more Letters of Credit denominated in Dollars and to amend Letters of Credit previously issued by it in accordance with subsection (b) below, provided that (i) Borrower or the relevant Co-Borrower shall not request that the Issuing Lender issue any Letter of Credit if, after giving effect to such issuance, the aggregate outstanding principal evidenced by the Committed Revolving Notes and the Competitive Revolving Notes plus the Letter of Credit Usage plus the Swing Line Outstandings exceeds the Revolving Commitment, (ii) Borrower or the relevant Co-Borrower shall not request that the Issuing Lender issue any Letter of Credit if Borrower and the Co-Borrowers would not be in compliance with Sections 6.7 and 6.8, (iii) in no event shall the Issuing Lender issue any Letter of Credit having an expiration date after the Maturity Date, (iv) Borrower or the relevant Co-Borrower shall not request any Letter of Credit if, after giving effect to such issuance, the Letter of Credit Usage would exceed $200,000,000 or any limit established by Law after the Closing Date on the Issuing Lender's ability to issue the requested Letter of Credit at any time, and (v) prior to the issuance of any Letter of Credit the Issuing Lender shall request confirmation by telephone from the Administrative Agent that such Letter of Credit may be issued. Notwithstanding the foregoing, the Issuing Lender shall not be obligated to issue a Letter of Credit if, (A) on or prior to the Business Day immediately preceding the issuance -30- thereof any Revolving Lender has notified the Issuing Lender in writing that the conditions set forth in Section 8.3 have not been satisfied with respect to the issuance of such Letter of Credit, (B) any order, judgment or decree of any Governmental Agency or arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any Law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Agency with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Lender in good faith deems material to it, (C) the issuance of such Letter of Credit would violate one or more policies of the Issuing Lender, or (D) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all of the Lenders have approved such expiry date. (b) Procedures for Issuance and Amendment of Letters of Credit. (1) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of Borrower or any Co-Borrower delivered to the Issuing Lender (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Official of Borrower or the relevant Co-Borrower. Each Letter of Credit Application submitted by the Borrower (or any Co-Borrower) shall be deemed to be a representation and warranty that the conditions specified in Section 8.3 have been satisfied on and as of the date of the issuance of the Letter of Credit requested thereby. Such Letter of Credit Application must be received by the Issuing Lender and the Administrative Agent not later than 1:00 p.m., Los Angeles time, at least 3 Business Days (or such later date and time as the Issuing Lender may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Issuing Lender: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the Issuing Lender may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Issuing Lender (W) the Letter of Credit to be amended; (X) the proposed date of amendment thereof (which shall be a Business Day); (Y) the nature of the proposed amendment; and (Z) such other matters as the Issuing Lender may require. (2) Promptly after receipt of any Letter of Credit Application, the Issuing Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from Borrower or the relevant Co-Borrower and, if not, the Issuing Lender will provide the Administrative Agent with a copy thereof. Upon receipt by the Issuing Lender of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the Issuing Lender shall, on the requested date, issue a Letter of Credit for the -31- account of Borrower or the relevant Co-Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the Issuing Lender's usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Lender a risk participation in such Letter of Credit in an amount equal to the product of such Lender's Pro Rata Share of the Revolving Commitment times the amount of such Letter of Credit. (3) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising Lender with respect thereto or to the beneficiary thereof, the Issuing Lender will also deliver to Borrower or the relevant Co-Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. (c) Drawings and Reimbursements; Funding of Participations. (1) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing Lender shall notify Borrower or the relevant Co-Borrower and the Administrative Agent thereof. Not later than 11:00 a.m. Los Angeles time on the date of any payment by the Issuing Lender under a Letter of Credit (each such date, an "Honor Date"), Borrower or the relevant Co-Borrower shall reimburse the Issuing Lender through the Administrative Agent in an amount equal to the amount of such drawing. If Borrower or the relevant Co-Borrower fails to so reimburse the Issuing Lender by such time, the Administrative Agent shall promptly notify each Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (the "Unreimbursed Amount"), and the amount of such Revolving Lender's Pro Rata Share thereof. In such event, Borrower shall be deemed to have requested a Base Rate Loan under the Revolving Commitment to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.1(f) for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Revolving Commitment and the conditions set forth in Section 8.2 (other than the delivery of a Request for Loan). Any notice given by the Issuing Lender or the Administrative Agent pursuant to this Section 2.4(c)(1) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice. (2) Each Revolving Lender (including the Lender acting as Issuing Lender) shall upon any notice pursuant to Section 2.4(c)(1) make funds available to the Administrative Agent for the account of the Issuing Lender at the Administrative Agent's Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. Los Angeles time on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.4(c)(3), each Revolving Lender that so makes funds available shall be deemed to have made a Committed Advance to Borrower or the relevant Co-Borrower in such amount. The Administrative Agent shall remit the funds so received to the Issuing Lender. (3) With respect to any Unreimbursed Amount that is not fully refinanced by a Base Rate Loan because the conditions set forth in Section 8.2 cannot be satisfied or for any other reason, Borrower or the relevant Co-Borrower shall be deemed to have incurred from the Issuing Lender an L/C Borrowing in the amount of the -32- Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender's payment to the Administrative Agent for the account of the Issuing Lender pursuant to Section 2.4(c)(2) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Revolving Lender in satisfaction of its participation obligation under this Section 2.4. (4) Until each Revolving Lender funds its Committed Advance or L/C Advance pursuant to this Section 2.4(c) to reimburse the Issuing Lender for any amount drawn under any Letter of Credit, interest in respect of such Revolving Lender's Pro Rata Share of such amount shall be solely for the account of the Issuing Lender. (5) Each Revolving Lender's obligation to make Committed Advances or L/C Advances to reimburse the Issuing Lender for amounts drawn under Letters of Credit, as contemplated by this Section 2.4(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Revolving Lender may have against the Issuing Lender, Borrower, any Co-Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Lender's obligation to make Committed Advances pursuant to this Section 2.4(c) is subject to the conditions set forth in Section 8.2 (other than delivery by Borrower or any Co-Borrower of a Request for Loan). No such making of an L/C Advance shall relieve or otherwise impair the obligation of Borrower or the relevant Co-Borrower to reimburse the Issuing Lender for the amount of any payment made by the Issuing Lender under any Letter of Credit, together with interest as provided herein. (6) If any Revolving Lender fails to make available to the Administrative Agent for the account of the Issuing Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.4(c) by the time specified in Section 2.4(c)(2), the Issuing Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Issuing Lender at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate of the Issuing Lender submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this clause (6) shall be conclusive absent manifest error. (d) Repayment of Participations. (1) At any time after the Issuing Lender has made a payment under any Letter of Credit and has received from any Revolving Lender such Revolving Lender's L/C Advance in respect of such payment in accordance with Section 2.4(c), if the Administrative Agent receives for the account of the Issuing Lender any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from Borrower, or the relevant Co-Borrower or otherwise, including proceeds of cash collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Revolving Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving -33- Lender's L/C Advance was outstanding) in the same funds as those received by the Administrative Agent. (2) If any payment received by the Administrative Agent for the account of the Issuing Lender pursuant to Section 2.4(c)(1) is required to be returned under any of the circumstances described in Section 11.30 (including pursuant to any settlement entered into by the Issuing Lender in its discretion), each Revolving Lender shall pay to the Administrative Agent for the account of the Issuing Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Revolving Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. (e) Obligations Absolute. The obligation of Borrower and the Co-Borrowers to reimburse the Issuing Lender for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following: (1) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto; (2) the existence of any claim, counterclaim, set-off, defense or other right that Borrower or the relevant Co-Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; (3) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit; (4) any payment by the Issuing Lender under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the Issuing Lender under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or (5) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, Borrower or the relevant Co-Borrower. Borrower or the relevant Co-Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with Borrower's or the relevant Co-Borrower's instructions or other irregularity, Borrower or the relevant Co-Borrower will immediately notify the Issuing Lender. Borrower or -34- the relevant Co-Borrower shall be conclusively deemed to have waived any such claim against the Issuing Lender and its correspondents unless such notice is given as aforesaid. (f) Role of Issuing Lender. Each Lender, Borrower and each of the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Issuing Lender shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the Issuing Lender, any Agent-Related Person nor any of the respective correspondents, participants or assignees of the Issuing Lender shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Requisite Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application. Borrower and the relevant Co-Borrower hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude Borrower's or the relevant Co-Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the Issuing Lender, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of the Issuing Lender, shall be liable or responsible for any of the matters described in clauses (1) through (5) of Section 2.4(e); provided, however, that anything in such clauses to the contrary notwithstanding, Borrower or the relevant Co-Borrower may have a claim against the Issuing Lender, and the Issuing Lender may be liable to Borrower or the relevant Co-Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by Borrower or the relevant Co-Borrower which such Borrower or such Co-Borrower proves were caused by the Issuing Lender's willful misconduct or gross negligence or the Issuing Lender's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the Issuing Lender shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. (g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the Issuing Lender has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, Borrower or the relevant Co-Borrower shall immediately Cash Collateralize the then outstanding amount of the Letter of Credit Usage (in an amount equal to such outstanding amount determined as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be). For purposes hereof, "Cash Collateralize" means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Issuing Lender and the Revolving Lenders, as collateral for the then outstanding amount of the Letter of Credit Usage, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the Issuing Lender (which documents are hereby consented to by the Revolving Lenders), subject to any limitations in the Intercreditor Agreement. Derivatives of such term have corresponding meanings. Any Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. -35- (h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed by the Issuing Lender and Borrower or the relevant Co-Borrower when a Letter of Credit is issued, (i) the rules of the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the "ICC") at the time of issuance (including the ICC decision published by the Commission on Banking Technique and Practice on April 6, 1998 regarding the European single currency (euro)) shall apply to each Commercial Letter of Credit. (i) Conflict with Letter of Credit Application. In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control. (j) Fees for Modifications. The issuance of any supplement, modification, amendment, renewal, or extension to or of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit, except that the Issuing Lender's issuance fees shall be payable as set forth in the letter agreement referred to in Section 3.5. 2.5 Competitive Advances. (a) Subject to the terms and conditions hereof, at any time and from time to time from the Closing Date through and including the Maturity Date, each Revolving Lender may in its sole and absolute discretion make Competitive Advances to Borrower or to any Co-Borrower in Dollars pursuant to Competitive Bids accepted by Borrower or the relevant Co-Borrower in such principal amounts as Borrower or the relevant Co-Borrower may request pursuant to a Competitive Bid Request that do not result in the aggregate outstanding principal Indebtedness evidenced by the Competitive Revolving Notes being in excess of the Maximum Competitive Outstandings Amount, provided that after giving effect to the making of each Competitive Advance, the sum of the Indebtedness evidenced by the Committed Revolving Notes and the Competitive Revolving Notes plus the Letters of Credit Usage plus the Swing Line Outstandings shall not exceed the then effective Revolving Commitment. Each Competitive Advance made to a Co-Borrower shall be directly used to finance the development, construction or operation of hotel/casino properties owned by that Co-Borrower. No Competitive Advance made by any Revolving Lender shall relieve that Revolving Lender of its Pro Rata Share of the undrawn Revolving Commitment. (b) Borrower or the relevant Co-Borrower shall request Competitive Advances by submitting Competitive Bid Requests to the Administrative Agent, which specify the relevant date, amount and maturity of the proposed Competitive Advance and whether the Competitive Bid requested is an Absolute Rate Bid or a LIBOR Margin Bid, or both. Borrower and each Co-Borrower may submit telephonic requests for Competitive Advances. Any Competitive Bid Request made by telephone shall promptly be confirmed by the delivery to Administrative Agent in person or by telecopier of a written Competitive Bid Request. The Administrative Agent shall incur no liability whatsoever hereunder in acting upon any telephonic Competitive Bid Request purportedly made by a Responsible Official of Borrower or Co-Borrower, each of which hereby agrees to indemnify the Administrative Agent from any loss, cost, expense or liability as a result of so acting. The Competitive Bid Request must be received by the Administrative Agent not later than 9:00 a.m., Los Angeles time, on a Business Day that is at least one Business Day prior to the date of the proposed Competitive Advance if an Absolute -36- Rate Bid is requested; if a LIBOR Margin Bid is requested, it must be received by the Administrative Agent five Business Days prior to the date of the proposed Competitive Advance. (c) Unless the Administrative Agent otherwise agrees, in its sole and absolute discretion, no Competitive Bid Request may be submitted within the five Business Day period following submission of another Competitive Bid Request. (d) Each Competitive Bid Request must be made for a Competitive Advance of at least $10,000,000 and shall be in an integral multiple of $1,000,000. (e) No Competitive Bid Request shall be made for a Competitive Advance with a maturity of less than 14 days or more than 180 days, or with a maturity date subsequent to the Maturity Date. (f) The Administrative Agent shall, promptly after receipt of a Competitive Bid Request, notify the Revolving Lenders thereof by telephone and provide the Revolving Lenders a copy thereof by telecopier. Any Revolving Lender may, by written notice to the Administrative Agent (with a copy to Borrower and the Co-Borrowers), advise the Administrative Agent that it elects not to be so notified of Competitive Bid Requests, in which case the Administrative Agent shall not notify such Revolving Lender of the Competitive Bid Request. (g) Each Revolving Lender receiving a Competitive Bid Request may, in its sole and absolute discretion, make or not make a Competitive Bid responsive to the Competitive Bid Request. Each Competitive Bid shall be submitted to the Administrative Agent not later than 7:30 a.m. (or, in the case of the Revolving Lender which is also the Administrative Agent, not later than 7:15 a.m.) Los Angeles time, in the case of a LIBOR Margin Bid, on the date which is four Business Days prior to the requested Competitive Advance and, in the case of an Absolute Rate Bid, on the date of the requested Competitive Advance. Any Competitive Bid received by the Administrative Agent after 7:30 a.m. (or 7:15 a.m. in the case of the Revolving Lender which is also the Administrative Agent) on such date shall be disregarded for purposes of this Agreement. Any Competitive Bid made by telephone shall promptly be confirmed by the delivery to the Administrative Agent in person or by telecopier of a written Competitive Bid. The Administrative Agent shall incur no liability whatsoever hereunder in acting upon any telephonic Competitive Bid purportedly made by a Responsible Official of a Revolving Lender, each of which hereby agrees to indemnify the Administrative Agent from any loss, cost, expense or liability as a result of so acting with respect to that Revolving Lender. (h) Each Competitive Bid shall specify the fixed interest rate or the margin over LIBOR, as applicable, for the offered Maximum Competitive Advance set forth in the Competitive Bid. The Maximum Competitive Advance offered by a Revolving Lender in a Competitive Bid may be less than the Competitive Advance requested by Borrower or the relevant Co-Borrower in the Competitive Bid Request, but, if so, shall be an integral multiple of $1,000,000. Any Competitive Bid which offers an interest rate other than a fixed interest rate or a margin over LIBOR, is in a form other than set forth in Exhibit D or which otherwise contains any term, condition or provision not contained in the Competitive Bid Request shall be disregarded for purposes of this Agreement. A Competitive Bid once submitted to the Administrative Agent shall be irrevocable until 8:30 a.m. Los Angeles time, in the case of a LIBOR Margin Bid, on the date which is three Business Days prior to the requested Competitive Advance and, in the case of an Absolute Rate Bid, on the date of the proposed Competitive -37- Advance set forth in the related Competitive Bid Request, and shall expire by its terms at such time unless accepted by Borrower or the relevant Co-Borrower prior thereto. (i) Promptly after 7:30 a.m. Los Angeles time, in the case of a LIBOR Margin Bid, on the date which is four Business Days prior to the date of the proposed Competitive Advance and, in the case of an Absolute Rate Bid, on the date of the proposed Competitive Advance, the Administrative Agent shall notify Borrower or the relevant Co-Borrower of the names of the Revolving Lenders providing Competitive Bids to the Administrative Agent at or before 7:30 a.m. on that date (or 7:15 a.m. in the case of the Revolving Lender which is also the Administrative Agent) and the Maximum Competitive Advance and fixed interest rate or margin over LIBOR set forth by each such Revolving Lender in its Competitive Bid. The Administrative Agent shall promptly confirm such notification in writing delivered in person or by telecopier to Borrower or the relevant Co-Borrower. (j) Borrower or the relevant Co-Borrower may, in its sole and absolute discretion, reject any or all of the Competitive Bids. If Borrower or the relevant Co-Borrower accepts any Competitive Bid, the following shall apply: (a) Borrower or the relevant Co-Borrower must accept all Absolute Rate Bids at all lower fixed interest rates before accepting any portion of an Absolute Rate Bid at a higher fixed interest rate, (b) Borrower or the relevant Co-Borrower must accept all LIBOR Margin Bids at all lower margins over LIBOR before accepting any portion of a LIBOR Margin Bid at a higher margin over LIBOR, (c) if two or more Revolving Lenders have submitted a Competitive Bid at the same fixed interest rate or margin, then Borrower or the relevant Co-Borrower must accept either all of such Competitive Bids or accept such Competitive Bids in the same proportion as the Maximum Competitive Advance of each Revolving Lender bears to the aggregate Maximum Competitive Advances of all such Revolving Lenders, and (d) Borrower and the Co-Borrower may not accept Competitive Bids for an aggregate amount in excess of the requested Competitive Advance set forth in the Competitive Bid Request. Borrower or the relevant Co-Borrower must accept (i) each LIBOR Margin Bid prior to 8:30 a.m. on the date which is three Business Days prior to the requested Competitive Advance and (iii) each Absolute Rate Bid prior to 8:30 a.m. on the date of the requested Competitive Advance or shall be deemed to have rejected the offered Competitive Advances. Acceptance of a Competitive Bid by Borrower or a Co-Borrower shall be irrevocable upon communication thereof to the Administrative Agent. The Administrative Agent shall promptly notify each of the Revolving Lenders whose Competitive Bid has been accepted by Borrower or the relevant Co-Borrower by telephone, which notification shall promptly be confirmed in writing delivered in person or by telecopier to such Revolving Lenders. (k) In the case of LIBOR Margin Bids, the Administrative Agent shall determine LIBOR on the date which is two Business Days prior to the date of the proposed Competitive Advance, and shall promptly thereafter notify Borrower or the relevant Co-Borrower and the Revolving Lenders whose Competitive Bids were accepted by Borrower or the relevant Co-Borrower of such LIBOR. (l) A Revolving Lender whose Competitive Bid has been accepted shall make the Competitive Advance in accordance with the Competitive Bid Request and with its Competitive Bid, subject to the applicable conditions set forth in this Agreement by making funds immediately available to the Administrative Agent at the Administrative Agent's Office in the amount of such Competitive Advance not later than 12:00 noon, Los Angeles time, on the date set forth in the Competitive Bid Request. The Administrative Agent shall then promptly credit the Competitive Advance in immediately available funds to the relevant Deposit Account. -38- (m) The Administrative Agent shall notify Borrower and the Revolving Lenders promptly after any Competitive Advance is made of the amounts and maturity of such Competitive Advances and the identity of the Revolving Lenders making such Competitive Advances. (n) The Competitive Advances made by each Revolving Lender shall be evidenced by that Revolving Lender's Competitive Revolving Note. 2.6 Swing Line. (a) Subject to the terms and conditions set forth herein, from the Closing Date through the day prior to the Maturity Date the Swing Line Lender shall make Swing Line Loans to Borrower and each of the Co-Borrowers in such amounts as they may request which do not result in the sum of the Indebtedness evidenced by the Committed Revolving Notes and the Competitive Revolving Notes plus the Letters of Credit Usage plus the Swing Line Outstandings exceeding the then effective Revolving Commitment (as in effect on the date of the making of the related Swing Line Loan), provided that (i) after giving effect to each Swing Line Loan, the Swing Line Outstandings shall not exceed $50,000,000, (ii) without the consent of all of the Lenders, no Swing Line Loan may be made during the continuation of an Event of Default and (iii) the Swing Line Lender has not given at least twenty-four hours prior notice to Borrower and the Co-Borrowers that availability under the Swing Line is suspended or terminated. Borrower and the Co-Borrowers may borrow, repay and reborrow under this Section. Unless notified to the contrary by the Swing Line Lender, borrowings under the Swing Line may be made in amounts which are integral multiples of $100,000 upon telephonic request by a Responsible Official of Borrower or the relevant Co-Borrower made to the Administrative Agent not later than 1:00 p.m., Los Angeles time, on the Business Day of the requested borrowing (which telephonic request shall be promptly confirmed in writing by telecopier), provided that if the requested Swing Line Loan is to be credited to an account which is not with the Swing Line Lender, the request must be submitted by 11:30 a.m., Los Angeles time. Promptly after receipt of such a request for borrowing, the Administrative Agent shall provide telephonic verification to the Swing Line Lender that, after giving effect to such request, the sum of the Indebtedness evidenced by the Committed Revolving Notes and the Competitive Revolving Notes plus the Letters of Credit Usage plus the Swing Line Outstandings will not exceed the then effective Revolving Commitment (and such verification shall be promptly confirmed in writing by telecopier). Unless notified to the contrary by the Swing Line Lender, each repayment of a Swing Line Loan shall be in an amount which is an integral multiple of $100,000. If Borrower or the relevant Co-Borrower instructs the Swing Line Lender to debit its demand deposit account at the Swing Line Lender in the amount of any payment with respect to a Swing Line Loan, or the Swing Line Lender otherwise receives repayment, after 3:00 p.m., Los Angeles time, on a Business Day, such payment shall be deemed received on the next Business Day. The Swing Line Lender shall promptly notify the Administrative Agent of the Swing Line Outstandings each time there is a change therein or if it suspends or terminates availability under the Swing Line. (b) Swing Line Loans shall bear interest at a fluctuating rate per annum equal to the Base Rate plus the Base Rate Margin minus one percent per annum. Interest shall be payable on such dates, not more frequent than monthly, as may be specified by the Swing Line Lender and in any event on the Maturity Date. The Swing Line Lender shall be responsible for invoicing Borrower or the relevant Co-Borrower for such interest. Interest payable on Swing Line Loans is solely for the account of the Swing Line Lender (subject to clause (d) below). -39- (c) The Swing Line Loans shall be payable within five Business Days after demand made by the Swing Line Lender and in any event on the Maturity Date or any earlier date when all other Obligations are due. (d) Upon the making of a Swing Line Loan in accordance with Section 2.6(a), each Revolving Lender shall be deemed to have purchased from the Swing Line Lender a participation therein in an amount equal to that Lender's Pro Rata Share of the Revolving Commitment times the amount of the Swing Line Loan. Upon demand made by the Swing Line Lender through the Administrative Agent, each Revolving Lender shall, according to its Pro Rata Share of the Revolving Commitment, promptly provide to the Swing Line Lender its purchase price therefor in an amount equal to its participation therein. The obligation of each Revolving Lender to so provide its purchase price to the Swing Line Lender shall be absolute and unconditional (subject only to the making of a demand upon that Revolving Lender by the Swing Line Lender) and shall not be affected by the occurrence of a Default or Event of Default; provided that no Revolving Lender shall be obligated to purchase its Pro Rata Share under the Revolving Commitment of (i) Swing Line Loans to the extent that Swing Line Outstandings are in excess of $50,000,000 or to the extent that the sum of the Indebtedness evidenced by the Committed Revolving Notes and the Competitive Revolving Notes plus the Letters of Credit Usage plus the Swing Line Outstandings exceeds the Revolving Commitment (as in effect on the date of the making of the related Swing Line Loan) and (ii) any Swing Line Loan made (absent the consent of all of the Revolving Lenders) at any time when the applicable conditions set forth in Section 8.2 have not been satisfied. Each Revolving Lender that has provided to the Swing Line Lender the purchase price due for its participation in Swing Line Loans shall thereupon acquire a pro rata participation, to the extent of such payment, in the claim of the Swing Line Lender against Borrower and the Co-Borrowers for principal and interest and shall share, in accordance with that pro rata participation, in any principal payment made by Borrower or the Co-Borrowers with respect to such claim and in any interest payment made by Borrower or the Co-Borrowers (but only with respect to periods subsequent to the date such Revolving Lender paid the Swing Line Lender its purchase price) with respect to such claim. (e) Upon any demand for payment of the Swing Line Outstandings by the Swing Line Lender (unless Borrower or the relevant Co-Borrower has made other arrangements acceptable to the Swing Line Lender to reduce the Swing Line Outstandings to $0), Borrower or the relevant Co-Borrower shall request a Committed Loan pursuant to Section 2.1(a) sufficient to repay all Swing Line Outstandings (and, for this purpose, Section 2.1(f) shall not apply). In each case, the Administrative Agent shall automatically provide the respective Committed Advances made by each Revolving Lender to the Swing Line Lender (which the Swing Line Lender shall then apply to the Swing Line Outstandings). In the event that Borrower and the Co-Borrowers fail to request a Committed Loan within the time specified by Section 2.2 on any such date, the Administrative Agent may, but is not required to, without notice to or the consent of Borrower or the Co-Borrowers, cause Committed Advances to be made by the Revolving Lenders under the Revolving Commitment in amounts which are sufficient to reduce the Swing Line Outstandings as required above. The conditions precedent set forth in Article 8 shall not apply to Committed Advances to be made by the Revolving Lenders pursuant to the three preceding sentences but the Revolving Lenders shall not be obligated to make such Committed Advances to the extent that the conditions set forth in Section 2.6(a)(i), (ii) and (iii) were not satisfied as to any Swing Line Loan which is part of such Swing Line Outstandings. The proceeds of such Committed Advances shall be paid directly to the Swing Line Lender for application to the Swing Line Outstandings. 2.7 Co-Borrowers. Detroit is hereby designated as a direct Co-Borrower under this Agreement, with the right to request Loans and Letters of Credit through the Administrative Agent -40- directly from the Lenders and the Issuing Lender, subject to the terms and conditions set forth herein, provided that (a) each Loan and Letter of Credit made hereunder to Detroit or any other Co-Borrower shall be used solely and directly to finance the development, construction or operation of hotel/casino properties owned by that Co-Borrower, and (b) the liability of Detroit is limited to that portion of the Obligations which are actually borrowed or received by Detroit. From time to time following the Closing Date, Borrower may designate one or more Guarantors which are United States domestic Persons to be additional joint and several direct Co-Borrowers hereunder by written request to the Administrative Agent accompanied by (a) an executed Assumption Agreement and appropriate Notes executed by the designated Guarantor, (b) a certificate of good standing of the designated Guarantor in the jurisdiction of its incorporation, (c) a certified corporate authority resolution covering the execution and delivery of the Assumption Agreement and such Notes, (d) a written consent to the Assumption Agreement executed by each other Guarantor, and (e) an appropriate written legal opinion similar to the Opinions with respect to the Co-Borrower and the Assumption Agreement. The Administrative Agent shall promptly notify the Lenders of such request, together with copies of such of the foregoing as any Lender may request and the designated Guarantor shall become a Co-Borrower hereunder. 2.8 Mandatory Reductions of the Term Commitment. Borrower and the Co-Borrowers shall repay the Term Loans on each Quarterly Payment Date, commencing with the Quarterly Payment Date occurring on December 31, 2005, in the related Term Amortization Amount. Each prepayment of the Term Loan shall be applied to installments of principal in respect of the Term Loans in the order of their occurrence unless the Borrower otherwise specifies in writing at the time of such prepayment in a writing making reference to this Section. 2.9 Voluntary Reduction of the Commitments. Borrower and the Co-Borrowers shall have the right, at any time and from time to time, without penalty or charge, upon at least three Business Days' prior written notice by a Responsible Official of Borrower and the Co-Borrowers to the Administrative Agent, voluntarily to reduce, permanently and irrevocably, in aggregate principal amounts in an integral multiple of $1,000,000 (but in the case of assignments of Pro Rata Shares of the Revolving Commitment, not less than $5,000,000), or to terminate, all or a portion of the then undisbursed portion of either of the Commitments; provided that (a) the Revolving Commitment may not be so reduced below an amount equal to the sum of (i) the aggregate principal amount outstanding under the Committed Revolving Notes and the Competitive Revolving Notes, plus (ii) the Letters of Credit Usage plus (iii) the Swing Line Outstandings, and (b) concurrently with each reduction of the Term Commitment, the Term Loans shall be prepaid in the same amount (with each such prepayment to be applied to Term Amortization Amounts in the inverse order of their occurrence). The Administrative Agent shall promptly notify the Lenders of any reduction or termination of the Commitments under this Section. 2.10 Optional Termination of Commitments. Following the occurrence of a Change in Control, the Requisite Lenders may in their sole and absolute discretion elect to terminate the Commitments during the sixty day period immediately subsequent to the later of (a) such occurrence or (b) the earlier of (i) receipt of written notice to the Administrative Agent of the Change in Control from Borrower and the Co-Borrowers, or (ii) if no such notice has been received by the Administrative Agent, the date upon which the Administrative Agent has actual knowledge thereof. In the event that the Lenders elect to so terminate the Commitments, the Commitments shall be terminated effective on the date which is sixty days subsequent to written notice from the Administrative Agent to Borrower and the Co-Borrowers thereof. 2.11 Administrative Agent's Right to Assume Funds Available for Advances. Unless the Administrative Agent shall have been notified by any Lender no later than 10:00 a.m. on the Business Day of the proposed funding by the Administrative Agent of any Loan that such Lender does not intend -41- to make available to the Administrative Agent such Lender's portion of the total amount of such Loan, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on the date of the Loan and the Administrative Agent may, in reliance upon such assumption, make available to Borrower or the relevant Co-Borrower a corresponding amount. If the Administrative Agent has made funds available to Borrower or a Co-Borrower based on such assumption and such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent promptly shall notify Borrower or that Co-Borrower who shall pay such corresponding amount to the Administrative Agent. The Administrative Agent also shall be entitled to recover from such Lender interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to Borrower or the Co-Borrowers to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to the daily Federal Funds Rate. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its share of the Commitments or to prejudice any rights which the Administrative Agent, Borrower or any Co-Borrower may have against any Lender as a result of any default by such Lender hereunder. 2.12 Release and Reattachment of Collateral. (a) If, following the Closing Date, Borrower and its Restricted Subsidiaries are then entitled to the release of all of the Liens described in the Intercreditor Agreement, both pursuant to this Agreement, pursuant to the Intercreditor Agreement and pursuant to the credit documents governing each of the then existing Qualified Obligations, and provided that no Default or Event of Default has then occurred and remains continuing, Borrower and the Co-Borrowers may in their sole discretion request that the Administrative Agent release, and that the Administrative Agent as a Creditor Representative under the Intercreditor Agreement direct the Collateral Agent to release, each of the Liens securing the Obligations and the other Qualified Obligations. Borrower and the Co-Borrowers shall submit any request under this Section in the form of a Certificate, in form and substance acceptable to the Administrative Agent, signed by a Senior Officer of Borrower and each Co-Borrower certifying that no Default or Event of Default exists, together with a written consent to the release of collateral executed by each Guarantor and such other supporting information as the Administrative Agent may request, including evidence reasonably satisfactory to the Administrative Agent that the Collateral Agent and the holders of the other Qualified Obligations shall previously or concurrently release all Liens held by such creditors. Promptly upon receipt of such a Certificate, the Administrative Agent shall (i) provide a copy thereof to the Lenders, (ii) direct the Collateral Agent to return to the Persons legally entitled thereto, all Collateral pledged in support of the Obligations and the other Qualified Obligations, and (iii) release any Liens then held for the Obligations by the Administrative Agent (other than any rights of set off or other inchoate Liens), but subject to the requirement that the Liens held by the Collateral Agent and the holders of the other Qualified Obligations are previously or concurrently released, all at the sole expense of Borrower and the Co-Borrowers (a "Collateral Release"). No Collateral Release shall constitute or be construed as a release (or to require the release) of the Guaranty. (b) If, following any Collateral Release, a Collateral Event occurs, then Borrower and the Co-Borrowers shall, and shall cause each of the Restricted Subsidiaries to, promptly and in any event within thirty days following the occurrence of such Collateral Event and in any event not later than the granting of any Liens in such collateral for the benefit of any Senior Indebtedness, grant perfected Liens in the same collateral to secure the Obligations (including any Related Swap Agreements) equally, ratably and on a pari passu basis with such -42- Senior Indebtedness, provided that Borrower and the Restricted Subsidiaries shall not be obligated to provide Liens in any Property to the extent that Gaming Laws prohibit the granting of Liens in such Property to holders of the Obligations and the Senior Indebtedness unless and until all required approvals of Gaming Boards thereto are obtained. In such event, Borrower shall, and shall cause each Restricted Subsidiary to, use its best efforts to obtain all necessary consents from the applicable Gaming Boards to grant a perfected Lien on such Property securing the Obligations and such Senior Indebtedness and, upon receipt of all consents needed to grant such a perfected Lien, shall promptly take all action (or cause the Restricted Subsidiaries to take all action) reasonably necessary in order to grant and perfect such a Lien. The Liens granted pursuant to this clause (b) shall be (i) equal, ratable and pari passu with any Liens securing the other Senior Indebtedness, (ii) granted concurrently therewith, and (iii) granted pursuant to instruments, documents and agreements which are similar to the Collateral Documents or otherwise reasonably acceptable to the Administrative Agent. While each of the Liens contemplated by this clause (b) shall be equal, ratable and pari passu in the manner described above, it is acknowledged that the same may subordinate to certain prior Liens in favor of creditors other than the holders of Senior Indebtedness permitted pursuant to Section 6.6. In connection with the granting of any such Liens, Borrower and its Restricted Subsidiaries shall provide to the Administrative Agent (y) policies of title insurance on customary terms and conditions, to the extent that policies of title insurance on the corresponding Property are provided to the holders of other classes of Senior Indebtedness (and in an insured amount that is proportionately equal to the policies provided to the holders of the other classes of Senior Indebtedness), and (z) legal opinions and other assurances as the Administrative Agent may reasonably request. 2.13 Senior Indebtedness. The Obligations shall be and hereby are designated as "Senior Indebtedness" and "Senior Obligations" of the Borrower and its Restricted Subsidiaries with respect to all Subordinated Obligations, and all payments with respect to any Subordinated Obligations shall be subject to Section 6.1. 2.14 Collateral. As of the Closing Date and each subsequent date, unless a Collateral Release has occurred and no re-attachment has thereafter occurred, the Obligations under the Loan Documents, including each Related Swap Agreement, are secured by the Collateral contemplated by the Intercreditor Agreement and the Collateral Documents on an equal, ratable and pari passu basis with the other Qualified Obligations, as provided for in the Intercreditor Agreement and in the manner set forth therein. -43- ARTICLE 3 PAYMENTS AND FEES 3.1 Principal and Interest. (a) Interest shall be payable on the outstanding daily unpaid principal amount of each Advance from the date thereof until payment in full is made and shall accrue and be payable at the rates set forth or provided for herein before and after Default, before and after maturity, before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law, with interest on overdue principal and interest at the Default Rate to the fullest extent permitted by applicable Laws. (b) Interest accrued on each Base Rate Loan on each Quarterly Payment Date shall be due and payable on that day. Except as otherwise provided in Section 3.9, the unpaid principal amount of any Base Rate Loan shall bear interest at a fluctuating rate per annum equal to the Base Rate plus the applicable Base Rate Margin. Each change in the interest rate under this Section 3.1(b) due to a change in the Base Rate shall take effect simultaneously with the corresponding change in the Base Rate. (c) Interest accrued on each LIBOR Loan which is for a term of three months or less shall be due and payable on the last day of the related Interest Period. Interest accrued on each other LIBOR Loan shall be due and payable on the date which is three months after the date such LIBOR Loan was made (and, every three months thereafter through the last day of the Interest Period) and on the last day of the related Interest Period. Except as otherwise provided in Section 3.9, the unpaid principal amount of any LIBOR Loan shall bear interest at a rate per annum equal to LIBOR for that LIBOR Loan plus the applicable LIBOR Margin. (d) Interest accrued on each Competitive Advance shall be due and payable on the maturity date of the Competitive Advance. Except as otherwise provided in Section 3.9, the unpaid principal amount of each Competitive Advance shall bear interest at the fixed interest rate or the margin over LIBOR specified in the related Competitive Bid. (e) If not sooner paid, the principal Indebtedness evidenced by the Notes shall be payable as follows: (i) the amount, if any, by which the Obligations outstanding (including, without limitation, obligations evidenced by the Competitive Revolving Notes) under the Revolving Commitment at any time exceed the then applicable Revolving Commitment, shall be payable immediately; (ii) the Term Loans shall be payable on each Quarterly Payment Date in the related Term Amortization Amount; (iii) the principal amount of each Competitive Advance shall be payable on the maturity date specified in the related Competitive Bid; and (iv) the principal Indebtedness evidenced by the Notes shall in any event be payable on the Maturity Date. (f) The Notes may, at any time and from time to time, voluntarily be paid or prepaid in whole or in part without premium or penalty, except that with respect to any voluntary -44- prepayment under this Section 3.1(f), (i) any partial prepayment shall be not less than $5,000,000, or in integral multiples of $1,000,000 which are in excess of $5,000,000, (ii) the Administrative Agent shall have received written notice of any prepayment by 9:00 a.m., Los Angeles time, on the Business Day prior to the date of prepayment (which must be a Business Day) in the case of a Base Rate Loan, and, in the case of a LIBOR Loan, three Business Days before the date of prepayment, which notice shall identify the date and amount of the prepayment and the Loan(s) being prepaid, (iii) each prepayment of principal on any LIBOR Loan shall be accompanied by payment of interest accrued to the date of payment on the amount of principal paid, (iv) any payment or prepayment of all or any part of any LIBOR Loan on a day other than the last day of the applicable Interest Period shall be subject to Section 3.8(e) and (v) each prepayment of the Term Loans shall be applied to Term Amortization Amounts in the inverse order of their maturity. Promptly following receipt of a notice of prepayment under clause (ii) above, the Administrative Agent shall notify each Lender by telephone or telecopier (and if by telephone, promptly confirmed by telecopier) of the date and amount thereof. (g) No Competitive Revolving Note may be prepaid without the prior written consent of the Lender making such Competitive Advance. 3.2 Joint Lead Arranger's Fees. On the date hereof, Borrower shall pay to the Joint Lead Arrangers fees in the amounts heretofore agreed upon by letter agreement between Borrower and the Joint Lead Arrangers. These fees are for the services of the Joint Lead Arrangers in arranging the credit facilities under this Agreement and are fully earned when paid and are nonrefundable. 3.3 Upfront Fees. On the date hereof, Borrower shall pay to the Administrative Agent, for the account of each Lender, upfront fees in an amount equal to (a) that Lender's allocated Pro Rata Share of the relevant Commitments times (b) a fee percentage based upon the amount of the offered commitment of that Lender to the credit facilities described herein, as set forth in a written confirmation delivered to that Lender by the Lead Arranger, provided that the fee percentage for Bank of America shall be as set forth in a letter agreement with Bank of America. Such upfront fees are for the credit facilities committed by each Lender under this Agreement and are fully earned when paid. The upfront fees paid to each Lender are solely for its own account and are nonrefundable. 3.4 Unused Fees. From the Closing Date, Borrower and the Co-Borrowers shall pay to the Administrative Agent, for the ratable accounts of the Revolving Lenders pro rata according to their Pro Rata Shares of the Revolving Commitment, an unused fee equal to the Unused Fee Rate in effect from time to time times the difference between (a) the principal amount of the Revolving Commitment, and (b) the aggregate principal amount of the Obligations outstanding from time to time under the Revolving Commitment (including the Letters of Credit), other than the Swing Line Outstandings and other than the aggregate principal amount outstanding under the Competitive Revolving Notes (the "Unused Fee"). The Unused Fees shall be payable quarterly in arrears on each Quarterly Payment Date, on the Maturity Date upon the date of any partial reduction or termination of the Revolving Commitment pursuant to Sections 2.9, 2.10 or 11.26. 3.5 Letter of Credit Fees. With respect to each Letter of Credit, Borrower and the Co-Borrowers shall pay the following fees: (a) concurrently with the issuance of each Standby Letter of Credit, a letter of credit issuance fee to the Issuing Lender for the sole account of the Issuing Lender, in an amount set forth in a letter agreement between Borrower and the Issuing Lender; -45- (b) concurrently with the issuance of each Standby Letter of Credit, to the Administrative Agent for the ratable account of the Revolving Lenders in accordance with their Pro Rata Shares of the Revolving Commitment, a standby letter of credit fee in an amount equal to the applicable Standby Letter of Credit Fee per annum as of the date of such issuance times the face amount of such Standby Letter of Credit through the termination or expiration of such Standby Letter of Credit, which the Administrative Agent shall promptly pay to the Lenders; and (c) concurrently with each issuance, negotiation, drawing or amendment of each Commercial Letter of Credit, to the Issuing Lender for the sole account of the Issuing Lender, issuance, negotiation, drawing and amendment fees in the amounts set forth from time to time as the Issuing Lender's published scheduled fees for such services. Each of the fees payable with respect to Letters of Credit under this Section is earned when due and is nonrefundable. 3.6 Agency Fees. On the Closing Date and annually thereafter, Borrower and the Co-Borrowers shall pay to the Administrative Agent an agency fee in such amounts as heretofore agreed upon by letter agreement between Borrower and Bank of America and the Lead Arranger. The agency fee is for the services to be performed by the Administrative Agent in acting as Administrative Agent and is fully earned on the date paid. The agency fee paid to the Administrative Agent is solely for its own account and is nonrefundable. 3.7 Increased Commitment Costs. If any Lender shall determine in good faith that the introduction after the Closing Date of any applicable law, rule, regulation or guideline regarding capital adequacy, or any change therein or any change in the interpretation or administration thereof by any central bank or other Governmental Agency charged with the interpretation or administration thereof, or compliance by such Lender (or its LIBOR Lending Office) or any corporation controlling the Lender, with any request, guideline or directive regarding capital adequacy (whether or not having the force of Law) of any such central bank or other authority, affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy and such Lender's desired return on capital) determines in good faith that the amount of such capital is increased, or the rate of return on capital is reduced, as a consequence of its obligations under this Agreement, then, within ten Business Days after demand of such Lender, Borrower and the Co-Borrowers shall pay to such Lender, from time to time as specified in good faith by such Lender, additional amounts sufficient to compensate such Lender in light of such circumstances, to the extent reasonably allocable to such obligations under this Agreement, provided that Borrower and the Co-Borrowers shall not be obligated to pay any such amount which arose prior to the date which is ninety days preceding the date of such demand or is attributable to periods prior to the date which is ninety days preceding the date of such demand. Each Lender's determination of such amounts shall be conclusive in the absence of manifest error. Any request for compensation by a Lender under this Section shall set forth the basis upon which it has been determined that such an amount is due from Borrower and the Co-Borrowers, a calculation of the amount due, and a certification that the corresponding costs or diminished rate of return on capital have been incurred or sustained by the Lender. If Borrower and the Co-Borrowers become obligated to pay a material amount under this Section to any Lender, that Lender will be subject to removal in accordance with Section 11.26; provided that Borrower and the Co-Borrowers shall have paid such amount to that Lender and that Borrower and the Co-Borrowers, within the thirty day period following the date of such payment, shall have notified that Lender in writing of their intent to so remove the Lender. -46- 3.8 LIBOR Costs and Related Matters. (a) In the event that any Governmental Agency imposes on any Lender any reserve or comparable requirement (including any emergency, supplemental or other reserve) with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as "eurocurrency liabilities") of that Lender, Borrower or the relevant Co-Borrower shall pay that Lender within five Business Days after demand all amounts necessary to compensate such Lender (determined as though such Lender's LIBOR Lending Office had funded 100% of its LIBOR Advance in the Designated Market) in respect of the imposition of such reserve requirements. The Lender's determination of such amount shall be conclusive in the absence of manifest error. (b) If, after the date hereof, the existence or occurrence of any Special Eurodollar Circumstance: (1) shall subject any Lender or its LIBOR Lending Office to any tax, duty or other charge or cost with respect to any LIBOR Advance, any of its Notes evidencing LIBOR Advances or its obligation to make LIBOR Advances, or shall change the basis of taxation of payments to any Lender attributable to the principal of or interest on any LIBOR Advance or any other amounts due under this Agreement in respect of any LIBOR Advance, any of its Notes evidencing LIBOR Advances or its obligation to make LIBOR Advances, excluding (i) taxes imposed on or measured in whole or in part by its overall net income, gross income or gross receipts, (ii) franchise taxes imposed by (A) any jurisdiction (or political subdivision thereof) in which it is organized or maintains its principal office or LIBOR Lending Office or (B) any jurisdiction (or political subdivision thereof) in which it is "doing business," and (iii) any withholding taxes or other taxes based on gross income imposed by the United States of America for any period with respect to which it has failed to provide Borrower or the relevant Co-Borrower with the appropriate form or forms required by Section 11.21, to the extent such forms are then available under applicable Laws; (2) shall impose, modify or deem applicable any reserve not applicable or deemed applicable on the date hereof (including any reserve imposed by the Board of Governors of the Federal Reserve System, special deposit, capital or similar requirements against assets of, deposits with or for the account of, or credit extended by, any Lender or its LIBOR Lending Office); or (3) shall impose on any Lender or its LIBOR Lending Office or the Designated Market any other condition affecting any LIBOR Advance, any of its Notes evidencing LIBOR Advances, its obligation to make LIBOR Advances or this Agreement, or shall otherwise affect any of the same; and the result of any of the foregoing, as determined in good faith by such Lender, increases the cost to such Lender or its LIBOR Lending Office of making or maintaining any LIBOR Advance or in respect of any LIBOR Advance, any of its Notes evidencing LIBOR Advances or its obligation to make LIBOR Advances or reduces the amount of any sum received or receivable by such Lender or its LIBOR Lending Office with respect to any LIBOR Advance, any of its Notes evidencing LIBOR Advances or its obligation to make LIBOR Advances (assuming such Lender's LIBOR Lending Office had funded 100% of its LIBOR Advance in the Designated Market), then, within five Business Days after demand by such Lender (with a copy to the Administrative Agent), Borrower and the Co-Borrowers shall pay to such Lender such additional -47- amount or amounts as will compensate such Lender for such increased cost or reduction (determined as though such Lender's LIBOR Lending Office had funded 100% of its LIBOR Advance in the Designated Market). A statement of any Lender claiming compensation under this subsection and setting forth in reasonable detail the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. (c) If, after the date hereof, the existence or occurrence of any Special Eurodollar Circumstance shall, in the good faith opinion of any Lender, make it unlawful or impossible for such Lender or its LIBOR Lending Office to make, maintain or fund its portion of any LIBOR Advance or materially restrict the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the Designated Market, or to determine or charge interest rates based upon LIBOR, and such Lender shall so notify the Administrative Agent, then such Lender's obligation to make LIBOR Advances shall be suspended for the duration of such illegality or impossibility and the Administrative Agent forthwith shall give notice thereof to the other Lenders, Borrower and the Co-Borrowers. Upon receipt of such notice, the outstanding principal amount of such Lender's LIBOR Advances, together with accrued interest thereon, automatically shall be converted to Base Rate Advances on either (1) the last day of the Interest Period(s) applicable to such LIBOR Advances if such Lender may lawfully continue to maintain and fund such LIBOR Advances to such day(s) or (2) immediately if such Lender may not lawfully continue to fund and maintain such LIBOR Advances to such day(s), provided that in such event the conversion shall not be subject to payment of a prepayment fee under clause (e) of this Section. Each Lender agrees to endeavor promptly to notify Borrower and the Co-Borrowers of any event occurring after the Closing Date of which it has actual knowledge, which will cause that Lender to notify the Administrative Agent under this Section, and agrees to designate a different LIBOR Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. In the event that any Lender is unable, for the reasons set forth above, to make, maintain or fund its portion of any LIBOR Loan or Advance, such Lender shall fund such amount as a Base Rate Advance for the same period of time, and such amount shall be treated in all respects as a Base Rate Advance. Any Lender whose obligation to make LIBOR Advances has been suspended under this Section shall promptly notify the Administrative Agent and Borrower of the cessation of the Special Eurodollar Circumstance which gave rise to such suspension. (d) If, with respect to any proposed LIBOR Loan: (1) the Administrative Agent reasonably determines that, by reason of circumstances affecting the Designated Market generally that are beyond the reasonable control of the Lenders, deposits in Dollars (in the applicable amounts) are not being offered to any Lender in the Designated Market for the applicable Interest Period; or (2) the Requisite Lenders advise the Administrative Agent that LIBOR as determined by the Administrative Agent (i) does not represent the effective pricing to such Lenders for deposits in Dollars in the Designated Market in the relevant amount for the applicable Interest Period, or (ii) will not adequately and fairly reflect the cost to such Lenders of making the applicable LIBOR Advances; then the Administrative Agent forthwith shall give notice thereof to Borrower or the relevant Co-Borrower and the Lenders, whereupon until the Administrative Agent notifies Borrower or the relevant Co-Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of the Lenders to make any future LIBOR Advances shall be suspended unless (but -48- only if clause (2) above is the basis for such suspension) Borrower and each Co-Borrower notify the Administrative Agent in writing that they elect to pay the Enhanced LIBOR Margin with respect to all LIBOR Loans made during such period. (e) Upon payment or prepayment of any LIBOR Advance (other than as the result of a conversion required under clause (c) of this Section) on a day other than the last day in the applicable Interest Period (whether voluntarily, involuntarily, by reason of acceleration, or otherwise), or upon the failure of Borrower or any Co-Borrower (for a reason other than the failure of a Lender to make an Advance) to borrow on the date or in the amount specified for a LIBOR Advance in any Request for Loan or Competitive Bid Request, or upon the failure of Borrower or any Co-Borrower to prepay a LIBOR Loan or Advance on the date specified in a notice of prepayment delivered to the Administrative Agent pursuant to Section 3.1(f), Borrower and the Co-Borrowers shall pay to the appropriate Lender within 10 Business Days after demand a prepayment fee, failure to borrow fee or failure to prepay fee, as the case may be (determined as though 100% of that Lender's LIBOR Advance had been funded in the Designated Market), equal to the sum of: (1) the principal amount of the LIBOR Advance prepaid or not borrowed or prepaid, as the case may be, times (the number of days from and including the date of prepayment or failure to borrow or prepay, as applicable, to but excluding the last day in the applicable Interest Period divided by 360) times the applicable Interest Differential (provided that the product of the foregoing formula must be a positive number); plus (2) all out-of-pocket expenses incurred by the Lender reasonably attributable to such payment, prepayment or failure to borrow. Each Lender's determination of the amount of any prepayment fee, failure to borrow fee or failure to prepay fee payable under this Section shall be conclusive in the absence of manifest error. (f) Each Lender agrees to endeavor promptly to notify Borrower and the Co-Borrowers of any event of which it has actual knowledge, occurring after the Closing Date, which will entitle such Lender to compensation pursuant to clause (a) or clause (b) of this Section, and agrees to designate a different LIBOR Lending Office if such designation will avoid the need for or reduce the amount of such compensation and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. Any request for compensation by a Lender under this Section shall set forth the basis upon which it has been determined that such an amount is due from Borrower and the Co-Borrowers, a calculation of the amount due, and a certification that the corresponding costs have been incurred by the Lender. (g) If any Lender claims compensation or is excused from making or continuing LIBOR Loans or Advances under this Section: (i) Borrower and the Co-Borrowers may at any time, upon at least four Business Days' prior notice to the Administrative Agent and such Lender and upon payment in full of the amounts provided for in this Section through the date of such payment plus any prepayment fee (subject to clause (c) of this Section) required by clause (e) of this Section, pay in full the affected LIBOR Advances of such Lender or request that such LIBOR Advances be converted to Base Rate Advances; and -49- (ii) In the case where Borrower and the Co-Borrowers become obligated to pay a material amount under this Section to any Lender, that Lender will be subject to removal in accordance with Section 11.26; provided that Borrower and the Co-Borrowers shall have paid such amount to that Lender and that Borrower and the Co-Borrowers, within the thirty day period following the date of such payment, shall have notified that Lender in writing of their intent to so remove the Lender. 3.9 Late Payments. If any installment of principal or interest or any fee or cost or other amount payable under any Loan Document to the Administrative Agent or any Lender is not paid when due, it shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the rate otherwise payable with respect thereto plus 2% per annum (or, in the case of any Obligations which do not bear stated interest, at the rate then otherwise applicable to Base Rate Loans plus 2% per annum), to the fullest extent permitted by applicable Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be compounded monthly, on the last day of each calendar month, to the fullest extent permitted by applicable Laws. 3.10 Computation of Interest and Fees. Computation of interest on Base Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed; computation of interest on LIBOR Loans, Competitive Advances and all fees under this Agreement shall be calculated on the basis of a year of 360 days and the actual number of days elapsed. Borrower and the Co-Borrowers acknowledge that such latter calculation method will result in a higher yield to the Lenders than a method based on a year of 365 or 366 days. Interest shall accrue on each Loan for the day on which the Loan is made; interest shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid. Any Loan that is repaid on the same day on which it is made shall bear interest for one day. Notwithstanding anything in this Agreement to the contrary, interest in excess of the maximum amount permitted by applicable Laws shall not accrue or be payable hereunder or under the Notes, and any amount paid as interest hereunder or under the Notes which would otherwise be in excess of such maximum permitted amount shall instead be treated as a payment of principal. 3.11 Non-Business Days. If any payment to be made by Borrower, any of the Co-Borrowers or any other Party under any Loan Document shall come due on a day other than a Business Day, payment shall instead be considered due on the next succeeding Business Day and the extension of time shall be reflected in computing interest and fees. 3.12 Manner and Treatment of Payments. (a) Each payment hereunder (except payments pursuant to Sections 3.7, 3.8, 11.3, 11.11 and 11.22) or on the Notes or under any other Loan Document shall be made to the Administrative Agent, at the Administrative Agent's Office, for the account of each of the Lenders or the Administrative Agent, as the case may be, in immediately available funds not later than 12:00 noon (other than payments with respect to Swing Line Loans, which must be paid directly to the Swing Line Lender and received by 3:00 p.m.), Los Angeles time, on the day of payment (which must be a Business Day). All payments received after such time, on any Business Day, shall be deemed received on the next succeeding Business Day. The amount of all payments received by the Administrative Agent for the account of each Lender shall be immediately paid by the Administrative Agent to the applicable Lender in immediately available funds and, if such payment was received by the Administrative Agent by 12:00 noon, Los Angeles time, on a Business Day and not so made available to the account of a Lender on that Business Day, the Administrative Agent shall reimburse that Lender for the cost to such Lender of funding the amount of such payment at the Federal Funds Rate. All payments shall be made in lawful money of the United States of America. -50- (b) Each payment or prepayment on account of any Loan shall be applied pro rata according to the outstanding Advances made by each Lender comprising such Loan. (c) Each Lender shall use its best efforts to keep a record (which may be in tangible or electronic or other intangible form) of Advances made by it and payments received by it with respect to each of its Notes and such record shall, as against Borrower and the Co-Borrowers, be presumptive evidence of the amounts owing. Notwithstanding the foregoing sentence, the failure by any Lender to keep such a record shall not affect Borrower's and the Co-Borrowers' joint and several obligations to pay the Obligations. (d) Each payment of any amount payable by Borrower or any other Party under this Agreement or any other Loan Document shall be made free and clear of, and without reduction by reason of, any taxes, assessments or other charges imposed by any Governmental Agency, central bank or comparable authority, excluding (i) taxes imposed on or measured in whole or in part by overall net income, gross income or gross receipts, (ii) franchise taxes imposed on any Lender by (A) any jurisdiction (or political subdivision thereof) in which it is organized or maintains its principal office or LIBOR Lending Office or (B) any jurisdiction (or political subdivision thereof) in which it is "doing business," (iii) any withholding taxes or other taxes based on gross income imposed by the United States of America that are not attributable to any change in any Law or the interpretation or administration of any Law by any Governmental Agency and (iv) any withholding tax or other taxes based on gross income imposed by the United States of America for any period with respect to which it has failed to provide Borrower with the appropriate form or forms required by Section 11.21, to the extent such forms are then available under applicable Laws (all such non-excluded taxes, assessments or other charges being hereinafter referred to as "Taxes"). To the extent that Borrower or any other Party is obligated by applicable Laws to make any deduction or withholding on account of Taxes from any amount payable to any Lender under this Agreement, they shall (i) make such deduction or withholding and pay the same to the relevant Governmental Agency and (ii) pay such additional amount to that Lender as is necessary to result in that Lender's receiving a net after-Tax amount equal to the amount to which that Lender would have been entitled under this Agreement absent such deduction or withholding. If and when receipt of such payment results in an excess payment or credit to that Lender on account of such Taxes, that Lender shall promptly refund such excess to Borrower or the relevant Party. If Borrower or any such Party becomes obligated to pay a material amount under this Section to any Lender, that Lender will be subject to removal in accordance with Section 11.26; provided that Borrower or the relevant Party shall have paid such amount to that Lender and that Borrower and the Co-Borrowers, within the thirty day period following the date of such payment, shall have notified that Lender in writing of their intent to so remove the Lender. (e) All payments to be made by Borrower or any Co-Borrower shall be made without conditions or deduction for any counterclaim, defense, recoupment or setoff. 3.13 Funding Sources. Nothing in this Agreement shall be deemed to obligate any Lender to obtain the funds for any Loan or Advance in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan or Advance in any particular place or manner, provided that each Lender which is not a bank under the laws of the United States or any state thereof severally represents and warrants that it has obtained the funds for its Advances in compliance with applicable Laws and that the making of its Advances will not constitute "prohibited transactions" as such term is defined in ERISA. -51- 3.14 Failure to Charge Not Subsequent Waiver. Any decision by the Administrative Agent or any Lender not to require payment of any interest (including interest at the Default Rate), fee, cost or other amount payable under any Loan Document, or to calculate any amount payable by a particular method, on any occasion shall in no way limit or be deemed a waiver of the Administrative Agent's or such Lender's right to require full payment of any interest (including interest at the Default Rate), fee, cost or other amount payable under any Loan Document, or to calculate an amount payable by another method that is not inconsistent with this Agreement, on any other or subsequent occasion. 3.15 Administrative Agent's Right to Assume Payments Will be Made. Unless Borrower, any Co-Borrower or any Lender has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that Borrower, such Co-Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that Borrower, such Co-Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then: (a) if Borrower or any Co-Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and (b) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to Borrower or any Co-Borrower to the date such amount is recovered by the Administrative Agent (the "Compensation Period") at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Advance included in the applicable Loan. If such Lender does not pay such amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent may make a demand therefor upon Borrower or the Co-Borrowers, if applicable, and Borrower or the Co-Borrowers, if applicable, shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Advance. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Pro Rata Share of the Commitments or to prejudice any rights which the Administrative Agent, Borrower or any Co-Borrower may have against any Lender as a result of any default by such Lender hereunder. A notice of the Administrative Agent to any Lender, any Co-Borrower or Borrower with respect to any amount owing under this Section 3.15 shall be conclusive, absent manifest error. 3.16 Fee Determination Detail. The Administrative Agent and any Lender shall provide reasonable detail to Borrower and the Co-Borrowers regarding the manner in which the amount of any payment to the Creditors, or that Lender, under Article 3 has been determined, concurrently with demand for such payment. 3.17 Survivability. All of Borrower's and the Co-Borrowers' obligations under Sections 3.7 and 3.8 shall survive for ninety days following the date on which the Commitments are -52- terminated, all Obligations hereunder are fully paid and all Letters of Credit have expired. -53- ARTICLE 4 REPRESENTATIONS AND WARRANTIES Borrower and each Co-Borrower represents and warrants to the Lenders on the date hereof and as of the Closing Date that: 4.1 Existence and Qualification; Power; Compliance With Laws. Borrower is a corporation duly formed, validly existing and in good standing under the Laws of Delaware. Each of the Guarantors is a corporation duly formed, validly existing and in good standing under the Laws of its state of formation. Borrower and each of the Guarantors are duly qualified or registered to transact business and are in good standing in each other jurisdiction in which the conduct of their business or the ownership or leasing of their Properties makes such qualification or registration necessary, except where the failure so to qualify or register and to be in good standing would not constitute a Material Adverse Effect. Borrower and each Guarantor have all requisite corporate or other organizational power and authority to conduct their business, to own and lease their Properties and to execute and deliver each Loan Document to which each is a Party and to perform the Obligations. All outstanding shares of the capital stock of Borrower are duly authorized, validly issued, fully paid and non-assessable, and no holder thereof has any enforceable right of rescission under any applicable state or federal securities Laws. Borrower is in compliance with all Requirements of Law applicable to its business as at present conducted, has obtained all authorizations, consents, approvals, orders, licenses and permits from, and has accomplished all filings, registrations and qualifications with, or obtained exemptions from any of the foregoing from, any Governmental Agency that are necessary for the transaction of its business as at present conducted, except where the failure so to comply, file, register, qualify or obtain exemptions does not constitute a Material Adverse Effect. 4.2 Authority; Compliance With Other Agreements and Instruments and Government Regulations. The execution, delivery and performance by Borrower, each Co-Borrower and each Guarantor of the Loan Documents to which it is a Party have been duly authorized by all necessary corporate or other organizational action, and do not and will not: (a) Require any consent or approval not heretofore obtained of any member, partner, director, stockholder, security holder or creditor of such party; (b) Violate or conflict with any provision of such party's charter, articles of incorporation, operating agreement or bylaws, as applicable; (c) Result in or require the creation or imposition of any Lien upon or with respect to any Property of Borrower and its Restricted Subsidiaries; (d) Violate any Requirement of Law applicable to such Party, subject to obtaining the authorizations from, or filings with, the Governmental Agencies described in Schedule 4.3; and (e) Result in a breach of or constitute a default under, or cause or permit the acceleration of any obligation owed under, any indenture or loan or credit agreement or any other Contractual Obligation to which such party is a party or by which such party or any of its Property is bound or affected; -54- and neither Borrower, the Co-Borrowers nor any Guarantor is in violation of, or default under, any Requirement of Law or Contractual Obligation, or any indenture, loan or credit agreement described in Section 4.2(e), in any respect that constitutes a Material Adverse Effect. 4.3 No Governmental Approvals Required. Except as set forth in Schedule 4.3 or previously obtained or made, no authorization, consent, approval, order, license or permit from, or filing, registration or qualification with, any Governmental Agency is or will be required to authorize or permit under applicable Laws the execution, delivery and performance by Borrower and its Restricted Subsidiaries of the Loan Documents to which it is a Party. Except as set forth in Schedule 4.3, all authorizations from, or filings with, any Governmental Agency described in Schedule 4.3 will be accomplished as of the Closing Date. 4.4 Subsidiaries. (a) Schedule 4.4 hereto correctly sets forth the names, form of legal entity, ownership and jurisdictions of organization of all Subsidiaries of Borrower. Except as described in Schedule 4.4, Borrower does not own any capital stock, equity interest or debt security which is convertible, or exchangeable, for capital stock or equity interests in any Person. Unless otherwise indicated in Schedule 4.4, all of the outstanding shares of capital stock, or all of the units of equity interest, as the case may be, of each Subsidiary are owned of record and beneficially by Borrower, there are no outstanding options, warrants or other rights to purchase capital stock of any such Subsidiary, and all such shares or equity interests so owned are duly authorized, validly issued, fully paid and non-assessable, and were issued in compliance with all applicable state and federal securities and other Laws, and are free and clear of all Liens, except for Permitted Encumbrances. (b) Each Restricted Subsidiary of Borrower is a business entity duly formed, validly existing and in good standing under the Laws of its jurisdiction of organization, is duly qualified to do business as a foreign organization and is in good standing as such in each jurisdiction in which the conduct of its business or the ownership or leasing of its Properties makes such qualification necessary (except where the failure to be so duly qualified and in good standing does not constitute a Material Adverse Effect), and has all requisite power and authority to conduct its business and to own and lease its Properties. (c) Each Restricted Subsidiary of Borrower is in compliance with all Requirements of Law applicable to its business and has obtained all authorizations, consents, approvals, orders, licenses, and permits from, and each such Restricted Subsidiary has accomplished all filings, registrations, and qualifications with, or obtained exemptions from any of the foregoing from, any Governmental Agency that are necessary for the transaction of its business, except where the failure to be in such compliance, obtain such authorizations, consents, approvals, orders, licenses, and permits, accomplish such filings, registrations, and qualifications, or obtain such exemptions, does not constitute a Material Adverse Effect. 4.5 Financial Statements. Borrower and the Co-Borrowers have furnished to the Administrative Agent for distribution to the Lenders (a) the audited consolidated financial statements of Borrower and its Subsidiaries for the Fiscal Year ended December 31, 2002, and (b) unaudited financial statements of Borrower and its Subsidiaries as of the Fiscal Quarter ended June 30, 2003. The financial statements described above fairly present in all material respects the financial condition, results of operations and changes in financial position of Borrower and its Subsidiaries as of such dates and for such periods in conformity with GAAP, consistently applied (except, in the case of the financial statements -55- described in (b), for the absence of certain footnotes and other informational disclosures customarily omitted from interim financial statements). 4.6 No Other Liabilities; No Material Adverse Changes. Borrower and its Subsidiaries do not have any material liability or material contingent liability required under GAAP to be reflected or disclosed and not reflected or disclosed in the financial statements described in Section 4.5(a), other than liabilities and contingent liabilities arising in the ordinary course of business since the date of such financial statements. As of the Closing Date, no circumstance or event has occurred that constitutes a Material Adverse Effect since December 31, 2002. 4.7 Title to Property. As of December 31, 2002, Borrower and its Subsidiaries had valid title to the Property reflected in the financial statements described in Section 4.5(a), other than immaterial items of Property, free and clear of all Liens, other than Permitted Encumbrances, and Liens described in Schedule 4.7 or permitted by Section 6.6. As of the Closing Date, Borrower and its Subsidiaries shall have valid title to all material Property reflected in the financial statements described in Section 4.5(b), other than Property subsequently sold or disposed of by Borrower and its Subsidiaries in the ordinary course of business, free and clear of all Liens, other than Permitted Encumbrances, and Liens described in Schedule 4.7 or permitted by Section 6.6. 4.8 Public Utility Holding Company Act. Neither Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. 4.9 Litigation. There are no actions, suits, proceedings or investigations pending as to which Borrower or any of its Subsidiaries have been served or have received notice or, to the best knowledge of Borrower and the Co-Borrowers, threatened against or affecting Borrower or any of its Subsidiaries or any Property of any of them before any Governmental Agency in which there is any reasonable possibility of an adverse decision which could materially adversely affect the business, consolidated financial position or results of operations of Borrower and its Restricted Subsidiaries, taken as a whole, or which in any manner draw into question the validity or enforceability of the Loan Documents, the Intercreditor Agreement or the Collateral Documents. 4.10 Binding Obligations. Each of the Loan Documents to which Borrower or any of its Restricted Subsidiaries is a Party will, when executed and delivered by such Party, constitute the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as enforcement may be limited by Debtor Relief Laws, Gaming Laws or equitable principles relating to the granting of specific performance and other equitable remedies as a matter of judicial discretion. 4.11 No Default. No event has occurred and is continuing that is a Default or Event of Default. 4.12 ERISA (a) With respect to each Pension Plan: (i) such Pension Plan complies in all material respects with ERISA and any other applicable Laws to the extent that noncompliance could reasonably be expected to have a Material Adverse Effect; -56- (ii) such Pension Plan has not incurred any "accumulated funding deficiency" (as defined in Section 302 of ERISA) that could reasonably be expected to have a Material Adverse Effect; (iii) no "reportable event" (as defined in Section 4043 of ERISA) has occurred that could reasonably be expected to have a Material Adverse Effect; and (iv) neither Borrower nor any of its Subsidiaries has engaged in any non-exempt "prohibited transaction" (as defined in Section 4975 of the Code) that could reasonably be expected to have a Material Adverse Effect. (b) Neither Borrower nor any of its Subsidiaries has incurred or expects to incur any withdrawal liability to any Multiemployer Plan that could reasonably be expected to have a Material Adverse Effect. 4.13 Regulations T, U and X; Investment Company Act. No part of the proceeds of any Loan hereunder will be used to purchase or carry, or to extend credit to others for the purpose of purchasing or carrying, any Margin Stock in violation of Regulations T, U and X. Neither Borrower nor any of its Subsidiaries is or is required to be registered as an "investment company" under the Investment Company Act of 1940. 4.14 Disclosure. No written statement made by a Senior Officer of Borrower, any Co-Borrower or any Guarantor to the Administrative Agent or any Lender in connection with this Agreement, or in connection with any Loan, as of the date thereof contained any untrue statement of a material fact or omitted a material fact necessary to make the statement made not misleading in light of all the circumstances existing at the date the statement was made. 4.15 Tax Liability. Borrower and its Subsidiaries have filed all tax returns which are required to be filed, and have paid, or made provision for the payment of, all taxes with respect to the periods, Property or transactions covered by said returns, or pursuant to any assessment received by Borrower or its Subsidiaries, except (a) such taxes, if any, as are being contested in good faith by appropriate proceedings and as to which adequate reserves have been established and maintained and (b) immaterial taxes so long as no material Property of Borrower or any of its Subsidiaries is in jeopardy of being seized, levied upon or forfeited. 4.16 Projections. As of the Closing Date, to the best knowledge of Borrower and the Co-Borrowers, the assumptions set forth in the Projections are reasonable and consistent with each other and with all facts known to Borrower and its Subsidiaries, and the Projections are reasonably based on such assumptions. Nothing in this Section shall be construed as a representation or covenant that the Projections in fact will be achieved. The Creditors acknowledge that the Projections are forward-looking statements and that actual financial results for Borrower and its Subsidiaries could differ materially from those set forth in the Projections. 4.17 Hazardous Materials. To the best knowledge of Borrower and the Co-Borrowers, no condition exists that violates any Hazardous Material Law affecting any Real Property except for such violations that would not individually or in the aggregate have a Material Adverse Effect. 4.18 Tax Shelter Regulations. Borrower and each of the Co-Borrowers do not intend to treat the Loans or Letters of Credit as being a "reportable transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In the event Borrower or any Co-Borrower determines to take any action inconsistent with such intention, it will promptly notify the Administrative Agent thereof. Accordingly, if -57- Borrower or any Co-Borrower so notifies the Administrative Agent, Borrower acknowledges that one or more of the Lenders may treat its Loans or its interest in Swing Line Loans or Letters of Credit 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. -58- ARTICLE 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS) So long as any Advance remains unpaid, or any Letter of Credit remains outstanding or any other Obligation remains unpaid, or any portion of either Commitment remains in force, Borrower shall, and shall cause each of its Restricted Subsidiaries to, and each Co-Borrower shall, unless the Administrative Agent (with the written approval of the Requisite Lenders) otherwise consents: 5.1 Preservation of Existence. Preserve and maintain their respective existences in the jurisdiction of their formation and all material authorizations, rights, franchises, privileges, consents, approvals, orders, licenses, permits, or registrations from any Governmental Agency that are necessary for the transaction of their respective business except (a) where the failure to so preserve and maintain the existence of any Restricted Subsidiary of Borrower and such authorizations, rights, franchises, privileges, consents, approvals, orders, licenses, permits, or registrations would not constitute a Material Adverse Effect and (b) that a merger permitted by Section 6.3 shall not constitute a violation of this covenant; and qualify and remain qualified to transact business in each jurisdiction in which such qualification is necessary in view of their respective business or the ownership or leasing of their respective Properties except where the failure to so qualify or remain qualified would not constitute a Material Adverse Effect. 5.2 Maintenance of Properties. Maintain, preserve and protect all of their respective Properties in good order and condition, subject to wear and tear in the ordinary course of business, and not permit any waste of their respective Properties, except that the failure to maintain, preserve and protect a particular item of Property that is not of significant value, either intrinsically or to the operations of Borrower and its Restricted Subsidiaries, taken as a whole, shall not constitute a violation of this covenant. 5.3 Maintenance of Insurance. Maintain liability, casualty and other insurance (subject to customary deductibles and retentions) with responsible insurance companies in such amounts and against such risks as is carried by responsible companies engaged in similar businesses and owning similar assets in the general areas in which Borrower and its Restricted Subsidiaries operate and in any event such insurance as may be required by the Collateral Documents. 5.4 Compliance With Laws. Comply, within the time period, if any, given for such compliance by the relevant Governmental Agency with enforcement authority, with all Requirements of Law (including Hazardous Materials Laws, ERISA and Gaming Laws) noncompliance with which constitutes a Material Adverse Effect, except that Borrower and its Restricted Subsidiaries need not comply with a Requirement of Law then being contested by any of them in good faith by appropriate proceedings. 5.5 Inspection Rights. Upon reasonable notice, at any time during regular business hours and as often as reasonably requested (but not so as to materially interfere with the business of Borrower or any of its Subsidiaries) permit the Administrative Agent or any Lender, or any authorized employee, agent or representative thereof, to examine, audit and make copies and abstracts from the records and books of account of, and to visit and inspect the Properties of, Borrower and its Subsidiaries and to discuss the affairs, finances and accounts of Borrower and its Subsidiaries with any of their officers, managers, key employees or accountants and, upon request, furnish promptly to the -59- Administrative Agent or any Lender true copies of all financial information made available to the board of directors or audit committee of the board of directors of Borrower. 5.6 Keeping of Records and Books of Account. Keep adequate records and books of account reflecting all financial transactions in conformity with GAAP, consistently applied, and in material conformity with all applicable requirements of any Governmental Agency having regulatory jurisdiction over Borrower or any of its Subsidiaries. 5.7 Use of Proceeds. Use the proceeds of Loans (a) on the Closing Date, to refinance the outstanding Loans under the Existing Multi-Year Agreement and any outstanding obligations under the Short Term Loan Agreement, (b) to finance expenses associated with the transactions contemplated herein, (c) to finance design, development and construction expenses associated with Capital Expenditures, Acquisitions and Investments permitted under Article 6 hereof, and (d) for other general corporate purposes including the Acquisitions and Investments described herein. 5.8 New Restricted Subsidiaries. Cause any Person which hereafter becomes a Restricted Subsidiary of Borrower to promptly execute and deliver to the Administrative Agent a Guaranty (and, if no Collateral Release has then occurred, or to the extent required by Section 2.12, security documents encumbering its Property to the extent required by Section 6.6). -60- ARTICLE 6 NEGATIVE COVENANTS So long as any Advance remains unpaid, or any Letter of Credit remains outstanding or any other Obligation remains unpaid, or any portion of either Commitment remains in force, Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, and each Co-Borrower shall not unless the Administrative Agent (with the written approval of the Requisite Lenders or, if required by Section 11.2, of all of the Lenders) otherwise consents: 6.1 Payment of Subordinated Obligations. Pay any principal (including sinking fund payments) or any other amount (other than scheduled interest payments) with respect to any Subordinated Obligation, or purchase or redeem (or offer to purchase or redeem) any Subordinated Obligation, or deposit any monies, securities or other Property with any trustee or other Person to provide assurance that the principal or any portion thereof of any Subordinated Obligation will be paid when due or otherwise to provide for the defeasance of any Subordinated Obligation provided that: (a) Borrower may make scheduled payments of principal and interest on any Subordinated Obligation in accordance with the subordination terms thereof; (b) Provided that no Default or Event of Default then exists, Borrower may prepay any Subordinated Obligations to the extent using the proceeds of Qualified Subordinated Obligations; and (c) Borrower may redeem Subordinated Obligations held by Persons which are subject to a Disqualification, provided that (i) no Default or Event of Default then exists or would result therefrom, and (ii) after giving effect to such redemption, Borrower is in pro forma compliance with the covenants set forth in Sections 6.7 and 6.8. 6.2 Disposition of Property. Make any Disposition of any Principal Resort Casino Properties, other than Dispositions of (i) any Release Parcel (as defined in and permitted by the relevant deeds of trust) consisting of any gores or strips of land required to be disposed of in the ordinary course of business to facilitate construction, improvement, public use dedication or similar purposes, and not material to the overall conduct of the business of the related Property, and (ii) all or any part of the Theme Park Property, in each case when no Default or Event of Default exists, provided that leases and subleases of portions of a Principal Resort Casino Property in the ordinary course of business and not involving their gaming or lodging operations shall not be considered a Disposition thereof. Borrower is hereby authorized to subdivide the Theme Park Property in any manner (whether concurrently with or prior to the Disposition thereof) and the Administrative Agent is hereby authorized to empower the Collateral Agent to make any amendments to the deed of trust covering the Theme Park Property and/or subordinate the lien of such deed of trust to any maps subdividing the Theme Park Property, so as to give effect thereto. The Administrative Agent is hereby authorized to send notice to the Collateral Agent and the Creditor Representatives requesting the release of any Theme Park Property concurrently with the sale or other Disposition thereof. 6.3 Mergers. Merge or consolidate with or into any Person, except (a) mergers and consolidations of a Restricted Subsidiary of Borrower into Borrower or another Restricted Subsidiary of Borrower, (b) mergers and consolidations with a Person to effect a mere change in the State or form of organization of Borrower, (c) mergers with any Person which if acquired by Borrower or its other Restricted Subsidiaries pursuant to Investments permitted hereby, would be Restricted Subsidiaries, -61- provided that the financial condition of Borrower and its Subsidiaries are not adversely affected thereby and Borrower and its Subsidiaries execute such amendments to the Loan Documents as may be requested by the Administrative Agent to reflect such change, and (d) mergers entered into in compliance with Section 6.3 with persons engaged primarily in the same or a similar line of business as one or more lines of business engaged in by Borrower and its Subsidiaries, provided that giving pro forma effect to such mergers as of the last day of the then most recently ended Fiscal Quarter, Borrower is in compliance with Sections 6.7 and 6.8. 6.4 Hostile Acquisitions. Directly or indirectly use the proceeds of any Loan in connection with the acquisition of part or all of a voting interest of five percent or more in any corporation or other business entity if such acquisition is opposed by the board of directors or management of such corporation or business entity. 6.5 Change in Nature of Business. Make any material change in the nature of the business of Borrower and its Subsidiaries, taken as a whole. 6.6 Liens and Negative Pledges. Create, incur, assume or suffer to exist any Lien or Negative Pledge of any nature upon or with respect to any of its Properties, or engage in any sale and leaseback transaction with respect to any of its Properties, whether now owned or hereafter acquired, except: (a) Permitted Encumbrances; (b) Liens and Negative Pledges under the Loan Documents; (c) Liens and Negative Pledges existing on the date hereof and disclosed in Schedule 4.7 and any renewals/extensions or amendments thereof, provided that the obligations secured or benefited thereby are not increased; (d) Liens on Property acquired by Borrower or any of its Restricted Subsidiaries after the Closing Date that are in existence at the time of such acquisition and are not created in contemplation of such acquisition; (e) purchase money Liens securing Indebtedness and Capital Lease Obligations in an aggregate principal amount not to exceed $100,000,000 (including any refinancings thereof); (f) any Lien or Negative Pledge created by an agreement or instrument entered into by Borrower or a Restricted Subsidiary of Borrower in the ordinary course of its business which consists of a restriction on the assignability, transfer or hypothecation of such agreement or instrument; and (g) Equal, ratable and pari passu Liens securing the Qualified Obligations pursuant to the Intercreditor Agreement (or, in the event that the Intercreditor Agreement is hereafter terminated in accordance with its terms, and any Collateral Event thereafter occurs, Liens securing Senior Indebtedness of the Borrower and its Subsidiaries on an equal, ratable and pari passu basis with the Obligations pursuant to an intercreditor agreement which is substantively similar to the Intercreditor Agreement (the Administrative Agent being hereby authorized by the other Creditors to enter into any such replacement intercreditor agreement), provided that as of the date of the incurrence of such Liens, no Default or Event of Default has occurred and remains continuing); -62- (h) Liens granted on the stock, partnership or other equity interests in a Person which is not a Restricted Subsidiary owned by Borrower or any if its Restricted Subsidiaries, which are granted solely to secure Indebtedness of that Person; provided that this Section shall not be effective to prohibit the Liens or Negative Pledges with respect to securities issued by any gaming licensee to the extent that appropriate approvals of this covenant have not been obtained under applicable Gaming Laws. 6.7 Leverage Ratio. Permit the Leverage Ratio, as of any Fiscal Quarter described below to be greater than the ratio set forth below opposite that Fiscal Quarter:

Fiscal Quarters Ending Maximum Ratio - ---------------------- ------------- December 31, 2003 through December 31, 2004 5.50:1.00 March 31, 2005 through and including September 30, 2005 5.25:1.00 December 31, 2005 through and including December 31, 2007 5.00:1.00 Thereafter 4.75:1.00

6.8 Interest Charge Coverage Ratio. Permit the Interest Charge Coverage Ratio as of the last day of any Fiscal Quarter, to be less than 2.75:1.00. 6.9 Investments in Insurance Subsidiary. Make Investments in the Insurance Subsidiary in an amount exceeding $25,000,000 in the aggregate. -63- ARTICLE 7 INFORMATION AND REPORTING REQUIREMENTS 7.1 Financial and Business Information. So long as any Advance remains unpaid, or any Letter of Credit remains outstanding or any other Obligation remains unpaid, or any portion of either Commitment remains in force, Borrower and each Co-Borrower shall, unless the Administrative Agent (with the written approval of the Requisite Lenders) otherwise consents, at Borrower's and the Co-Borrowers' sole expense, deliver to the Administrative Agent for distribution by it to the Lenders: (a) As soon as practicable, and in any event within 60 days after the end of each Fiscal Quarter (other than the fourth Fiscal Quarter in any Fiscal Year), the consolidated balance sheet of Borrower and its Subsidiaries as at the end of such Fiscal Quarter and the consolidated statement of operations for such Fiscal Quarter, and its statement of cash flows for the portion of the Fiscal Year ended with such Fiscal Quarter, all in reasonable detail; (b) As soon as practicable, and in any event within 45 days after the end of each Fiscal Quarter, a Pricing Certificate setting forth a preliminary calculation of the Leverage Ratio as of the last day of such Fiscal Quarter, and providing reasonable detail as to the calculation thereof, which calculations shall be based on the preliminary unaudited financial statements of Borrower for such Fiscal Quarter, and as soon as practicable thereafter, in the event of any material variance in the actual calculation of the Leverage Ratio from such preliminary calculation, a revised Pricing Certificate setting forth the actual calculation thereof; (c) As soon as practicable, and in any event within 105 days after the end of each Fiscal Year, (i) the consolidated balance sheet of Borrower and its Subsidiaries as at the end of such Fiscal Year and the consolidated statements of operations, shareholders' equity and cash flows, in each case of Borrower and its Subsidiaries for such Fiscal Year, in each case as at the end of and for the Fiscal Year, all in reasonable detail. Such financial statements shall be prepared in accordance with GAAP, consistently applied, and such consolidated balance sheet and consolidated statements shall be accompanied by a report of one of the four largest public accounting firms in the United States of America or other independent public accountants of recognized standing selected by Borrower and reasonably satisfactory to the Requisite Lenders, which report shall be prepared in accordance with generally accepted auditing standards as at such date, and shall not be subject to any qualifications or exceptions as to the scope of the audit nor to any other qualification or exception determined by the Requisite Lenders in their good faith business judgment to be adverse to the interests of the Lenders. Such accountants' report shall be accompanied by a certificate stating that, in making the examination pursuant to generally accepted auditing standards necessary for the certification of such financial statements and such report, such accountants have obtained no knowledge of any Default or, if, in the opinion of such accountants, any such Default shall exist, stating the nature and status of such Default, and stating that such accountants have reviewed Borrower's financial calculations as at the end of such Fiscal Year (which shall accompany such certificate) under Sections 6.7 and 6.8, have read such Sections (including the definitions of all defined terms used therein) and that nothing has come to the attention of such accountants in the course of such examination that would cause them to believe that the same were not calculated by Borrower in the manner prescribed by this Agreement; (d) As soon as practicable, and in any event within 90 days after the commencement of each Fiscal Year, a budget and projection by Fiscal Quarter for that Fiscal -64- Year and by Fiscal Year for the next two succeeding Fiscal Years, including for the first such Fiscal Year, projected consolidated balance sheets, statements of operations and statements of cash flow and, for the second and third such Fiscal Years, projected consolidated condensed balance sheets and statements of operations and cash flows, of Borrower and its Subsidiaries, all in reasonable detail; (e) Promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of Borrower, and copies of all annual, regular, periodic and special reports and registration statements which Borrower may file or be required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and not otherwise required to be delivered to the Lenders pursuant to other provisions of this Section; (f) Promptly after request by the Administrative Agent or any Lender, copies of the Nevada "Regulation 6.090 Report" and "6A Report"; (g) Promptly after request by the Administrative Agent or any Lender, copies of any other report or other document that was filed by Borrower or any of its Subsidiaries with any Governmental Agency (other than any report regarding Tracinda Corporation or individuals associated with Tracinda Corporation, Borrower and its Subsidiaries and their confidential business or financial information); (h) As soon as practicable, and in any event within three Business Days after a Senior Officer of Borrower or any Co-Borrower becomes aware of the existence of any condition or event which constitutes a Default or Event of Default, telephonic notice specifying the nature and period of existence thereof, and, no more than three Business Days after such telephonic notice, written notice again specifying the nature and period of existence thereof and specifying what action Borrower or its Subsidiaries are taking or propose to take with respect thereto; (i) Promptly upon a Senior Officer of Borrower or any Co-Borrower becoming aware of any litigation, governmental investigation or proceeding (including any litigation, governmental investigation or proceeding by or subject to decision by any Gaming Board) that is pending (i) against Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect, (ii) in respect of any material Indebtedness of Borrower or any of its Subsidiaries, or (iii) with respect to the Loan Documents, the Intercreditor Agreement, or the Collateral Documents, notice of the same; (j) Promptly following any Senior Officer of Borrower or any Co-Borrower becoming aware of any change in the Debt Rating assigned hereto written notice of such change and, if the same will result in a revision to the Applicable Debt Rating, a revised Pricing Certificate setting forth the revised Applicable Debt Rating; and (k) Such other data and information as from time to time may be reasonably requested by the Administrative Agent, any Lender (through the Administrative Agent) or the Requisite Lenders. 7.2 Compliance Certificates. So long as any Advance remains unpaid, or any Letter of Credit remains outstanding or any other Obligation remains unpaid or unperformed, or any portion of either Commitment remains outstanding, Borrower and the Co-Borrowers shall, at their sole expense, deliver to the Administrative Agent for distribution by it to the Lenders concurrently with the financial -65- statements required pursuant to Sections 7.1(a) and 7.1(c), Compliance Certificates signed by a Senior Officer of Borrower and each Co-Borrower. -66- ARTICLE 8 CONDITIONS 8.1 Initial Advances on the Closing Date. The obligation of each Lender to make the initial Advance to be made by it on the Closing Date, is subject to the following conditions precedent, each of which shall be satisfied prior to the making of the initial Advances (unless all of the Lenders, in their sole and absolute discretion, shall agree otherwise): (a) The Administrative Agent shall have received all of the following, each of which shall be originals unless otherwise specified, each properly executed by a Responsible Official of each party thereto, each dated as of the Closing Date and each in form and substance satisfactory to the Administrative Agent and its legal counsel (unless otherwise specified or, in the case of the date of any of the following, unless the Administrative Agent otherwise agrees or directs): (1) at least one executed counterpart of this Agreement, together with arrangements satisfactory to the Administrative Agent for additional executed counterparts, sufficient in number for distribution to the Lenders, Borrower and Detroit; (2) Committed Revolving Notes executed by Borrower and Detroit in favor of each Revolving Lender, each in a principal amount equal to that Revolving Lender's Pro Rata Share of the Revolving Commitment; (3) Term Notes executed by Borrower and Detroit in favor of each Term Lender, each in a principal amount equal to that Term Lender's Pro Rata Share of the Term Commitment; (4) Competitive Revolving Notes executed by Borrower and Detroit in favor of each Lender (except for any Lender who has requested to not be notified of Competitive Bid Requests pursuant to Section 2.5(f)), each in a principal amount equal to $750,000,000; (5) with respect to Borrower, Detroit and each Guarantor, such documentation as the Administrative Agent may require to establish the due organization, valid existence and good standing of Borrower, Detroit, and each of the Guarantors, its qualification to engage in business in each material jurisdiction in which it is engaged in business or required to be so qualified, its authority to execute, deliver and perform any Loan Documents to which it is a Party, the identity, authority and capacity of each Responsible Official thereof authorized to act on its behalf, including (if applicable) certified copies of articles of incorporation or organization and amendments thereto, bylaws or operating agreements and amendments thereto, certificates of good standing and/or qualification to engage in business, tax clearance certificates, certificates of corporate or other organizational resolutions, incumbency certificates, Certificates of Responsible Officials, and the like; (6) the Swing Line Documents; (7) the Guaranty executed by each Guarantor which is a Restricted Subsidiary; -67- (8) a certificate of insurance issued by Borrower's insurance carrier or agent; (9) the Opinions; (10) a Request for Loan and a Letter of Credit Application in compliance with Article 2; (11) a completed Pricing Certificate; (12) the letter agreement described in Sections 3.2, 3.3, 3.5 and 3.6; (13) such assurances as the Administrative Agent deems appropriate that the relevant Gaming Boards have approved the transactions contemplated by the Loan Documents to the extent that such approval is required by applicable Gaming Laws; (14) a Certificate signed by a Senior Officer of Borrower and Detroit certifying that the conditions specified in Section 8.1 (d) and (e) have been satisfied; and (15) such other assurances, certificates, documents, consents or opinions as the Administrative Agent reasonably may require. (b) The fees payable on the Closing Date pursuant to Article 3 shall have been paid. (c) The reasonable costs and expenses of the Administrative Agent in connection with the preparation of the Loan Documents payable pursuant to Section 11.3, and invoiced to Borrower prior to the Closing Date, shall have been paid. (d) The representations and warranties of Borrower and the Co-Borrowers contained in Article 4 shall be true and correct. (e) Borrower, each Co-Borrower and any other Parties shall be in compliance with all the terms and provisions of the Loan Documents, and giving effect to the initial Advance, no Default or Event of Default shall have occurred and be continuing. (f) All legal matters relating to the Loan Documents shall be satisfactory to Sheppard, Mullin, Richter & Hampton LLP, special counsel to the Administrative Agent. It is acknowledged that effective upon the Closing Date, the lending commitments of the lenders under the Existing Multi-Year Agreement shall be amended and restated hereby and that the lending commitments of the lenders under the Existing Short Term Agreement shall be and hereby is terminated. 8.2 Any Increasing Advance. The obligation of each Lender to make any Advance, and the obligation of the Issuing Lender to issue a Letter of Credit, which would result in an increase in the outstanding principal amount of the Outstanding Obligations, is subject to the following conditions precedent (unless the Requisite Lenders, in their sole and absolute discretion, shall agree otherwise): (a) except (i) for representations and warranties which expressly speak as of a particular date or are no longer true and correct as a result of a change which is permitted by this Agreement or (ii) as disclosed by Borrower and the Co-Borrowers and approved in writing -68- by the Requisite Lenders, the representations and warranties contained in Article 4 (other than Sections 4.4(a), 4.6 and 4.16 (but only if Borrower and its Restricted Subsidiaries are diligently engaged in measures that will result in compliance with all Hazardous Materials Laws)) shall be true and correct on and as of the date of the Advance as though made on that date; (b) the Administrative Agent shall have timely received a Request for Loan or Competitive Bid Request in compliance with Article 2 (or telephonic or other request for Loan referred to in the second sentence of Section 2.1(c), if applicable) or the Issuing Lender shall have received a Letter of Credit Application, as the case may be, in compliance with Article 2; and (c) the Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent, such other assurances, certificates, documents or consents related to the foregoing as the Administrative Agent or Requisite Lenders reasonably may require. 8.3 Any Letter of Credit. The obligation of the Issuing Lender to issue any Letter of Credit, and the obligation of the other Lenders to participate therein, are subject to the conditions precedent that (a) the conditions set forth in Section 8.2 have been satisfied and (b) Borrower shall have certified that, giving effect to the issuance of the requested Letter of Credit, the Letter of Credit Usage shall not exceed any limitations set forth in this Agreement. -69- ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT 9.1 Events of Default. The existence or occurrence of any one or more of the following events, whatever the reason therefor and under any circumstances whatsoever, shall constitute an Event of Default so long as such event is continuous and has not been waived in accordance with Section 11.2: (a) Borrower or the Co-Borrowers fail to pay any principal on any of the Notes, or any L/C Borrowing or any portion thereof, on the date when due; or (b) Borrower or the Co-Borrowers fail to pay any interest on any of the Notes, or any fees under Sections 3.4, 3.5 or 3.6, or any portion thereof, within five Business Days after the date when due; or fails to pay any other fee or amount payable to the Lenders under any Loan Document, or any portion thereof, within five Business Days after demand therefor; or (c) Borrower or the Co-Borrowers fail to comply with any of the covenants contained in Article 6, other than the covenant contained in Section 6.5; or (d) Borrower or the Co-Borrowers fail to comply with Section 7.1(h) in any respect that is materially adverse to the interests of the Lenders; or (e) Borrower, any of its Restricted Subsidiaries or any other Party fails to perform or observe any other covenant or agreement (not specified in clause (a), (b), (c), or (d) above) contained in any Loan Document on its part to be performed or observed within (i) ten Business Days after the giving of notice by the Administrative Agent on behalf of the Requisite Lenders of such Default or (ii) if the nature of the covenant or agreement is such that the violation can be cured, thirty Business Days after the giving of such notice so long as Borrower and the Co-Borrowers diligently pursue in good faith the cure or correction of such violation continuously during such period; or (f) Any representation or warranty of Borrower or any of its Restricted Subsidiaries or any other Party made in any Loan Document, or in any certificate or other writing delivered by Borrower or such Restricted Subsidiary or Party pursuant to any Loan Document, proves to have been incorrect when made or reaffirmed in any respect that is materially adverse to the interests of the Lenders; or (g) Borrower or any of its Subsidiaries (i) fails to pay the principal, or any principal installment, of any present or future Indebtedness of $100,000,000 or more, or any guaranty of present or future Indebtedness of $100,000,000 or more, on its part to be paid, when due (or within any stated grace period), whether at the stated maturity, upon acceleration, by reason of required prepayment or otherwise or (ii) fails to perform or observe any other term, covenant or agreement on its part to be performed or observed, or suffers any event of default to occur, in connection with any present or future Indebtedness of $100,000,000 or more, or of any guaranty of present or future Indebtedness of $100,000,000 or more, if as a result of such failure or sufferance any holder or holders thereof (or an agent or trustee on its or their behalf) has the right to declare such Indebtedness due before the date on which it otherwise would become due or -70- the right to require Borrower or any of its Subsidiaries to redeem or purchase, or offer to redeem or purchase, all or any portion of such Indebtedness; or (h) Any event occurs which gives the holder or holders of any Subordinated Obligation (or an agent or trustee on its or their behalf) the right to declare such Subordinated Obligation due before the date on which it otherwise would become due, or the right to require the issuer thereof to redeem or purchase, or offer to redeem or purchase, all or any portion of any Subordinated Obligation; or (i) Any Loan Document, at any time after its execution and delivery and for any reason other than the agreement or action (or omission to act) of the Administrative Agent or any of the Lenders or satisfaction in full of all the Obligations ceases to be in full force and effect or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any respect which, in any such event in the reasonable opinion of the Requisite Lenders, is materially adverse to the interests of the Lenders; or any Party thereto denies in writing that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind same; or (j) Any default of the Borrower or its Restricted Subsidiaries occurs under the Intercreditor Agreement or the Collateral Documents which entitles the Collateral Agent or the Creditor Representatives thereunder to exercise upon any of the collateral provided pursuant to the Collateral Documents; or (k) the Intercreditor Agreement or any of the Collateral Documents are terminated (other than in accordance with their express terms); (l) A final judgment against Borrower or any of its Subsidiaries is entered for the payment of money in excess of $25,000,000 and, absent procurement of a stay of execution, such judgment remains unsatisfied for thirty calendar days after the date of entry of judgment, or in any event later than five days prior to the date of any proposed sale thereunder; or any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the Property of any such Person and is not released, vacated or fully bonded within thirty calendar days after its issue or levy; or (m) Borrower or any of its Subsidiaries institutes or consents to the institution of any proceeding under a Debtor Relief Law relating to it or to all or any material part of its Property, or is unable or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its Property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of that Person and the appointment continues undischarged or unstayed for ninety calendar days; or any proceeding under a Debtor Relief Law relating to any such Person or to all or any part of its Property is instituted without the consent of that Person and continues undismissed or unstayed for ninety calendar days; or (n) The occurrence of an Event of Default (as such term is or may hereafter be specifically defined in any other Loan Document) under any other Loan Document; or -71- (o) Any Pension Plan maintained by Borrower or any of its Restricted Subsidiaries is determined to have a material "accumulated funding deficiency" as that term is defined in Section 302 of ERISA and the result is a Material Adverse Effect; or (p) The occurrence of a License Revocation that continues for seven consecutive calendar days with respect to gaming operations at any gaming facility accounting for ten percent or more of the consolidated total assets or consolidated gross revenues of Borrower and its Subsidiaries. 9.2 Remedies Upon Event of Default. Without limiting any other rights or remedies of the Creditors provided for elsewhere in this Agreement, or the other Loan Documents, or by applicable Law, or in equity, or otherwise: (a) Upon the occurrence, and during the continuance, of any event of default other than an Event of Default described in Section 9.1(m): (1) the Commitments to make Advances, the obligation of the Issuing Lender to issue Letters of Credit, the obligation of the Swing Line Lender to make Swing Line Loans and all other obligations of the Creditors and all rights of Borrower, the Co-Borrowers and any other Parties under the Loan Documents shall be suspended without notice to or demand upon Borrower or any Co-Borrower, which are expressly waived by Borrower and the Co-Borrowers, except that all of the Lenders or the Requisite Lenders (as the case may be, in accordance with Section 11.2) may waive an Event of Default or, without waiving, determine, upon terms and conditions satisfactory to the Lenders or Requisite Lenders, as the case may be, to reinstate the Commitments and such other obligations and rights and make further Advances, and cause the Issuing Lender to issue further Letters of Credit which waiver or determination shall apply equally to, and shall be binding upon, all the Lenders; (2) the Issuing Lender may, with the approval of the Administrative Agent on behalf of the Requisite Lenders, demand immediate payment by Borrower and the Co-Borrowers of an amount equal to the aggregate amount of all outstanding Letters of Credit to be held by the Issuing Lender in an interest-bearing cash collateral account as collateral for the Letters of Credit; and (3) the Requisite Lenders may request the Administrative Agent to, and the Administrative Agent thereupon shall, terminate the Commitments and/or declare all or any part of the unpaid principal of all Notes, all interest accrued and unpaid thereon and all other amounts payable under the Loan Documents to be forthwith due and payable, whereupon the same shall become and be forthwith due and payable, without protest, presentment, notice of dishonor, demand or further notice of any kind, all of which are expressly waived by Borrower and each Co-Borrower. (b) Upon the occurrence, and during the continuance, of any Event of Default described in Section 9.1(m): (1) the Commitments to make Advances, the obligation of the Issuing Lender to issue Letters of Credit, the obligation of the Swing Line Lender to make Swing Line Loans and all other obligations of the Creditors and all rights of Borrower, the Co-Borrowers and any other Parties under the Loan Documents shall terminate without notice to or demand upon Borrower or any Co-Borrower, which are -72- expressly waived by Borrower and the Co-Borrowers, except that all of the Lenders may waive the Event of Default or, without waiving, determine, upon terms and conditions satisfactory to all the Lenders, to reinstate the Commitments and such other obligations and rights and make further Advances and to cause the Issuing Lender to issue further Letters of Credit, which determination shall apply equally to, and shall be binding upon, all the Lenders; (2) an amount equal to the aggregate amount of all outstanding Letters of Credit shall be immediately due and payable to the Issuing Lender without notice to or demand upon Borrower or any Co-Borrower, which are expressly waived by Borrower and the Co-Borrowers, to be held by the Issuing Lender in an interest-bearing account as collateral for the Letters of Credit; and (3) the unpaid principal of all Notes, all interest accrued and unpaid thereon and all other amounts payable under the Loan Documents shall be forthwith due and payable, without protest, presentment, notice of dishonor, demand or further notice of any kind, all of which are expressly waived by Borrower and the Co-Borrowers. (c) Upon the occurrence, and during the continuance, of any Event of Default, the Creditors, or any of them, without notice to (except as expressly provided for in any Loan Document) or demand upon Borrower or any Co-Borrower, which are expressly waived by Borrower and the Co-Borrowers (except as to notices expressly provided for in any Loan Document), may proceed (but only with the consent of the Requisite Lenders) to protect, exercise and enforce their rights and remedies under the Loan Documents against Borrower, the Co-Borrowers and any other Party and such other rights and remedies as are provided by Law or equity. (d) The order and manner in which the Creditors' rights and remedies are to be exercised shall be determined by the Requisite Lenders in their sole discretion, and all payments received by the Creditors, or any of them, shall be applied first to the costs and expenses (including reasonable attorneys' fees and disbursements and the reasonably allocated costs of attorneys employed by any of the Creditors) of the Creditors, and thereafter paid pro rata to the Lenders in the same proportions that the aggregate Obligations owed to each Lender under the Loan Documents bear to the aggregate Obligations owed under the Loan Documents to all the Lenders, without priority or preference among the Lenders. Regardless of how each Lender may treat payments for the purpose of its own accounting, for the purpose of computing the Obligations hereunder and under the Notes, payments shall be applied first, to the costs and expenses of the Creditors, as set forth above, second, to the payment of accrued and unpaid interest due under any Loan Documents to and including the date of such application (ratably, and without duplication, according to the accrued and unpaid interest due under each of the Loan Documents), and third, to the payment of all other amounts (including principal and fees) then owing to the Creditors under the Loan Documents. Amounts due to a Lender under a Related Swap Agreement shall be considered a principal amount for purposes of the preceding sentence. No application of payments will cure any Event of Default, or prevent acceleration, or continued acceleration, of amounts payable under the Loan Documents, or prevent the exercise, or continued exercise, of rights or remedies of the Lenders hereunder or thereunder or at Law or in equity. -73- ARTICLE 10 THE ADMINISTRATIVE AGENT 10.1 Appointment and Authorization of Administrative Agent. (a) 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. (b) The Issuing Lender shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Issuing Lender shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article 10 with respect to any acts taken or omissions suffered by the Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term "Administrative Agent" as used in this Article 10 and in the definition of "Agent-Related Person" included the Issuing Lender with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the Issuing Lender. 10.2 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. 10.3 Liability of Administrative Agent. No Agent-Related Person shall (a) be liable 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 any Party 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 any Party or any other party to any Loan Document to perform its obligations hereunder or -74- 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 any Party or any Affiliate thereof. 10.4 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 any Party), 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 Requisite 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 Requisite 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 8.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto. 10.5 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 a Lender or 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 Requisite Lenders in accordance with Article 9; 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. 10.6 Credit Decision; Disclosure of Information by Administrative Agent. Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether 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-Related Person and based on such documents and information as it has deemed appropriate, made its own -75- appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Parties and their respective 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 Borrower and the other Parties hereunder. Each Lender also represents that it will, independently and without reliance upon any 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 Borrower and the other Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent herein, the Administrative Agent shall not 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 any of the Parties or any of their respective Affiliates which may come into the possession of any Agent-Related Person. 10.7 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 any Party and without limiting the obligation of any Party 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 Requisite Lenders (or, if required by Section 11.2, all of the 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-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 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. 10.8 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 each of the Parties and their respective Affiliates as though Bank of America were not the Administrative Agent or the Issuing Lender 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 any Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Party 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 or the Issuing Lender, and the terms "Lender" and "Lenders" include Bank of America in its individual capacity. 10.9 Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 30 days' notice to the Lenders; provided that any such resignation by Bank of America shall also constitute its resignation as Issuing Lender and Swing Line Lender. The -76- Administrative Agent shall, in connection with any such resignation, make appropriate arrangements to ensure that, to the extent that it then holds any capital stock or other equity securities of any Person which is a gaming licensee as collateral for the Obligations, that any transfer of possession of such pledged securities to any successor is in full compliance with the requirements of all relevant Gaming Boards. If the Administrative Agent resigns under this Agreement, the Requisite Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders, which successor administrative agent shall be consented to by Borrower at all times other than during the existence of an Event of Default (which consent of 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 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, Issuing Lender and Swing Line Lender and the respective terms "Administrative Agent," "L/C Issuer" and "Swing Line Lender" shall mean such successor administrative agent, Letter of Credit issuer and Swing Line Lender, and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated and the retiring Issuing Lender's and Swing Line Lender's rights, powers and duties as such shall be terminated, without any other or further act or deed on the part of such retiring Issuing Lender or Swing Line Lender or any other Lender, other than the obligation of the successor Issuing Lender to issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or to make other arrangements satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article 10 and Sections 11.3 and 11.11 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 Requisite Lenders appoint a successor agent as provided for above. 10.10 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 any Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on 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, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders 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 Article 3 and Section 11.3) 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 -77- 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 Article 3 and Section 11.3. 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. 10.11 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," "documentation agent," "co-agent," "book manager," "lead manager," "arranger," "lead arranger" or "co-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. 10.12 Proportionate Interest in any Collateral. The Administrative Agent, on behalf of all the Lenders, shall hold in accordance with the Loan Documents all items of any collateral or interests therein received or held by the Administrative Agent. Subject to the Administrative Agent's and the Lenders' rights to reimbursement for their costs and expenses hereunder (including reasonable attorneys' fees and disbursements and other professional services and the reasonably allocated costs of attorneys employed by the Administrative Agent or a Lender) and subject to the application of payments in accordance with Section 9.2(d), each Lender shall have an interest in the Lenders' interest in the collateral or interests therein in the same proportions that the aggregate Obligations owed such Lender under the Loan Documents bear to the aggregate Obligations owed under the Loan Documents to all the Lenders, without priority or preference among the Lenders, except that Obligations owed to any Lender under a Related Swap Agreement shall be secured on an equal, ratable and pari passu basis with all other Obligations in an amount equal to (i) the marked to market exposure under the ISDA Master Agreement covering the Related Swap Agreement, or (ii) if not governed by an ISDA Master Agreement, an amount equal the Administrative Agent's then customary credit risk factor for Swap Agreements times the notional amount of Indebtedness covered by such Related Swap Agreement and, in each case shall be secured on a subordinate basis as to amounts in excess of such amount. 10.13 Foreclosure on Collateral. In the event of foreclosure or enforcement of the Lien created by any of the Loan Documents, title to any collateral encumbered thereby shall be taken and held (a) by the Collateral Agent pursuant to the Intercreditor Agreement or (b) by Administrative Agent (or an Affiliate or designee thereof) pro rata for the benefit of the Lenders in accordance with the Obligations outstanding to each of them and shall be administered in accordance with the standard form of collateral holding participation agreement used by the Administrative Agent in comparable syndicated credit facilities. 10.14 Intercreditor Arrangements; Attornment Agreements. Each of the Creditors and the other Parties acknowledges that the Collateral for the Obligations, and the rights of the Administrative Agent to take action with respect thereto, are subject to the terms of the Intercreditor Agreement. Provided that no Default or Event of Default has then occurred, the Administrative Agent is hereby irrevocably authorized by the other Creditors to: -78- (a) take any discretionary action, or exercise any prerogatives, provided to a Creditor Representative pursuant to the Intercreditor Agreement; (b) enter into attornment, non-disturbance and estoppel agreements acceptable to the Administrative Agent with lessees of interests in leases of real property from Borrower and its Restricted Subsidiaries permitted hereby; (c) provided that no Default or Event of Default has occurred and remains continuing, enter into or approve, as Creditor Representative, such amendments to the Collateral Documents as are required to secure additional Qualified Obligations designated by the Borrower in accordance with the terms of the Intercreditor Agreement; and (d) provided that no Default or Event of Default has occurred and remains continuing, enter into such instruments, documents or agreements as are reasonably required to release or partially release, or authorize the Collateral Agent to release or partially release, the Liens of the Collateral Documents under the circumstances described in, and subject to the conditions set forth in, Section 2.12(a) or Section 11.2, as applicable. 10.15 No Obligations of Borrower and the Co-Borrowers. Nothing contained in this Article 10 shall be deemed to impose upon Borrower or any Co-Borrower any obligation in respect of the due and punctual performance by the Administrative Agent of its obligations to the Lenders under any provision of this Agreement, and Borrower and the Co-Borrowers shall have no liability to the Administrative Agent or any of the Lenders in respect of any failure by the Administrative Agent or any Lender to perform any of its obligations to the Creditors under this Agreement. Without limiting the generality of the foregoing, where any provision of this Agreement relating to the payment of any amounts due and owing under the Loan Documents provides that such payments shall be made by Borrower or the Co-Borrower to the Administrative Agent for the account of the Lenders, Borrower's and the Co-Borrowers' obligations to the Lenders in respect of such payments shall be deemed to be satisfied upon the making of such payments to the Administrative Agent in the manner provided by this Agreement. -79- ARTICLE 11 MISCELLANEOUS 11.1 Cumulative Remedies; No Waiver. The rights, powers, privileges and remedies of the Creditors provided herein or in any Note or other Loan Document are cumulative and not exclusive of any right, power, privilege or remedy provided by Law or equity. No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power, privilege or remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any right, power, privilege or remedy preclude any other or further exercise of the same or any other right, power, privilege or remedy. The terms and conditions of Article 8 hereof are inserted for the sole benefit of the Creditors; the same may be waived in whole or in part, with or without terms or conditions, in respect of any Loan or Letter of Credit without prejudicing the Administrative Agent's or the Lenders' rights to assert them in whole or in part in respect of any other Loan. 11.2 Amendments; Consents. Each amendment, modification, supplement, extension, termination, waiver, approval and consent under this Agreement and the other Loan Documents shall be subject to the terms of all applicable Laws, including Gaming Laws. No amendment, modification, supplement, extension, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, and no consent to any departure by Borrower, the Co-Borrowers or any other Party therefrom, may in any event be effective unless in writing signed by the Administrative Agent with the approval of Requisite Lenders (and, in the case of any amendment, modification or supplement of or to any Loan Document to which Borrower or any of its Subsidiaries is a Party, signed by each such Party, and, in the case of any amendment, modification or supplement to Article 10, signed by the Administrative Agent), and then only in the specific instance and for the specific purpose given; and, without the approval in writing of all the Lenders, no amendment, modification, supplement, termination, waiver or consent may be effective: (a) Without the consent of each affected Lender, (i) to reduce the principal of, or the amount of principal, principal prepayments or the rate of interest payable on, any Note, or (ii) to increase the amount of the Commitments or the Pro Rata Share of any Lender or (iii) to reduce the amount of any Unused Fee payable to any Revolving Lender, or any other fee or amount payable to any Lender under the Loan Documents or (iv) to waive an Event of Default consisting of the failure of Borrower or the Co-Borrowers to pay when due principal, interest or any Unused Fee or other fee; (b) To postpone any date fixed for any payment of principal of, prepayment of principal of or any installment of interest on, any Note or any installment of any Unused Fee, or to extend the term of either of the Commitments; (c) To permit the term of any Letter of Credit to exceed one year (provided that this shall not be construed to prohibit the provision of automatic renewal clauses in Letters of Credit issued hereunder) or extend beyond the Maturity Date; (d) To release the Guaranty, the Collateral Documents or any other material portion of any collateral for the Obligations, or to permit the Collateral Agent to take any such action (except in accordance with the provisions of the Intercreditor Agreement), provided that if no Default or Event of Default exists, the Administrative Agent may without the consent of any Lender (and shall at the request of Borrower), (i) release its Lien in any personal property financed or leased by Borrower or its Subsidiaries and granted a Lien in accordance with Section -80- 6.6(e), (ii) release its Lien in any collateral as otherwise may be expressly provided for in any Loan Document, (iii) release its Lien in the equity securities of, and all Guaranty Obligations executed by, any Subsidiary which is the subject of a Disposition not prohibited by Section 6.2, (iv) subordinate its Lien with respect to any Property which is the subject of a Disposition not prohibited by Section 6.2, (v) release its Lien in any Property which is the subject of a Distribution not prohibited by this Agreement, and (vi) release all of the Liens under the Loan Documents in a Collateral Release under Section 2.12, or shall, in each case to the extent such Lien or Guaranty Obligations are held by the Collateral Agent, shall to the extent permitted by the Intercreditor Agreement direct the Collateral Agent to take such actions. (e) To amend the provisions of the definitions of "Requisite Lenders" or "Maturity Date"; (f) To amend or waive Article 8, Section 6.4 or this Section; or (g) To amend any provision of this Agreement that expressly requires the consent or approval of all the Lenders. Any amendment, modification, supplement, termination, waiver or consent pursuant to this Section shall apply equally to, and shall be binding upon, all of the Creditors. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Pro Rata Share of the Commitments of such Lender may not be increased or extended without the consent of such Lender. 11.3 Attorney Costs, Expenses and Taxes. (a) Borrower and the Co-Borrowers agree (a) to pay or reimburse the Administrative Agent for all 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 costs and expenses incurred 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 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 11.3 shall be payable within five Business Days after demand therefor. The agreements in this Section shall survive the termination of the Commitments and repayment of all other Obligations. (b) Borrower and the Co-Borrowers shall pay any and all documentary and other taxes, excluding (1) taxes imposed on or measured in whole or in part by overall net income, gross income or gross receipts and franchise taxes imposed on any Lender by (A) any jurisdiction (or political subdivision thereof) in which it is organized or maintains its principal office or LIBOR Lending Office or (B) any jurisdiction (or political subdivision thereof) in which it is "doing business", (2) any withholding taxes or other taxes based on gross income imposed by -81- the United States of America that are not attributable to any change in any Law or the interpretation or administration of any Law by any Governmental Agency and (3) any withholding tax or other taxes based on gross income imposed by the United States of America for any period with respect to which it has failed to provide Borrower with the appropriate form or forms required by Section 11.21, to the extent such forms are then required by applicable Laws, and all costs, expenses, fees and charges payable or determined to be payable in connection with the filing or recording of this Agreement, any other Loan Document or any other instrument or writing to be delivered hereunder or thereunder, or in connection with any transaction pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify on the terms set forth in Section 11.11 the Creditors from and against any and all loss, liability or legal or other expense with respect to or resulting from any delay in paying or failure to pay any such tax, cost, expense, fee or charge or that any of them may suffer or incur by reason of the failure of any Party to perform any of its Obligations. Any amount payable to the Administrative Agent or any Lender under this Section shall bear interest from the second Business Day following the date of demand for payment at the Default Rate. 11.4 Nature of Lenders' Obligations. The obligations of the Lenders hereunder to make Loans and to fund participations in Letters of Credit and Swing Line Loans are several and not joint. The failure of any Lender to make any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation. Nothing contained in this Agreement or any other Loan Document and no action taken by the Creditors or any of them pursuant hereto or thereto may, or may be deemed to, make the Lenders a partnership, an association, a joint venture or other entity, either among themselves or with Borrower, the Co-Borrowers or any Affiliate of Borrower. Each Lender's obligation to make any Advance pursuant hereto is several and not joint or joint and several, and in the case of the initial Advance only is conditioned upon the performance by all other Lenders of their obligations to make initial Advances. A default by any Lender will not increase the Pro Rata Share of any other Lender. Any Lender not in default may, if it desires, assume in such proportion as the non-Defaulting Lenders agree the obligations of any Lender in default, but is not obligated to do so. The Administrative Agent agrees that it will use its best efforts either to induce the other Lenders to assume the obligations of a Lender in default or to obtain another Lender, reasonably satisfactory to Borrower and the Co-Borrowers, to replace such a Lender in default. 11.5 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Letter of Credit, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding. 11.6 Notices. (a) General. 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 -82- notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows: (1) if to Borrower, the Administrative Agent, the Issuing Lender or the Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 11.6 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 (2) 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 Borrower, the Administrative Agent, the Issuing Lender and the Swing Line Lender. 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, the Issuing Lender and the Swing Line Lender pursuant to Article 2 shall not be effective until actually received by such Person. In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder. (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be transmitted 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, the Administrative Agent and the Lenders. 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. (c) Limited Use of Electronic Mail. Electronic mail and Internet and intranet websites may be used only to distribute routine communications, such as financial statements and other information as provided in Section 7.1, and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other purpose. (d) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic requests for Loans and Swing Line Loans) that, in the reasonable judgment of the Administrative Agent and the Lenders, are purportedly given by or on behalf of Borrower or any Co-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. Borrower and the Co-Borrowers shall jointly and severally 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 that, in the reasonable judgment of such Agent-Related Person, is purportedly given by or on behalf of Borrower or any Co-Borrower. All telephonic notices to and other communications -83- with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording. (e) Notice to Borrower is Notice to Co-Borrowers. Borrower and the Co-Borrower expressly agree that the credit facilities provided hereunder are being provided for the joint convenience of Borrower and its Restricted Subsidiaries, including the Co-Borrowers, and that (despite the joint and several nature of the Obligations), it is expected that Borrower shall administer the Advances and Letters of Credit on behalf of itself and the Co-Borrowers. Accordingly, Borrower and the Co-Borrowers agree that any notice provided to Borrower hereunder shall be deemed to constitute the same notice to the Co-Borrowers, without the requirement that separate notices be provided to the Co-Borrowers. 11.7 Execution of Loan Documents. Unless the Administrative Agent otherwise specifies with respect to any Loan Document, (a) this Agreement and any other Loan Document may be executed in any number of counterparts and any party hereto or thereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Agreement or any other Loan Document, as the case may be, when taken together will be deemed to be but one and the same instrument and (b) execution of any such counterpart may be evidenced by a telecopier transmission of the signature of such party followed by prompt transmission of an original signature. The execution of this Agreement or any other Loan Document by any party hereto or thereto will not become effective until counterparts hereof or thereof, as the case may be, have been executed by all the parties hereto or thereto. 11.8 Binding Effect; Assignment. (a) This Agreement and the other Loan Documents to which Borrower and the Co-Borrowers are a Party will be binding upon and inure to the exclusive benefit of Borrower, the Co-Borrowers, the Creditors, and their respective successors and assigns, except that Borrower and the Co-Borrowers may not assign their respective rights hereunder or thereunder or any interest herein or therein without the prior written consent of all the Lenders. Each Lender represents that it is not acquiring its Notes with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (subject to any requirement that disposition of its Notes must be within the control of such Lender). Any Lender may at any time pledge its Notes or any other instrument evidencing its rights as a Lender under this Agreement to a Federal Reserve Bank, but no such pledge shall release that Lender from its obligations hereunder or grant to such Federal Reserve Bank the rights of a Lender hereunder absent foreclosure of such pledge. (b) From time to time, each Lender may assign to one or more Eligible Assignees all or any portion of its Pro Rata Share of either or both of the Commitments, provided that (i) such Eligible Assignee, if not then a Lender or an Affiliate of the assigning Lender, shall be approved by each of the Administrative Agent and (if no Event of Default then exists) Borrower and the Co-Borrowers (none of which approvals shall be unreasonably withheld or delayed), (ii) in the case of assignments of a Pro Rata Share of the Revolving Commitment, such Eligible Assignee, if not then a Revolving Lender or an Affiliate of the assigning Lender, shall be approved by each of the Administrative Agent and (if no Event of Default then exists) Borrower and the Co-Borrowers (none of which approvals shall be unreasonably withheld or delayed), (iii) such assignment shall be evidenced by an Assignment Agreement, a copy of which shall be furnished to the Administrative Agent as hereinbelow provided, (iv) except in the case of an assignment to an Affiliate of the assigning Lender, to another Lender or of the entire remaining Pro Rata Share of the relevant Commitment by the assigning Lender, the assignment shall not -84- assign a Pro Rata Share that is less than $1,000,000, (v) the effective date of any such assignment shall be as specified in the Assignment Agreement, but not earlier than the date which is five Business Days after the date the Administrative Agent has received the Assignment Agreement, (vi) such assignment shall be of a constant and non-varying percentage of the Pro Rata Share of the assigning Lender, and (vii) the assignor Lender shall have paid a $3500 assignment fee to the Administrative Agent. Upon the effective date of such Assignment Agreement, the Eligible Assignee named therein shall be a Lender for all purposes of this Agreement, with the Pro Rata Share set forth therein and, to the extent of such Pro Rata Share, the assigning Lender shall be released from its further obligations under this Agreement. Borrower and the Co-Borrowers agree that they shall execute and deliver (against delivery by the assigning Lender to Borrower of appropriate Notes) to such assignee Lender, a Committed Advance Note evidencing that assignee Lender's Pro Rata Share of the appropriate Commitment and a Competitive Revolving Note, and to the assigning Lender, a Committed Advance Note evidencing the remaining balance Pro Rata Share of the appropriate Commitment retained by the assigning Lender. (c) By executing and delivering a Assignment Agreement, the Eligible Assignee thereunder acknowledges and agrees that: (i) other than the representation and warranty that it is the legal and beneficial owner of the Pro Rata Share being assigned thereby free and clear of any adverse claim, the assigning Lender has made no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness or sufficiency of this Agreement or any other Loan Document; (ii) the assigning Lender has made no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower or its Subsidiaries or the performance by Borrower and its Subsidiaries of the Obligations; (iii) it has received a copy of this Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.1 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment Agreement; (iv) it will, independently and without reliance upon the Administrative Agent or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) it appoints and authorizes the Administrative Agent to take such action and to exercise such powers under this Agreement as are delegated to the Administrative Agent by this Agreement; and (vi) it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender. (d) The Administrative Agent shall maintain at the Administrative Agent's Office a copy of each Assignment Agreement delivered to it and a register (the "Register") of the names and address of each of the Lenders and the Pro Rata Share held by each Lender, giving effect to each Assignment Agreement. The Register shall be available during normal business hours for inspection by Borrower, the Co-Borrowers or any Lender upon reasonable prior notice to the Administrative Agent. Borrower, the Co-Borrowers and the Creditors shall deem and treat the Persons listed as Lenders in the Register as the holders and owners of the Pro Rata Share listed therein for all purposes hereof, and no assignment or transfer of any such Pro Rata Share shall be effective, in each case unless and until a Assignment Agreement effecting the assignment or transfer thereof shall have been accepted by the Administrative Agent and recorded in the Register as provided above. Prior to such recordation, all amounts owed with respect to the applicable Pro Rata Share shall be owed to the Lender listed in the Register as the owner thereof, and any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Pro Rata Share. -85- (e) Each Lender may from time to time grant participations to one or more banks or other financial institutions (including another Lender) in a portion of its Pro Rata Share (or in Competitive Advances made by that Lender); provided, however, 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, (iii) the participating banks or other financial institutions shall not be a Lender hereunder for any purpose except, if the participation agreement so provides, for the purposes of Sections 3.7, 3.8, 11.11 and 11.22 but only to the extent that the cost of such benefits to Borrower and the Co-Borrowers does not exceed the cost which Borrower and the Co-Borrowers would have incurred in respect of such Lender absent the participation, (iv) Borrower, the Co-Borrowers, 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, (v) the participation interest shall be expressed as a percentage of the granting Lender's Pro Rata Share as it then exists and shall not restrict an increase in the Commitments, or in the granting Lender's Pro Rata Share, so long as the amount of the participation interest is not affected thereby, and (vi) the consent of the holder of such participation interest shall not be required for amendments or waivers of provisions of the Loan Documents other than those which (A) extend the Maturity Date or any other date upon which any payment of money is due to the Lenders, (B) reduce the rate of interest on the Notes, any fee or any other monetary amount payable to the Lenders, (C) reduce the amount of any installment of principal due under the Notes, (D) release the Guaranty, or (E) change the definition of "Requisite Lenders." (f) Notwithstanding anything in this Section to the contrary, the rights of the Lenders to make assignments of, and grant participations in, their Pro Rata Shares of the Commitments shall be subject to the approval of any Gaming Board, to the extent required by applicable Gaming Laws, and to compliance with applicable securities laws, if any. (g) Notwithstanding anything to the contrary contained herein, any Lender (a "Granting Lender") may grant to one or more SPC's established or maintained by that Granting Lender the option to provide all or any part of any Loan or Advance that such Granting Lender would otherwise be obligated to make pursuant to Sections 2.1, 2.2, 2.3 or 2.6, provided that (i) nothing herein shall constitute a commitment to make any Loan by any SPC, (ii) if a SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof, and (iii) the rights of any such SPC shall be derivative of the rights of the Granting Lender, and each SPC shall be subject to all of the restrictions upon the Granting Lender herein contained. Each SPC shall be conclusively presumed to have made arrangements with its Granting Lender for the exercise of voting and other rights hereunder in a manner which is acceptable to the SPC, and the Administrative Agent, the other Creditors, Borrower, the Co-Borrowers and each other Party shall be entitled to rely upon and deal solely with the Granting Lender with respect to Loans and Advances made by or through its SPC. The making of a Loan by a SPC hereunder shall utilize the Commitments of the Granting Lender (and, if such Loan is a Competitive Advance, shall be deemed to utilize the Revolving Commitments of the Lenders) to the same extent, and as if, such Loan were made by the Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the related 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 senior indebtedness 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 proceedings or similar proceedings under the laws of the United States or any State thereof, -86- provided that the Granting Lender for each SPC hereby agrees to indemnify, save, and hold harmless each other party hereto for any loss, cost, damage and expense arising out of their inability to institute any such proceeding against its SPC. In addition, notwithstanding anything to the contrary contained in this Section 11.8, any SPC may (i) with notice to, but without the prior written consent of, Borrower, the Co-Borrowers or the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to its Granting Lender or to any financial institutions providing liquidity and/or credit facilities to or for the account of such SPC to fund the Loans made by such SPC or to support the securities (if any) issued by such SPC to fund such Loans (but nothing contained herein shall be construed in derogation of the obligation of the Granting Lender to make Loans hereunder), provided that neither the consent of the SPC or of any such assignee shall be required for amendments or waivers of provisions of the Loan Documents except for those amendments or waivers for which the consent of participants is required under Section 11.8(e)(vi), and (ii) disclose on a confidential basis (in the same manner described in Section 11.14) any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of a surety, guarantee or credit or liquidity enhancement to such SPC. 11.9 Right of Setoff. If an Event of Default has occurred and is continuing, the Administrative Agent or any Lender (but in each case only with the consent of the Requisite Lenders) may exercise its rights under Article 9 of the Uniform Commercial Code and other applicable Laws and, to the extent permitted by applicable Laws, apply any funds in any deposit account maintained with it by Borrower, the Co-Borrowers and/or any of their Property in its possession against the Obligations. 11.10 Sharing of Setoffs. Each Lender severally agrees that if it, through the exercise of any right of setoff, banker's lien or counterclaim against Borrower, any Co-Borrower, or otherwise, receives payment of the Obligations held by it that is ratably more than any other Lender, through any means, receives in payment of the Obligations held by that Lender, then, subject to applicable Laws: (a) the Lender exercising the right of setoff, banker's lien or counterclaim or otherwise receiving such payment shall purchase, and shall be deemed to have simultaneously purchased, from the other Lender a participation in the Obligations held by the other Lender and shall pay to the other Lender a purchase price in an amount so that the share of the Obligations held by each Lender after the exercise of the right of setoff, banker's lien or counterclaim or receipt of payment shall be in the same proportion that existed prior to the exercise of the right of setoff, banker's lien or counterclaim or receipt of payment; and (b) such other adjustments and purchases of participations shall be made from time to time as shall be equitable to ensure that all of the Lenders share any payment obtained in respect of the Obligations ratably in accordance with each Lender's share of the Obligations immediately prior to, and without taking into account, the payment; provided that, if all or any portion of a disproportionate payment obtained as a result of the exercise of the right of setoff, banker's lien, counterclaim or otherwise is thereafter recovered from the purchasing Lender by Borrower, any Co-Borrower or any Person claiming through or succeeding to the rights of Borrower or a Co-Borrower, the purchase of a participation shall be rescinded and the purchase price thereof shall be restored to the extent of the recovery, but without interest. Each Lender that purchases a participation in the Obligations pursuant to this Section shall from and after the purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased. Borrower and each Co-Borrower expressly consents to the foregoing arrangements and agrees that any Lender holding a participation in an Obligation so purchased may exercise any and all rights of setoff, banker's lien or counterclaim with respect to the participation as fully as if the Lender were the original owner of the Obligation purchased. -87- 11.11 Indemnification by Borrower and the Co-Borrowers. Whether or not the transactions contemplated hereby are consummated, Borrower and each Co-Borrower jointly and severally shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and 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, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit) 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, consequential, special or punitive 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 Closing Date). All amounts due under this Section 11.11 shall be payable within 10 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. 11.12 Nonliability of the Lenders. Borrower and each Co-Borrower acknowledges and agrees that: (a) Any inspections of any Property of Borrower and its Subsidiaries made by or through the Creditors are for purposes of administration of the Loans and Letters of Credit only and Borrower and its Affiliates are not entitled to rely upon the same (whether or not such inspections are at the expense of Borrower or its Subsidiaries); (b) By accepting or approving anything required to be observed, performed, fulfilled or given to the Creditors pursuant to the Loan Documents, neither the Administrative Agent nor the Lenders shall be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof, and such acceptance or approval thereof shall not constitute a warranty or representation to anyone with respect thereto by the Creditors; (c) The relationship between Borrower and the Co-Borrowers and the Creditors is, and shall at all times remain, solely that of borrowers and lenders; neither the Administrative Agent nor the Lenders shall under any circumstance be construed to be partners or joint venturers of Borrower or its Affiliates; neither the Administrative Agent nor the Lenders shall under any circumstance be deemed to be in a relationship of confidence or trust or a -88- fiduciary or other "special" relationship with Borrower or its Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates; neither the Administrative Agent nor the Lenders undertake or assume any responsibility or duty to Borrower or its Affiliates to select, review, inspect, supervise, pass judgment upon or inform Borrower or its Affiliates of any matter in connection with their Property or the operations of Borrower or its Affiliates; Borrower and its Affiliates shall rely entirely upon their own judgment with respect to such matters; and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by the Creditors in connection with such matters is solely for the protection of the Creditors and neither Borrower, the Co-Borrowers nor any other Person is entitled to rely thereon; and (d) The Creditors shall not be responsible or liable to any Person for any loss, damage, liability or claim of any kind relating to injury or death to Persons or damage to Property caused by the actions, inaction or negligence of Borrower and/or its Affiliates and Borrower and the Co-Borrowers hereby indemnify and hold the Creditors harmless on the terms set forth in Section 11.11 from any such loss, damage, liability or claim. 11.13 No Third Parties Benefited. This Agreement is made for the purpose of defining and setting forth certain obligations, rights and duties of Borrower, the Co-Borrowers and the Creditors in connection with the Loans, and is made for the sole benefit of Borrower, the Co-Borrowers, the Creditors, and the Creditors' successors and assigns. Except as provided in Sections 11.8, 11.11, and 11.28 no other Person shall have any rights of any nature hereunder or by reason hereof. 11.14 Confidentiality. Each Lender agrees to hold any confidential information that it may receive from Borrower and the Co-Borrowers pursuant to this Agreement in confidence, except for disclosure: (a) to other Creditors (or, subject to appropriate confidentiality restrictions, Affiliates of any Creditor); (b) to legal counsel and accountants for Borrower and the Co-Borrowers or any Lender; (c) to other professional advisors to Borrower and the Co-Borrowers or any Lender, provided that the recipient has accepted such information subject to a confidentiality agreement substantially similar to this Section; (d) to regulatory officials having jurisdiction over that Lender; (e) to any Gaming Board having regulatory jurisdiction over Borrower or its Subsidiaries, provided that each Lender agrees to use its best efforts to notify Borrower and the Co-Borrowers of any such disclosure unless prohibited by applicable Laws; (f) as required by Law or legal process or in connection with any legal proceeding to which that Lender and Borrower or any of its Subsidiaries 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 Notes, 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 Borrower or its Subsidiaries reasonably considered by Borrower 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 Borrower or its Subsidiaries to any Person not associated with Borrower without a confidentiality agreement or obligation substantially similar to this Section. Notwithstanding anything herein to the contrary, "confidential information" shall not include, and the Administrative Agent and each Lender may disclose without limitation of any kind, any information with respect to 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 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, Letters of Credit and transactions contemplated -89- hereby. Nothing in this Section shall be construed to create or give rise to any fiduciary duty on the part of the Creditors to Borrower or any other Party. 11.15 Further Assurances. Borrower and its Subsidiaries shall, at their expense and without expense to the Lenders or the Administrative Agent, do, execute and deliver such further acts and documents as the Requisite Lenders or the Administrative Agent from time to time reasonably require for the assuring and confirming unto the Lenders or the Administrative Agent of the rights hereby created or intended now or hereafter so to be, or for carrying out the intention or facilitating the performance of the terms of any Loan Document. 11.16 Integration. This Agreement, the other Loan Documents and the letter agreements referred to in Sections 3.2, 3.3, 3.5 and 3.6, comprise the complete and integrated agreements of the parties on the subject matter hereof and supersedes all prior agreements, written or oral, on the subject matter hereof. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control and govern; provided that the inclusion of supplemental rights or remedies in favor of the Creditors in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof. 11.17 Governing Law. Except to the extent otherwise provided therein, each Loan Document shall be governed by, and construed and enforced in accordance with, the local Laws of Nevada. 11.18 Severability of Provisions. Any provision in any Loan Document that is held to be inoperative, unenforceable or invalid as to any party or in any jurisdiction shall, as to that party or jurisdiction, be inoperative, unenforceable or invalid without affecting the remaining provisions or the operation, enforceability or validity of that provision as to any other party or in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable. 11.19 Headings. Article and Section headings in this Agreement and the other Loan Documents are included for convenience of reference only and are not part of this Agreement or the other Loan Documents for any other purpose. 11.20 Time of the Essence. Time is of the essence of the Loan Documents. 11.21 Foreign Lenders and Participants. (a) Tax Forms. (1) Each Lender that is not a "United States person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign Lender") shall deliver to the Administrative Agent, prior to receipt of any payment subject to withholding under the Code (or upon accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Foreign Lender by Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Foreign Lender by Borrower pursuant to this Agreement) or such other evidence satisfactory to Borrower and the Administrative Agent that such Foreign Lender is entitled to an exemption from, or reduction of, U.S. withholding tax, including any -90- exemption pursuant to Section 881(c) of the Code. Thereafter and from time to time, each such Foreign Lender shall (A) promptly submit to the Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to Borrower and the Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Foreign Lender by Borrower pursuant to this Agreement, (B) promptly notify the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (C) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that Borrower make any deduction or withholding for taxes from amounts payable to such Foreign Lender. (2) Each Foreign Lender, to the extent it does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example, in the case of a typical participation by such Lender), shall deliver to the Administrative Agent on the date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and at such other times as may be necessary in the determination of the Administrative Agent (in the reasonable exercise of its discretion), (A) two duly signed completed copies of the forms or statements required to be provided by such Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account that is not subject to U.S. withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any successor thereto), together with any information such Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Code, to establish that such Lender is not acting for its own account with respect to a portion of any such sums payable to such Lender. (3) Borrower shall not be required to pay any additional amount to any Foreign Lender under Section 3.12(d) (A) with respect to any taxes required to be deducted or withheld on the basis of the information, certificates or statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant to this Section 11.21(a) or (B) if such Lender shall have failed to satisfy the foregoing provisions of this Section 11.21(a); provided that if such Lender shall have satisfied the requirement of this Section 11.21(a) on the date such Lender became a Lender or ceased to act for its own account with respect to any payment under any of the Loan Documents, nothing in this Section 11.21(a) shall relieve Borrower of its obligation to pay any amounts pursuant to Section 3.12(d) in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender or other Person for the account of which such Lender receives any sums payable under any of the Loan Documents is not subject to withholding or is subject to withholding at a reduced rate. (4) The Administrative Agent may, without reduction, withhold any Taxes required to be deducted and withheld from any payment under any of the Loan -91- Documents with respect to which Borrower is not required to pay additional amounts under this Section 11.21(a). (b) Form W-9. Upon the request of the Administrative Agent, each Lender that is a "United States person" within the meaning of Section 7701(a)(30) of the Code shall deliver to the Administrative Agent two duly signed completed copies of IRS Form W-9. If such Lender fails to deliver such forms, then the Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable back-up withholding tax imposed by the Code, without reduction. (c) Withholding. If any Governmental Agency asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Agent. The obligation of the Lenders under this Section shall survive the termination of the Commitments, repayment of all other Obligations hereunder and the resignation of the Administrative Agent. 11.22 Hazardous Material Indemnity. Borrower and each Co-Borrower hereby agrees to indemnify, hold harmless and defend (by counsel reasonably satisfactory to the Administrative Agent) the Administrative Agent and each of the Lenders (and any successor to a Lender) and their respective directors, officers, employees and agents from and against any and all claims, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action requirements, enforcement actions of any kind, and all costs and expenses incurred in connection therewith (including reasonable attorneys' fees and the reasonably allocated costs of attorneys employed by the Administrative Agent or any Lender, and expenses to the extent that the defense of any such action has not been assumed by Borrower and the Co-Borrowers), arising directly or indirectly out of (i) the presence on, in, under or about any Real Property of any Hazardous Materials, or any releases or discharges of any Hazardous Materials on, under or from any Real Property and (ii) any activity carried on or undertaken on or off any Real Property by Borrower its Subsidiaries or any of their predecessors in title, whether prior to or during the term of this Agreement, and whether by Borrower, its Subsidiaries or any predecessor in title or any employees, agents, contractors or subcontractors of Borrower, its Subsidiaries or any predecessor in title, or any third persons at any time occupying or present on any Real Property (other than a Lender or a representative of a Lender), in connection with the handling, treatment, removal, storage, decontamination, clean-up, transport or disposal of any Hazardous Materials at any time located or present on, in, under or about any Real Property; provided that, anything to the contrary herein notwithstanding (including Exhibit K), the liability of Detroit shall be limited to that portion of the Obligations which are actually borrowed or received by Detroit. The foregoing indemnity shall further apply to any residual contamination on, in, under or about any Real Property, or affecting any natural resources, and to any contamination of any Property or natural resources arising in connection with the generation, use, handling, storage, transport or disposal of any such Hazardous Materials, and irrespective of whether any of such activities were or will be undertaken in accordance with applicable Laws, but the foregoing indemnity shall not apply to Hazardous Materials on any Real Property, the presence of which is caused by the Creditors. Borrower and each Co-Borrower hereby acknowledges and agrees that, notwithstanding any other provision of this Agreement or any of the other Loan Documents to the contrary, the obligations of Borrower and the Co-Borrowers under this Section (and under Sections 4.17 and 5.4, with respect to compliance with Hazardous Materials Laws) shall be unlimited corporate obligations of Borrower and the Co-Borrowers and shall not be secured by any deed of trust or mortgage on any Real Property. Any obligation or liability of Borrower and the Co-Borrowers to any Indemnitee under this Section shall survive the expiration or termination of this Agreement, the repayment of all -92- Loans, the expiration or termination of all Letters of Credit and the payment and performance of all other Obligations owed to the Lenders. 11.23 Gaming Boards. The Administrative Agent and each of the Lenders agree to cooperate with all Gaming Boards in connection with the administration of their regulatory jurisdiction over Borrower and its Subsidiaries, including the provision of such documents or other information as may be requested by any such Gaming Board relating to Borrower or any of its Subsidiaries or to the Loan Documents. 11.24 Lien Releases. The Administrative Agent shall release any Lien granted to or held by the Administrative Agent on any collateral for the Obligations (and shall consent to the release by the Collateral Agent of any Liens held by the Collateral Agent) which is (i) sold, transferred or otherwise disposed of in connection with any transaction not prohibited by the Loan Documents, (ii) constituting Property leased to Borrower or its Subsidiaries under a lease which has expired or been terminated in a transaction not prohibited by the Loan Documents or which will concurrently expire and which has not been, and is not intended by Borrower or the relevant Subsidiary to be, renewed or extended, (iii) consisting of an instrument, if the Indebtedness evidenced by such instrument has been finally repaid in full, (iv) if approved or consented to by those of the Lenders required by Section 11.2, (v) for the avoidance of doubt, of the Golden Nugget Properties (and the stock of entities owning the Golden Nugget Properties) upon any permitted sale, transfer or other disposition of the Golden Nugget Properties, or (vi) as otherwise expressly required by the Loan Documents, provided in each case that any Liens securing the other Senior Indebtedness are concurrently released. If the collateral so released consists of capital stock of a Subsidiary which is sold, transferred or otherwise disposed of in connection with any transaction not prohibited by the Loan Documents, then the Administrative Agent shall concurrently also release such Subsidiary from its obligations under the Guaranty. Each of the Creditors hereby consent to the arrangements set forth in this Section and, upon the request of the Administrative Agent, each Lender shall promptly provide written confirmation of the authority of the Administrative Agent to release such Liens (or to consent to such release by the Collateral Agent) upon any one or more items of collateral under this Section. 11.25 Termination; Release of Liens. In addition to any Collateral Release as contemplated in Section 2.12, upon (a) the expiration or termination of the Commitments, (b) the full and final payment in Cash of the Loans, all interest and fees with respect thereto, (c) the reimbursement of all draws under Letters of Credit and the payment of all fees with respect thereto, (d) the expiration of all Letters of Credit or the deposit of Cash collateral with the Issuing Lender in the effective face amount thereof, (e) the payment of all amounts then demanded by any Lender or indemnitee under Sections 3.7, 3.8, 11.11 and 11.22 and (f) the payment of all other amounts then due under the Loan Documents, the Administrative Agent is hereby authorized by the Lenders to, and the Administrative Agent shall, upon the request of Borrower and the Co-Borrowers, execute and deliver to Borrower and the Co-Borrowers discharges from further compliance with the covenants contained in Articles 5, 6, and 7 and releases of the Liens created by the Loan Documents, and shall return any Property pledged to the Administrative Agent as collateral for the Obligations, notwithstanding the survival of any provisions of this Agreement herein provided for. 11.26 Removal of a Lender. Borrower and the Co-Borrowers shall have the right to remove a Lender as a party to this Agreement in accordance with this Section (a) under the circumstances set forth in Sections 2.11, 3.7, 3.8(g) and 3.12(d) and (b) if such Lender is the subject of a Disqualification. If Borrower and the Co-Borrowers are entitled to remove a Lender pursuant to this Section either: -93- (x) Upon notice from Borrower and the Co-Borrowers, the Lender being removed shall execute and deliver a Assignment Agreement covering that Lender's Pro Rata Share in favor of one or more Eligible Assignees designated by Borrower and the Co-Borrowers (and acceptable to the Administrative Agent, which acceptance shall not be unreasonably delayed or withheld), subject to (i) payment of a purchase price by such Eligible Assignee equal to all principal and accrued interest, fees and other amounts payable to such Lender under this Agreement through the date of assignment and (ii) the written release of the Issuing Lender and the Swing Line Lender of such Lender's obligations under Sections 2.4(c) and 2.6(d) or delivery by such Eligible Assignee of such appropriate assurances and indemnities (which may include letters of credit) as such Lender may reasonably require with respect to its participation interest in any Letters of Credit then outstanding or any Swing Line Outstandings; or (y) Except in the case of the removal of a Lender pursuant to Section 2.11, Borrower and the Co-Borrowers may reduce the Commitments pursuant to Section 2.9 (and, for this purpose, the numerical requirements of such Section shall not apply) by an amount equal to that Lender's Pro Rata Share, pay and provide to such Lender the amounts, assurances and indemnities described in subclauses (i) and (ii) of clause (x) above and release such Lender from its Pro Rata Share. 11.27 Joint and Several. Borrower and each of the Co-Borrowers shall be obligated for all of the Obligations on a joint and several basis, notwithstanding which of them may have directly received the proceeds of any particular Loan or Advance or the benefit of a particular Letter of Credit, provided that, anything to the contrary herein notwithstanding (including Exhibit K), the liability of Detroit shall be limited to that portion of the Obligations which are actually borrowed or received by Detroit. Borrower and each of the Co-Borrowers acknowledge and agree that, for purposes of the Loan Documents, Borrower, the Co-Borrowers and the Guarantors constitute a single integrated financial enterprise and that each receives a benefit from the availability of credit under this Agreement. Borrower and the Co-Borrowers each waive all defenses arising under the Laws of suretyship, to the extent such Laws are applicable, in connection with their joint and several obligations under this Agreement. Without limiting the foregoing, Borrower and each of the Co-Borrowers agree to the Joint Borrower Provisions set forth in Exhibit K, incorporated by this reference. 11.28 Non-Involvement of Tracinda. The parties hereto acknowledge that neither Kirk Kerkorian nor Tracinda Corporation, individually or collectively, is a party to this Agreement or any of the other Loan Documents executed on the Closing Date. Accordingly, the parties hereto hereby agree that in the event (i) there is any alleged breach or default by any Party under this Agreement or any such Loan Document, or (ii) any party hereto has any claim arising from or relating to any such Loan Document, no party hereto, nor any party claiming through it (to the extent permitted by applicable Law), shall commence any proceedings or otherwise seek to impose any liability whatsoever against Mr. Kerkorian or Tracinda Corporation by reason of such alleged breach, default or claim. 11.29 Pledged Stock in Gaming Companies. If and to the extent that the capital stock or other equity securities of any Person which holds a gaming license are at any time pledged to the Creditors, the Creditors shall, to the extent required by applicable Gaming Laws (a) in the case of any such Person holding a Nevada gaming license, retain possession of such pledged capital stock or other equity securities within the State of Nevada at a location designated to the Nevada State Gaming Control Board, and (b) in the case of any Person holding a gaming license from another jurisdiction, shall retain possession of such pledged stock or other equity securities at a location in that jurisdiction designated to the Gaming Board of that jurisdiction, if so required by the Gaming Board of that jurisdiction. -94- 11.30 Payments Set Aside. To the extent that any payment by or on behalf of Borrower or any Co-Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. 11.31 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 11.32 Purported Oral Amendments. BORROWER AND EACH CO-BORROWER EXPRESSLY ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AND EACH CO-BORROWER AGREE THAT THEY WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY LENDER THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. -95- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. MGM MIRAGE, a Delaware corporation By: /s/ BRYAN L. WRIGHT -------------------------------------- Bryan Wright, Vice President-Assistant General Counsel and Assistant Secretary MGM GRAND DETROIT, LLC By: MGM Grand Detroit, Inc., managing member By: /s/ BRYAN L. WRIGHT -------------------------------------- Bryan Wright, Assistant Secretary Signature Page Loan Agreement BANK OF AMERICA, N.A., as Administrative Agent By: /s/ JANICE HAMMOND -------------------------------------- Janice Hammond, Vice President Signature Page Loan Agreement BANK OF AMERICA, N.A., as a Lender By: /s/ SCOTT L. FABER -------------------------------------- Scott L. Faber, Managing Director Signature Page Loan Agreement JPMORGAN CHASE BANK, as a Lender By: /s/ DONALD S. SHOKRIAN -------------------------------------- Name: Donald S. Shokrian Title: Managing Director Signature Page Loan Agreement CITICORP USA, INC., as a Lender By: /s/ ROBERT F. PARR -------------------------------------- Name: Robert F. Parr Title: Managing Director Signature Page Loan Agreement WELLS FARGO BANK, N.A., as a Lender By: /s/ CATHRYN SANTORO -------------------------------------- Name: Cathryn Santoro Title: AVP, Relationship Manager Signature Page Loan Agreement DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender By: /s/ GEORGE R. REYNOLDS -------------------------------------- Name: George R. Reynolds Title: Vice President Signature Page Loan Agreement THE ROYAL BANK OF SCOTLAND PLC, as a Lender By: /s/ MARIA AMARAL-LEBLANC -------------------------------------- Name: Maria Amaral-LeBlanc Title: Senior Vice President Signature Page Loan Agreement COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, as a Lender By: /s/ CHRISTIAN JAGENBERG -------------------------------------- Name: Christian Jagenberg Title: SVP and Manager By: /s/ WERNER SCHMIDBAUER -------------------------------------- Name: Werner Schmidbauer Title: SVP Signature Page Loan Agreement BANK OF SCOTLAND, as a Lender By: /s/ JOSEPH FRATUS -------------------------------------- Name: Joseph Fratus Title: First Vice President Signature Page Loan Agreement THE BANK OF NOVA SCOTIA, as a Lender By: /s/ MICHAEL A. MITCHELL -------------------------------------- Name: Michael A. Mitchell Title: Director Signature Page Loan Agreement SCOTIABANC, INC., as a Lender By: /s/ WILLIAM E. ZARRETT -------------------------------------- Name: William E. Zarrett Title: Managing Director Signature Page Loan Agreement SOCIETE GENERALE, as a Lender By: /s/ THOMAS K. DAY -------------------------------------- Name: Thomas K. Day Title: Managing Director Signature Page Loan Agreement BARCLAYS BANK PLC, as a Lender By: /s/ L. PETER YETMAN -------------------------------------- Name: L. Peter Yetman Title: Director Signature Page Loan Agreement WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender By: /s/ DANIEL L. EVANS -------------------------------------- Name: Daniel L. Evans Title: Managing Director Signature Page Loan Agreement FLEET NATIONAL BANK, as a Lender By: /s/ THOMAS BROWER -------------------------------------- Name: Thomas Brower Title: Vice President Signature Page Loan Agreement BANK ONE, N.A., as a Lender By: /s/ KANDIS A. JAFFREY -------------------------------------- Name: Kandis A. Jaffrey Title: Director Signature Page Loan Agreement THE BANK OF NEW YORK, as a Lender By: /s/ MEHRASA RAYGANI -------------------------------------- Name: Mehrasa Raygani Title: Vice President Signature Page Loan Agreement KEYBANK NATIONAL ASSOCIATION, as a Lender By: /s/ MICHAEL J. VEGH -------------------------------------- Name: Michael J. Vegh Title: Portfolio Manager Signature Page Loan Agreement CIBC INC., as a Lender By: /s/ PAUL J. CHAKMAK -------------------------------------- Name: Paul J. Chakmak Title: Managing Director CIBC World Markets Corp., AS AGENT Signature Page Loan Agreement BNP PARIBAS, as a Lender By: /s/ JANICE S. H. HO -------------------------------------- Name: Janice S. H. Ho Title: Director By: /s/ MITCHELL M. OZAWA -------------------------------------- Name: Mitchell M. Ozawa Title: Managing Director Signature Page Loan Agreement MIZUHO CORPORATE BANK, LIMITED, as a Lender By: /s/ MARK GRONICH -------------------------------------- Name: Mark Gronich Title: Vice President Signature Page Loan Agreement COMERICA BANK, as a Lender By: /s/ EOIN P. COLLINS -------------------------------------- Name: Eoin P. Collins Title: Vice President Signature Page Loan Agreement SUMITOMO MITSUI BANKING CORPORATION, as a Lender By: /s/ AL GALLUZZO -------------------------------------- Name: Al Galluzzo Title: Senior Vice President Signature Page Loan Agreement THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND, as a Lender By: /s/ TOM HAYES /s/ DAVID WALSH --------------------- -------------------- Name: Tom Hayes David Walsh Title: Authorised Signatory Authorised Signatory Signature Page Loan Agreement PB CAPITAL CORPORATION, as a Lender By: /s/ MARIA C. LEVY -------------------------------------- Name: Maria C. Levy Title: Vice President By: /s/ STEVEN ALEXANDER -------------------------------------- Name: Steven Alexander Title: Vice President Signature Page Loan Agreement UFJ BANK LIMITED, as a Lender By: /s/ TOSHIKO BOYD -------------------------------------- Name: Toshiko Boyd Title: Vice President Signature Page Loan Agreement STANDARD FEDERAL BANK, as a Lender By: /s/ ANNETTE GORDON -------------------------------------- Name: Annette Gordon Title: First Vice President Signature Page Loan Agreement ALLIED IRISH BANK, as a Lender By: /s/ MARGARET BRENNAN -------------------------------------- Name: Margaret Brennan Title: Vice President Signature Page Loan Agreement HSH NORDBANK AG, NEW YORK BRANCH, as a Lender By: /s/ DREW VON GLAHN -------------------------------------- Name: Drew von Glahn Title: Senior Vice President Head of Corporate Banking HSH Nordbank, New York Branch By: /s/ AMY CHEN LU -------------------------------------- Name: Amy Chen Lu Title: Corporate Banking HSH Nordbank AG, New York Branch Signature Page Loan Agreement ERSTE BANK NEW YORK BRANCH, as a Lender By: /s/ ROBERT J. WAGMAN -------------------------------------- Name: Robert J. Wagman Title: Vice President Erste Bank New York Branch By: /s/ BRYAN J. LYNCH -------------------------------------- Name: Bryan J. Lynch Title: First Vice President Signature Page Loan Agreement OAK BROOK BANK, as a Lender By: /s/ GLENN KRIETSCH -------------------------------------- Name: Glenn Krietsch Title: Executive Vice President Signature Page Loan Agreement BANK OF HAWAII, as a Lender By: /s/ SCOTT NAHME -------------------------------------- Name: Scott Nahme Title: Vice President Signature Page Loan Agreement BANK OF CHINA, LOS ANGELES BRANCH, as a Lender By: /s/ KARL K. Y. PAN -------------------------------------- Name: Karl K. Y. Pan Title: FVP and Senior Relationship Manager Signature Page Loan Agreement THE PEOPLES BANK, BILOXI, MISSISSIPPI, as a Lender By: /s/ CHEVIS C. SWETMAN -------------------------------------- Name: Chevis C. Swetman Title: President Signature Page Loan Agreement TRUSTMARK NATIONAL BANK, as a Lender By: /s/ SARAH B. ADAMS -------------------------------------- Name: Sarah B. Adams Title: Assistant Vice President Signature Page Loan Agreement GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender By: /s/ KARL KIEFFER -------------------------------------- Name: Karl Kieffer Title: Duly Authorized Signatory Signature Page Loan Agreement EX-21 4 p68776exv21.htm EX-21

EXHIBIT 21

Subsidiaries of MGM MIRAGE

MGM Grand Resorts, LLC
	a Nevada limited liability company
MGM Grand Hotel, LLC (1)
	a Nevada limited liability company
	dba MGM Grand Hotel & Casino
MGM Grand Condominiums (2)
	a Nevada corporation
Grand Laundry, Inc. (2)
	a Nevada corporation
Destron, Inc.
	a Nevada corporation
MGM MIRAGE International (3)
	a Nevada corporation
MGM Grand Diamond, Inc.
	a Nevada corporation
MGM Grand Australia Pty Ltd (4)
	an Australia corporation
Diamond Darwin Pty Ltd (5)
	an Australia corporation
Diamond Leisure Pty Ltd (6)
	an Australia corporation
	dba MGM Grand Australia
Fernbank Pty Ltd (6)
	an Australia corporation
Territory Property Trust (7)
	an Australia corporation
MGM Grand Atlantic City, Inc.
	a New Jersey corporation
MGM MIRAGE Development, Inc.
	a Nevada corporation
MGM MIRAGE UK Holding Company, Inc. (8)
	a Nevada corporation
MGM MIRAGE Development, Ltd. (9)
	a United Kingdom corporation
MGM Grand Detroit, Inc. (1)
	a Delaware corporation
MGM Grand Detroit, LLC (10)
	a Delaware limited liability company
	dba MGM Grand Detroit
MGM Grand Detroit II, LLC (11)
	a Delaware limited liability company
MGM Grand New York, LLC (1)
	a Nevada limited liability company
New PRMA Las Vegas, Inc. (1)
	a Nevada corporation
PRMA, LLC
	a Nevada limited liability company
	dba Buffalo Bill’s Resort & Casino, Primm Valley Resort & Casino and
	Whiskey Pete’s Hotel & Casino
PRMA Land Development Company (12)
	a Nevada corporation
New York-New York Hotel & Casino, LLC (13)
	a Nevada limited liability company
	dba New York-New York Hotel & Casino
The Primadonna Company, LLC (14)
	a Nevada limited liability company
MGM MIRAGE Operations, Inc.
	a Nevada corporation
MGM MIRAGE Macao, LLC
	a Nevada limited liability company

MGM MIRAGE Online, LLC
	a Nevada limited liability company
MGM MIRAGE Online Holdings Guernsey, Limited (15)
	a Guernsey corporation
MGM MIRAGE Online Isle of Man, Ltd. (15)
	a Isle of Man corporation
MGM MIRAGE Online Isle of Man Holdings, Ltd. (15)
	a Isle of Man corporation
MGM MIRAGE Online Services United Kingdom, Ltd. (15)
	a United Kingdom corporation
MGM MIRAGE Online United Kingdom, Ltd. (15)
	a United Kingdom corporation
MGMM Insurance Company
	a Vermont corporation
MGM MIRAGE Advertising, Inc.
	a Nevada corporation
MGM MIRAGE Retail
	a Nevada corporation
Metropolitan Marketing, LLC
	a Nevada limited liability company
MMNY Land Company, Inc. (16)
	a New York corporation
VidiAd
	a Nevada corporation
Mirage Resorts, Incorporated
	a Nevada corporation
AC Holding Corp. (17)
	a Nevada corporation
AC Holding Corp. II (17)
	a Nevada corporation
The April Cook Companies (17)
	a Nevada corporation
MGM MIRAGE Manufacturing Corp. (17)
	a Nevada corporation
Beau Rivage Resorts, Inc. (17)
	a Mississippi corporation
	dba Beau Rivage
Beau Rivage Distribution Corp. (18)
	a Mississippi corporation
Bellagio, LLC (17)
	a Nevada limited liability company
	dba Bellagio
MRGS Corp. (19)
	a Nevada corporation
Boardwalk Casino, Inc. (17)
	a Nevada corporation
	dba Boardwalk Hotel and Casino
Bungalow, Inc. (17)
	a Mississippi corporation
Restaurant Ventures of Nevada, Inc. (17)
	a Nevada corporation
Country Star Las Vegas, LLC (20)
	a Nevada limited liability company
EGARIM, Inc. (17)
	an Alabama corporation

2

LV Concrete Corp. (17)
	a Nevada corporation
MAC, CORP. (17)
	a New Jersey corporation
MGM MIRAGE Aviation Corp. (17)
	a Nevada corporation
MGM MIRAGE Corporate Services (17)
	a Nevada corporation
MGM MIRAGE Design Group (17)
	a Nevada corporation
MGM MIRAGE International Hong Kong Limited (17)
	a Nevada corporation
THE MIRAGE CASINO-HOTEL (17)
	a Nevada corporation
	dba The Mirage
Treasure Island Corp. (21)
	a Nevada corporation
	dba Treasure Island at The Mirage
MH, INC. (21)
	a Nevada corporation
	dba Shadow Creek
M.I.R. Travel (17)
	a Nevada corporation
Mirage Laundry Services Corp. (17)
	a Nevada corporation
Mirage Leasing Corp. (17)
	a Nevada corporation

(1)	100% of the voting securities are owned by MGM Grand Resorts, LLC.
(2)	100% of the voting securities are owned by MGM Grand Hotel, LLC.
(3)	100% of the voting securities are owned by Destron, Inc.
(4)	50% of the voting securities are owned by MGM MIRAGE and 50% are owned by MGM Grand Diamond, Inc.
(5)	100% of the voting securities are owned by MGM Grand Australia Pty Ltd.
(6)	100% of the voting securities are owned by Diamond Darwin Pty Ltd.
(7)	82.8% of the voting securities are owned by Diamond Darwin Pty Ltd. and 17.2% are owned by MGM Grand Australia Pty Ltd.
(8)	100% of the voting securities are owned by MGM MIRAGE Development, Inc.
(9)	100% of the voting securities are owned by MGM MIRAGE UK Holding Company, Inc.
(10)	Approximately 97% of the voting securities are owned by MGM Grand Detroit, Inc. and 3% are owned by unrelated third parties.
(11)	100% of the voting securities are owned by MGM Grand Detroit, LLC.
(12)	100% of the voting securities are owned by PRMA, LLC.
(13)	50% of the voting securities are owned by MGM MIRAGE and 50% are owned by New PRMA Las Vegas, Inc.
(14)	100% of the voting securities are owned by New York-New York Hotel & Casino, LLC.
(15)	100% of the voting securities are owned by MGM MIRAGE Online, LLC.
(16)	100% of the voting securities are owned by Metropolitan Marketing, LLC.
(17)	100% of the voting securities are owned by Mirage Resorts, Incorporated.
(18)	100% of the voting securities are owned by Beau Rivage Resorts, Inc.
(19)	100% of the voting securities are owned by Bellagio, LLC.
(20)	99% of the voting securities are owned by Mirage Resorts, Incorporated and 1% are owned by Restaurant Ventures of Nevada, Inc.
(21)	100% of the voting securities are owned by THE MIRAGE CASINO-HOTEL.

3 EX-23 5 p68776exv23.htm EX-23

EXHIBIT 23

INDEPENDENT AUDITORS’ CONSENT

      We consent to the incorporation by reference in Registration Statements File Nos. 33-35023, 33-38616, 333-00187, 333-73155, 333-77061, 333-42729, 333-33200, 333-37350, 333-50880, 333-89190 and 333-105964 of MGM MIRAGE of our report dated January 28, 2004, except for Note 18, as to which the date is February 10, 2004, appearing in this Annual Report on Form 10-K of MGM MIRAGE for the year ended December 31, 2003.

DELOITTE & TOUCHE LLP

Las Vegas, Nevada
February 13, 2004 EX-31.1 6 p68776exv31w1.htm EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, J. Terrence Lanni, certify that:

1.	I have reviewed this annual report on Form 10-K of MGM MIRAGE;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 13, 2004	/s/ J. TERRENCE LANNI
	J. Terrence Lanni
	Chairman of the Board and Chief Executive Officer

EX-31.2 7 p68776exv31w2.htm EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, James J. Murren, certify that:

1.	I have reviewed this annual report on Form 10-K of MGM MIRAGE;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 13, 2004	/s/ JAMES J. MURREN
	James J. Murren
	President, Chief Financial Officer and Treasurer

EX-32.1 8 p68776exv32w1.htm EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report of MGM MIRAGE (the “Company”) on Form 10-K for the period ending December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Terrence Lanni, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ J. TERRENCE LANNI

J. Terrence Lanni
Chairman and Chief Executive Officer
February 13, 2004

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2 9 p68776exv32w2.htm EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report of MGM MIRAGE (the “Company”) on Form 10-K for the period ending December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James J. Murren, President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ JAMES J. MURREN

James J. Murren
President, Chief Financial Officer and Treasurer
February 13, 2004

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1(10)

                                                                EXHIBIT 10.1(10)

                                                              EXECUTION

                    THIRD AMENDED AND RESTATED LOAN AGREEMENT

                          Dated as of November 24, 2003

                                      among

                                   MGM MIRAGE,
                                   as Borrower

                                       and

                             MGM GRAND DETROIT, LLC
                                 as Co-Borrower

 The Lenders, and Co-Documentation Agents and Co-Syndication Agents herein named

                                       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



                                                                                                                    Page
                                                                                                                 
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS........................................................................    1

         1.1      Defined Terms...................................................................................    1

         1.2      Use of Defined Terms............................................................................   26

         1.3      Accounting Terms - Fiscal Periods...............................................................   26

         1.4      Rounding........................................................................................   27

         1.5      Exhibits and Schedules..........................................................................   27

         1.6      Miscellaneous Terms.............................................................................   27

         1.7      Letter of Credit Amounts........................................................................   27

ARTICLE 2 LOANS AND LETTERS OF CREDIT.............................................................................   28

         2.1      Committed Loans-General.........................................................................   28

         2.2      Base Rate Loans.................................................................................   29

         2.3      LIBOR Loans.....................................................................................   30

         2.4      Letters of Credit...............................................................................   30

         2.5      Competitive Advances............................................................................   36

         2.6      Swing Line......................................................................................   39

         2.7      Co-Borrowers....................................................................................   40

         2.8      Mandatory Reductions of the Term Commitment.....................................................   41

         2.9      Voluntary Reduction of the Commitments..........................................................   41

         2.10     Optional Termination of Commitments.............................................................   41

         2.11     Administrative Agent's Right to Assume Funds Available for Advances.............................   41

         2.12     Release and Reattachment of Collateral..........................................................   42

         2.13     Senior Indebtedness.............................................................................   43

         2.14     Collateral......................................................................................   43

ARTICLE 3 PAYMENTS AND FEES.......................................................................................   44

         3.1      Principal and Interest..........................................................................   44


                                      -i-



                                                                                                                  
         3.2      Joint Lead Arranger's Fees......................................................................   45

         3.3      Upfront Fees....................................................................................   45

         3.4      Unused Fees.....................................................................................   45

         3.5      Letter of Credit Fees...........................................................................   45

         3.6      Agency Fees.....................................................................................   46

         3.7      Increased Commitment Costs......................................................................   46

         3.8      LIBOR Costs and Related Matters.................................................................   47

         3.9      Late Payments...................................................................................   50

         3.10     Computation of Interest and Fees................................................................   50

         3.11     Non-Business Days...............................................................................   50

         3.12     Manner and Treatment of Payments................................................................   50

         3.13     Funding Sources.................................................................................   51

         3.14     Failure to Charge Not Subsequent Waiver.........................................................   52

         3.15     Administrative Agent's Right to Assume Payments Will be Made....................................   52

         3.16     Fee Determination Detail........................................................................   52

         3.17     Survivability...................................................................................   52

ARTICLE 4 REPRESENTATIONS AND WARRANTIES..........................................................................   54

         4.1      Existence and Qualification; Power; Compliance With Laws........................................   54

         4.2      Authority; Compliance With Other Agreements and Instruments and Government Regulations..........   54

         4.3      No Governmental Approvals Required..............................................................   55

         4.4      Subsidiaries....................................................................................   55

         4.5      Financial Statements............................................................................   55

         4.6      No Other Liabilities; No Material Adverse Changes...............................................   56

         4.7      Title to Property...............................................................................   56

         4.8      Public Utility Holding Company Act..............................................................   56

         4.9      Litigation......................................................................................   56

         4.10     Binding Obligations.............................................................................   56



                                      -ii-



                                                                                                                  
         4.11     No Default......................................................................................   56

         4.12     ERISA...........................................................................................   56

         4.13     Regulations T, U and X; Investment Company Act..................................................   57

         4.14     Disclosure......................................................................................   57

         4.15     Tax Liability...................................................................................   57

         4.16     Projections.....................................................................................   57

         4.17     Hazardous Materials.............................................................................   57

         4.18     Tax Shelter Regulations.........................................................................   57

ARTICLE 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)...............................   59

         5.1      Preservation of Existence.......................................................................   59

         5.2      Maintenance of Properties.......................................................................   59

         5.3      Maintenance of Insurance........................................................................   59

         5.4      Compliance With Laws............................................................................   59

         5.5      Inspection Rights...............................................................................   59

         5.6      Keeping of Records and Books of Account.........................................................   60

         5.7      Use of Proceeds.................................................................................   60

         5.8      New Restricted Subsidiaries.....................................................................   60

ARTICLE 6 NEGATIVE COVENANTS......................................................................................   61

         6.1      Payment of Subordinated Obligations.............................................................   61

         6.2      Disposition of Property.........................................................................   61

         6.3      Mergers.........................................................................................   61

         6.4      Hostile Acquisitions............................................................................   62

         6.5      Change in Nature of Business....................................................................   62

         6.6      Liens and Negative Pledges......................................................................   62

         6.7      Leverage Ratio..................................................................................   63

         6.8      Interest Charge Coverage Ratio..................................................................   63

         6.9      Investments in Insurance Subsidiary.............................................................   63



                                     -iii-



                                                                                                                  
ARTICLE 7 INFORMATION AND REPORTING REQUIREMENTS..................................................................   64

         7.1      Financial and Business Information..............................................................   64

         7.2      Compliance Certificates.........................................................................   65

ARTICLE 8 CONDITIONS..............................................................................................   67

         8.1      Initial Advances on the Closing Date............................................................   67

         8.2      Any Increasing Advance..........................................................................   68

         8.3      Any Letter of Credit............................................................................   69

ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT....................................................   70

         9.1      Events of Default...............................................................................   70

         9.2      Remedies Upon Event of Default..................................................................   72

ARTICLE 10 THE ADMINISTRATIVE AGENT...............................................................................   74

         10.1     Appointment and Authorization of Administrative Agent...........................................   74

         10.2     Delegation of Duties............................................................................   74

         10.3     Liability of Administrative Agent...............................................................   74

         10.4     Reliance by Administrative Agent................................................................   75

         10.5     Notice of Default...............................................................................   75

         10.6     Credit Decision; Disclosure of Information by Administrative Agent..............................   75

         10.7     Indemnification of Administrative Agent.........................................................   76

         10.8     Administrative Agent in its Individual Capacity.................................................   76

         10.9     Successor Administrative Agent..................................................................   76

         10.10    Administrative Agent May File Proofs of Claim...................................................   77

         10.11    Other Agents; Arrangers and Managers............................................................   78

         10.12    Proportionate Interest in any Collateral........................................................   78

         10.13    Foreclosure on Collateral.......................................................................   78

         10.14    Intercreditor Arrangements; Attornment Agreements...............................................   78

         10.15    No Obligations of Borrower and the Co-Borrowers.................................................   79



                                      -iv-



                                                                                                                  
ARTICLE 11 MISCELLANEOUS..........................................................................................   80

         11.1     Cumulative Remedies; No Waiver..................................................................   80

         11.2     Amendments; Consents............................................................................   80

         11.3     Attorney Costs, Expenses and Taxes..............................................................   81

         11.4     Nature of Lenders' Obligations..................................................................   82

         11.5     Survival of Representations and Warranties......................................................   82

         11.6     Notices.........................................................................................   82

         11.7     Execution of Loan Documents.....................................................................   84

         11.8     Binding Effect; Assignment......................................................................   84

         11.9     Right of Setoff.................................................................................   87

         11.10    Sharing of Setoffs..............................................................................   87

         11.11    Indemnification by Borrower and the Co-Borrowers................................................   88

         11.12    Nonliability of the Lenders.....................................................................   88

         11.13    No Third Parties Benefited......................................................................   89

         11.14    Confidentiality.................................................................................   89

         11.15    Further Assurances..............................................................................   90

         11.16    Integration.....................................................................................   90

         11.17    Governing Law...................................................................................   90

         11.18    Severability of Provisions......................................................................   90

         11.19    Headings........................................................................................   90

         11.20    Time of the Essence.............................................................................   90

         11.21    Foreign Lenders and Participants................................................................   90

         11.22    Hazardous Material Indemnity....................................................................   92

         11.23    Gaming Boards...................................................................................   93

         11.24    Lien Releases...................................................................................   93

         11.25    Termination; Release of Liens...................................................................   93

         11.26    Removal of a Lender.............................................................................   93



                                       -v-



                                                                                                                  
         11.27    Joint and Several...............................................................................   94

         11.28    Non-Involvement of Tracinda.....................................................................   94

         11.29    Pledged Stock in Gaming Companies...............................................................   94

         11.30    Payments Set Aside..............................................................................   95

         11.31    Waiver of Right to Trial by Jury................................................................   95

         11.32    Purported Oral Amendments.......................................................................   95



Exhibits

A - Assignment Agreement
B - Assumption Agreement
C - Committed Revolving Note
D - Competitive Bid
E - Competitive Bid Request
F - Competitive Revolving Note
G - Compliance Certificate
H - Pricing Certificate
I - Request for Loan
J - Term Note
K - Joint Borrower Provisions

Schedules

1.1      Theme Park Property
4.3      Governmental Approvals
4.4      Subsidiaries
4.7      Existing Liens and Negative Pledges
11.6     Notice Addresses

                                      -vi-



                    THIRD AMENDED AND RESTATED LOAN AGREEMENT

                          Dated as of November 24, 2003

         This Third Amended and Restated Loan Agreement ("Agreement") is entered
into by and among MGM MIRAGE, a Delaware corporation formerly known as MGM
Grand, Inc. ("Borrower") and MGM Grand Detroit, LLC, a Delaware limited
liability company ("Detroit"), as initial Co-Borrower, each Guarantor which may
hereafter be designated as an additional Co-Borrower pursuant to Section 2.7,
each lender whose name is set forth on the signature pages of this Agreement and
each lender which may hereafter become a party to this Agreement pursuant to
Section 11.8 (collectively, the "Lenders" and individually, a "Lender"),
Deutsche Bank Trust Company Americas and JPMorgan Chase Bank, as Co-Syndication
Agents, Citicorp USA, Inc. and Wells Fargo Bank, N.A., as Co-Documentation
Agents, and Bank of America, N.A., as Administrative Agent. Borrower, Detroit
and each Co-Borrower which hereafter becomes a Party hereto pursuant to Section
2.7, the Administrative Agent and the other Creditors, covenant and agree with
reference to the following facts:

         A.       Borrower, MGM Grand Atlantic City, Inc., a New Jersey
corporation ("Atlantic City") and Detroit have previously entered into the
Existing Multi-Year Agreement and the Existing Short Term Agreement described
herein.

         B.       Effective on the Closing Date, Borrower, Detroit (as a
Co-Borrower), the Administrative Agent and the Lenders desire to amend and
restate the Existing Multi-Year Agreement in its entirety by this Agreement, and
to provide, inter alia (and subject to the terms and conditions set forth
herein), for an increase in the amount of the credit facilities provided by the
Existing Multi-Year Agreement, an extension of the maturity thereof and
revisions to the covenants of Borrower set forth therein.

         C.       Atlantic City shall no longer be a Co-Borrower under this
Agreement, and by its execution of the Subsidiary Guaranty, consents to the
amendment and restatement of the Existing Multi-Year Agreement as set forth
herein without its being a Co-Borrower.

         D.       Effective on the Closing Date, the Existing Short Term
Agreement shall be terminated.

         E.       While not parties hereto, Banc of America Securities LLC and
J.P. Morgan Securities Inc. have served as Joint Lead Arrangers and Joint Book
Managers for the credit facilities described herein.

         NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, Borrower, Detroit, each Co-Borrower
which hereafter becomes a Party hereto pursuant to Section 2.7, and each of the
Creditors, hereby amend and restate the Existing Multi-Year Agreement as of the
Closing Date, and covenant and agree as follows:

                                   ARTICLE 1
                        DEFINITIONS AND ACCOUNTING TERMS

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

                  "Absolute Rate Bid" means a Competitive Bid to provide
         Competitive Advances on the basis of a fixed interest rate.

                                      -1-



                  "Acquisition" means any transaction, or any series of related
         transactions, by which Borrower or its Restricted Subsidiaries directly
         or indirectly (i) acquire any going business or all or substantially
         all of the assets of any Person, or any division thereof, whether
         through purchase of assets, merger or otherwise, or (ii) acquire (in
         one transaction or as the most recent transaction in a series of
         transactions) control of at least a majority in ordinary voting power
         of the securities of a corporation which have ordinary voting power for
         the election of directors, or (iii) acquire control of a majority
         ownership interest in any partnership, joint venture, limited liability
         company or any other Person.

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

                  "Administrative Agent's Office" means the Administrative
         Agent's address as set forth on Schedule 11.6, or such other address as
         the Administrative Agent hereafter may designate by written notice to
         Borrower and the Lenders.

                  "Advance" means any advance made or to be made by any Lender
         to Borrower or any Co-Borrower as provided in Article 2, and includes
         each Base Rate Advance, LIBOR Advance, Committed Advance, Competitive
         Advance and Swing Line Advance.

                  "Affiliate" means, as to any Person, any other Person which
         directly or indirectly controls, or is under common control with, or is
         controlled by, such Person. As used in this definition, "control" (and
         the correlative terms, "controlled by" and "under common control with")
         shall mean possession, directly or indirectly, of power to direct or
         cause the direction of management or policies (whether through
         ownership of securities or partnership or other ownership interests, by
         contract or otherwise); provided that, in any event, any Person that
         owns, directly or indirectly, 10% 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 10% 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 presumed (subject to rebuttal by a
         preponderance of the evidence) to control such corporation, partnership
         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 and as a Joint Lead
         Arranger), and the officers, directors, employees, agents and
         attorneys-in-fact of such Persons and Affiliates.

                  "Agreement" means this Third Amended and Restated Loan
         Agreement, either as originally executed, or as it may from time to
         time be supplemented, modified, amended, restated or extended.

                  "Applicable Leverage Ratio" means, as of each date of
         determination, the Leverage Ratio in effect as of the last day of the
         Fiscal Quarter ending approximately 45 days prior to the first day of
         the Pricing Period in which the date of determination occurs.

                  "Applicable Rates" means, as of any date of determination, the
         following percentages per annum, based upon the Pricing Level on that
         date:

                                      -2-





                 LIBOR       BASE RATE   UNUSED FEE    STANDBY LETTER OF
PRICING LEVEL    MARGIN       MARGIN        RATE           CREDIT FEE
- ------------------------------------------------------------------------
                                           
      I          1.000%      0.000%        0.200%            1.000%
     II          1.250%      0.250%        0.250%            1.250%
     III         1.500%      0.500%        0.250%            1.500%
     IV          1.625%      0.625%        0.300%            1.625%
      V          1.750%      0.750%        0.300%            1.750%


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

                  "Assumption Agreement" means each Assumption Agreement
         hereafter executed by a Co-Borrower pursuant to Section 2.7,
         substantially in the form of Exhibit B either as originally executed or
         as the same may from time to time be supplemented, modified, amended,
         renewed, extended or supplanted.

                  "Atlantic City" means MGM Grand Atlantic City, Inc., a New
         Jersey corporation, its successors and permitted assigns.

                  "Attorney Costs" means and includes all fees, expenses and
         disbursements of any law firm or other external counsel and, without
         duplication, the allocated cost of internal legal services and all
         expenses and disbursements of internal counsel.

                  "Average Quarterly Funded Debt" means, as of the last day of
         each Fiscal Quarter, the average of the principal amount of Funded Debt
         outstanding on the last day of each of the three calendar months
         comprising such Fiscal Quarter, provided that if any Material
         Transaction occurs during the relevant Fiscal Quarter, Average
         Quarterly Funded Debt shall be adjusted on a pro forma basis (a) in the
         case of any Material Transaction which is a Disposition, to exclude
         Funded Debt in an amount equal to the consideration received by
         Borrower and its Restricted Subsidiaries in the form of Cash and Cash
         Equivalents in connection with such Disposition from each of the
         constituent calendar months ending prior to the receipt of such
         consideration, and (b) in the case of any Material Transaction which is
         an Acquisition, to increase Funded Debt for each of the constituent
         calendar months ending prior to the payment of such consideration by
         the amount of the consideration paid by Borrower and its Restricted
         Subsidiaries in Cash and Cash Equivalents in connection with such
         Acquisition.

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

                  "Base Rate" means for any day a fluctuating rate per annum
         equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and
         (b) the rate of interest in effect for such day as publicly announced
         from time to time by Bank of America as its "prime rate." The "prime
         rate" is a rate set by Bank of America based upon various factors
         including Bank of America's costs and desired return, general economic
         conditions and other factors, and is used as a reference point for
         pricing some loans, which may be priced at, above, or below such
         announced rate. Any change in such rate announced by Bank of America
         shall take effect at the opening of business on the day specified in
         the public announcement of such change.

                  "Base Rate Advance" means an Advance made hereunder and
         specified to be a Base Rate Advance in accordance with Article 2.

                                      -3-



                  "Base Rate Loan" means a Loan made hereunder and specified to
         be a Base Rate Loan in accordance with Article 2.

                  "Base Rate Margin" means the applicable per annum percentage
         set forth in the definition of "Applicable Rates".

                  "Borrower" means MGM MIRAGE, a Delaware corporation, its
         successors and permitted assigns.

                  "Borrower Group EBITDA" means, for any fiscal period, the
         EBITDA of Borrower and its Restricted Subsidiaries for that fiscal
         period.

                  "Business Day" and "Banking Day" mean any day other than a
         Saturday, Sunday or other day on which commercial banks are authorized
         to close under the Laws of, or are in fact closed in the State of New
         York or the state where the Administrative Agent's Office is located
         and, if such day relates to any LIBOR Loan, means any such day on which
         dealings in Dollar deposits are conducted by and between banks in the
         London interbank Eurodollar Market.

                  "Capital Expenditure" means any expenditure for or related to
         fixed assets or purchased intangibles that is treated as a capital
         expenditure under GAAP, including any amount which is required to be
         treated as an asset subject to a Capital Lease Obligation.

                  "Capital Lease Obligations" means all monetary obligations of
         a Person under any leasing or similar arrangement which, in accordance
         with GAAP, is classified as a capital lease.

                  "Cash" means, when used in connection with any Person, all
         monetary and non-monetary items owned by that Person that are treated
         as cash in accordance with GAAP, consistently applied.

                  "Cash Equivalents" means, when used in connection with any
         Person, that Person's Investments in:

                           (a)      Government Securities due within one year
         after the date of the making of the Investment;

                           (b)      readily marketable direct obligations of any
         State of the United States of America or any political subdivision of
         any such State or any public agency or instrumentality thereof given on
         the date of such Investment a credit rating of at least Aa by Moody's
         or AA by S&P in each case due within one year from the making of the
         Investment;

                           (c)      certificates of deposit issued by, bank
         deposits in, eurodollar deposits through, bankers' acceptances of, and
         repurchase agreements covering Government Securities executed by any
         Bank or by any bank incorporated under the Laws of the United States of
         America, any State thereof or the District of Columbia and having on
         the date of such Investment combined capital, surplus and undivided
         profits of at least $250,000,000, or total assets of at least
         $5,000,000,000, in each case due within one year after the date of the
         making of the Investment;

                           (d)      certificates of deposit issued by, bank
         deposits in, eurodollar deposits through, bankers' acceptances of, and
         repurchase agreements covering Government Securities executed by any
         branch or office located in the United States of America of a bank
         incorporated under the Laws of any jurisdiction outside the United
         States of America having on the date of

                                      -4-



         such Investment combined capital, surplus and undivided profits of at
         least $500,000,000, or total assets of at least $15,000,000,000, in
         each case due within one year after the date of the making of the
         Investment;

                           (e)      repurchase agreements covering Government
         Securities executed by a broker or dealer registered under Section
         15(b) of the Securities Exchange Act of 1934, as amended, having on the
         date of the Investment capital of at least $50,000,000, due within 90
         days after the date of the making of the Investment; provided that the
         maker of the Investment receives written confirmation of the transfer
         to it of record ownership of the Government Securities on the books of
         a "primary dealer" in such Government Securities or on the books of
         such registered broker or dealer, as soon as practicable after the
         making of the Investment;

                           (f)      readily marketable commercial paper or other
         debt securities issued by corporations doing business in and
         incorporated under the Laws of the United States of America or any
         State thereof or of any corporation that is the holding company for a
         bank described in clause (c) or (d) above given on the date of such
         Investment a credit rating of at least P-1 by Moody's or A-1 by S&P, in
         each case due within one year after the date of the making of the
         Investment;

                           (g)      "money market preferred stock" issued by a
         corporation incorporated under the Laws of the United States of America
         or any State thereof (i) given on the date of such Investment a credit
         rating of at least Aa by Moody's Investors Service, Inc. and AA by S&P,
         in each case having an investment period not exceeding 50 days or (ii)
         to the extent that investors therein have the benefit of a standby
         letter of credit issued by a Lender or a bank described in clauses (c)
         or (d) above;

                           (h)      a readily redeemable "money market mutual
         fund" sponsored by a bank described in clause (c) or (d) hereof, or a
         registered broker or dealer described in clause (e) hereof, that has
         and maintains an investment policy limiting its investments primarily
         to instruments of the types described in clauses (a) through (g) hereof
         and given on the date of such Investment a credit rating of at least Aa
         by Moody's and AA by S & P; and

                           (i)      corporate notes or bonds having an original
         term to maturity of not more than one year issued by a corporation
         incorporated under the Laws of the United States of America or any
         State thereof, or a participation interest therein; provided that any
         commercial paper issued by such corporation is given on the date of
         such Investment a credit rating of at least Aa by Moody's and AA by
         S&P.

                  "Cash Flow" means, for any period, and without duplication,
         the sum of (a) Borrower Group EBITDA for that period, plus (b) Other
         Available EBITDA for that period, plus (c) New Project Annualized
         EBITDA, provided that if any Material Transaction occurs during that
         period, Cash Flow shall be adjusted on a pro forma basis (i) in the
         case of any Material Transaction which is a Disposition, to exclude for
         the entire period the results of operation of any Person or assets
         which are the subject of such Disposition, and (ii) in the case of any
         Material Transaction which is an Acquisition, to include for the entire
         period the results of operation of any Person or assets which are the
         subject of such Acquisition.

                  "Cash Interest Charges" means, for any period, that portion of
         Interest Charges of Borrower and its Restricted Subsidiaries which are
         paid or currently payable in Cash during that period excluding
         intercompany accounts, provided that if any Material Transaction occurs
         during that period, Cash Interest Charges shall be adjusted on a pro
         forma basis (a) in the case of any

                                      -5-



         Material Transaction which is a Disposition, to exclude Interest
         Charges associated with Funded Debt in an amount equal to the
         consideration received by Borrower and its Restricted Subsidiaries in
         the form of cash and Cash Equivalents in connection with such
         Disposition, and (b) in the case of any Material Transaction which is
         an Acquisition, to increase Interest Charges by the amount of Interest
         Charges which would be associated with Funded Debt in an amount equal
         to the consideration paid by Borrower and its Restricted Subsidiaries
         in the form of cash and Cash Equivalents in connection with such
         Acquisition (in each case, for that portion of the period occurring
         prior to the receipt of such consideration, and at an interest rate
         which is equal, as of the time of calculation, to the rate of interest
         associated with LIBOR Loans under this Agreement).

                  "Change in Control" means (a) any transaction or series of
         related transactions in which any Unrelated Person or two or more
         Unrelated Persons acting in concert acquire beneficial ownership
         (within the meaning of Rule 13d-3(a)(1) under the Securities Exchange
         Act of 1934, as amended), directly or indirectly, of 25% or more of the
         outstanding common stock of Borrower or (b) during any period of 24
         consecutive months, individuals who at the beginning of such period
         constituted the board of directors of Borrower (together with any new
         or replacement directors whose election by the board of directors, or
         whose nomination for election, was approved by a vote of at least 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 reelection was previously so approved) cease for any
         reason to constitute a majority of the directors then in office,
         provided, however, that no Change in Control shall exist for so long as
         Tracinda Corporation, a Nevada corporation, and its Affiliates continue
         to be the beneficial owner of 25% or more of the common stock of
         Borrower and no other Person is the owner of more of the common stock
         of Borrower than Tracinda Corporation and its Affiliates.

                  "Closing Date" means the time and Business Day on which the
         conditions set forth in Section 8.1 are satisfied or waived. The
         Administrative Agent shall notify Borrower and the Creditors of the
         date that is the Closing Date.

                  "Co-Borrowers" means, collectively, Detroit and each other
         Guarantor which is hereafter designated as a Co-Borrower pursuant to
         Section 2.7.

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

                  "Co-Documentation Agents" and "Co-Syndication Agents" means
         the Persons identified in the preamble to this Agreement as such.

                  "Collateral Agent" means U.S. Bank, National Association, or
         any successor Collateral Agent under the Intercreditor Agreement.

                  "Collateral Documents" means each mortgage, deed of trust,
         ship mortgage, aircraft chattel mortgage, pledge agreement, security
         agreement or other instrument, document or agreement now or hereafter
         executed pursuant to the Intercreditor Agreement or otherwise to secure
         the Obligations or any of the Qualified Obligations.

                  "Collateral Event" means any event or circumstance which
         entitles the holders of any class of Senior Indebtedness of the
         Borrower and its Restricted Subsidiaries to receive the benefit of
         Liens on all or any part of the Property of the Borrower or its
         Restricted Subsidiaries, which Liens would be prohibited hereunder but
         for the provisions of Section 6.6(g).

                                      -6-



                  "Collateral Release" has the meaning set forth for that term
         in Section 2.12.

                  "Commercial Letter of Credit" means each Letter of Credit
         issued to support the purchase of goods by Borrower or any Co-Borrower
         which is determined to be a commercial letter of credit by the Issuing
         Lender.

                  "Commitments" means, collectively, the Revolving Commitment
         and the Term Commitment.

                  "Committed Advances" means an Advance by a Lender as a ratable
         part of a Committed Loan pursuant to such Lender's Pro Rata Share of
         the applicable Commitment.

                  "Committed Loan" means a Loan consisting of ratable Advances
         by the Lenders pursuant to their respective Pro Rata Shares of the
         relevant Commitment.

                  "Committed Revolving Note" means each promissory note made by
         Borrower and each Co-Borrower to a Lender evidencing the Advances made
         by that Lender under its Pro Rata Share of the Revolving Commitment,
         substantially in the form of Exhibit C, either as originally executed
         or as the same may from time to time be supplemented, modified,
         amended, renewed, extended or supplanted.

                  "Competitive Advance" means an Advance made to Borrower or any
         Co-Borrower under the Revolving Commitment by any Lender not determined
         by that Lender's Pro Rata Share of the Revolving Commitment pursuant to
         Section 2.5.

                  "Competitive Bid" means (a) a written bid to provide a
         Competitive Advance substantially in the form of Exhibit D, signed by a
         Responsible Official of a Lender and properly completed to provide all
         information required to be included therein or (b) at the election of
         any Lender, a telephonic bid by that Lender to provide a Competitive
         Advance which, if so made, shall be made by a Responsible Official of
         that Lender and deemed to have been made incorporating the substance of
         Exhibit D, and shall promptly be confirmed by a written Competitive
         Bid.

                  "Competitive Bid Request" means (a) a written request
         submitted by Borrower or any Co-Borrower to the Administrative Agent to
         provide a Competitive Bid, substantially in the form of Exhibit E,
         signed by a Responsible Official of Borrower and any relevant
         Co-Borrower and properly completed to provide all information required
         to be included therein or (b) at the election of Borrower, a telephonic
         request by Borrower to the Administrative Agent to provide a
         Competitive Bid which, if so made, shall be made by a Responsible
         Official of Borrower and deemed to have been made incorporating the
         substance of Exhibit E, and shall promptly be confirmed by a written
         Competitive Bid Request.

                  "Competitive Revolving Note" means each promissory note made
         by Borrower and each Co-Borrower to a Lender evidencing the Competitive
         Advances made under the Revolving Commitment by that Lender,
         substantially in the form of Exhibit F, either as originally executed
         or as the same may from time to time be supplemented, modified,
         amended, renewed, extended or supplanted.

                  "Compliance Certificate" means a certificate substantially in
         the form of Exhibit G, properly completed and signed by a Senior
         Officer of Borrower and each Co-Borrower.

                                      -7-



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

                  "Creditors" means, collectively, the Administrative Agent, the
         Issuing Lender, the Swing Line Lender, each Lender and, where the
         context requires, any one or more of them.

                  "Debt Rating" means, as of any date of determination, the
         credit rating assigned to the credit facilities provided hereunder
         whether senior secured or senior unsecured (or, if the facilities
         hereunder are not rated, the corporate rating assigned to Borrower's
         most senior indebtedness), by a nationally recognized credit reporting
         agency selected by the Borrower, reasonably approved by the
         Administrative Agent, and not objected to by the Requisite Lenders
         within five Business Days following notice of such designation).

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

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

                  "Default Rate" means the interest rate prescribed in Section
         3.9.

                  "Defaulting Lender" means any Lender that (a) has failed to
         fund any portion of the Loans, participations in L/C Obligations or
         participations in Swing Line Loans required to be funded by it
         hereunder within one Business Day of the date required to be funded by
         it hereunder, (b) has otherwise failed to pay over to the
         Administrative Agent or any other Lender any other amount required to
         be paid by it hereunder within one Business Day of the date when due,
         unless the subject of a good faith dispute, or (c) has been deemed
         insolvent or become the subject of a bankruptcy or insolvency
         proceeding.

                  "Deposit Account" means separate accounts located at Bank of
         America as to Borrower and each Co-Borrower designated by Borrower or
         such Co-Borrower with the reasonable approval of the Administrative
         Agent.

                  "Designated Market" means, with respect to any LIBOR Loan, (a)
         the London Eurodollar Market, (b) if prime banks in the London
         Eurodollar Market are at the relevant time not accepting deposits of
         Dollars or if the Administrative Agent determines in good faith that
         the London Eurodollar Market does not represent at the relevant time
         the effective pricing to the Lenders for deposits of Dollars in the
         London Eurodollar Market, the Cayman Islands Eurodollar Market or (c)
         if prime banks in the Cayman Islands Eurodollar Market are at the
         relevant time not accepting deposits of Dollars or if the
         Administrative Agent determines in good faith that the Cayman Islands
         Eurodollar Market does not represent at the relevant time the effective
         pricing to the Lenders for deposits of Dollars in the Cayman Islands
         Eurodollar Market, such other Eurodollar Market as may from time to
         time be selected by the Administrative Agent with the approval of
         Borrower, the Co-Borrowers and the Requisite Lenders. The
         Administrative Agent will endeavor to provide prompt notice to Borrower
         and the Co-Borrowers of any change in the location of the Designated
         Market.

                                      -8-



                  "Detroit" means MGM Grand Detroit, LLC, a Delaware limited
         liability company, it successors and permitted assigns.

                  "Disposition" means the voluntary sale, transfer or other
         disposition, in one transaction or any series of related transactions,
         of any asset.

                  "Disqualification" means, with respect to any Creditor or any
         holder of Subordinated Obligations:

                           (a)      the failure of that Person timely to file
         pursuant to applicable Gaming Laws (i) any application requested of
         that Person by any Gaming Board in connection with any licensing
         required of that Person as a lender to Borrower or a Co-Borrower or
         (ii) any required application or other papers in connection with
         determination of the suitability of that Person as a lender to Borrower
         or a Co-Borrower;

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

                           (c)      any final determination by a Gaming Board
         pursuant to applicable Gaming Laws (i) that such Person is "unsuitable"
         as a lender to Borrower or a Co-Borrower, (ii) that such Person shall
         be "disqualified" as a lender to Borrower or a Co-Borrower or (iii)
         denying the issuance to that Person of any license required under
         applicable Gaming Laws to be held by all lenders to Borrower or any
         Co-Borrower.

                  "Distribution" means, with respect to any shares of capital
         stock or any warrant or option to purchase an equity security or other
         equity security issued by a Person, (a) the retirement, redemption,
         purchase or other acquisition for Cash or for Property (other than
         capital stock, or any warrants or options to purchase an equity
         security or other security of such Person) by such Person of any such
         security, (b) the declaration or (without duplication) payment by such
         Person of any dividend in Cash or in Property (other than capital
         stock, or any warrants or options to purchase an equity security or
         other security of such Person) on or with respect to any such security,
         (c) any Investment by such Person in the holder of 5% or more of any
         such security if a purpose of such Investment is to avoid
         characterization of the transaction as a Distribution and (d) any other
         payment in Cash or Property (other than capital stock, or any warrants
         or options to purchase an equity security or other security of such
         Person) by such Person constituting a distribution under applicable
         Laws with respect to such security.

                  "Dollars" or "$" means United States dollars.

                  "EBITDA" means, with respect to any fiscal period and with
         respect to any Person, the sum of (a) Net Income of such Person for
         that period, plus (b) any extraordinary loss reflected in such Net
         Income and, without duplication, any loss associated with the early
         retirement of Indebtedness, minus (c) any extraordinary gain reflected
         in such Net Income, plus (d) Interest Charges of such Person for that
         period, plus (e) the aggregate amount of federal, state and local taxes
         on or measured by income of such Person for that period (whether or not
         payable during that period) plus (f) depreciation, amortization and all
         non-recurring and/or other non-cash expenses to the extent deducted in
         arriving at Net Income for that period, plus (g) expenses classified as
         "pre-opening and start-up expenses" on the applicable financial
         statements of that Person for that fiscal period, plus (h) minority
         interest, in each case as determined in accordance with GAAP.

                                      -9-



                  "Eligible Assignee" means (a) another Lender, (b) with respect
         to any Lender, any Affiliate of that Lender having combined capital and
         surplus of $100,000,000 or more, (c) any commercial bank having a
         combined capital and surplus of $100,000,000 or more, (d) any insurance
         company engaged in the business of writing insurance which (i) has a
         net worth of $200,000,000 or more, (ii) is engaged in the business of
         lending money and extending credit under credit facilities
         substantially similar to those extended under this Agreement and (iii)
         is operationally and procedurally able to meet the obligations of a
         Lender hereunder to the same degree as a commercial bank and (e) any
         other financial institution (including a mutual fund or other fund)
         having total assets of $100,000,000 or more which meets the
         requirements set forth in subclauses (ii) and (iii) of clause (d)
         above; provided that each Eligible Assignee must either (a) be
         organized under the Laws of the United States of America, any State
         thereof or the District of Columbia or (b) be organized under the Laws
         of the Cayman Islands or any country which is a member of the
         Organization for Economic Cooperation and Development, or a political
         subdivision of such a country, and (i) act hereunder through a branch,
         agency or funding office located in the United States of America, (ii)
         be exempt from withholding of tax on interest and deliver the documents
         related thereto pursuant to Section 11.21, and (iii) to the extent
         required under applicable Gaming Laws, each Eligible Assignee must not
         be the subject of a Disqualification.

                  "Enhanced LIBOR Margin" means, for any period, the sum of (i)
         the LIBOR Margin then in effect plus (ii) such interest rate margin as
         the Requisite Lenders specify is necessary to adjust LIBOR to a rate
         which represents the effective pricing to such Lenders for deposits of
         Dollars in the Designated Market in the relevant amount for the
         applicable Interest Period and which adequately and fairly reflects the
         cost to such Lenders of making the applicable LIBOR Advances.

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

                  "ERISA Affiliate" means, with respect to any Person, any other
         Person (or any trade or business, whether or not incorporated) that is
         under common control with that Person within the meaning of Section 414
         of the Code.

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

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

                  "Existing Letters of Credit" means the letters of credit
         issued under the Existing Multi-Year Agreement and outstanding as of
         the Closing Date.

                  "Existing Multi-Year Agreement" means the Second Amended and
         Restated Loan Agreement dated as of April 10, 2000 among Borrower, the
         lenders referred to therein, and the Administrative Agent, as amended,
         to which Atlantic City and Detroit are parties as additional
         Co-Borrowers, as heretofore amended.

                  "Existing Short Term Agreement" means the Third Amended and
         Restated 364-Day Loan Agreement dated as of April 4, 2003 among
         Borrower, the lenders referred to therein, and the Administrative
         Agent, as amended, to which Atlantic City and Detroit are parties as
         additional Co-Borrowers.

                                      -10-



                  "Existing Subordinated Obligations" means, collectively, (a)
         the Borrower's $710,000,000 of 9 3/4 % senior subordinated notes due
         2007, issued pursuant to the Indenture dated as of May 31, 2000 between
         the Borrower and The Bank of New York, as Trustee, and (b) the
         Borrower' $400,000,000 of 8 3/8% senior subordinated notes due 2011
         issued pursuant to the Indenture dated as of January 23, 2001 between
         the Borrower and United States Trust Company of New York, as Trustee.

                  "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 Business Day next succeeding such day; provided that (a) if
         such day is not a Business Day, the Federal Funds Rate for such day
         shall be such rate on such transactions on the next preceding Business
         Day as so published on the next succeeding Business Day, and (b) if no
         such rate is so published on such next succeeding Business Day, the
         Federal Funds Rate for such day shall be the average rate (rounded
         upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
         Bank of America on such day on such transactions as determined by the
         Administrative Agent.

                  "Fiscal Quarter" means the fiscal quarter of Borrower
         consisting, subject to Section 1.3, of the three calendar month periods
         ending on each March 31, June 30, September 30 and December 31.

                  "Fiscal Year" means the fiscal year of Borrower consisting,
         subject to Section 1.3, of the twelve month period ending on each
         December 31.

                  "Foreign Lender" has the meaning specified in Section
         11.21(a)(1).

                  "Funded Debt" means, as of any date of determination, the sum
         (without duplication) of (a) all principal Indebtedness of Borrower and
         its Restricted Subsidiaries for borrowed money (including debt
         securities issued by Borrower or any of its Restricted Subsidiaries) on
         that date (other than any such Indebtedness to the extent it has been
         legally or contractually defeased or is the subject of a deposit in
         Cash or Cash Equivalents for the purpose of defeasing the same in
         accordance with its terms), plus (b) the aggregate amount of all
         Capital Lease Obligations of Borrower and its Restricted Subsidiaries
         on that date, plus (c) all Guaranty Obligations issued by Borrower and
         its Restricted Subsidiaries, provided that the amount of any Guaranty
         Obligation or letter of credit shall be deemed to be zero unless and
         until (i) in the case of Guaranty Obligations in respect of letters of
         credit, a drawing is made with respect thereto, and (ii) in the case of
         any other Guaranty Obligations, demand for payment is made with respect
         thereto.

                  "GAAP" means, as of any date of determination, accounting
         principles (a) set forth as generally accepted in then currently
         effective Opinions of the Accounting Principles Board of the American
         Institute of Certified Public Accountants, (b) set forth as generally
         accepted in then currently effective statements of the Financial
         Accounting Standards Board or (c) that are then approved by such other
         entity as may be approved by a significant segment of the accounting
         profession in the United States of America. The term "consistently
         applied," as used in connection therewith, means that the accounting
         principles applied are consistent in all material respects with those
         applied at prior dates or for prior periods.

                  "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, (f) the

                                      -11-



         Michigan Gaming Control Board, and (g) any other Governmental Agency
         (including Governmental Agencies associated with foreign governments)
         that holds regulatory, licensing or permit authority over gambling,
         gaming or casino activities conducted by Borrower, any Co-Borrower or
         any Restricted Subsidiary 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 Borrower and its
         Subsidiaries within its jurisdiction, in each case to the extent
         applicable to Borrower and its Restricted Subsidiaries.

                  "Golden Nugget Properties" means, collectively (i) the shares
         of the capital stock of GNLV, Corp., GNL, Corp. and the membership
         interests in Golden Nugget Experience, LLC, (ii) the Golden Nugget
         Hotel and Casino in Las Vegas, Nevada, the Golden Nugget Hotel and
         Casino in Laughlin, Nevada, and the Nevada Club Inn in Bullhead City,
         Arizona, and (iii) all Property used in connection with the operation
         of the businesses associated therewith.

                  "Government Securities" means readily marketable (a) direct
         full faith and credit obligations of the United States of America or
         obligations guaranteed by the full faith and credit of the United
         States of America and (b) obligations of an agency or instrumentality
         of, or corporation owned, controlled or sponsored by, the United States
         of America that are generally considered in the securities industry to
         be implicit obligations of the United States of America.

                  "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 or (c) any court or administrative tribunal of competent
         jurisdiction.

                  "Guarantors" means, collectively, each Restricted Subsidiary
         of Borrower which exists as of the Closing Date, and each other
         Restricted Subsidiary of Borrower which hereafter becomes a Guarantor
         pursuant to Section 5.8, provided that any Guarantor which is sold or
         otherwise transferred in a Disposition permitted by Section 6.2 may be
         released from the Guaranty in accordance with Section 11.2(d)(iii).

                  "Guaranty" means each of the continuing guaranties of the
         Obligations (or, in the case of Detroit, of the portion of the
         Obligations which are actually borrowed or received by Detroit)
         executed and delivered by the Guarantors on the Closing Date,
         substantially in the form of the Subsidiary Guaranty executed in
         connection with the Existing Multi-Year Agreement.

                  "Guaranty Obligation" means, as to any Person (without
         duplication), any (a) guarantee by that Person of Indebtedness of, or
         other obligation performable by, any other Person or (b) assurance
         given by that Person to an obligee of any other Person with respect to
         the performance of an obligation by, or the financial condition of,
         such other Person, whether direct, indirect or contingent, including
         any purchase or repurchase agreement covering such obligation or any
         collateral security therefor, any agreement to provide funds (by means
         of loans, capital contributions or otherwise) to such other Person, any
         agreement to support the solvency or level of any balance sheet or
         income statement item of such other Person or any "keep-well" or other
         arrangement of whatever nature given for the purpose of assuring or
         holding harmless such obligee against loss with respect to any
         obligation of such other Person; provided, however, that the term
         Guaranty Obligation shall not include endorsements of instruments for
         deposit or collection in the ordinary course of business.

                                      -12-





                  "Hazardous Materials" means substances defined as "hazardous
         substances" pursuant to the Comprehensive Environmental Response,
         Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.,
         or as "hazardous", "toxic" or "pollutant" substances or as "solid
         waste" pursuant to the Hazardous Materials Transportation Act, 49
         U.S.C. Section 1801, et seq., the Resource Conservation and Recovery
         Act, 42 U.S.C. Section 6901, et seq., or as "friable asbestos" pursuant
         to the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., in
         each case as such Laws are amended from time to time.

                  "Hazardous Materials Laws" means all Laws governing the
         treatment, transportation or disposal of Hazardous Materials applicable
         to any of the Real Property.

                  "Indebtedness" means, as to any Person (without duplication),
         (a) indebtedness of such Person for borrowed money or for the deferred
         purchase price of Property (excluding trade and other accounts payable
         in the ordinary course of business in accordance with ordinary trade
         terms), including any Guaranty Obligation for any such indebtedness,
         (b) indebtedness of such Person of the nature described in clause (a)
         that is non-recourse to the credit of such Person but is secured by
         assets of such Person, to the extent of the value of such assets, (c)
         Capital Lease Obligations of such Person, (d) indebtedness of such
         Person arising under bankers' acceptance facilities or under facilities
         for the discount of accounts receivable of such Person, (e) any direct
         or contingent obligations of such Person under letters of credit issued
         for the account of such Person, and (f) any net obligations of such
         Person under Swap Agreements.

                  "Indemnified Liabilities" has the meaning set forth in Section
         11.11.

                  "Indemnitees" has the meaning set forth in Section 11.11.

                  "Insurance Subsidiary" means MGMM Insurance Company, a Vermont
         corporation, which is a captive insurance company approved by the
         Vermont Department of Banking, Insurance, Securities and Health Care
         Administration engaging solely in the business of facilitating and
         providing insurance coverage and claims services for Borrower,
         Co-Borrowers or the Subsidiaries.

                  "Intercreditor Agreement" means the Collateral Agent and
         Intercreditor Agreement dated as of February 13, 2002, among U.S. Bank,
         National Association, as Collateral Agent; Borrower, Mirage; the
         Restricted Subsidiaries referred to therein, and Bank of America, N.A.,
         as Administrative Agent and each of the other Creditor Representatives
         referred to therein, including any subsequent joinders thereto by which
         additional Creditor Representatives or Restricted Subsidiaries become
         party thereto, and as the same may be amended from time to time.

                  "Interest Charge Coverage Ratio" means, as of the last day of
         each Fiscal Quarter, the ratio of (a) Cash Flow for the period of four
         Fiscal Quarters ending on that date, to (b) Cash Interest Charges of
         Borrower and its Restricted Subsidiaries for the same period.

                  "Interest Charges" means, for any Person, as of the last day
         of any fiscal period, the sum of (a) all interest, fees, charges and
         related expenses paid or payable (without duplication) for that fiscal
         period by that Person to a lender in connection with borrowed money
         (including any obligations for fees, charges and related expenses
         payable to the issuer of any letter of credit) or the deferred purchase
         price of assets that are considered "interest expense" under GAAP, plus
         (b) the portion of rent paid or payable (without duplication) for that
         fiscal period by that Person under Capital Lease Obligations that
         should be treated as interest in accordance with Financial Accounting
         Standards Board Statement No. 13.

                                      -13-



                  "Interest Differential" means, with respect to any prepayment
         of a LIBOR Loan on a day other than the last day of the applicable
         Interest Period and with respect to any failure to borrow a LIBOR Loan
         on the date or in the amount specified in any Request for Loan, (a)
         LIBOR payable (or, with respect to a failure to borrow, LIBOR which
         would have been payable) with respect to the LIBOR Loan minus (b) LIBOR
         on, or as near as practicable to, the date of the prepayment or failure
         to borrow for a LIBOR Loan with an Interest Period commencing on such
         date and ending on the last day of the Interest Period of the LIBOR
         Loan so prepaid or which would have been borrowed on such date.

                  "Interest Period" means, as to each LIBOR Loan, a period of
         one week, or of 1, 2, 3, 6 or 9 months (or, with the written consent of
         all of the Lenders, any other period) as designated by Borrower;
         provided that (a) the first day of each Interest Period must be a
         Business Day, (b) any Interest Period that would otherwise end on a day
         that is not a Business Day shall be extended to the next succeeding
         Business Day, unless such Business Day falls in the next calendar
         month, in which case the Interest Period shall end on the next
         preceding Business Day, and (c) no Interest Period may extend beyond
         the Maturity Date.

                  "Investment" means, when used in connection with any Person,
         any investment by or of that Person, whether by means of purchase or
         other acquisition of stock or other securities of any other Person or
         by means of a loan, advance creating a debt, capital contribution,
         guaranty or other debt or equity participation or interest in any other
         Person, including any partnership and joint venture interests of such
         Person. The amount of any Investment shall be the amount actually
         invested (minus any return of capital with respect to such Investment
         which has actually been received in Cash or Cash Equivalents or has
         been converted into Cash or Cash Equivalents), without adjustment for
         subsequent increases or decreases in the value of such Investment.

                  "Investment Grade" means that the Debt Rating assigned is a
         rating which, as reasonably determined by the Administrative Agent,
         would be the lowest rating granted by the relevant credit rating agency
         which is generally treated as "investment grade" in the ratings regime
         of that credit rating agency.

                  "Issuing Lender" means Bank of America, N.A.

                  "Joint Lead Arrangers" means Banc of America Securities LLC
         and J. P. Morgan Securities, Inc. in their capacities as joint lead
         arrangers and joint book managers of the credit facilities described
         herein.

                  "L/C Advance" means, with respect to each Lender, such
         Lender's funding of its participation in any L/C Borrowing in
         accordance with its Pro Rata Share of the Revolving Commitment.

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

                  "L/C Obligations" means, as at any date of determination, the
         aggregate undrawn amount of all outstanding Letters of Credit plus the
         aggregate of all Unreimbursed Amounts, including all L/C Borrowings.

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

                                      -14-



                  "Lender" means each lender whose name is set forth in the
         signature pages of this Agreement and each lender which may hereafter
         become a party to this Agreement pursuant to Section 11.8 (and to the
         extent a party to a Related Swap Agreement, any Affiliate of a Lender).
         Each reference to a "Bank" or "Banks" in any Loan Document or
         Collateral Document shall be deemed to be a reference to the Lenders.

                  "Lending Office" means, as to any Lender, the office or
         offices of such Lender described as such in such Lender's
         Administrative Questionnaire, or such other office or offices as a
         Lender may from time to time notify Borrower and the Administrative
         Agent.

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

                  "Letter of Credit Expiration Date" means the day that is seven
         days prior to the Maturity Date then in effect (or, if such day is not
         a Business Day, the next preceding Business Day).

                  "Letter of Credit Usage" means, as of any date of
         determination, the aggregate undrawn face amount of outstanding Letters
         of Credit plus the aggregate amount of all Unreimbursed Amounts,
         including all L/C Borrowings.

                  "Letters of Credit" means any of the Standby Letters of Credit
         or Commercial Letters of Credit issued by the Issuing Lender under the
         Revolving Commitment pursuant to Section 2.4, including the Existing
         Letters of Credit, either as originally issued or as the same may be
         supplemented, modified, amended, renewed, extended or supplanted.

                  "Leverage Ratio" means, as of the last day of each Fiscal
         Quarter, the ratio of (a) Average Quarterly Funded Debt as of that date
         to (b) Cash Flow for the four Fiscal Quarter period then ended.

                  "LIBOR" means for any Interest Period with respect to any
         LIBOR Loan, a rate per annum determined by the Administrative Agent
         pursuant to the following formula:

                           LIBOR =      LIBO Base Rate
                                   -------------------------
                                   1.00 - Reserve Percentage

                  Where, "LIBO Base Rate" means, for such Interest Period:

                  (a)      the rate per annum equal to the rate determined by
                           the Administrative Agent to be the offered rate that
                           appears on the page of the Telerate screen (or any
                           successor thereto) that displays an average British
                           Bankers Association Interest Settlement Rate for
                           deposits in Dollars (for delivery on the first day of
                           such Interest Period) with a term equivalent to such
                           Interest Period, determined as of approximately 11:00
                           a.m. (London time) 2 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

                                      -15-



                           such Interest Period) with a term equivalent to such
                           Interest Period, determined as of approximately 11:00
                           a.m. (London time) 2 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 LIBOR 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) 2 Business Days prior to the first day
                           of such Interest Period.

                  "LIBOR Advance" means an Advance made hereunder and specified
         to be a LIBOR Advance in accordance with Article 2.

                  "LIBOR Lending Office" means, as to each Lender, its office or
         branch so designated by written notice to Borrower and the
         Administrative Agent as its LIBOR Lending Office. If no LIBOR Lending
         Office is designated by a Lender, its LIBOR Lending Office shall be its
         office at its address for purposes of notices hereunder.

                  "LIBOR Loan" means a Loan made hereunder and specified to be a
         LIBOR Loan in accordance with Article 2.

                  "LIBOR Margin" means the applicable per annum percentage set
         forth in the definition of "Applicable Rates".

                  "LIBOR Margin Bid" means a Competitive Bid to provide a
         Competitive Advance on the basis of a margin over the LIBOR.

                  "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.

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

                  "Loan" means the aggregate of the Advances made at any one
         time by the Lenders pursuant to Article 2.

                  "Loan Documents" means, collectively, this Agreement, the
         Notes, the Swing Line Documents, the Guaranty, each Request for Loan,
         each Competitive Bid Request, each Letter of Credit Application, each
         Pricing Certificate, each Compliance Certificate, any Related Swap
         Agreement and any other agreements of any type or nature hereafter
         executed and delivered by

                                      -16-



         Borrower or any of its Restricted Subsidiaries to the Administrative
         Agent or to any Lender in any way relating to or in furtherance of this
         Agreement, in each case either as originally executed or as the same
         may from time to time be supplemented, modified, amended, restated,
         extended or supplanted.

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

                  "Material Adverse Effect" means any set of circumstances or
         events which (a) has or could reasonably be expected to have any
         material adverse effect whatsoever upon the validity or enforceability
         of any Loan Document, (b) is or could reasonably be expected to be
         material and adverse to the condition or prospects (financial or
         otherwise), assets, business or operations of Borrower and its
         Restricted Subsidiaries, taken as a whole, or (c) materially impairs or
         could reasonably be expected to materially impair the ability of
         Borrower or Guarantors (taken as a whole) to perform the Obligations.

                  "Material Transaction" means (a) each Acquisition made by the
         Borrower or any of its Restricted Subsidiaries following the Closing
         Date pursuant to which the aggregate consideration paid by the Borrower
         and its Restricted Subsidiaries (whether in Cash or other Property, or
         by means of the assumption of any liabilities) is in excess of
         $250,000,000, and (b) each Disposition made by the Borrower or any of
         its Restricted Subsidiaries following the Closing Date pursuant to
         which the aggregate consideration received by the Borrower and its
         Restricted Subsidiaries (whether in Cash or other Property, or by means
         of the assumption of any liabilities) is in excess of $250,000,000.

                  "Maturity Date" means November 24, 2008.

                  "Maximum Competitive Advance" means, with respect to any
         Competitive Bid made by a Lender, the amount set forth therein as the
         maximum Competitive Advance which that Lender is willing to make in
         response to the related Competitive Bid Request.

                  "Maximum Competitive Outstandings Amount" means, as of each
         date of determination, one half of the then effective amount of the
         Revolving Commitment.

                  "MGM Grand Detroit II" means MGM Grand Detroit II, LLC, a
         Delaware limited liability company, and its successors.

                  "Mirage" means Mirage Resorts, Incorporated, a Nevada
         corporation.

                  "Moody's" means Moody's Investors Service, Inc., and any
         successor thereto.

                  "Multiemployer Plan" means any employee benefit plan of the
         type described in Section 4001(a)(3) of ERISA to which Borrower or any
         of its ERISA Affiliates contribute or are obligated to contribute.

                  "Negative Pledge" means a Contractual Obligation that contains
         a covenant binding on Borrower or any of its Restricted Subsidiaries
         that prohibits Liens on any of its or their Property, other than (a)
         any such covenant contained in a Contractual Obligation granting a Lien
         permitted under Section 6.6 which affects only the Property that is the
         subject of such permitted Lien and (b) any such covenant that does not
         apply to Liens securing the Obligations or any indebtedness which is
         used, directly or indirectly, to refinance the Obligations.

                                      -17-



                  "Net Income" means, with respect to any fiscal period and with
         respect to any Person, the consolidated net income of that Person from
         continuing operations for that period, determined in accordance with
         GAAP, consistently applied.

                  "New Project" means each free-standing hotel, casino or other
         development commenced by Borrower and its Restricted Subsidiaries
         following the Closing Date having an aggregate construction budget in
         excess of $250,000,000.

                  "New Project Annualized EBITDA" means, as of each date of
         determination which occurs during the one year period following the
         opening of any New Project for business, the EBITDA associated with
         that New Project for the fiscal period following such opening,
         annualized on the following basis:

                  (a) where the period from the opening is less than one full
         Fiscal Quarter, such EBITDA times four; and

                  (b) where the period from the opening is one full Fiscal
         Quarter or more, such EBITDA annualized on a straight-line basis.

                  "New York" means New York-New York Hotel & Casino LLC, a
         Nevada limited liability company, its successors and permitted assigns.

                  "Notes" means, collectively, the Competitive Revolving Notes,
         the Committed Revolving Notes and the Term Notes.

                  "Obligations" means all present and future obligations of
         every kind or nature of Borrower, the Co-Borrowers or the Guarantors at
         any time and from time to time owed to the Administrative Agent, the
         Issuing Lender, the Swing Line Lender or the Lenders or any one or more
         of them, under any one or more of the Loan Documents, whether due or to
         become due, matured or unmatured, liquidated or unliquidated, or
         contingent or noncontingent, including obligations of performance as
         well as obligations of payment, and including interest that accrues
         after the commencement of any proceeding under any Debtor Relief Law by
         or against Borrower or Affiliate of Borrower, whether or not allowed as
         a claim in such proceeding.

                  "Opinions" means the favorable written legal opinions of (a)
         Christensen, Miller, Fink, Jacobs, Glaser, Weil and Shapiro, LLP,
         counsel to Borrower, (b) Lionel Sawyer & Collins, Nevada counsel to
         Borrower, (c) Sterns & Weinroth, a professional corporation, New Jersey
         counsel to Borrower, (d) Butler, Snow, et. al., Mississippi counsel to
         Borrower, and (e) Dickinson Wright PLLC, Michigan counsel to Borrower,
         together with copies of all factual certificates and legal opinions
         upon which such counsel has relied.

                  "Other Available EBITDA" means, for any fiscal period, that
         portion of the EBITDA of (a) any Unrestricted Subsidiaries for that
         fiscal period, and (b) any other joint venture or other Person in which
         Borrower or its Restricted Subsidiaries have any Investment for that
         fiscal period, in each case to the extent that the same may be
         distributed in Cash to Borrower and its Restricted Subsidiaries during
         that fiscal period in accordance with applicable Law and subject to any
         Contractual Obligations (including credit documents) which are binding
         upon such Unrestricted Subsidiary or Person or their respective
         Properties (whether or not so distributed).

                  "Outstanding Obligations" means, as of each date of
         determination, and giving effect to the making of any such credit
         accommodations requested on that date, the sum of (i) the

                                      -18-



         aggregate principal amount of the outstanding Committed Loans, plus
         (ii) the aggregate principal amount of the outstanding Competitive
         Advances, plus (iii) the Swing Line Outstandings, plus (iv) the Letter
         of Credit Usage.

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

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

                  "Permitted Encumbrances" means:

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

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

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

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

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

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

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

                                      -19-



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

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

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

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

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

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

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

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

                           (p)      Liens consisting of deposits of Property to
         secure statutory obligations of Borrower or a Restricted Subsidiary of
         Borrower;

                           (q)      Liens consisting of deposits of Property to
         secure (or in lieu of) surety, appeal or customs bonds in proceedings
         to which Borrower or a Restricted Subsidiary of Borrower is a party;

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

                           (s)      other non-consensual Liens incurred in the
         ordinary course of business but not in connection with an extension of
         credit, which do not in the aggregate, when taken

                                      -20-



         together with all other Liens, materially impair the value or use of
         the Property of Borrower and the Restricted Subsidiaries of Borrower,
         taken as a whole.

                  "Person" means any individual or entity, including a trustee,
         corporation, limited liability company, general partnership, limited
         partnership, joint stock company, trust, estate, unincorporated
         organization, business association, firm, joint venture, Governmental
         Agency, or other entity.

                  "Pricing Certificate" means a certificate substantially in the
         form of Exhibit H, properly completed and signed by a Senior Officer of
         Borrower and each Co-Borrower.

                  "Pricing Level" means, as of each date of determination, the
         pricing level set forth below opposite (a) the Applicable Leverage
         Ratio, or (b) at such times when the Debt Rating is Investment Grade or
         Superior Investment Grade, the Debt Rating, provided that if the
         Applicable Leverage Ratio and the Debt Rating are at different Pricing
         Levels, then the Pricing Level which yields the lowest LIBOR Margin
         shall apply:



Pricing Level                                Pricing Criteria
- -------------      -------------------------------------------------------------------
                                 Leverage Ratio                       Debt Rating
                                 --------------                       -----------
                                                             
     I             Less than 3.50 to 1.00                          Superior Investment
                                                                   Grade

     II            Equal to or greater than 3.50 to 1.00 but       Investment Grade
                   less than 4.00 to 1.00

     III           Equal to or greater than 4.00 to 1.00 but       N/A
                   less than 4.50 to 1.00

     IV            Equal to or greater than 4.50 to 1.00 but       N/A
                   less than 5.00 to 1.00

     V             Equal to or greater than 5.00 to 1.00           N/A


                  "Pricing Period" means (a) the period commencing on the date
         hereof and ending on February 15, 2003, and (b) the subsequent
         concurrent quarterly periods of approximately 90 days each commencing
         on each May 16, August 16, November 16 and February 16.

                  "Principal Resort Casino Properties" means The MGM Grand Hotel
         and Casino, the Bellagio Hotel and Casino, and the Mirage Hotel and
         Casino.

                  "Pro Rata Share" means, with respect to each Lender, the
         percentage of the relevant Commitment, the Loans (except for
         Competitive Advances) thereunder (and in the case of the Revolving
         Commitment, the Letters of Credit and the Swing Line Advances) held by
         that Lender (or by a SPC for which that Lender is the Granting Lender).
         As of the Closing Date, each Lender has been informed by the Lead
         Arranger of the amount and percentage of its Pro Rata Share of each of
         the Commitments. The percentage Pro Rata Shares of each Lender in the
         Commitments is subject to adjustment pursuant to any Assignment
         Agreement executed in accordance with Section 11.8.

                                      -21-



                  "Projections" means the financial projections for Borrower and
         its Subsidiaries prepared on behalf of Borrower and heretofore
         distributed to the Lenders.

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

                  "Qualified Obligations" means (a) the Indebtedness of the
         Borrower and its Restricted Subsidiaries which is now entitled to the
         benefits of the collateral security contemplated by the Intercreditor
         Agreement, including the Obligations under this Agreement and (b) each
         additional class of Indebtedness of Borrower which hereafter is
         properly treated as a Qualified Obligation pursuant to the terms of the
         Intercreditor Agreement.

                  "Qualified Subordinated Obligations" means unsecured
         Indebtedness of Borrower which (a) have no principal payments which are
         due prior to the earlier of (i) the Maturity Date, or (ii) the
         scheduled maturity date of any Subordinated Obligations which are,
         directly or indirectly, repaid or otherwise retired using the proceeds
         of such Indebtedness, (b) are subject to representations, covenants,
         defaults and other provisions which are not, taken as a whole, more
         burdensome upon Borrower and its Subsidiaries than those set forth in
         the Existing Subordinated Obligations, and (c) are subject to
         subordination to the Obligations in a manner which is at least as
         favorable to the Lenders as the subordination provisions contained in
         the Existing Subordinated Obligations.

                  "Quarterly Payment Date" means the last Business Day of each
         December, March, June and September following the Closing Date.

                  "Real Property" means, as of any date of determination, all
         real Property then or theretofore owned, leased or occupied by Borrower
         or any of its Restricted Subsidiaries.

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

                  "Related Swap Agreement" means a Swap Agreement between
         Borrower and a Lender or an Affiliate of a Lender. Each Related Swap
         Agreement is a secured "Swap Agreement" as described and defined in the
         Intercreditor Agreement and is entitled to the benefits of the Liens
         provided in the Collateral Documents.

                  "Request for Loan" means a written request for a Loan
         substantially in the form of Exhibit I, signed by a Responsible
         Official of Borrower or a Co-Borrower, on its behalf, and properly
         completed to provide all information required to be included therein.

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

                  "Requisite Lenders" means (a) as of any date of determination
         if the Commitments are then in effect, Lenders having Pro Rata Shares
         of the Commitments which are, in the aggregate, a majority of the Pro
         Rata Shares of the Commitments then in effect, and (b) as of any date
         of determination if the Commitments have then been terminated and there
         are then any Obligations

                                      -22-



         outstanding, Lenders or other creditors holding a majority of the
         Outstanding Obligations; provided that the Pro Rata Shares of the
         Commitments of, and the portion of the Outstanding Obligations held or
         deemed held by, any Defaulting Lender shall be excluded for purposes of
         making a determination of Requisite Lenders.

                  "Reserve Percentage" means, for any day during any Interest
         Period, the reserve percentage (expressed as a decimal, carried out to
         five decimal places) in effect on such day, whether or not applicable
         to any Lender, under regulations issued from time to time by the Board
         of Governors of the Federal Reserve System for determining the maximum
         reserve requirement (including any emergency, supplemental or other
         marginal reserve requirement) with respect to liabilities or assets
         consisting of or including Eurocurrency funds or deposits (currently
         referred to as "eurocurrency liabilities"). LIBOR for each outstanding
         LIBOR Loan shall be adjusted automatically as of the effective date of
         any change in the Reserve Percentage.

                  "Responsible Official" means when used with reference to any
         Person, any officer or manager of such Person, general partner of such
         Person, officer of a corporate or limited liability company general
         partner of such Person, officer of a corporate or limited liability
         company general partner of a partnership that is a general partner of
         such Person, or any other responsible official thereof duly acting on
         behalf thereof. The Lenders shall be entitled to conclusively rely upon
         any document or certificate that is signed or executed by a Responsible
         Official of Borrower or any of its Restricted Subsidiaries as having
         been authorized by all necessary corporate, limited liability company,
         partnership and/or other action on the part of Borrower or such
         Restricted Subsidiary.

                  "Restricted Subsidiary" means each Subsidiary of Borrower
         other than:

                  (a) Subsidiaries formed under the Laws of foreign nations
         whose only tangible assets are located in foreign nations, and pure
         holding companies for such foreign Subsidiaries owning as their sole
         asset the stock or other securities and obligations thereof;

                  (b) MGM Grand Detroit II and the Insurance Subsidiary; and

                  (c) any Subsidiary of Borrower formed or acquired after the
         date of this Agreement that is designated in writing by Borrower to the
         Administrative Agent, but only so long as such Subsidiary of Borrower
         does not, and is not required to, guarantee or otherwise be liable for
         any of the Senior Indebtedness.

                  "Revolving Commitment" means, subject to any decrease in the
         amount thereof pursuant to Sections 2.9, 2.10 or 11.26, $1,500,000,000.

                  "Revolving Lender" means each Lender having a Pro Rata Share
         of the Revolving Loans, the Letters of Credit, the Swing Line Loans and
         the Revolving Commitment.

                  "Revolving Loans" means the aggregate of the Advances made at
         any one time by the Revolving Lenders under the Revolving Commitment.

                  "S&P" means Standard & Poor's Ratings Services, a division of
         McGraw Hill Companies, Inc., and any successor thereto.

                  "Senior Indebtedness" means, collectively (a) any present or
         future Qualified Obligations, and (b) each other issue, item or class
         of Indebtedness of the Borrower or any of its Restricted

                                      -23-


         Subsidiaries which is in the principal amount of $50,000,000 or more
         and which is not a Subordinated Obligation.

                  "Senior Officer" means the (a) chief executive officer or
         manager, (b) president, (c) executive vice president, (d) senior vice
         president, (e) chief financial officer, (f) treasurer, (g) assistant
         treasurer, (h) secretary, or (i) assistant secretary of Borrower or any
         Co-Borrower.

                  "SPC" means, as to each Lender, one or more special purpose
         funding vehicles maintained or established by that Lender.

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

                  "Standby Letter of Credit" means each Letter of Credit that is
         not a Commercial Letter of Credit.

                  "Standby Letter of Credit Fee" means the applicable per annum
         percentage set forth in the definition of "Applicable Rates".

                  "Subordinated Obligations" means, collectively, the Existing
         Subordinated Obligations and any future class of Indebtedness of
         Borrower or any of its Subsidiaries which, by its terms, at any time
         purports to be subordinated in right of payment to the Obligations or
         any other class of Indebtedness of the Borrower or any of its
         Subsidiaries in any manner.

                  "Subsidiary" means, as of any date of determination and with
         respect to any Person, any corporation, limited liability company or
         partnership (whether or not, in either case, characterized as such or
         as a "joint venture"), whether now existing or hereafter organized or
         acquired: (a) in the case of a corporation or limited liability
         company, of which a majority of the securities having ordinary voting
         power for the election of directors or other governing body (other than
         securities having such power only by reason of the happening of a
         contingency) are at the time beneficially owned by such Person and/or
         one or more Subsidiaries of such Person, or (b) in the case of a
         partnership, of which a majority of the partnership or other ownership
         interests are at the time beneficially owned by such Person and/or one
         or more of its Subsidiaries.

                  For the avoidance of doubt, and only by way of example, as of
         the Closing Date, (a) Victoria Partners, a Nevada general partnership,
         and (b) Marina District Development Holding Co., LLC, a New Jersey
         limited liability company, the 100% owner of Marina District
         Development Company, LLC, a New Jersey limited liability company doing
         business as "The Borgata," are each only 50% owned by Borrower and
         therefore are not Subsidiaries of Borrower.

                  "Superior Investment Grade" means that the Debt Rating
         assigned is a rating which, as reasonably determined by the
         Administrative Agent, would be a rating which is higher than the
         minimum Investment Grade rating in the ratings regime of that credit
         rating agency.

                                      -24-



                  "Swap Agreement" means a written agreement between Borrower
         and one or more financial institutions providing for "swap", "cap",
         "collar" or other interest rate protection with respect to any
         Indebtedness.

                  "Swing Line" means the revolving line of credit established by
         the Swing Line Lender in favor of Borrower and the Co-Borrowers
         pursuant to Section 2.6.

                  "Swing Line Documents" means the promissory note and any other
         documents executed by Borrower and each Co-Borrower in favor of the
         Swing Line Lender in connection with the Swing Line.

                  "Swing Line Lender" means Bank of America, acting through its
         Las Vegas Commercial Banking Division.

                  "Swing Line Loans" and "Swing Line Advances" mean loans made
         by the Swing Line Lender to Borrower or the Co-Borrowers pursuant to
         Section 2.6.

                  "Swing Line Outstandings" means, as of any date of
         determination, the aggregate principal Indebtedness of Borrower and the
         Co-Borrowers on all Swing Line Loans then outstanding.

                  "Term Amortization Amount" means, as to each Quarterly Payment
         Date, the amount set forth opposite that Quarterly Payment Date in the
         matrix set forth below:



   Quarterly Payment Dates               Term Amortization Amount
   -----------------------               ------------------------
                                      
December 31, 2003 through September                  None
             30, 2004

December 31, 2004 through September                  None
             30, 2005

December 31, 2005 through September               $ 5,000,000
             30, 2006

December 31, 2006 through September               $ 7,500,000
             30, 2007

December 31, 2007 through September               $37,500,000
             30, 2008


                  "Term Commitment" means subject to any decrease in the amount
         thereof pursuant to Sections 2.8, 2.9, 2.10 or 11.26, $1,000,000,000.

                  "Term Lender" means each Lender having a Pro Rata Share of the
         Term Loans and the Term Commitment.

                  "Term Loans" means the aggregate of the Advances made at any
         one time by the Term Lenders under the Term Commitment.

                  "Term Note" means each promissory note made by Borrower and
         each Co-Borrower to a Lender evidencing the Advances made by that
         Lender under its Pro Rata Share of the Term

                                      -25-



         Commitment, substantially in the form of Exhibit J, either as
         originally executed or as the same may from time to time be
         supplemented, modified, amended, renewed, extended or supplanted.

                  "Theme Park Property" means the former site of the MGM Grand
         Theme Park, consisting of the real property consisting of 18.49 acres
         which is shown in crosshatch on Schedule 1.1 hereto, provided that the
         Theme Park Property shall not include any portion of the casino or
         hotel improvements associated with the MGM Grand Hotel and Casino.

                  "to the best knowledge of" means, when modifying a
         representation, warranty or other statement of any Person, that the
         fact or situation described therein is known by the Person (or, in the
         case of a Person other than a natural Person, known by a Responsible
         Official of that Person) making the representation, warranty or other
         statement, or with the exercise of reasonable due diligence under the
         circumstances (in accordance with the standard of what a reasonable
         Person in similar circumstances would have done) would have been known
         by the Person (or, in the case of a Person other than a natural Person,
         would have been known by a Responsible Official of that Person).

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

                  "Unreimbursed Amount" has the meaning set forth in Section
         2.4(c)(1).

                  "Unrelated Person" means any Person other than (i) an employee
         stock ownership plan or other employee benefit plan covering the
         employees of Borrower and its Subsidiaries or (ii) an Affiliate of any
         Person or group of related Persons which as of the date of this
         Agreement is the beneficial owner of 25% or more (in the aggregate) of
         the outstanding common stock of Borrower.

                  "Unrestricted Subsidiary" means each Subsidiary of Borrower
         which is not a Restricted Subsidiary.

                  "Unused Fee" has the meaning set forth in Section 3.4.

                  "Unused Fee Rate" means the applicable per annum percentage
         set forth in the definition of "Applicable Rates".

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

                  1.3      Accounting Terms - Fiscal Periods. All accounting
terms not specifically defined in this Agreement shall be construed in
conformity with, and all financial data required to be submitted by this
Agreement shall be prepared in conformity with, GAAP applied on a consistent
basis, except as otherwise specifically prescribed herein. In the event that
GAAP or Borrower's Fiscal Year or Fiscal Quarters change during the term of this
Agreement such that the covenants contained in Sections 6.7 and 6.8 would then
be calculated for different periods, in a different manner or with different
components, (a) Borrower, the Co-Borrowers and the Lenders agree to amend this
Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating Borrower's financial condition to substantially the same
criteria as were effective prior to such change in Fiscal Year, Fiscal Quarters
or in GAAP and (b) Borrower and the Co-Borrowers shall be deemed to be in
compliance with the covenants contained in the aforesaid Sections if and to the
extent that Borrower and the Co-Borrowers would have

                                      -26-



been in compliance therewith for the pre-existing fiscal periods and under GAAP
as in effect immediately prior to such change, but shall have the obligation to
deliver each of the materials described in Article 7 to the Creditors, on the
dates therein specified, with financial data presented for its pre-existing
fiscal periods and in a manner which conforms with GAAP as in effect immediately
prior to such change.

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

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

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

                           (a)      The meanings of defined terms are equally
         applicable to the singular and plural forms of the defined terms.

                           (b)      The words "herein," "hereto," "hereof" and
         "hereunder" and words of similar import when used in any Loan Document
         shall refer to such Loan Document as a whole and not to any particular
         provision thereof.

                           (c)      Article, Section, Exhibit and Schedule
         references are to the Loan Document in which such reference appears.

                           (d)      The term "including" is by way of example
         and not limitation.

                           (e)      The term "or" is not exclusive.

                           (f)      The term "documents" includes any and all
         instruments, documents, agreements, certificates, notices, reports,
         financial statements and other writings, however evidenced, whether in
         physical or electronic form.

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

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

                                      -27-



                                    ARTICLE 2
                           LOANS AND LETTERS OF CREDIT

                  2.1      Committed Loans-General.

                           (a)      Subject to the terms and conditions set
         forth in this Agreement, at any time and from time to time from the
         Closing Date through the Business Day immediately prior to the Maturity
         Date, each Revolving Lender shall, pro rata according to that Revolving
         Lender's Pro Rata Share of the then applicable Revolving Commitment,
         make Committed Advances to Borrower or to any Co-Borrower under the
         Revolving Commitment in Dollars in such amounts as Borrower or any
         Co-Borrower may request that (i) do not result in the sum of the
         Indebtedness evidenced by the Committed Revolving Notes and the
         Competitive Revolving Notes plus the Letters of Credit Usage plus the
         Swing Line Outstandings (after giving effect to any concurrent payment
         thereof with the proceeds of such Advances) exceeding the then
         effective Revolving Commitment, and (ii) in the case of Committed
         Advances made to a Co-Borrower, are directly used to finance the
         development, construction or operation of hotel/casino properties owned
         by that Co-Borrower. Subject to the limitations set forth herein, the
         Committed Advances by each Revolving Lender under its Pro Rata Share of
         the Revolving Commitment may be prepaid without premium or penalty. The
         Administrative Agent shall promptly provide Borrower or the relevant
         Co-Borrower with a written report allocating the Obligations under the
         Revolving Commitment if requested by Borrower or such Co-Borrower.

                           (b)      Subject to the terms and conditions set
         forth in this Agreement, on the Closing Date, each Term Lender shall
         make an Advance to Borrower or to any Co-Borrower under the Term
         Commitment in Dollars in the full amount of that Term Lender's Pro Rata
         Share of the Term Commitment. Thereafter, through the Business Day
         immediately prior to the Maturity Date, each Term Lender shall
         refinance its outstanding Advances, pro rata according to that Term
         Lender's Pro Rata Share of the then applicable Term Commitment, in such
         amounts as Borrower or the relevant Co-Borrower may request that do not
         result in the Indebtedness evidenced by the Term Notes being in excess
         of the then effective Term Commitment. No Term Loan which is repaid
         (rather than refinanced with the making of new Term Loans) may be
         reborrowed. Subject to the limitations set forth herein, the Advances
         by each Term Lender under its Pro Rata Share of the Term Commitment may
         be prepaid without premium or penalty.

                           (c)      Subject to the next sentence, each Loan
         consisting of Committed Advances shall be made pursuant to a Request
         for Loan which shall specify the requested (i) date of such Loan, (ii)
         type of Loan, (iii) amount of such Loan, (iv) in the case of a LIBOR
         Loan, the Interest Period for such Loan, and (v) whether the Loan is
         requested under the Term Commitment or the Revolving Commitment. Unless
         the Administrative Agent, in its sole and absolute discretion, has
         notified Borrower or the relevant Co-Borrower to the contrary, a Loan
         consisting of Committed Advances may be requested by telephone by a
         Responsible Official of Borrower or the relevant Co-Borrower, in which
         case Borrower or the relevant Co-Borrower shall confirm such request by
         promptly delivering a Request for Loan in person or by telecopier
         conforming to the preceding sentence to the Administrative Agent. The
         Administrative Agent shall incur no liability whatsoever hereunder in
         acting upon any telephonic request purportedly made by a Responsible
         Official of Borrower or the relevant Co-Borrower, and Borrower and the
         Co-Borrowers hereby agree to indemnify each Creditor from any loss,
         cost, expense or liability as a result of so acting.

                                      -28-



                           (d)      Promptly following receipt of a Request for
         Loan in respect of a Revolving Loan, the Administrative Agent shall
         notify each Revolving Lender by telephone or telecopier (and if by
         telephone, promptly confirmed by telecopier) of the date and type of
         the Revolving Loan, any applicable Interest Period, and that Revolving
         Lender's Pro Rata Share of the Loan.

                           (e)      Not later than 11:00 a.m., Los Angeles time,
         on the date specified for any Committed Loan (which must be a Business
         Day), each Lender having a Pro Rata Share of the relevant Commitment
         shall make its Pro Rata Share of the Committed Loan in immediately
         available funds available to the Administrative Agent at the
         Administrative Agent's Office. Upon satisfaction or waiver of the
         applicable conditions set forth in Article 8, all Committed Advances
         shall be credited on that date in immediately available funds to the
         Deposit Account for Borrower or that Co-Borrower.

                           (f)      Unless the Requisite Lenders otherwise
         consent, each Committed Loan shall be in an integral multiple of
         $1,000,000 which is not less than $5,000,000.

                           (g)      The Committed Advances made by each
         Revolving Lender under the Revolving Commitment shall be evidenced by
         that Lender's Committed Revolving Note, and the Committed Advances made
         by each Term Lender under the Term Commitment shall be evidenced by
         that Lender's Term Note.

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

                           (i)      If no Request for Loan (or telephonic
         request for Loan referred to in the second sentence of Section 2.1(c),
         if applicable) has been made within the requisite notice periods set
         forth in Section 2.2 or 2.3 prior to the end of the Interest Period for
         any LIBOR Loan, then on the last day of such Interest Period, such
         LIBOR Loan shall be automatically converted into a Base Rate Loan in
         the same amount.

                           (j)      If a Loan is to be made on the same date
         that another Loan is due and payable:

                                    (i)      the Lenders shall make available to
                  the Administrative Agent (or the Administrative Agent shall
                  make available to the Lenders) the net amount of funds giving
                  effect to both such Loans and the effect for purposes of this
                  Agreement shall be the same as if separate transfers of funds
                  had been made with respect to each such Loan; and

                                    (ii)     in the case where the same Party is
                  the primary borrower of both such Loans, Borrower or the
                  relevant Co-Borrower shall make available to the
                  Administrative Agent (or the Administrative Agent shall make
                  available to such Party) the net amount of funds giving effect
                  to both such Loans and the effect for purposes of this
                  Agreement shall be the same as if separate transfers of funds
                  had been made with respect to each such Loan .

                  2.2      Base Rate Loans. Each request by Borrower or any
Co-Borrower for a Base Rate Loan shall be made pursuant to a Request for Loan
(or telephonic or other request for loan referred to in the second sentence of
Section 2.1(c), if applicable) received by the Administrative Agent, at the
Administrative Agent's Office, not later than 9:15 a.m. Los Angeles time, on the
date (which must be a

                                      -29-



Business Day) of the requested Base Rate Loan. All Committed Loans shall
constitute Base Rate Loans unless properly designated as a LIBOR Loan pursuant
to Section 2.3.

                  2.3      LIBOR Loans.

                           (a)      Each request by Borrower or any Co-Borrower
         for a LIBOR Loan (including any conversion or continuation thereof)
         shall be made pursuant to a Request for Loan (or telephonic or other
         request for Loan referred to in the second sentence of Section 2.1(c),
         if applicable) received by the Administrative Agent, at the
         Administrative Agent's Office, not later than 10:00 a.m., Los Angeles
         time, at least three Business Days before the first day of the
         applicable Interest Period.

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

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

                           (d)      No LIBOR Loan may be requested during the
         continuation of a Default or Event of Default.

                           (e)      Nothing contained herein shall require any
         Lender to fund any LIBOR Advance in the Designated Market.

                  2.4      Letters of Credit.

                           (a)      Letter of Credit Subfacility. Subject to the
         terms and conditions of this Agreement (including Section 8.3),
         Borrower or any Co-Borrower may request from time to time during the
         period from the Closing Date through the day prior to the Letter of
         Credit Expiration Date that the Issuing Lender, in reliance upon the
         agreements of the other Lenders set forth in this Section 2.4, issue
         Letters of Credit for the account of Borrower or the relevant
         Co-Borrower, and the Issuing Lender agrees to issue for the account of
         Borrower or the relevant Co-Borrower one or more Letters of Credit
         denominated in Dollars and to amend Letters of Credit previously issued
         by it in accordance with subsection (b) below, provided that (i)
         Borrower or the relevant Co-Borrower shall not request that the Issuing
         Lender issue any Letter of Credit if, after giving effect to such
         issuance, the aggregate outstanding principal evidenced by the
         Committed Revolving Notes and the Competitive Revolving Notes plus the
         Letter of Credit Usage plus the Swing Line Outstandings exceeds the
         Revolving Commitment, (ii) Borrower or the relevant Co-Borrower shall
         not request that the Issuing Lender issue any Letter of Credit if
         Borrower and the Co-Borrowers would not be in compliance with Sections
         6.7 and 6.8, (iii) in no event shall the Issuing Lender issue any
         Letter of Credit having an expiration date after the Maturity Date,
         (iv) Borrower or the relevant Co-Borrower shall not request any Letter
         of Credit if, after giving effect to such issuance, the Letter of
         Credit Usage would exceed $200,000,000 or any limit established by Law
         after the Closing Date on the Issuing Lender's ability to issue the
         requested Letter of Credit at any time, and (v) prior to the issuance
         of any Letter of Credit the Issuing Lender shall request confirmation
         by telephone from the Administrative Agent that such Letter of Credit
         may be issued. Notwithstanding the foregoing, the Issuing Lender shall
         not be obligated to issue a Letter of Credit if, (A) on or prior to the
         Business Day immediately preceding the issuance

                                      -30-



         thereof any Revolving Lender has notified the Issuing Lender in writing
         that the conditions set forth in Section 8.3 have not been satisfied
         with respect to the issuance of such Letter of Credit, (B) any order,
         judgment or decree of any Governmental Agency or arbitrator shall by
         its terms purport to enjoin or restrain the Issuing Lender from issuing
         such Letter of Credit, or any Law applicable to the Issuing Lender or
         any request or directive (whether or not having the force of law) from
         any Governmental Agency with jurisdiction over the Issuing Lender shall
         prohibit, or request that the Issuing Lender refrain from, the issuance
         of letters of credit generally or such Letter of Credit in particular
         or shall impose upon the Issuing Lender with respect to such Letter of
         Credit any restriction, reserve or capital requirement (for which the
         Issuing Lender is not otherwise compensated hereunder) not in effect on
         the Closing Date, or shall impose upon the Issuing Lender any
         unreimbursed loss, cost or expense which was not applicable on the
         Closing Date and which the Issuing Lender in good faith deems material
         to it, (C) the issuance of such Letter of Credit would violate one or
         more policies of the Issuing Lender, or (D) the expiry date of such
         requested Letter of Credit would occur after the Letter of Credit
         Expiration Date, unless all of the Lenders have approved such expiry
         date.

                           (b)      Procedures for Issuance and Amendment of
         Letters of Credit.

                                    (1)      Each Letter of Credit shall be
                  issued or amended, as the case may be, upon the request of
                  Borrower or any Co-Borrower delivered to the Issuing Lender
                  (with a copy to the Administrative Agent) in the form of a
                  Letter of Credit Application, appropriately completed and
                  signed by a Responsible Official of Borrower or the relevant
                  Co-Borrower. Each Letter of Credit Application submitted by
                  the Borrower (or any Co-Borrower) shall be deemed to be a
                  representation and warranty that the conditions specified in
                  Section 8.3 have been satisfied on and as of the date of the
                  issuance of the Letter of Credit requested thereby. Such
                  Letter of Credit Application must be received by the Issuing
                  Lender and the Administrative Agent not later than 1:00 p.m.,
                  Los Angeles time, at least 3 Business Days (or such later date
                  and time as the Issuing Lender may agree in a particular
                  instance in its sole discretion) prior to the proposed
                  issuance date or date of amendment, as the case may be. In the
                  case of a request for an initial issuance of a Letter of
                  Credit, such Letter of Credit Application shall specify in
                  form and detail satisfactory to the Issuing Lender: (A) the
                  proposed issuance date of the requested Letter of Credit
                  (which shall be a Business Day); (B) the amount thereof; (C)
                  the expiry date thereof; (D) the name and address of the
                  beneficiary thereof; (E) the documents to be presented by such
                  beneficiary in case of any drawing thereunder; (F) the full
                  text of any certificate to be presented by such beneficiary in
                  case of any drawing thereunder; and (G) such other matters as
                  the Issuing Lender may require. In the case of a request for
                  an amendment of any outstanding Letter of Credit, such Letter
                  of Credit Application shall specify in form and detail
                  satisfactory to the Issuing Lender (W) the Letter of Credit to
                  be amended; (X) the proposed date of amendment thereof (which
                  shall be a Business Day); (Y) the nature of the proposed
                  amendment; and (Z) such other matters as the Issuing Lender
                  may require.

                                    (2)      Promptly after receipt of any
                  Letter of Credit Application, the Issuing Lender will confirm
                  with the Administrative Agent (by telephone or in writing)
                  that the Administrative Agent has received a copy of such
                  Letter of Credit Application from Borrower or the relevant
                  Co-Borrower and, if not, the Issuing Lender will provide the
                  Administrative Agent with a copy thereof. Upon receipt by the
                  Issuing Lender of confirmation from the Administrative Agent
                  that the requested issuance or amendment is permitted in
                  accordance with the terms hereof, then, subject to the terms
                  and conditions hereof, the Issuing Lender shall, on the
                  requested date, issue a Letter of Credit for the

                                      -31-



                  account of Borrower or the relevant Co-Borrower or enter into
                  the applicable amendment, as the case may be, in each case in
                  accordance with the Issuing Lender's usual and customary
                  business practices. Immediately upon the issuance of each
                  Letter of Credit, each Lender shall be deemed to, and hereby
                  irrevocably and unconditionally agrees to, purchase from the
                  Issuing Lender a risk participation in such Letter of Credit
                  in an amount equal to the product of such Lender's Pro Rata
                  Share of the Revolving Commitment times the amount of such
                  Letter of Credit.

                                    (3)      Promptly after its delivery of any
                  Letter of Credit or any amendment to a Letter of Credit to an
                  advising Lender with respect thereto or to the beneficiary
                  thereof, the Issuing Lender will also deliver to Borrower or
                  the relevant Co-Borrower and the Administrative Agent a true
                  and complete copy of such Letter of Credit or amendment.

                           (c)      Drawings and Reimbursements; Funding of
         Participations.

                                    (1)      Upon receipt from the beneficiary
                  of any Letter of Credit of any notice of a drawing under such
                  Letter of Credit, the Issuing Lender shall notify Borrower or
                  the relevant Co-Borrower and the Administrative Agent thereof.
                  Not later than 11:00 a.m. Los Angeles time on the date of any
                  payment by the Issuing Lender under a Letter of Credit (each
                  such date, an "Honor Date"), Borrower or the relevant
                  Co-Borrower shall reimburse the Issuing Lender through the
                  Administrative Agent in an amount equal to the amount of such
                  drawing. If Borrower or the relevant Co-Borrower fails to so
                  reimburse the Issuing Lender by such time, the Administrative
                  Agent shall promptly notify each Revolving Lender of the Honor
                  Date, the amount of the unreimbursed drawing (the
                  "Unreimbursed Amount"), and the amount of such Revolving
                  Lender's Pro Rata Share thereof. In such event, Borrower shall
                  be deemed to have requested a Base Rate Loan under the
                  Revolving Commitment to be disbursed on the Honor Date in an
                  amount equal to the Unreimbursed Amount, without regard to the
                  minimum and multiples specified in Section 2.1(f) for the
                  principal amount of Base Rate Loans, but subject to the amount
                  of the unutilized portion of the Revolving Commitment and the
                  conditions set forth in Section 8.2 (other than the delivery
                  of a Request for Loan). Any notice given by the Issuing Lender
                  or the Administrative Agent pursuant to this Section 2.4(c)(1)
                  may be given by telephone if immediately confirmed in writing;
                  provided that the lack of such an immediate confirmation shall
                  not affect the conclusiveness or binding effect of such
                  notice.

                                    (2)      Each Revolving Lender (including
                  the Lender acting as Issuing Lender) shall upon any notice
                  pursuant to Section 2.4(c)(1) make funds available to the
                  Administrative Agent for the account of the Issuing Lender at
                  the Administrative Agent's Office in an amount equal to its
                  Pro Rata Share of the Unreimbursed Amount not later than 1:00
                  p.m. Los Angeles time on the Business Day specified in such
                  notice by the Administrative Agent, whereupon, subject to the
                  provisions of Section 2.4(c)(3), each Revolving Lender that so
                  makes funds available shall be deemed to have made a Committed
                  Advance to Borrower or the relevant Co-Borrower in such
                  amount. The Administrative Agent shall remit the funds so
                  received to the Issuing Lender.

                                    (3)      With respect to any Unreimbursed
                  Amount that is not fully refinanced by a Base Rate Loan
                  because the conditions set forth in Section 8.2 cannot be
                  satisfied or for any other reason, Borrower or the relevant
                  Co-Borrower shall be deemed to have incurred from the Issuing
                  Lender an L/C Borrowing in the amount of the

                                      -32-



                  Unreimbursed Amount that is not so refinanced, which L/C
                  Borrowing shall be due and payable on demand (together with
                  interest) and shall bear interest at the Default Rate. In such
                  event, each Lender's payment to the Administrative Agent for
                  the account of the Issuing Lender pursuant to Section
                  2.4(c)(2) shall be deemed payment in respect of its
                  participation in such L/C Borrowing and shall constitute an
                  L/C Advance from such Revolving Lender in satisfaction of its
                  participation obligation under this Section 2.4.

                                    (4)      Until each Revolving Lender funds
                  its Committed Advance or L/C Advance pursuant to this Section
                  2.4(c) to reimburse the Issuing Lender for any amount drawn
                  under any Letter of Credit, interest in respect of such
                  Revolving Lender's Pro Rata Share of such amount shall be
                  solely for the account of the Issuing Lender.

                                    (5)      Each Revolving Lender's obligation
                  to make Committed Advances or L/C Advances to reimburse the
                  Issuing Lender for amounts drawn under Letters of Credit, as
                  contemplated by this Section 2.4(c), shall be absolute and
                  unconditional and shall not be affected by any circumstance,
                  including (A) any set-off, counterclaim, recoupment, defense
                  or other right which such Revolving Lender may have against
                  the Issuing Lender, Borrower, any Co-Borrower or any other
                  Person for any reason whatsoever; (B) the occurrence or
                  continuance of a Default, or (C) any other occurrence, event
                  or condition, whether or not similar to any of the foregoing;
                  provided, however, that each Revolving Lender's obligation to
                  make Committed Advances pursuant to this Section 2.4(c) is
                  subject to the conditions set forth in Section 8.2 (other than
                  delivery by Borrower or any Co-Borrower of a Request for
                  Loan). No such making of an L/C Advance shall relieve or
                  otherwise impair the obligation of Borrower or the relevant
                  Co-Borrower to reimburse the Issuing Lender for the amount of
                  any payment made by the Issuing Lender under any Letter of
                  Credit, together with interest as provided herein.

                                    (6)      If any Revolving Lender fails to
                  make available to the Administrative Agent for the account of
                  the Issuing Lender any amount required to be paid by such
                  Lender pursuant to the foregoing provisions of this Section
                  2.4(c) by the time specified in Section 2.4(c)(2), the Issuing
                  Lender shall be entitled to recover from such Lender (acting
                  through the Administrative Agent), on demand, such amount with
                  interest thereon for the period from the date such payment is
                  required to the date on which such payment is immediately
                  available to the Issuing Lender at a rate per annum equal to
                  the Federal Funds Rate from time to time in effect. A
                  certificate of the Issuing Lender submitted to any Revolving
                  Lender (through the Administrative Agent) with respect to any
                  amounts owing under this clause (6) shall be conclusive absent
                  manifest error.

                           (d)      Repayment of Participations.

                                    (1)      At any time after the Issuing
                  Lender has made a payment under any Letter of Credit and has
                  received from any Revolving Lender such Revolving Lender's L/C
                  Advance in respect of such payment in accordance with Section
                  2.4(c), if the Administrative Agent receives for the account
                  of the Issuing Lender any payment in respect of the related
                  Unreimbursed Amount or interest thereon (whether directly from
                  Borrower, or the relevant Co-Borrower or otherwise, including
                  proceeds of cash collateral applied thereto by the
                  Administrative Agent), the Administrative Agent will
                  distribute to such Revolving Lender its Pro Rata Share thereof
                  (appropriately adjusted, in the case of interest payments, to
                  reflect the period of time during which such Revolving

                                      -33-



                  Lender's L/C Advance was outstanding) in the same funds as
                  those received by the Administrative Agent.

                                    (2)      If any payment received by the
                  Administrative Agent for the account of the Issuing Lender
                  pursuant to Section 2.4(c)(1) is required to be returned under
                  any of the circumstances described in Section 11.30 (including
                  pursuant to any settlement entered into by the Issuing Lender
                  in its discretion), each Revolving Lender shall pay to the
                  Administrative Agent for the account of the Issuing Lender its
                  Pro Rata Share thereof on demand of the Administrative Agent,
                  plus interest thereon from the date of such demand to the date
                  such amount is returned by such Revolving Lender, at a rate
                  per annum equal to the Federal Funds Rate from time to time in
                  effect.

                           (e)      Obligations Absolute. The obligation of
         Borrower and the Co-Borrowers to reimburse the Issuing Lender for each
         drawing under each Letter of Credit and to repay each L/C Borrowing
         shall be absolute, unconditional and irrevocable, and shall be paid
         strictly in accordance with the terms of this Agreement under all
         circumstances, including the following:

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

                                    (2)      the existence of any claim,
                  counterclaim, set-off, defense or other right that Borrower or
                  the relevant Co-Borrower may have at any time against any
                  beneficiary or any transferee of such Letter of Credit (or any
                  Person for whom any such beneficiary or any such transferee
                  may be acting), the Issuing Lender or any other Person,
                  whether in connection with this Agreement, the transactions
                  contemplated hereby or by such Letter of Credit or any
                  agreement or instrument relating thereto, or any unrelated
                  transaction;

                                    (3)      any draft, demand, certificate or
                  other document presented under such Letter of Credit proving
                  to be forged, fraudulent, invalid or insufficient in any
                  respect or any statement therein being untrue or inaccurate in
                  any respect; or any loss or delay in the transmission or
                  otherwise of any document required in order to make a drawing
                  under such Letter of Credit;

                                    (4)      any payment by the Issuing Lender
                  under such Letter of Credit against presentation of a draft or
                  certificate that does not strictly comply with the terms of
                  such Letter of Credit; or any payment made by the Issuing
                  Lender under such Letter of Credit to any Person purporting to
                  be a trustee in bankruptcy, debtor-in-possession, assignee for
                  the benefit of creditors, liquidator, receiver or other
                  representative of or successor to any beneficiary or any
                  transferee of such Letter of Credit, including any arising in
                  connection with any proceeding under any Debtor Relief Law; or

                                    (5)      any other circumstance or happening
                  whatsoever, whether or not similar to any of the foregoing,
                  including any other circumstance that might otherwise
                  constitute a defense available to, or a discharge of, Borrower
                  or the relevant Co-Borrower.

         Borrower or the relevant Co-Borrower shall promptly examine a copy of
         each Letter of Credit and each amendment thereto that is delivered to
         it and, in the event of any claim of noncompliance with Borrower's or
         the relevant Co-Borrower's instructions or other irregularity, Borrower
         or the relevant Co-Borrower will immediately notify the Issuing Lender.
         Borrower or

                                      -34-



         the relevant Co-Borrower shall be conclusively deemed to have waived
         any such claim against the Issuing Lender and its correspondents unless
         such notice is given as aforesaid.

                           (f)      Role of Issuing Lender. Each Lender,
         Borrower and each of the Co-Borrowers agree that, in paying any drawing
         under a Letter of Credit, the Issuing Lender shall not have any
         responsibility to obtain any document (other than any sight draft,
         certificates and documents expressly required by the Letter of Credit)
         or to ascertain or inquire as to the validity or accuracy of any such
         document or the authority of the Person executing or delivering any
         such document. None of the Issuing Lender, any Agent-Related Person nor
         any of the respective correspondents, participants or assignees of the
         Issuing Lender shall be liable to any Lender for (i) any action taken
         or omitted in connection herewith at the request or with the approval
         of the Lenders or the Requisite Lenders, as applicable; (ii) any action
         taken or omitted in the absence of gross negligence or willful
         misconduct; or (iii) the due execution, effectiveness, validity or
         enforceability of any document or instrument related to any Letter of
         Credit or Letter of Credit Application. Borrower and the relevant
         Co-Borrower hereby assume all risks of the acts or omissions of any
         beneficiary or transferee with respect to its use of any Letter of
         Credit; provided, however, that this assumption is not intended to, and
         shall not, preclude Borrower's or the relevant Co-Borrower's pursuing
         such rights and remedies as it may have against the beneficiary or
         transferee at law or under any other agreement. None of the Issuing
         Lender, any Agent-Related Person, nor any of the respective
         correspondents, participants or assignees of the Issuing Lender, shall
         be liable or responsible for any of the matters described in clauses
         (1) through (5) of Section 2.4(e); provided, however, that anything in
         such clauses to the contrary notwithstanding, Borrower or the relevant
         Co-Borrower may have a claim against the Issuing Lender, and the
         Issuing Lender may be liable to Borrower or the relevant Co-Borrower,
         to the extent, but only to the extent, of any direct, as opposed to
         consequential or exemplary, damages suffered by Borrower or the
         relevant Co-Borrower which such Borrower or such Co-Borrower proves
         were caused by the Issuing Lender's willful misconduct or gross
         negligence or the Issuing Lender's willful failure to pay under any
         Letter of Credit after the presentation to it by the beneficiary of a
         sight draft and certificate(s) strictly complying with the terms and
         conditions of a Letter of Credit. In furtherance and not in limitation
         of the foregoing, the Issuing Lender may accept documents that appear
         on their face to be in order, without responsibility for further
         investigation, regardless of any notice or information to the contrary,
         and the Issuing Lender shall not be responsible for the validity or
         sufficiency of any instrument transferring or assigning or purporting
         to transfer or assign a Letter of Credit or the rights or benefits
         thereunder or proceeds thereof, in whole or in part, which may prove to
         be invalid or ineffective for any reason.

                           (g)      Cash Collateral. Upon the request of the
         Administrative Agent, (i) if the Issuing Lender has honored any full or
         partial drawing request under any Letter of Credit and such drawing has
         resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit
         Expiration Date, any Letter of Credit may for any reason remain
         outstanding and partially or wholly undrawn, Borrower or the relevant
         Co-Borrower shall immediately Cash Collateralize the then outstanding
         amount of the Letter of Credit Usage (in an amount equal to such
         outstanding amount determined as of the date of such L/C Borrowing or
         the Letter of Credit Expiration Date, as the case may be). For purposes
         hereof, "Cash Collateralize" means to pledge and deposit with or
         deliver to the Administrative Agent, for the benefit of the Issuing
         Lender and the Revolving Lenders, as collateral for the then
         outstanding amount of the Letter of Credit Usage, cash or deposit
         account balances pursuant to documentation in form and substance
         satisfactory to the Administrative Agent and the Issuing Lender (which
         documents are hereby consented to by the Revolving Lenders), subject to
         any limitations in the Intercreditor Agreement. Derivatives of such
         term have corresponding meanings. Any Cash Collateral shall be
         maintained in blocked, non-interest bearing deposit accounts at Bank of
         America.

                                      -35-



                           (h)      Applicability of ISP98 and UCP. Unless
         otherwise expressly agreed by the Issuing Lender and Borrower or the
         relevant Co-Borrower when a Letter of Credit is issued, (i) the rules
         of the "International Standby Practices 1998" published by the
         Institute of International Banking Law & Practice (or such later
         version thereof as may be in effect at the time of issuance) shall
         apply to each Standby Letter of Credit, and (ii) the rules of the
         Uniform Customs and Practice for Documentary Credits, as most recently
         published by the International Chamber of Commerce (the "ICC") at the
         time of issuance (including the ICC decision published by the
         Commission on Banking Technique and Practice on April 6, 1998 regarding
         the European single currency (euro)) shall apply to each Commercial
         Letter of Credit.

                           (i)      Conflict with Letter of Credit Application.
         In the event of any conflict between the terms hereof and the terms of
         any Letter of Credit Application, the terms hereof shall control.

                           (j)      Fees for Modifications. The issuance of any
         supplement, modification, amendment, renewal, or extension to or of any
         Letter of Credit shall be treated in all respects the same as the
         issuance of a new Letter of Credit, except that the Issuing Lender's
         issuance fees shall be payable as set forth in the letter agreement
         referred to in Section 3.5.

                  2.5      Competitive Advances.

                           (a)      Subject to the terms and conditions hereof,
         at any time and from time to time from the Closing Date through and
         including the Maturity Date, each Revolving Lender may in its sole and
         absolute discretion make Competitive Advances to Borrower or to any
         Co-Borrower in Dollars pursuant to Competitive Bids accepted by
         Borrower or the relevant Co-Borrower in such principal amounts as
         Borrower or the relevant Co-Borrower may request pursuant to a
         Competitive Bid Request that do not result in the aggregate outstanding
         principal Indebtedness evidenced by the Competitive Revolving Notes
         being in excess of the Maximum Competitive Outstandings Amount,
         provided that after giving effect to the making of each Competitive
         Advance, the sum of the Indebtedness evidenced by the Committed
         Revolving Notes and the Competitive Revolving Notes plus the Letters of
         Credit Usage plus the Swing Line Outstandings shall not exceed the then
         effective Revolving Commitment. Each Competitive Advance made to a
         Co-Borrower shall be directly used to finance the development,
         construction or operation of hotel/casino properties owned by that
         Co-Borrower. No Competitive Advance made by any Revolving Lender shall
         relieve that Revolving Lender of its Pro Rata Share of the undrawn
         Revolving Commitment.

                           (b)      Borrower or the relevant Co-Borrower shall
         request Competitive Advances by submitting Competitive Bid Requests to
         the Administrative Agent, which specify the relevant date, amount and
         maturity of the proposed Competitive Advance and whether the
         Competitive Bid requested is an Absolute Rate Bid or a LIBOR Margin
         Bid, or both. Borrower and each Co-Borrower may submit telephonic
         requests for Competitive Advances. Any Competitive Bid Request made by
         telephone shall promptly be confirmed by the delivery to Administrative
         Agent in person or by telecopier of a written Competitive Bid Request.
         The Administrative Agent shall incur no liability whatsoever hereunder
         in acting upon any telephonic Competitive Bid Request purportedly made
         by a Responsible Official of Borrower or Co-Borrower, each of which
         hereby agrees to indemnify the Administrative Agent from any loss,
         cost, expense or liability as a result of so acting. The Competitive
         Bid Request must be received by the Administrative Agent not later than
         9:00 a.m., Los Angeles time, on a Business Day that is at least one
         Business Day prior to the date of the proposed Competitive Advance if
         an Absolute

                                      -36-



         Rate Bid is requested; if a LIBOR Margin Bid is requested, it must be
         received by the Administrative Agent five Business Days prior to the
         date of the proposed Competitive Advance.

                           (c)      Unless the Administrative Agent otherwise
         agrees, in its sole and absolute discretion, no Competitive Bid Request
         may be submitted within the five Business Day period following
         submission of another Competitive Bid Request.

                           (d)      Each Competitive Bid Request must be made
         for a Competitive Advance of at least $10,000,000 and shall be in an
         integral multiple of $1,000,000.

                           (e)      No Competitive Bid Request shall be made for
         a Competitive Advance with a maturity of less than 14 days or more than
         180 days, or with a maturity date subsequent to the Maturity Date.

                           (f)      The Administrative Agent shall, promptly
         after receipt of a Competitive Bid Request, notify the Revolving
         Lenders thereof by telephone and provide the Revolving Lenders a copy
         thereof by telecopier. Any Revolving Lender may, by written notice to
         the Administrative Agent (with a copy to Borrower and the
         Co-Borrowers), advise the Administrative Agent that it elects not to be
         so notified of Competitive Bid Requests, in which case the
         Administrative Agent shall not notify such Revolving Lender of the
         Competitive Bid Request.

                           (g)      Each Revolving Lender receiving a
         Competitive Bid Request may, in its sole and absolute discretion, make
         or not make a Competitive Bid responsive to the Competitive Bid
         Request. Each Competitive Bid shall be submitted to the Administrative
         Agent not later than 7:30 a.m. (or, in the case of the Revolving Lender
         which is also the Administrative Agent, not later than 7:15 a.m.) Los
         Angeles time, in the case of a LIBOR Margin Bid, on the date which is
         four Business Days prior to the requested Competitive Advance and, in
         the case of an Absolute Rate Bid, on the date of the requested
         Competitive Advance. Any Competitive Bid received by the Administrative
         Agent after 7:30 a.m. (or 7:15 a.m. in the case of the Revolving Lender
         which is also the Administrative Agent) on such date shall be
         disregarded for purposes of this Agreement. Any Competitive Bid made by
         telephone shall promptly be confirmed by the delivery to the
         Administrative Agent in person or by telecopier of a written
         Competitive Bid. The Administrative Agent shall incur no liability
         whatsoever hereunder in acting upon any telephonic Competitive Bid
         purportedly made by a Responsible Official of a Revolving Lender, each
         of which hereby agrees to indemnify the Administrative Agent from any
         loss, cost, expense or liability as a result of so acting with respect
         to that Revolving Lender.

                           (h)      Each Competitive Bid shall specify the fixed
         interest rate or the margin over LIBOR, as applicable, for the offered
         Maximum Competitive Advance set forth in the Competitive Bid. The
         Maximum Competitive Advance offered by a Revolving Lender in a
         Competitive Bid may be less than the Competitive Advance requested by
         Borrower or the relevant Co-Borrower in the Competitive Bid Request,
         but, if so, shall be an integral multiple of $1,000,000. Any
         Competitive Bid which offers an interest rate other than a fixed
         interest rate or a margin over LIBOR, is in a form other than set forth
         in Exhibit D or which otherwise contains any term, condition or
         provision not contained in the Competitive Bid Request shall be
         disregarded for purposes of this Agreement. A Competitive Bid once
         submitted to the Administrative Agent shall be irrevocable until 8:30
         a.m. Los Angeles time, in the case of a LIBOR Margin Bid, on the date
         which is three Business Days prior to the requested Competitive Advance
         and, in the case of an Absolute Rate Bid, on the date of the proposed
         Competitive

                                      -37-



         Advance set forth in the related Competitive Bid Request, and shall
         expire by its terms at such time unless accepted by Borrower or the
         relevant Co-Borrower prior thereto.

                           (i)      Promptly after 7:30 a.m. Los Angeles time,
         in the case of a LIBOR Margin Bid, on the date which is four Business
         Days prior to the date of the proposed Competitive Advance and, in the
         case of an Absolute Rate Bid, on the date of the proposed Competitive
         Advance, the Administrative Agent shall notify Borrower or the relevant
         Co-Borrower of the names of the Revolving Lenders providing Competitive
         Bids to the Administrative Agent at or before 7:30 a.m. on that date
         (or 7:15 a.m. in the case of the Revolving Lender which is also the
         Administrative Agent) and the Maximum Competitive Advance and fixed
         interest rate or margin over LIBOR set forth by each such Revolving
         Lender in its Competitive Bid. The Administrative Agent shall promptly
         confirm such notification in writing delivered in person or by
         telecopier to Borrower or the relevant Co-Borrower.

                           (j)      Borrower or the relevant Co-Borrower may, in
         its sole and absolute discretion, reject any or all of the Competitive
         Bids. If Borrower or the relevant Co-Borrower accepts any Competitive
         Bid, the following shall apply: (a) Borrower or the relevant
         Co-Borrower must accept all Absolute Rate Bids at all lower fixed
         interest rates before accepting any portion of an Absolute Rate Bid at
         a higher fixed interest rate, (b) Borrower or the relevant Co-Borrower
         must accept all LIBOR Margin Bids at all lower margins over LIBOR
         before accepting any portion of a LIBOR Margin Bid at a higher margin
         over LIBOR, (c) if two or more Revolving Lenders have submitted a
         Competitive Bid at the same fixed interest rate or margin, then
         Borrower or the relevant Co-Borrower must accept either all of such
         Competitive Bids or accept such Competitive Bids in the same proportion
         as the Maximum Competitive Advance of each Revolving Lender bears to
         the aggregate Maximum Competitive Advances of all such Revolving
         Lenders, and (d) Borrower and the Co-Borrower may not accept
         Competitive Bids for an aggregate amount in excess of the requested
         Competitive Advance set forth in the Competitive Bid Request. Borrower
         or the relevant Co-Borrower must accept (i) each LIBOR Margin Bid prior
         to 8:30 a.m. on the date which is three Business Days prior to the
         requested Competitive Advance and (iii) each Absolute Rate Bid prior to
         8:30 a.m. on the date of the requested Competitive Advance or shall be
         deemed to have rejected the offered Competitive Advances. Acceptance of
         a Competitive Bid by Borrower or a Co-Borrower shall be irrevocable
         upon communication thereof to the Administrative Agent. The
         Administrative Agent shall promptly notify each of the Revolving
         Lenders whose Competitive Bid has been accepted by Borrower or the
         relevant Co-Borrower by telephone, which notification shall promptly be
         confirmed in writing delivered in person or by telecopier to such
         Revolving Lenders.

                           (k)      In the case of LIBOR Margin Bids, the
         Administrative Agent shall determine LIBOR on the date which is two
         Business Days prior to the date of the proposed Competitive Advance,
         and shall promptly thereafter notify Borrower or the relevant
         Co-Borrower and the Revolving Lenders whose Competitive Bids were
         accepted by Borrower or the relevant Co-Borrower of such LIBOR.

                           (l)      A Revolving Lender whose Competitive Bid has
         been accepted shall make the Competitive Advance in accordance with the
         Competitive Bid Request and with its Competitive Bid, subject to the
         applicable conditions set forth in this Agreement by making funds
         immediately available to the Administrative Agent at the Administrative
         Agent's Office in the amount of such Competitive Advance not later than
         12:00 noon, Los Angeles time, on the date set forth in the Competitive
         Bid Request. The Administrative Agent shall then promptly credit the
         Competitive Advance in immediately available funds to the relevant
         Deposit Account.

                                      -38-



                           (m)      The Administrative Agent shall notify
         Borrower and the Revolving Lenders promptly after any Competitive
         Advance is made of the amounts and maturity of such Competitive
         Advances and the identity of the Revolving Lenders making such
         Competitive Advances.

                           (n)      The Competitive Advances made by each
         Revolving Lender shall be evidenced by that Revolving Lender's
         Competitive Revolving Note.

                  2.6      Swing Line.

                           (a)      Subject to the terms and conditions set
         forth herein, from the Closing Date through the day prior to the
         Maturity Date the Swing Line Lender shall make Swing Line Loans to
         Borrower and each of the Co-Borrowers in such amounts as they may
         request which do not result in the sum of the Indebtedness evidenced by
         the Committed Revolving Notes and the Competitive Revolving Notes plus
         the Letters of Credit Usage plus the Swing Line Outstandings exceeding
         the then effective Revolving Commitment (as in effect on the date of
         the making of the related Swing Line Loan), provided that (i) after
         giving effect to each Swing Line Loan, the Swing Line Outstandings
         shall not exceed $50,000,000, (ii) without the consent of all of the
         Lenders, no Swing Line Loan may be made during the continuation of an
         Event of Default and (iii) the Swing Line Lender has not given at least
         twenty-four hours prior notice to Borrower and the Co-Borrowers that
         availability under the Swing Line is suspended or terminated. Borrower
         and the Co-Borrowers may borrow, repay and reborrow under this Section.
         Unless notified to the contrary by the Swing Line Lender, borrowings
         under the Swing Line may be made in amounts which are integral
         multiples of $100,000 upon telephonic request by a Responsible Official
         of Borrower or the relevant Co-Borrower made to the Administrative
         Agent not later than 1:00 p.m., Los Angeles time, on the Business Day
         of the requested borrowing (which telephonic request shall be promptly
         confirmed in writing by telecopier), provided that if the requested
         Swing Line Loan is to be credited to an account which is not with the
         Swing Line Lender, the request must be submitted by 11:30 a.m., Los
         Angeles time. Promptly after receipt of such a request for borrowing,
         the Administrative Agent shall provide telephonic verification to the
         Swing Line Lender that, after giving effect to such request, the sum of
         the Indebtedness evidenced by the Committed Revolving Notes and the
         Competitive Revolving Notes plus the Letters of Credit Usage plus the
         Swing Line Outstandings will not exceed the then effective Revolving
         Commitment (and such verification shall be promptly confirmed in
         writing by telecopier). Unless notified to the contrary by the Swing
         Line Lender, each repayment of a Swing Line Loan shall be in an amount
         which is an integral multiple of $100,000. If Borrower or the relevant
         Co-Borrower instructs the Swing Line Lender to debit its demand deposit
         account at the Swing Line Lender in the amount of any payment with
         respect to a Swing Line Loan, or the Swing Line Lender otherwise
         receives repayment, after 3:00 p.m., Los Angeles time, on a Business
         Day, such payment shall be deemed received on the next Business Day.
         The Swing Line Lender shall promptly notify the Administrative Agent of
         the Swing Line Outstandings each time there is a change therein or if
         it suspends or terminates availability under the Swing Line.

                           (b)      Swing Line Loans shall bear interest at a
         fluctuating rate per annum equal to the Base Rate plus the Base Rate
         Margin minus one percent per annum. Interest shall be payable on such
         dates, not more frequent than monthly, as may be specified by the Swing
         Line Lender and in any event on the Maturity Date. The Swing Line
         Lender shall be responsible for invoicing Borrower or the relevant
         Co-Borrower for such interest. Interest payable on Swing Line Loans is
         solely for the account of the Swing Line Lender (subject to clause (d)
         below).

                                      -39-



                           (c)      The Swing Line Loans shall be payable within
         five Business Days after demand made by the Swing Line Lender and in
         any event on the Maturity Date or any earlier date when all other
         Obligations are due.

                           (d)      Upon the making of a Swing Line Loan in
         accordance with Section 2.6(a), each Revolving Lender shall be deemed
         to have purchased from the Swing Line Lender a participation therein in
         an amount equal to that Lender's Pro Rata Share of the Revolving
         Commitment times the amount of the Swing Line Loan. Upon demand made by
         the Swing Line Lender through the Administrative Agent, each Revolving
         Lender shall, according to its Pro Rata Share of the Revolving
         Commitment, promptly provide to the Swing Line Lender its purchase
         price therefor in an amount equal to its participation therein. The
         obligation of each Revolving Lender to so provide its purchase price to
         the Swing Line Lender shall be absolute and unconditional (subject only
         to the making of a demand upon that Revolving Lender by the Swing Line
         Lender) and shall not be affected by the occurrence of a Default or
         Event of Default; provided that no Revolving Lender shall be obligated
         to purchase its Pro Rata Share under the Revolving Commitment of (i)
         Swing Line Loans to the extent that Swing Line Outstandings are in
         excess of $50,000,000 or to the extent that the sum of the Indebtedness
         evidenced by the Committed Revolving Notes and the Competitive
         Revolving Notes plus the Letters of Credit Usage plus the Swing Line
         Outstandings exceeds the Revolving Commitment (as in effect on the date
         of the making of the related Swing Line Loan) and (ii) any Swing Line
         Loan made (absent the consent of all of the Revolving Lenders) at any
         time when the applicable conditions set forth in Section 8.2 have not
         been satisfied. Each Revolving Lender that has provided to the Swing
         Line Lender the purchase price due for its participation in Swing Line
         Loans shall thereupon acquire a pro rata participation, to the extent
         of such payment, in the claim of the Swing Line Lender against Borrower
         and the Co-Borrowers for principal and interest and shall share, in
         accordance with that pro rata participation, in any principal payment
         made by Borrower or the Co-Borrowers with respect to such claim and in
         any interest payment made by Borrower or the Co-Borrowers (but only
         with respect to periods subsequent to the date such Revolving Lender
         paid the Swing Line Lender its purchase price) with respect to such
         claim.

                           (e)      Upon any demand for payment of the Swing
         Line Outstandings by the Swing Line Lender (unless Borrower or the
         relevant Co-Borrower has made other arrangements acceptable to the
         Swing Line Lender to reduce the Swing Line Outstandings to $0),
         Borrower or the relevant Co-Borrower shall request a Committed Loan
         pursuant to Section 2.1(a) sufficient to repay all Swing Line
         Outstandings (and, for this purpose, Section 2.1(f) shall not apply).
         In each case, the Administrative Agent shall automatically provide the
         respective Committed Advances made by each Revolving Lender to the
         Swing Line Lender (which the Swing Line Lender shall then apply to the
         Swing Line Outstandings). In the event that Borrower and the
         Co-Borrowers fail to request a Committed Loan within the time specified
         by Section 2.2 on any such date, the Administrative Agent may, but is
         not required to, without notice to or the consent of Borrower or the
         Co-Borrowers, cause Committed Advances to be made by the Revolving
         Lenders under the Revolving Commitment in amounts which are sufficient
         to reduce the Swing Line Outstandings as required above. The conditions
         precedent set forth in Article 8 shall not apply to Committed Advances
         to be made by the Revolving Lenders pursuant to the three preceding
         sentences but the Revolving Lenders shall not be obligated to make such
         Committed Advances to the extent that the conditions set forth in
         Section 2.6(a)(i), (ii) and (iii) were not satisfied as to any Swing
         Line Loan which is part of such Swing Line Outstandings. The proceeds
         of such Committed Advances shall be paid directly to the Swing Line
         Lender for application to the Swing Line Outstandings.

                           2.7      Co-Borrowers. Detroit is hereby designated
as a direct Co-Borrower under this Agreement, with the right to request Loans
and Letters of Credit through the Administrative Agent

                                      -40-


directly from the Lenders and the Issuing Lender, subject to the terms and
conditions set forth herein, provided that (a) each Loan and Letter of Credit
made hereunder to Detroit or any other Co-Borrower shall be used solely and
directly to finance the development, construction or operation of hotel/casino
properties owned by that Co-Borrower, and (b) the liability of Detroit is
limited to that portion of the Obligations which are actually borrowed or
received by Detroit. From time to time following the Closing Date, Borrower may
designate one or more Guarantors which are United States domestic Persons to be
additional joint and several direct Co-Borrowers hereunder by written request to
the Administrative Agent accompanied by (a) an executed Assumption Agreement and
appropriate Notes executed by the designated Guarantor, (b) a certificate of
good standing of the designated Guarantor in the jurisdiction of its
incorporation, (c) a certified corporate authority resolution covering the
execution and delivery of the Assumption Agreement and such Notes, (d) a written
consent to the Assumption Agreement executed by each other Guarantor, and (e) an
appropriate written legal opinion similar to the Opinions with respect to the
Co-Borrower and the Assumption Agreement. The Administrative Agent shall
promptly notify the Lenders of such request, together with copies of such of the
foregoing as any Lender may request and the designated Guarantor shall become a
Co-Borrower hereunder.

                 2.8      Mandatory Reductions of the Term Commitment. Borrower
and the Co-Borrowers shall repay the Term Loans on each Quarterly Payment Date,
commencing with the Quarterly Payment Date occurring on December 31, 2005, in
the related Term Amortization Amount. Each prepayment of the Term Loan shall be
applied to installments of principal in respect of the Term Loans in the order
of their occurrence unless the Borrower otherwise specifies in writing at the
time of such prepayment in a writing making reference to this Section.

                 2.9      Voluntary Reduction of the Commitments. Borrower and
the Co-Borrowers shall have the right, at any time and from time to time,
without penalty or charge, upon at least three Business Days' prior written
notice by a Responsible Official of Borrower and the Co-Borrowers to the
Administrative Agent, voluntarily to reduce, permanently and irrevocably, in
aggregate principal amounts in an integral multiple of $1,000,000 (but in the
case of assignments of Pro Rata Shares of the Revolving Commitment, not less
than $5,000,000), or to terminate, all or a portion of the then undisbursed
portion of either of the Commitments; provided that (a) the Revolving Commitment
may not be so reduced below an amount equal to the sum of (i) the aggregate
principal amount outstanding under the Committed Revolving Notes and the
Competitive Revolving Notes, plus (ii) the Letters of Credit Usage plus (iii)
the Swing Line Outstandings, and (b) concurrently with each reduction of the
Term Commitment, the Term Loans shall be prepaid in the same amount (with each
such prepayment to be applied to Term Amortization Amounts in the inverse order
of their occurrence). The Administrative Agent shall promptly notify the Lenders
of any reduction or termination of the Commitments under this Section.

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

                 2.11     Administrative Agent's Right to Assume Funds Available
for Advances. Unless the Administrative Agent shall have been notified by any
Lender no later than 10:00 a.m. on the Business Day of the proposed funding by
the Administrative Agent of any Loan that such Lender does not intend

                                      -41-


to make available to the Administrative Agent such Lender's portion of the
total amount of such Loan, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on the date of the
Loan and the Administrative Agent may, in reliance upon such assumption, make
available to Borrower or the relevant Co-Borrower a corresponding amount. If the
Administrative Agent has made funds available to Borrower or a Co-Borrower based
on such assumption and such corresponding amount is not in fact made available
to the Administrative Agent by such Lender, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent promptly shall
notify Borrower or that Co-Borrower who shall pay such corresponding amount to
the Administrative Agent. The Administrative Agent also shall be entitled to
recover from such Lender interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by the
Administrative Agent to Borrower or the Co-Borrowers to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to the daily Federal Funds Rate. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its share of the Commitments
or to prejudice any rights which the Administrative Agent, Borrower or any
Co-Borrower may have against any Lender as a result of any default by such
Lender hereunder.

                  2.12     Release and Reattachment of Collateral.

                           (a)      If, following the Closing Date, Borrower and
         its Restricted Subsidiaries are then entitled to the release of all of
         the Liens described in the Intercreditor Agreement, both pursuant to
         this Agreement, pursuant to the Intercreditor Agreement and pursuant to
         the credit documents governing each of the then existing Qualified
         Obligations, and provided that no Default or Event of Default has then
         occurred and remains continuing, Borrower and the Co-Borrowers may in
         their sole discretion request that the Administrative Agent release,
         and that the Administrative Agent as a Creditor Representative under
         the Intercreditor Agreement direct the Collateral Agent to release,
         each of the Liens securing the Obligations and the other Qualified
         Obligations. Borrower and the Co-Borrowers shall submit any request
         under this Section in the form of a Certificate, in form and substance
         acceptable to the Administrative Agent, signed by a Senior Officer of
         Borrower and each Co-Borrower certifying that no Default or Event of
         Default exists, together with a written consent to the release of
         collateral executed by each Guarantor and such other supporting
         information as the Administrative Agent may request, including evidence
         reasonably satisfactory to the Administrative Agent that the Collateral
         Agent and the holders of the other Qualified Obligations shall
         previously or concurrently release all Liens held by such creditors.
         Promptly upon receipt of such a Certificate, the Administrative Agent
         shall (i) provide a copy thereof to the Lenders, (ii) direct the
         Collateral Agent to return to the Persons legally entitled thereto, all
         Collateral pledged in support of the Obligations and the other
         Qualified Obligations, and (iii) release any Liens then held for the
         Obligations by the Administrative Agent (other than any rights of set
         off or other inchoate Liens), but subject to the requirement that the
         Liens held by the Collateral Agent and the holders of the other
         Qualified Obligations are previously or concurrently released, all at
         the sole expense of Borrower and the Co-Borrowers (a "Collateral
         Release"). No Collateral Release shall constitute or be construed as a
         release (or to require the release) of the Guaranty.

                           (b)      If, following any Collateral Release, a
         Collateral Event occurs, then Borrower and the Co-Borrowers shall, and
         shall cause each of the Restricted Subsidiaries to, promptly and in any
         event within thirty days following the occurrence of such Collateral
         Event and in any event not later than the granting of any Liens in such
         collateral for the benefit of any Senior Indebtedness, grant perfected
         Liens in the same collateral to secure the Obligations (including any
         Related Swap Agreements) equally, ratably and on a pari passu basis
         with such

                                      -42-




         Senior Indebtedness, provided that Borrower and the Restricted
         Subsidiaries shall not be obligated to provide Liens in any Property to
         the extent that Gaming Laws prohibit the granting of Liens in such
         Property to holders of the Obligations and the Senior Indebtedness
         unless and until all required approvals of Gaming Boards thereto are
         obtained. In such event, Borrower shall, and shall cause each
         Restricted Subsidiary to, use its best efforts to obtain all necessary
         consents from the applicable Gaming Boards to grant a perfected Lien on
         such Property securing the Obligations and such Senior Indebtedness
         and, upon receipt of all consents needed to grant such a perfected
         Lien, shall promptly take all action (or cause the Restricted
         Subsidiaries to take all action) reasonably necessary in order to grant
         and perfect such a Lien. The Liens granted pursuant to this clause (b)
         shall be (i) equal, ratable and pari passu with any Liens securing the
         other Senior Indebtedness, (ii) granted concurrently therewith, and
         (iii) granted pursuant to instruments, documents and agreements which
         are similar to the Collateral Documents or otherwise reasonably
         acceptable to the Administrative Agent. While each of the Liens
         contemplated by this clause (b) shall be equal, ratable and pari passu
         in the manner described above, it is acknowledged that the same may
         subordinate to certain prior Liens in favor of creditors other than the
         holders of Senior Indebtedness permitted pursuant to Section 6.6. In
         connection with the granting of any such Liens, Borrower and its
         Restricted Subsidiaries shall provide to the Administrative Agent (y)
         policies of title insurance on customary terms and conditions, to the
         extent that policies of title insurance on the corresponding Property
         are provided to the holders of other classes of Senior Indebtedness
         (and in an insured amount that is proportionately equal to the policies
         provided to the holders of the other classes of Senior Indebtedness),
         and (z) legal opinions and other assurances as the Administrative Agent
         may reasonably request.

                  2.13     Senior Indebtedness. The Obligations shall be and
hereby are designated as "Senior Indebtedness" and "Senior Obligations" of the
Borrower and its Restricted Subsidiaries with respect to all Subordinated
Obligations, and all payments with respect to any Subordinated Obligations shall
be subject to Section 6.1.

                  2.14     Collateral. As of the Closing Date and each
subsequent date, unless a Collateral Release has occurred and no re-attachment
has thereafter occurred, the Obligations under the Loan Documents, including
each Related Swap Agreement, are secured by the Collateral contemplated by the
Intercreditor Agreement and the Collateral Documents on an equal, ratable and
pari passu basis with the other Qualified Obligations, as provided for in the
Intercreditor Agreement and in the manner set forth therein.

                                      -43-


                                    ARTICLE 3
                                PAYMENTS AND FEES

                  3.1      Principal and Interest.

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

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

                           (c)      Interest accrued on each LIBOR Loan which is
         for a term of three months or less shall be due and payable on the last
         day of the related Interest Period. Interest accrued on each other
         LIBOR Loan shall be due and payable on the date which is three months
         after the date such LIBOR Loan was made (and, every three months
         thereafter through the last day of the Interest Period) and on the last
         day of the related Interest Period. Except as otherwise provided in
         Section 3.9, the unpaid principal amount of any LIBOR Loan shall bear
         interest at a rate per annum equal to LIBOR for that LIBOR Loan plus
         the applicable LIBOR Margin.

                           (d)      Interest accrued on each Competitive Advance
         shall be due and payable on the maturity date of the Competitive
         Advance. Except as otherwise provided in Section 3.9, the unpaid
         principal amount of each Competitive Advance shall bear interest at the
         fixed interest rate or the margin over LIBOR specified in the related
         Competitive Bid.

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

                                    (i)      the amount, if any, by which the
                  Obligations outstanding (including, without limitation,
                  obligations evidenced by the Competitive Revolving Notes)
                  under the Revolving Commitment at any time exceed the then
                  applicable Revolving Commitment, shall be payable immediately;

                                    (ii)     the Term Loans shall be payable on
                  each Quarterly Payment Date in the related Term Amortization
                  Amount;

                                    (iii)    the principal amount of each
                  Competitive Advance shall be payable on the maturity date
                  specified in the related Competitive Bid; and

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

                           (f)      The Notes may, at any time and from time to
         time, voluntarily be paid or prepaid in whole or in part without
         premium or penalty, except that with respect to any voluntary

                                      -44-


         prepayment under this Section 3.1(f), (i) any partial prepayment shall
         be not less than $5,000,000, or in integral multiples of $1,000,000
         which are in excess of $5,000,000, (ii) the Administrative Agent shall
         have received written notice of any prepayment by 9:00 a.m., Los
         Angeles time, on the Business Day prior to the date of prepayment
         (which must be a Business Day) in the case of a Base Rate Loan, and, in
         the case of a LIBOR Loan, three Business Days before the date of
         prepayment, which notice shall identify the date and amount of the
         prepayment and the Loan(s) being prepaid, (iii) each prepayment of
         principal on any LIBOR Loan shall be accompanied by payment of interest
         accrued to the date of payment on the amount of principal paid, (iv)
         any payment or prepayment of all or any part of any LIBOR Loan on a day
         other than the last day of the applicable Interest Period shall be
         subject to Section 3.8(e) and (v) each prepayment of the Term Loans
         shall be applied to Term Amortization Amounts in the inverse order of
         their maturity. Promptly following receipt of a notice of prepayment
         under clause (ii) above, the Administrative Agent shall notify each
         Lender by telephone or telecopier (and if by telephone, promptly
         confirmed by telecopier) of the date and amount thereof.

                           (g)      No Competitive Revolving Note may be prepaid
         without the prior written consent of the Lender making such Competitive
         Advance.

                  3.2      Joint Lead Arranger's Fees. On the date hereof,
Borrower shall pay to the Joint Lead Arrangers fees in the amounts heretofore
agreed upon by letter agreement between Borrower and the Joint Lead Arrangers.
These fees are for the services of the Joint Lead Arrangers in arranging the
credit facilities under this Agreement and are fully earned when paid and are
nonrefundable.

                  3.3      Upfront Fees. On the date hereof, Borrower shall pay
to the Administrative Agent, for the account of each Lender, upfront fees in an
amount equal to (a) that Lender's allocated Pro Rata Share of the relevant
Commitments times (b) a fee percentage based upon the amount of the offered
commitment of that Lender to the credit facilities described herein, as set
forth in a written confirmation delivered to that Lender by the Lead Arranger,
provided that the fee percentage for Bank of America shall be as set forth in a
letter agreement with Bank of America. Such upfront fees are for the credit
facilities committed by each Lender under this Agreement and are fully earned
when paid. The upfront fees paid to each Lender are solely for its own account
and are nonrefundable.

                  3.4      Unused Fees. From the Closing Date, Borrower and the
Co-Borrowers shall pay to the Administrative Agent, for the ratable accounts of
the Revolving Lenders pro rata according to their Pro Rata Shares of the
Revolving Commitment, an unused fee equal to the Unused Fee Rate in effect from
time to time times the difference between (a) the principal amount of the
Revolving Commitment, and (b) the aggregate principal amount of the Obligations
outstanding from time to time under the Revolving Commitment (including the
Letters of Credit), other than the Swing Line Outstandings and other than the
aggregate principal amount outstanding under the Competitive Revolving Notes
(the "Unused Fee"). The Unused Fees shall be payable quarterly in arrears on
each Quarterly Payment Date, on the Maturity Date upon the date of any partial
reduction or termination of the Revolving Commitment pursuant to Sections 2.9,
2.10 or 11.26.

                  3.5      Letter of Credit Fees. With respect to each Letter of
Credit, Borrower and the Co-Borrowers shall pay the following fees:

                           (a)      concurrently with the issuance of each
         Standby Letter of Credit, a letter of credit issuance fee to the
         Issuing Lender for the sole account of the Issuing Lender, in an amount
         set forth in a letter agreement between Borrower and the Issuing
         Lender;

                                      -45-


                           (b)      concurrently with the issuance of each
         Standby Letter of Credit, to the Administrative Agent for the ratable
         account of the Revolving Lenders in accordance with their Pro Rata
         Shares of the Revolving Commitment, a standby letter of credit fee in
         an amount equal to the applicable Standby Letter of Credit Fee per
         annum as of the date of such issuance times the face amount of such
         Standby Letter of Credit through the termination or expiration of such
         Standby Letter of Credit, which the Administrative Agent shall promptly
         pay to the Lenders; and

                           (c)      concurrently with each issuance,
         negotiation, drawing or amendment of each Commercial Letter of Credit,
         to the Issuing Lender for the sole account of the Issuing Lender,
         issuance, negotiation, drawing and amendment fees in the amounts set
         forth from time to time as the Issuing Lender's published scheduled
         fees for such services.

Each of the fees payable with respect to Letters of Credit under this Section is
earned when due and is nonrefundable.

                  3.6      Agency Fees. On the Closing Date and annually
thereafter, Borrower and the Co-Borrowers shall pay to the Administrative Agent
an agency fee in such amounts as heretofore agreed upon by letter agreement
between Borrower and Bank of America and the Lead Arranger. The agency fee is
for the services to be performed by the Administrative Agent in acting as
Administrative Agent and is fully earned on the date paid. The agency fee paid
to the Administrative Agent is solely for its own account and is nonrefundable.

                  3.7      Increased Commitment Costs. If any Lender shall
determine in good faith that the introduction after the Closing Date of any
applicable law, rule, regulation or guideline regarding capital adequacy, or any
change therein or any change in the interpretation or administration thereof by
any central bank or other Governmental Agency charged with the interpretation or
administration thereof, or compliance by such Lender (or its LIBOR Lending
Office) or any corporation controlling the Lender, with any request, guideline
or directive regarding capital adequacy (whether or not having the force of Law)
of any such central bank or other authority, affects or would affect the amount
of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital) determines in good faith that the amount of
such capital is increased, or the rate of return on capital is reduced, as a
consequence of its obligations under this Agreement, then, within ten Business
Days after demand of such Lender, Borrower and the Co-Borrowers shall pay to
such Lender, from time to time as specified in good faith by such Lender,
additional amounts sufficient to compensate such Lender in light of such
circumstances, to the extent reasonably allocable to such obligations under this
Agreement, provided that Borrower and the Co-Borrowers shall not be obligated to
pay any such amount which arose prior to the date which is ninety days preceding
the date of such demand or is attributable to periods prior to the date which is
ninety days preceding the date of such demand. Each Lender's determination of
such amounts shall be conclusive in the absence of manifest error. Any request
for compensation by a Lender under this Section shall set forth the basis upon
which it has been determined that such an amount is due from Borrower and the
Co-Borrowers, a calculation of the amount due, and a certification that the
corresponding costs or diminished rate of return on capital have been incurred
or sustained by the Lender. If Borrower and the Co-Borrowers become obligated to
pay a material amount under this Section to any Lender, that Lender will be
subject to removal in accordance with Section 11.26; provided that Borrower and
the Co-Borrowers shall have paid such amount to that Lender and that Borrower
and the Co-Borrowers, within the thirty day period following the date of such
payment, shall have notified that Lender in writing of their intent to so remove
the Lender.

                                      -46-


                  3.8      LIBOR Costs and Related Matters.

                           (a)      In the event that any Governmental Agency
         imposes on any Lender any reserve or comparable requirement (including
         any emergency, supplemental or other reserve) with respect to
         liabilities or assets consisting of or including Eurocurrency funds or
         deposits (currently known as "eurocurrency liabilities") of that
         Lender, Borrower or the relevant Co-Borrower shall pay that Lender
         within five Business Days after demand all amounts necessary to
         compensate such Lender (determined as though such Lender's LIBOR
         Lending Office had funded 100% of its LIBOR Advance in the Designated
         Market) in respect of the imposition of such reserve requirements. The
         Lender's determination of such amount shall be conclusive in the
         absence of manifest error.

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

                                    (1)      shall subject any Lender or its
                  LIBOR Lending Office to any tax, duty or other charge or cost
                  with respect to any LIBOR Advance, any of its Notes evidencing
                  LIBOR Advances or its obligation to make LIBOR Advances, or
                  shall change the basis of taxation of payments to any Lender
                  attributable to the principal of or interest on any LIBOR
                  Advance or any other amounts due under this Agreement in
                  respect of any LIBOR Advance, any of its Notes evidencing
                  LIBOR Advances or its obligation to make LIBOR Advances,
                  excluding (i) taxes imposed on or measured in whole or in part
                  by its overall net income, gross income or gross receipts,
                  (ii) franchise taxes imposed by (A) any jurisdiction (or
                  political subdivision thereof) in which it is organized or
                  maintains its principal office or LIBOR Lending Office or (B)
                  any jurisdiction (or political subdivision thereof) in which
                  it is "doing business," and (iii) any withholding taxes or
                  other taxes based on gross income imposed by the United States
                  of America for any period with respect to which it has failed
                  to provide Borrower or the relevant Co-Borrower with the
                  appropriate form or forms required by Section 11.21, to the
                  extent such forms are then available under applicable Laws;

                                    (2)      shall impose, modify or deem
                  applicable any reserve not applicable or deemed applicable on
                  the date hereof (including any reserve imposed by the Board of
                  Governors of the Federal Reserve System, special deposit,
                  capital or similar requirements against assets of, deposits
                  with or for the account of, or credit extended by, any Lender
                  or its LIBOR Lending Office); or

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

         and the result of any of the foregoing, as determined in good faith by
         such Lender, increases the cost to such Lender or its LIBOR Lending
         Office of making or maintaining any LIBOR Advance or in respect of any
         LIBOR Advance, any of its Notes evidencing LIBOR Advances or its
         obligation to make LIBOR Advances or reduces the amount of any sum
         received or receivable by such Lender or its LIBOR Lending Office with
         respect to any LIBOR Advance, any of its Notes evidencing LIBOR
         Advances or its obligation to make LIBOR Advances (assuming such
         Lender's LIBOR Lending Office had funded 100% of its LIBOR Advance in
         the Designated Market), then, within five Business Days after demand by
         such Lender (with a copy to the Administrative Agent), Borrower and the
         Co-Borrowers shall pay to such Lender such additional

                                      -47-


         amount or amounts as will compensate such Lender for such increased
         cost or reduction (determined as though such Lender's LIBOR Lending
         Office had funded 100% of its LIBOR Advance in the Designated Market).
         A statement of any Lender claiming compensation under this subsection
         and setting forth in reasonable detail the additional amount or amounts
         to be paid to it hereunder shall be conclusive in the absence of
         manifest error.

                           (c)      If, after the date hereof, the existence or
         occurrence of any Special Eurodollar Circumstance shall, in the good
         faith opinion of any Lender, make it unlawful or impossible for such
         Lender or its LIBOR Lending Office to make, maintain or fund its
         portion of any LIBOR Advance or materially restrict the authority of
         such Lender to purchase or sell, or to take deposits of, Dollars in the
         Designated Market, or to determine or charge interest rates based upon
         LIBOR, and such Lender shall so notify the Administrative Agent, then
         such Lender's obligation to make LIBOR Advances shall be suspended for
         the duration of such illegality or impossibility and the Administrative
         Agent forthwith shall give notice thereof to the other Lenders,
         Borrower and the Co-Borrowers. Upon receipt of such notice, the
         outstanding principal amount of such Lender's LIBOR Advances, together
         with accrued interest thereon, automatically shall be converted to Base
         Rate Advances on either (1) the last day of the Interest Period(s)
         applicable to such LIBOR Advances if such Lender may lawfully continue
         to maintain and fund such LIBOR Advances to such day(s) or (2)
         immediately if such Lender may not lawfully continue to fund and
         maintain such LIBOR Advances to such day(s), provided that in such
         event the conversion shall not be subject to payment of a prepayment
         fee under clause (e) of this Section. Each Lender agrees to endeavor
         promptly to notify Borrower and the Co-Borrowers of any event occurring
         after the Closing Date of which it has actual knowledge, which will
         cause that Lender to notify the Administrative Agent under this
         Section, and agrees to designate a different LIBOR Lending Office if
         such designation will avoid the need for such notice and will not, in
         the good faith judgment of such Lender, otherwise be materially
         disadvantageous to such Lender. In the event that any Lender is unable,
         for the reasons set forth above, to make, maintain or fund its portion
         of any LIBOR Loan or Advance, such Lender shall fund such amount as a
         Base Rate Advance for the same period of time, and such amount shall be
         treated in all respects as a Base Rate Advance. Any Lender whose
         obligation to make LIBOR Advances has been suspended under this Section
         shall promptly notify the Administrative Agent and Borrower of the
         cessation of the Special Eurodollar Circumstance which gave rise to
         such suspension.

                           (d)      If, with respect to any proposed LIBOR Loan:

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

                                    (2)      the Requisite Lenders advise the
                  Administrative Agent that LIBOR as determined by the
                  Administrative Agent (i) does not represent the effective
                  pricing to such Lenders for deposits in Dollars in the
                  Designated Market in the relevant amount for the applicable
                  Interest Period, or (ii) will not adequately and fairly
                  reflect the cost to such Lenders of making the applicable
                  LIBOR Advances;

         then the Administrative Agent forthwith shall give notice thereof to
         Borrower or the relevant Co-Borrower and the Lenders, whereupon until
         the Administrative Agent notifies Borrower or the relevant Co-Borrower
         that the circumstances giving rise to such suspension no longer exist,
         the obligation of the Lenders to make any future LIBOR Advances shall
         be suspended unless (but

                                      -48-


         only if clause (2) above is the basis for such suspension) Borrower and
         each Co-Borrower notify the Administrative Agent in writing that they
         elect to pay the Enhanced LIBOR Margin with respect to all LIBOR Loans
         made during such period.

                           (e)      Upon payment or prepayment of any LIBOR
         Advance (other than as the result of a conversion required under clause
         (c) of this Section) on a day other than the last day in the applicable
         Interest Period (whether voluntarily, involuntarily, by reason of
         acceleration, or otherwise), or upon the failure of Borrower or any
         Co-Borrower (for a reason other than the failure of a Lender to make an
         Advance) to borrow on the date or in the amount specified for a LIBOR
         Advance in any Request for Loan or Competitive Bid Request, or upon the
         failure of Borrower or any Co-Borrower to prepay a LIBOR Loan or
         Advance on the date specified in a notice of prepayment delivered to
         the Administrative Agent pursuant to Section 3.1(f), Borrower and the
         Co-Borrowers shall pay to the appropriate Lender within 10 Business
         Days after demand a prepayment fee, failure to borrow fee or failure to
         prepay fee, as the case may be (determined as though 100% of that
         Lender's LIBOR Advance had been funded in the Designated Market), equal
         to the sum of:

                                    (1)      the principal amount of the LIBOR
                  Advance prepaid or not borrowed or prepaid, as the case may
                  be, times (the number of days from and including the date of
                  prepayment or failure to borrow or prepay, as applicable, to
                  but excluding the last day in the applicable Interest Period
                  divided by 360) times the applicable Interest Differential
                  (provided that the product of the foregoing formula must be a
                  positive number); plus

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

         Each Lender's determination of the amount of any prepayment fee,
         failure to borrow fee or failure to prepay fee payable under this
         Section shall be conclusive in the absence of manifest error.

                           (f)      Each Lender agrees to endeavor promptly to
         notify Borrower and the Co-Borrowers of any event of which it has
         actual knowledge, occurring after the Closing Date, which will entitle
         such Lender to compensation pursuant to clause (a) or clause (b) of
         this Section, and agrees to designate a different LIBOR Lending Office
         if such designation will avoid the need for or reduce the amount of
         such compensation and will not, in the good faith judgment of such
         Lender, otherwise be materially disadvantageous to such Lender. Any
         request for compensation by a Lender under this Section shall set forth
         the basis upon which it has been determined that such an amount is due
         from Borrower and the Co-Borrowers, a calculation of the amount due,
         and a certification that the corresponding costs have been incurred by
         the Lender.

                           (g)      If any Lender claims compensation or is
         excused from making or continuing LIBOR Loans or Advances under this
         Section:

                                    (i)      Borrower and the Co-Borrowers may
                  at any time, upon at least four Business Days' prior notice to
                  the Administrative Agent and such Lender and upon payment in
                  full of the amounts provided for in this Section through the
                  date of such payment plus any prepayment fee (subject to
                  clause (c) of this Section) required by clause (e) of this
                  Section, pay in full the affected LIBOR Advances of such
                  Lender or request that such LIBOR Advances be converted to
                  Base Rate Advances; and

                                      -49-


                                    (ii)     In the case where Borrower and the
                  Co-Borrowers become obligated to pay a material amount under
                  this Section to any Lender, that Lender will be subject to
                  removal in accordance with Section 11.26; provided that
                  Borrower and the Co-Borrowers shall have paid such amount to
                  that Lender and that Borrower and the Co-Borrowers, within the
                  thirty day period following the date of such payment, shall
                  have notified that Lender in writing of their intent to so
                  remove the Lender.

                  3.9      Late Payments. If any installment of principal or
interest or any fee or cost or other amount payable under any Loan Document to
the Administrative Agent or any Lender is not paid when due, it shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the
rate otherwise payable with respect thereto plus 2% per annum (or, in the case
of any Obligations which do not bear stated interest, at the rate then otherwise
applicable to Base Rate Loans plus 2% per annum), to the fullest extent
permitted by applicable Laws. Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be compounded monthly, on the
last day of each calendar month, to the fullest extent permitted by applicable
Laws.

                  3.10     Computation of Interest and Fees. Computation of
interest on Base Rate Loans shall be calculated on the basis of a year of 365 or
366 days, as the case may be, and the actual number of days elapsed; computation
of interest on LIBOR Loans, Competitive Advances and all fees under this
Agreement shall be calculated on the basis of a year of 360 days and the actual
number of days elapsed. Borrower and the Co-Borrowers acknowledge that such
latter calculation method will result in a higher yield to the Lenders than a
method based on a year of 365 or 366 days. Interest shall accrue on each Loan
for the day on which the Loan is made; interest shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid. Any
Loan that is repaid on the same day on which it is made shall bear interest for
one day. Notwithstanding anything in this Agreement to the contrary, interest in
excess of the maximum amount permitted by applicable Laws shall not accrue or be
payable hereunder or under the Notes, and any amount paid as interest hereunder
or under the Notes which would otherwise be in excess of such maximum permitted
amount shall instead be treated as a payment of principal.

                  3.11     Non-Business Days. If any payment to be made by
Borrower, any of the Co-Borrowers or any other Party under any Loan Document
shall come due on a day other than a Business Day, payment shall instead be
considered due on the next succeeding Business Day and the extension of time
shall be reflected in computing interest and fees.

                  3.12     Manner and Treatment of Payments.

                           (a)      Each payment hereunder (except payments
         pursuant to Sections 3.7, 3.8, 11.3, 11.11 and 11.22) or on the Notes
         or under any other Loan Document shall be made to the Administrative
         Agent, at the Administrative Agent's Office, for the account of each of
         the Lenders or the Administrative Agent, as the case may be, in
         immediately available funds not later than 12:00 noon (other than
         payments with respect to Swing Line Loans, which must be paid directly
         to the Swing Line Lender and received by 3:00 p.m.), Los Angeles time,
         on the day of payment (which must be a Business Day). All payments
         received after such time, on any Business Day, shall be deemed received
         on the next succeeding Business Day. The amount of all payments
         received by the Administrative Agent for the account of each Lender
         shall be immediately paid by the Administrative Agent to the applicable
         Lender in immediately available funds and, if such payment was received
         by the Administrative Agent by 12:00 noon, Los Angeles time, on a
         Business Day and not so made available to the account of a Lender on
         that Business Day, the Administrative Agent shall reimburse that Lender
         for the cost to such Lender of funding the amount of such payment at
         the Federal Funds Rate. All payments shall be made in lawful money of
         the United States of America.

                                      -50-


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

                           (c)      Each Lender shall use its best efforts to
         keep a record (which may be in tangible or electronic or other
         intangible form) of Advances made by it and payments received by it
         with respect to each of its Notes and such record shall, as against
         Borrower and the Co-Borrowers, be presumptive evidence of the amounts
         owing. Notwithstanding the foregoing sentence, the failure by any
         Lender to keep such a record shall not affect Borrower's and the
         Co-Borrowers' joint and several obligations to pay the Obligations.

                           (d)      Each payment of any amount payable by
         Borrower or any other Party under this Agreement or any other Loan
         Document shall be made free and clear of, and without reduction by
         reason of, any taxes, assessments or other charges imposed by any
         Governmental Agency, central bank or comparable authority, excluding
         (i) taxes imposed on or measured in whole or in part by overall net
         income, gross income or gross receipts, (ii) franchise taxes imposed on
         any Lender by (A) any jurisdiction (or political subdivision thereof)
         in which it is organized or maintains its principal office or LIBOR
         Lending Office or (B) any jurisdiction (or political subdivision
         thereof) in which it is "doing business," (iii) any withholding taxes
         or other taxes based on gross income imposed by the United States of
         America that are not attributable to any change in any Law or the
         interpretation or administration of any Law by any Governmental Agency
         and (iv) any withholding tax or other taxes based on gross income
         imposed by the United States of America for any period with respect to
         which it has failed to provide Borrower with the appropriate form or
         forms required by Section 11.21, to the extent such forms are then
         available under applicable Laws (all such non-excluded taxes,
         assessments or other charges being hereinafter referred to as "Taxes").
         To the extent that Borrower or any other Party is obligated by
         applicable Laws to make any deduction or withholding on account of
         Taxes from any amount payable to any Lender under this Agreement, they
         shall (i) make such deduction or withholding and pay the same to the
         relevant Governmental Agency and (ii) pay such additional amount to
         that Lender as is necessary to result in that Lender's receiving a net
         after-Tax amount equal to the amount to which that Lender would have
         been entitled under this Agreement absent such deduction or
         withholding. If and when receipt of such payment results in an excess
         payment or credit to that Lender on account of such Taxes, that Lender
         shall promptly refund such excess to Borrower or the relevant Party. If
         Borrower or any such Party becomes obligated to pay a material amount
         under this Section to any Lender, that Lender will be subject to
         removal in accordance with Section 11.26; provided that Borrower or the
         relevant Party shall have paid such amount to that Lender and that
         Borrower and the Co-Borrowers, within the thirty day period following
         the date of such payment, shall have notified that Lender in writing of
         their intent to so remove the Lender.

                           (e)      All payments to be made by Borrower or any
         Co-Borrower shall be made without conditions or deduction for any
         counterclaim, defense, recoupment or setoff.

                  3.13     Funding Sources. Nothing in this Agreement shall be
deemed to obligate any Lender to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner, provided that each Lender which is not a bank under
the laws of the United States or any state thereof severally represents and
warrants that it has obtained the funds for its Advances in compliance with
applicable Laws and that the making of its Advances will not constitute
"prohibited transactions" as such term is defined in ERISA.

                                      -51-


                  3.14     Failure to Charge Not Subsequent Waiver. Any decision
by the Administrative Agent or any Lender not to require payment of any interest
(including interest at the Default Rate), fee, cost or other amount payable
under any Loan Document, or to calculate any amount payable by a particular
method, on any occasion shall in no way limit or be deemed a waiver of the
Administrative Agent's or such Lender's right to require full payment of any
interest (including interest at the Default Rate), fee, cost or other amount
payable under any Loan Document, or to calculate an amount payable by another
method that is not inconsistent with this Agreement, on any other or subsequent
occasion.

                  3.15     Administrative Agent's Right to Assume Payments Will
be Made. Unless Borrower, any Co-Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be made by it
to the Administrative Agent hereunder, that Borrower, such Co-Borrower or such
Lender, as the case may be, will not make such payment, the Administrative Agent
may assume that Borrower, such Co-Borrower or such Lender, as the case may be,
has timely made such payment and may (but shall not be so required to), in
reliance thereon, make available a corresponding amount to the Person entitled
thereto. If and to the extent that such payment was not in fact made to the
Administrative Agent in immediately available funds, then:

                           (a)      if Borrower or any Co-Borrower failed to
         make such payment, each Lender shall forthwith on demand repay to the
         Administrative Agent the portion of such assumed payment that was made
         available to such Lender in immediately available funds, together with
         interest thereon in respect of each day from and including the date
         such amount was made available by the Administrative Agent to such
         Lender to the date such amount is repaid to the Administrative Agent in
         immediately available funds at the Federal Funds Rate from time to time
         in effect; and

                           (b)      if any Lender failed to make such payment,
         such Lender shall forthwith on demand pay to the Administrative Agent
         the amount thereof in immediately available funds, together with
         interest thereon for the period from the date such amount was made
         available by the Administrative Agent to Borrower or any Co-Borrower to
         the date such amount is recovered by the Administrative Agent (the
         "Compensation Period") at a rate per annum equal to the Federal Funds
         Rate from time to time in effect. If such Lender pays such amount to
         the Administrative Agent, then such amount shall constitute such
         Lender's Advance included in the applicable Loan. If such Lender does
         not pay such amount forthwith upon the Administrative Agent's demand
         therefor, the Administrative Agent may make a demand therefor upon
         Borrower or the Co-Borrowers, if applicable, and Borrower or the
         Co-Borrowers, if applicable, shall pay such amount to the
         Administrative Agent, together with interest thereon for the
         Compensation Period at a rate per annum equal to the rate of interest
         applicable to the applicable Advance. Nothing herein shall be deemed to
         relieve any Lender from its obligation to fulfill its Pro Rata Share of
         the Commitments or to prejudice any rights which the Administrative
         Agent, Borrower or any Co-Borrower may have against any Lender as a
         result of any default by such Lender hereunder.

A notice of the Administrative Agent to any Lender, any Co-Borrower or Borrower
with respect to any amount owing under this Section 3.15 shall be conclusive,
absent manifest error.

                  3.16     Fee Determination Detail. The Administrative Agent
and any Lender shall provide reasonable detail to Borrower and the Co-Borrowers
regarding the manner in which the amount of any payment to the Creditors, or
that Lender, under Article 3 has been determined, concurrently with demand for
such payment.

                  3.17     Survivability. All of Borrower's and the
Co-Borrowers' obligations under Sections 3.7 and 3.8 shall survive for ninety
days following the date on which the Commitments are

                                      -52-


terminated, all Obligations hereunder are fully paid and all Letters of Credit
have expired.

                                      -53-


                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

                  Borrower and each Co-Borrower represents and warrants to the
Lenders on the date hereof and as of the Closing Date that:

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

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

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

                           (b)      Violate or conflict with any provision of
         such party's charter, articles of incorporation, operating agreement or
         bylaws, as applicable;

                           (c)      Result in or require the creation or
         imposition of any Lien upon or with respect to any Property of Borrower
         and its Restricted Subsidiaries;

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

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

                                      -54-


and neither Borrower, the Co-Borrowers nor any Guarantor is in violation of, or
default under, any Requirement of Law or Contractual Obligation, or any
indenture, loan or credit agreement described in Section 4.2(e), in any respect
that constitutes a Material Adverse Effect.

                  4.3      No Governmental Approvals Required. Except as set
forth in Schedule 4.3 or previously obtained or made, no authorization, consent,
approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Agency is or will be required to authorize
or permit under applicable Laws the execution, delivery and performance by
Borrower and its Restricted Subsidiaries of the Loan Documents to which it is a
Party. Except as set forth in Schedule 4.3, all authorizations from, or filings
with, any Governmental Agency described in Schedule 4.3 will be accomplished as
of the Closing Date.

                  4.4      Subsidiaries.

                           (a)      Schedule 4.4 hereto correctly sets forth the
         names, form of legal entity, ownership and jurisdictions of
         organization of all Subsidiaries of Borrower. Except as described in
         Schedule 4.4, Borrower does not own any capital stock, equity interest
         or debt security which is convertible, or exchangeable, for capital
         stock or equity interests in any Person. Unless otherwise indicated in
         Schedule 4.4, all of the outstanding shares of capital stock, or all of
         the units of equity interest, as the case may be, of each Subsidiary
         are owned of record and beneficially by Borrower, there are no
         outstanding options, warrants or other rights to purchase capital stock
         of any such Subsidiary, and all such shares or equity interests so
         owned are duly authorized, validly issued, fully paid and
         non-assessable, and were issued in compliance with all applicable state
         and federal securities and other Laws, and are free and clear of all
         Liens, except for Permitted Encumbrances.

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

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

                  4.5      Financial Statements. Borrower and the Co-Borrowers
have furnished to the Administrative Agent for distribution to the Lenders (a)
the audited consolidated financial statements of Borrower and its Subsidiaries
for the Fiscal Year ended December 31, 2002, and (b) unaudited financial
statements of Borrower and its Subsidiaries as of the Fiscal Quarter ended June
30, 2003. The financial statements described above fairly present in all
material respects the financial condition, results of operations and changes in
financial position of Borrower and its Subsidiaries as of such dates and for
such periods in conformity with GAAP, consistently applied (except, in the case
of the financial statements

                                      -55-


described in (b), for the absence of certain footnotes and other informational
disclosures customarily omitted from interim financial statements).

                  4.6      No Other Liabilities; No Material Adverse Changes.
Borrower and its Subsidiaries do not have any material liability or material
contingent liability required under GAAP to be reflected or disclosed and not
reflected or disclosed in the financial statements described in Section 4.5(a),
other than liabilities and contingent liabilities arising in the ordinary course
of business since the date of such financial statements. As of the Closing Date,
no circumstance or event has occurred that constitutes a Material Adverse Effect
since December 31, 2002.

                  4.7      Title to Property. As of December 31, 2002, Borrower
and its Subsidiaries had valid title to the Property reflected in the financial
statements described in Section 4.5(a), other than immaterial items of Property,
free and clear of all Liens, other than Permitted Encumbrances, and Liens
described in Schedule 4.7 or permitted by Section 6.6. As of the Closing Date,
Borrower and its Subsidiaries shall have valid title to all material Property
reflected in the financial statements described in Section 4.5(b), other than
Property subsequently sold or disposed of by Borrower and its Subsidiaries in
the ordinary course of business, free and clear of all Liens, other than
Permitted Encumbrances, and Liens described in Schedule 4.7 or permitted by
Section 6.6.

                  4.8      Public Utility Holding Company Act. Neither Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

                  4.9      Litigation. There are no actions, suits, proceedings
or investigations pending as to which Borrower or any of its Subsidiaries have
been served or have received notice or, to the best knowledge of Borrower and
the Co-Borrowers, threatened against or affecting Borrower or any of its
Subsidiaries or any Property of any of them before any Governmental Agency in
which there is any reasonable possibility of an adverse decision which could
materially adversely affect the business, consolidated financial position or
results of operations of Borrower and its Restricted Subsidiaries, taken as a
whole, or which in any manner draw into question the validity or enforceability
of the Loan Documents, the Intercreditor Agreement or the Collateral Documents.

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

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

                  4.12     ERISA

                           (a)      With respect to each Pension Plan:

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

                                      -56-


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

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

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

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

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

                  4.14     Disclosure. No written statement made by a Senior
Officer of Borrower, any Co-Borrower or any Guarantor to the Administrative
Agent or any Lender in connection with this Agreement, or in connection with any
Loan, as of the date thereof contained any untrue statement of a material fact
or omitted a material fact necessary to make the statement made not misleading
in light of all the circumstances existing at the date the statement was made.

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

                  4.16     Projections. As of the Closing Date, to the best
knowledge of Borrower and the Co-Borrowers, the assumptions set forth in the
Projections are reasonable and consistent with each other and with all facts
known to Borrower and its Subsidiaries, and the Projections are reasonably based
on such assumptions. Nothing in this Section shall be construed as a
representation or covenant that the Projections in fact will be achieved. The
Creditors acknowledge that the Projections are forward-looking statements and
that actual financial results for Borrower and its Subsidiaries could differ
materially from those set forth in the Projections.

                  4.17     Hazardous Materials. To the best knowledge of
Borrower and the Co-Borrowers, no condition exists that violates any Hazardous
Material Law affecting any Real Property except for such violations that would
not individually or in the aggregate have a Material Adverse Effect.

                  4.18     Tax Shelter Regulations. Borrower and each of the
Co-Borrowers do not intend to treat the Loans or Letters of Credit as being a
"reportable transaction" (within the meaning of Treasury Regulation Section
1.6011-4). In the event Borrower or any Co-Borrower determines to take any
action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof. Accordingly, if

                                      -57-


Borrower or any Co-Borrower so notifies the Administrative Agent, Borrower
acknowledges that one or more of the Lenders may treat its Loans or its interest
in Swing Line Loans or Letters of Credit 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.

                                      -58-


                                    ARTICLE 5
                              AFFIRMATIVE COVENANTS
                           (OTHER THAN INFORMATION AND
                             REPORTING REQUIREMENTS)

                  So long as any Advance remains unpaid, or any Letter of Credit
remains outstanding or any other Obligation remains unpaid, or any portion of
either Commitment remains in force, Borrower shall, and shall cause each of its
Restricted Subsidiaries to, and each Co-Borrower shall, unless the
Administrative Agent (with the written approval of the Requisite Lenders)
otherwise consents:

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

                  5.2      Maintenance of Properties. Maintain, preserve and
protect all of their respective Properties in good order and condition, subject
to wear and tear in the ordinary course of business, and not permit any waste of
their respective Properties, except that the failure to maintain, preserve and
protect a particular item of Property that is not of significant value, either
intrinsically or to the operations of Borrower and its Restricted Subsidiaries,
taken as a whole, shall not constitute a violation of this covenant.

                  5.3      Maintenance of Insurance. Maintain liability,
casualty and other insurance (subject to customary deductibles and retentions)
with responsible insurance companies in such amounts and against such risks as
is carried by responsible companies engaged in similar businesses and owning
similar assets in the general areas in which Borrower and its Restricted
Subsidiaries operate and in any event such insurance as may be required by the
Collateral Documents.

                  5.4      Compliance With Laws. Comply, within the time period,
if any, given for such compliance by the relevant Governmental Agency with
enforcement authority, with all Requirements of Law (including Hazardous
Materials Laws, ERISA and Gaming Laws) noncompliance with which constitutes a
Material Adverse Effect, except that Borrower and its Restricted Subsidiaries
need not comply with a Requirement of Law then being contested by any of them in
good faith by appropriate proceedings.

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

                                      -59-


Administrative Agent or any Lender true copies of all financial information made
available to the board of directors or audit committee of the board of directors
of Borrower.

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

                  5.7      Use of Proceeds. Use the proceeds of Loans (a) on the
Closing Date, to refinance the outstanding Loans under the Existing Multi-Year
Agreement and any outstanding obligations under the Short Term Loan Agreement,
(b) to finance expenses associated with the transactions contemplated herein,
(c) to finance design, development and construction expenses associated with
Capital Expenditures, Acquisitions and Investments permitted under Article 6
hereof, and (d) for other general corporate purposes including the Acquisitions
and Investments described herein.

                  5.8      New Restricted Subsidiaries. Cause any Person which
hereafter becomes a Restricted Subsidiary of Borrower to promptly execute and
deliver to the Administrative Agent a Guaranty (and, if no Collateral Release
has then occurred, or to the extent required by Section 2.12, security documents
encumbering its Property to the extent required by Section 6.6).

                                      -60-


                                    ARTICLE 6
                               NEGATIVE COVENANTS

                  So long as any Advance remains unpaid, or any Letter of Credit
remains outstanding or any other Obligation remains unpaid, or any portion of
either Commitment remains in force, Borrower shall not, and shall not permit any
of its Restricted Subsidiaries to, and each Co-Borrower shall not unless the
Administrative Agent (with the written approval of the Requisite Lenders or, if
required by Section 11.2, of all of the Lenders) otherwise consents:

                  6.1      Payment of Subordinated Obligations. Pay any
principal (including sinking fund payments) or any other amount (other than
scheduled interest payments) with respect to any Subordinated Obligation, or
purchase or redeem (or offer to purchase or redeem) any Subordinated Obligation,
or deposit any monies, securities or other Property with any trustee or other
Person to provide assurance that the principal or any portion thereof of any
Subordinated Obligation will be paid when due or otherwise to provide for the
defeasance of any Subordinated Obligation provided that:

                           (a)      Borrower may make scheduled payments of
         principal and interest on any Subordinated Obligation in accordance
         with the subordination terms thereof;

                           (b)      Provided that no Default or Event of Default
         then exists, Borrower may prepay any Subordinated Obligations to the
         extent using the proceeds of Qualified Subordinated Obligations; and

                           (c)      Borrower may redeem Subordinated Obligations
         held by Persons which are subject to a Disqualification, provided that
         (i) no Default or Event of Default then exists or would result
         therefrom, and (ii) after giving effect to such redemption, Borrower is
         in pro forma compliance with the covenants set forth in Sections 6.7
         and 6.8.

                  6.2      Disposition of Property. Make any Disposition of any
Principal Resort Casino Properties, other than Dispositions of (i) any Release
Parcel (as defined in and permitted by the relevant deeds of trust) consisting
of any gores or strips of land required to be disposed of in the ordinary course
of business to facilitate construction, improvement, public use dedication or
similar purposes, and not material to the overall conduct of the business of the
related Property, and (ii) all or any part of the Theme Park Property, in each
case when no Default or Event of Default exists, provided that leases and
subleases of portions of a Principal Resort Casino Property in the ordinary
course of business and not involving their gaming or lodging operations shall
not be considered a Disposition thereof. Borrower is hereby authorized to
subdivide the Theme Park Property in any manner (whether concurrently with or
prior to the Disposition thereof) and the Administrative Agent is hereby
authorized to empower the Collateral Agent to make any amendments to the deed of
trust covering the Theme Park Property and/or subordinate the lien of such deed
of trust to any maps subdividing the Theme Park Property, so as to give effect
thereto. The Administrative Agent is hereby authorized to send notice to the
Collateral Agent and the Creditor Representatives requesting the release of any
Theme Park Property concurrently with the sale or other Disposition thereof.

                  6.3      Mergers. Merge or consolidate with or into any
Person, except (a) mergers and consolidations of a Restricted Subsidiary of
Borrower into Borrower or another Restricted Subsidiary of Borrower, (b) mergers
and consolidations with a Person to effect a mere change in the State or form of
organization of Borrower, (c) mergers with any Person which if acquired by
Borrower or its other Restricted Subsidiaries pursuant to Investments permitted
hereby, would be Restricted Subsidiaries,

                                      -61-


provided that the financial condition of Borrower and its Subsidiaries are not
adversely affected thereby and Borrower and its Subsidiaries execute such
amendments to the Loan Documents as may be requested by the Administrative Agent
to reflect such change, and (d) mergers entered into in compliance with Section
6.3 with persons engaged primarily in the same or a similar line of business as
one or more lines of business engaged in by Borrower and its Subsidiaries,
provided that giving pro forma effect to such mergers as of the last day of the
then most recently ended Fiscal Quarter, Borrower is in compliance with Sections
6.7 and 6.8.

                  6.4      Hostile Acquisitions. Directly or indirectly use the
proceeds of any Loan in connection with the acquisition of part or all of a
voting interest of five percent or more in any corporation or other business
entity if such acquisition is opposed by the board of directors or management of
such corporation or business entity.

                  6.5      Change in Nature of Business. Make any material
change in the nature of the business of Borrower and its Subsidiaries, taken as
a whole.

                  6.6      Liens and Negative Pledges. Create, incur, assume or
suffer to exist any Lien or Negative Pledge of any nature upon or with respect
to any of its Properties, or engage in any sale and leaseback transaction with
respect to any of its Properties, whether now owned or hereafter acquired,
except:

                           (a)      Permitted Encumbrances;

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

                           (c)      Liens and Negative Pledges existing on the
         date hereof and disclosed in Schedule 4.7 and any renewals/extensions
         or amendments thereof, provided that the obligations secured or
         benefited thereby are not increased;

                           (d)      Liens on Property acquired by Borrower or
         any of its Restricted Subsidiaries after the Closing Date that are in
         existence at the time of such acquisition and are not created in
         contemplation of such acquisition;

                           (e)      purchase money Liens securing Indebtedness
         and Capital Lease Obligations in an aggregate principal amount not to
         exceed $100,000,000 (including any refinancings thereof);

                           (f)      any Lien or Negative Pledge created by an
         agreement or instrument entered into by Borrower or a Restricted
         Subsidiary of Borrower in the ordinary course of its business which
         consists of a restriction on the assignability, transfer or
         hypothecation of such agreement or instrument; and

                           (g)      Equal, ratable and pari passu Liens securing
         the Qualified Obligations pursuant to the Intercreditor Agreement (or,
         in the event that the Intercreditor Agreement is hereafter terminated
         in accordance with its terms, and any Collateral Event thereafter
         occurs, Liens securing Senior Indebtedness of the Borrower and its
         Subsidiaries on an equal, ratable and pari passu basis with the
         Obligations pursuant to an intercreditor agreement which is
         substantively similar to the Intercreditor Agreement (the
         Administrative Agent being hereby authorized by the other Creditors to
         enter into any such replacement intercreditor agreement), provided that
         as of the date of the incurrence of such Liens, no Default or Event of
         Default has occurred and remains continuing);

                                      -62-


                           (h)      Liens granted on the stock, partnership or
         other equity interests in a Person which is not a Restricted Subsidiary
         owned by Borrower or any if its Restricted Subsidiaries, which are
         granted solely to secure Indebtedness of that Person;

provided that this Section shall not be effective to prohibit the Liens or
Negative Pledges with respect to securities issued by any gaming licensee to the
extent that appropriate approvals of this covenant have not been obtained under
applicable Gaming Laws.

                  6.7      Leverage Ratio. Permit the Leverage Ratio,
as of any Fiscal Quarter described below to be greater than the ratio set forth
below opposite that Fiscal Quarter:



Fiscal Quarters Ending                                               Maximum Ratio
- ----------------------                                               -------------
                                                                  
December 31, 2003 through December 31, 2004                           5.50:1.00

March 31, 2005 through and including
September 30, 2005                                                    5.25:1.00

December 31, 2005 through and including
December 31, 2007                                                     5.00:1.00

Thereafter                                                            4.75:1.00


                  6.8      Interest Charge Coverage Ratio. Permit the Interest
Charge Coverage Ratio as of the last day of any Fiscal Quarter, to be less than
2.75:1.00.

                  6.9      Investments in Insurance Subsidiary. Make Investments
in the Insurance Subsidiary in an amount exceeding $25,000,000 in the aggregate.

                                      -63-


                                   ARTICLE 7
                     INFORMATION AND REPORTING REQUIREMENTS

                  7.1      Financial and Business Information. So long as any
Advance remains unpaid, or any Letter of Credit remains outstanding or any other
Obligation remains unpaid, or any portion of either Commitment remains in force,
Borrower and each Co-Borrower shall, unless the Administrative Agent (with the
written approval of the Requisite Lenders) otherwise consents, at Borrower's and
the Co-Borrowers' sole expense, deliver to the Administrative Agent for
distribution by it to the Lenders:

                           (a)      As soon as practicable, and in any event
         within 60 days after the end of each Fiscal Quarter (other than the
         fourth Fiscal Quarter in any Fiscal Year), the consolidated balance
         sheet of Borrower and its Subsidiaries as at the end of such Fiscal
         Quarter and the consolidated statement of operations for such Fiscal
         Quarter, and its statement of cash flows for the portion of the Fiscal
         Year ended with such Fiscal Quarter, all in reasonable detail;

                           (b)      As soon as practicable, and in any event
         within 45 days after the end of each Fiscal Quarter, a Pricing
         Certificate setting forth a preliminary calculation of the Leverage
         Ratio as of the last day of such Fiscal Quarter, and providing
         reasonable detail as to the calculation thereof, which calculations
         shall be based on the preliminary unaudited financial statements of
         Borrower for such Fiscal Quarter, and as soon as practicable
         thereafter, in the event of any material variance in the actual
         calculation of the Leverage Ratio from such preliminary calculation, a
         revised Pricing Certificate setting forth the actual calculation
         thereof;

                           (c)      As soon as practicable, and in any event
         within 105 days after the end of each Fiscal Year, (i) the consolidated
         balance sheet of Borrower and its Subsidiaries as at the end of such
         Fiscal Year and the consolidated statements of operations,
         shareholders' equity and cash flows, in each case of Borrower and its
         Subsidiaries for such Fiscal Year, in each case as at the end of and
         for the Fiscal Year, all in reasonable detail. Such financial
         statements shall be prepared in accordance with GAAP, consistently
         applied, and such consolidated balance sheet and consolidated
         statements shall be accompanied by a report of one of the four largest
         public accounting firms in the United States of America or other
         independent public accountants of recognized standing selected by
         Borrower and reasonably satisfactory to the Requisite Lenders, which
         report shall be prepared in accordance with generally accepted auditing
         standards as at such date, and shall not be subject to any
         qualifications or exceptions as to the scope of the audit nor to any
         other qualification or exception determined by the Requisite Lenders in
         their good faith business judgment to be adverse to the interests of
         the Lenders. Such accountants' report shall be accompanied by a
         certificate stating that, in making the examination pursuant to
         generally accepted auditing standards necessary for the certification
         of such financial statements and such report, such accountants have
         obtained no knowledge of any Default or, if, in the opinion of such
         accountants, any such Default shall exist, stating the nature and
         status of such Default, and stating that such accountants have reviewed
         Borrower's financial calculations as at the end of such Fiscal Year
         (which shall accompany such certificate) under Sections 6.7 and 6.8,
         have read such Sections (including the definitions of all defined terms
         used therein) and that nothing has come to the attention of such
         accountants in the course of such examination that would cause them to
         believe that the same were not calculated by Borrower in the manner
         prescribed by this Agreement;

                           (d)      As soon as practicable, and in any event
         within 90 days after the commencement of each Fiscal Year, a budget and
         projection by Fiscal Quarter for that Fiscal

                                      -64-


         Year and by Fiscal Year for the next two succeeding Fiscal Years,
         including for the first such Fiscal Year, projected consolidated
         balance sheets, statements of operations and statements of cash flow
         and, for the second and third such Fiscal Years, projected consolidated
         condensed balance sheets and statements of operations and cash flows,
         of Borrower and its Subsidiaries, all in reasonable detail;

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

                           (f)      Promptly after request by the Administrative
         Agent or any Lender, copies of the Nevada "Regulation 6.090 Report" and
         "6A Report";

                           (g)      Promptly after request by the Administrative
         Agent or any Lender, copies of any other report or other document that
         was filed by Borrower or any of its Subsidiaries with any Governmental
         Agency (other than any report regarding Tracinda Corporation or
         individuals associated with Tracinda Corporation, Borrower and its
         Subsidiaries and their confidential business or financial information);

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

                           (i)      Promptly upon a Senior Officer of Borrower
         or any Co-Borrower becoming aware of any litigation, governmental
         investigation or proceeding (including any litigation, governmental
         investigation or proceeding by or subject to decision by any Gaming
         Board) that is pending (i) against Borrower or any of its Subsidiaries
         which could reasonably be expected to have a Material Adverse Effect,
         (ii) in respect of any material Indebtedness of Borrower or any of its
         Subsidiaries, or (iii) with respect to the Loan Documents, the
         Intercreditor Agreement, or the Collateral Documents, notice of the
         same;

                           (j)      Promptly following any Senior Officer of
         Borrower or any Co-Borrower becoming aware of any change in the Debt
         Rating assigned hereto written notice of such change and, if the same
         will result in a revision to the Applicable Debt Rating, a revised
         Pricing Certificate setting forth the revised Applicable Debt Rating;
         and

                           (k)      Such other data and information as from time
         to time may be reasonably requested by the Administrative Agent, any
         Lender (through the Administrative Agent) or the Requisite Lenders.

                  7.2      Compliance Certificates. So long as any Advance
remains unpaid, or any Letter of Credit remains outstanding or any other
Obligation remains unpaid or unperformed, or any portion of either Commitment
remains outstanding, Borrower and the Co-Borrowers shall, at their sole expense,
deliver to the Administrative Agent for distribution by it to the Lenders
concurrently with the financial

                                      -65-


statements required pursuant to Sections 7.1(a) and 7.1(c), Compliance
Certificates signed by a Senior Officer of Borrower and each Co-Borrower.

                                      -66-


                                    ARTICLE 8
                                   CONDITIONS

                  8.1      Initial Advances on the Closing Date. The obligation
of each Lender to make the initial Advance to be made by it on the Closing Date,
is subject to the following conditions precedent, each of which shall be
satisfied prior to the making of the initial Advances (unless all of the
Lenders, in their sole and absolute discretion, shall agree otherwise):

                           (a)      The Administrative Agent shall have received
         all of the following, each of which shall be originals unless otherwise
         specified, each properly executed by a Responsible Official of each
         party thereto, each dated as of the Closing Date and each in form and
         substance satisfactory to the Administrative Agent and its legal
         counsel (unless otherwise specified or, in the case of the date of any
         of the following, unless the Administrative Agent otherwise agrees or
         directs):

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

                                    (2)      Committed Revolving Notes executed
                  by Borrower and Detroit in favor of each Revolving Lender,
                  each in a principal amount equal to that Revolving Lender's
                  Pro Rata Share of the Revolving Commitment;

                                    (3)      Term Notes executed by Borrower and
                  Detroit in favor of each Term Lender, each in a principal
                  amount equal to that Term Lender's Pro Rata Share of the Term
                  Commitment;

                                    (4)      Competitive Revolving Notes
                  executed by Borrower and Detroit in favor of each Lender
                  (except for any Lender who has requested to not be notified of
                  Competitive Bid Requests pursuant to Section 2.5(f)), each in
                  a principal amount equal to $750,000,000;

                                    (5)      with respect to Borrower, Detroit
                  and each Guarantor, such documentation as the Administrative
                  Agent may require to establish the due organization, valid
                  existence and good standing of Borrower, Detroit, and each of
                  the Guarantors, its qualification to engage in business in
                  each material jurisdiction in which it is engaged in business
                  or required to be so qualified, its authority to execute,
                  deliver and perform any Loan Documents to which it is a Party,
                  the identity, authority and capacity of each Responsible
                  Official thereof authorized to act on its behalf, including
                  (if applicable) certified copies of articles of incorporation
                  or organization and amendments thereto, bylaws or operating
                  agreements and amendments thereto, certificates of good
                  standing and/or qualification to engage in business, tax
                  clearance certificates, certificates of corporate or other
                  organizational resolutions, incumbency certificates,
                  Certificates of Responsible Officials, and the like;

                                    (6)      the Swing Line Documents;

                                    (7)      the Guaranty executed by each
                  Guarantor which is a Restricted Subsidiary;

                                      -67-


                                    (8)      a certificate of insurance issued
                  by Borrower's insurance carrier or agent;

                                    (9)      the Opinions;

                                    (10)     a Request for Loan and a Letter of
                  Credit Application in compliance with Article 2;

                                    (11)     a completed Pricing Certificate;

                                    (12)     the letter agreement described in
                  Sections 3.2, 3.3, 3.5 and 3.6;

                                    (13)     such assurances as the
                  Administrative Agent deems appropriate that the relevant
                  Gaming Boards have approved the transactions contemplated by
                  the Loan Documents to the extent that such approval is
                  required by applicable Gaming Laws;

                                    (14)     a Certificate signed by a Senior
                  Officer of Borrower and Detroit certifying that the conditions
                  specified in Section 8.1 (d) and (e) have been satisfied; and

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

                           (b)      The fees payable on the Closing Date
         pursuant to Article 3 shall have been paid.

                           (c)      The reasonable costs and expenses of the
         Administrative Agent in connection with the preparation of the Loan
         Documents payable pursuant to Section 11.3, and invoiced to Borrower
         prior to the Closing Date, shall have been paid.

                           (d)      The representations and warranties of
         Borrower and the Co-Borrowers contained in Article 4 shall be true and
         correct.

                           (e)      Borrower, each Co-Borrower and any other
         Parties shall be in compliance with all the terms and provisions of the
         Loan Documents, and giving effect to the initial Advance, no Default or
         Event of Default shall have occurred and be continuing.

                           (f)      All legal matters relating to the Loan
         Documents shall be satisfactory to Sheppard, Mullin, Richter & Hampton
         LLP, special counsel to the Administrative Agent.

It is acknowledged that effective upon the Closing Date, the lending commitments
of the lenders under the Existing Multi-Year Agreement shall be amended and
restated hereby and that the lending commitments of the lenders under the
Existing Short Term Agreement shall be and hereby is terminated.

                  8.2      Any Increasing Advance. The obligation of each Lender
to make any Advance, and the obligation of the Issuing Lender to issue a Letter
of Credit, which would result in an increase in the outstanding principal amount
of the Outstanding Obligations, is subject to the following conditions precedent
(unless the Requisite Lenders, in their sole and absolute discretion, shall
agree otherwise):

                           (a)      except (i) for representations and
         warranties which expressly speak as of a particular date or are no
         longer true and correct as a result of a change which is permitted by
         this Agreement or (ii) as disclosed by Borrower and the Co-Borrowers
         and approved in writing

                                      -68-


         by the Requisite Lenders, the representations and warranties contained
         in Article 4 (other than Sections 4.4(a), 4.6 and 4.16 (but only if
         Borrower and its Restricted Subsidiaries are diligently engaged in
         measures that will result in compliance with all Hazardous Materials
         Laws)) shall be true and correct on and as of the date of the Advance
         as though made on that date;

                           (b)      the Administrative Agent shall have timely
         received a Request for Loan or Competitive Bid Request in compliance
         with Article 2 (or telephonic or other request for Loan referred to in
         the second sentence of Section 2.1(c), if applicable) or the Issuing
         Lender shall have received a Letter of Credit Application, as the case
         may be, in compliance with Article 2; and

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

                  8.3      Any Letter of Credit. The obligation of the Issuing
Lender to issue any Letter of Credit, and the obligation of the other Lenders to
participate therein, are subject to the conditions precedent that (a) the
conditions set forth in Section 8.2 have been satisfied and (b) Borrower shall
have certified that, giving effect to the issuance of the requested Letter of
Credit, the Letter of Credit Usage shall not exceed any limitations set forth in
this Agreement.

                                      -69-


                                    ARTICLE 9
              EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

                  9.1      Events of Default. The existence or occurrence of any
one or more of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default so long as such
event is continuous and has not been waived in accordance with Section 11.2:

                           (a)      Borrower or the Co-Borrowers fail to pay any
         principal on any of the Notes, or any L/C Borrowing or any portion
         thereof, on the date when due; or

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

                           (c)      Borrower or the Co-Borrowers fail to comply
         with any of the covenants contained in Article 6, other than the
         covenant contained in Section 6.5; or

                           (d)      Borrower or the Co-Borrowers fail to comply
         with Section 7.1(h) in any respect that is materially adverse to the
         interests of the Lenders; or

                           (e)      Borrower, any of its Restricted Subsidiaries
         or any other Party fails to perform or observe any other covenant or
         agreement (not specified in clause (a), (b), (c), or (d) above)
         contained in any Loan Document on its part to be performed or observed
         within (i) ten Business Days after the giving of notice by the
         Administrative Agent on behalf of the Requisite Lenders of such Default
         or (ii) if the nature of the covenant or agreement is such that the
         violation can be cured, thirty Business Days after the giving of such
         notice so long as Borrower and the Co-Borrowers diligently pursue in
         good faith the cure or correction of such violation continuously during
         such period; or

                           (f)      Any representation or warranty of Borrower
         or any of its Restricted Subsidiaries or any other Party made in any
         Loan Document, or in any certificate or other writing delivered by
         Borrower or such Restricted Subsidiary or Party pursuant to any Loan
         Document, proves to have been incorrect when made or reaffirmed in any
         respect that is materially adverse to the interests of the Lenders; or

                           (g)      Borrower or any of its Subsidiaries (i)
         fails to pay the principal, or any principal installment, of any
         present or future Indebtedness of $100,000,000 or more, or any guaranty
         of present or future Indebtedness of $100,000,000 or more, on its part
         to be paid, when due (or within any stated grace period), whether at
         the stated maturity, upon acceleration, by reason of required
         prepayment or otherwise or (ii) fails to perform or observe any other
         term, covenant or agreement on its part to be performed or observed, or
         suffers any event of default to occur, in connection with any present
         or future Indebtedness of $100,000,000 or more, or of any guaranty of
         present or future Indebtedness of $100,000,000 or more, if as a result
         of such failure or sufferance any holder or holders thereof (or an
         agent or trustee on its or their behalf) has the right to declare such
         Indebtedness due before the date on which it otherwise would become due
         or

                                      -70-


         the right to require Borrower or any of its Subsidiaries to redeem or
         purchase, or offer to redeem or purchase, all or any portion of such
         Indebtedness; or

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

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

                           (j)      Any default of the Borrower or its
         Restricted Subsidiaries occurs under the Intercreditor Agreement or the
         Collateral Documents which entitles the Collateral Agent or the
         Creditor Representatives thereunder to exercise upon any of the
         collateral provided pursuant to the Collateral Documents; or

                           (k)      the Intercreditor Agreement or any of the
         Collateral Documents are terminated (other than in accordance with
         their express terms);

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

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

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

                                      -71-


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

                           (p)      The occurrence of a License Revocation that
         continues for seven consecutive calendar days with respect to gaming
         operations at any gaming facility accounting for ten percent or more of
         the consolidated total assets or consolidated gross revenues of
         Borrower and its Subsidiaries.

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

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

                                    (1)      the Commitments to make Advances,
                  the obligation of the Issuing Lender to issue Letters of
                  Credit, the obligation of the Swing Line Lender to make Swing
                  Line Loans and all other obligations of the Creditors and all
                  rights of Borrower, the Co-Borrowers and any other Parties
                  under the Loan Documents shall be suspended without notice to
                  or demand upon Borrower or any Co-Borrower, which are
                  expressly waived by Borrower and the Co-Borrowers, except that
                  all of the Lenders or the Requisite Lenders (as the case may
                  be, in accordance with Section 11.2) may waive an Event of
                  Default or, without waiving, determine, upon terms and
                  conditions satisfactory to the Lenders or Requisite Lenders,
                  as the case may be, to reinstate the Commitments and such
                  other obligations and rights and make further Advances, and
                  cause the Issuing Lender to issue further Letters of Credit
                  which waiver or determination shall apply equally to, and
                  shall be binding upon, all the Lenders;

                                    (2)      the Issuing Lender may, with the
                  approval of the Administrative Agent on behalf of the
                  Requisite Lenders, demand immediate payment by Borrower and
                  the Co-Borrowers of an amount equal to the aggregate amount of
                  all outstanding Letters of Credit to be held by the Issuing
                  Lender in an interest-bearing cash collateral account as
                  collateral for the Letters of Credit; and

                                    (3)      the Requisite Lenders may request
                  the Administrative Agent to, and the Administrative Agent
                  thereupon shall, terminate the Commitments and/or declare all
                  or any part of the unpaid principal of all Notes, all interest
                  accrued and unpaid thereon and all other amounts payable under
                  the Loan Documents to be forthwith due and payable, whereupon
                  the same shall become and be forthwith due and payable,
                  without protest, presentment, notice of dishonor, demand or
                  further notice of any kind, all of which are expressly waived
                  by Borrower and each Co-Borrower.

                           (b)      Upon the occurrence, and during the
         continuance, of any Event of Default described in Section 9.1(m):

                                    (1)      the Commitments to make Advances,
                  the obligation of the Issuing Lender to issue Letters of
                  Credit, the obligation of the Swing Line Lender to make Swing
                  Line Loans and all other obligations of the Creditors and all
                  rights of Borrower, the Co-Borrowers and any other Parties
                  under the Loan Documents shall terminate without notice to or
                  demand upon Borrower or any Co-Borrower, which are

                                      -72-


                  expressly waived by Borrower and the Co-Borrowers, except that
                  all of the Lenders may waive the Event of Default or, without
                  waiving, determine, upon terms and conditions satisfactory to
                  all the Lenders, to reinstate the Commitments and such other
                  obligations and rights and make further Advances and to cause
                  the Issuing Lender to issue further Letters of Credit, which
                  determination shall apply equally to, and shall be binding
                  upon, all the Lenders;

                                    (2)      an amount equal to the aggregate
                  amount of all outstanding Letters of Credit shall be
                  immediately due and payable to the Issuing Lender without
                  notice to or demand upon Borrower or any Co-Borrower, which
                  are expressly waived by Borrower and the Co-Borrowers, to be
                  held by the Issuing Lender in an interest-bearing account as
                  collateral for the Letters of Credit; and

                                    (3)      the unpaid principal of all Notes,
                  all interest accrued and unpaid thereon and all other amounts
                  payable under the Loan Documents shall be forthwith due and
                  payable, without protest, presentment, notice of dishonor,
                  demand or further notice of any kind, all of which are
                  expressly waived by Borrower and the Co-Borrowers.

                           (c)      Upon the occurrence, and during the
         continuance, of any Event of Default, the Creditors, or any of them,
         without notice to (except as expressly provided for in any Loan
         Document) or demand upon Borrower or any Co-Borrower, which are
         expressly waived by Borrower and the Co-Borrowers (except as to notices
         expressly provided for in any Loan Document), may proceed (but only
         with the consent of the Requisite Lenders) to protect, exercise and
         enforce their rights and remedies under the Loan Documents against
         Borrower, the Co-Borrowers and any other Party and such other rights
         and remedies as are provided by Law or equity.

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

                                      -73-


                                   ARTICLE 10
                            THE ADMINISTRATIVE AGENT

                  10.1     Appointment and Authorization of Administrative
Agent.

                           (a)      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.

                           (b)      The Issuing Lender shall act on behalf of
         the Lenders with respect to any Letters of Credit issued by it and the
         documents associated therewith, and the Issuing Lender shall have all
         of the benefits and immunities (i) provided to the Administrative Agent
         in this Article 10 with respect to any acts taken or omissions suffered
         by the Issuing Lender in connection with Letters of Credit issued by it
         or proposed to be issued by it and the applications and agreements for
         letters of credit pertaining to such Letters of Credit as fully as if
         the term "Administrative Agent" as used in this Article 10 and in the
         definition of "Agent-Related Person" included the Issuing Lender with
         respect to such acts or omissions, and (ii) as additionally provided
         herein with respect to the Issuing Lender.

                  10.2     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.

                  10.3     Liability of Administrative Agent. No Agent-Related
Person shall (a) be liable 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 any Party 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
any Party or any other party to any Loan Document to perform its obligations
hereunder or

                                      -74-


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 any Party
or any Affiliate thereof.

                  10.4     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 any Party),
         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
         Requisite 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 Requisite 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 8.1, each Lender that has signed
         this Agreement shall be deemed to have consented to, approved or
         accepted or to be satisfied with, each document or other matter
         required thereunder to be consented to or approved by or acceptable or
         satisfactory to a Lender unless the Administrative Agent shall have
         received notice from such Lender prior to the proposed Closing Date
         specifying its objection thereto.

                  10.5     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 a Lender or
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 Requisite
Lenders in accordance with Article 9; 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.

                  10.6     Credit Decision; Disclosure of Information by
Administrative Agent. Each Lender acknowledges that no Agent-Related Person has
made any representation or warranty to it, and that no act by the Administrative
Agent hereafter taken, including any consent to and acceptance of any assignment
or review of the affairs of any Party or any Affiliate thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether 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-Related Person and based on such documents and information as it has
deemed appropriate, made its own

                                      -75-


appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Parties and
their respective 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 Borrower and the other Parties
hereunder. Each Lender also represents that it will, independently and without
reliance upon any 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 Borrower and the
other Parties. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent herein, the
Administrative Agent shall not 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 any
of the Parties or any of their respective Affiliates which may come into the
possession of any Agent-Related Person.

                  10.7     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 any Party and without limiting the obligation of any Party 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
Requisite Lenders (or, if required by Section 11.2, all of the 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-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 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.

                  10.8     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 each of the Parties and their respective Affiliates as though Bank
of America were not the Administrative Agent or the Issuing Lender 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 any Party or its Affiliates (including information that
may be subject to confidentiality obligations in favor of such Party 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 or the Issuing Lender, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.

                  10.9     Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon 30 days' notice to the Lenders;
provided that any such resignation by Bank of America shall also constitute its
resignation as Issuing Lender and Swing Line Lender. The

                                      -76-


Administrative Agent shall, in connection with any such resignation, make
appropriate arrangements to ensure that, to the extent that it then holds any
capital stock or other equity securities of any Person which is a gaming
licensee as collateral for the Obligations, that any transfer of possession of
such pledged securities to any successor is in full compliance with the
requirements of all relevant Gaming Boards. If the Administrative Agent resigns
under this Agreement, the Requisite Lenders shall appoint from among the Lenders
a successor administrative agent for the Lenders, which successor administrative
agent shall be consented to by Borrower at all times other than during the
existence of an Event of Default (which consent of 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 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, Issuing Lender
and Swing Line Lender and the respective terms "Administrative Agent," "L/C
Issuer" and "Swing Line Lender" shall mean such successor administrative agent,
Letter of Credit issuer and Swing Line Lender, and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated and the retiring Issuing Lender's and Swing Line Lender's rights,
powers and duties as such shall be terminated, without any other or further act
or deed on the part of such retiring Issuing Lender or Swing Line Lender or any
other Lender, other than the obligation of the successor Issuing Lender to issue
letters of credit in substitution for the Letters of Credit, if any, outstanding
at the time of such succession or to make other arrangements satisfactory to the
retiring Issuing Lender to effectively assume the obligations of the retiring
Issuing Lender with respect to such Letters of Credit. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article 10 and Sections 11.3 and 11.11 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 Requisite Lenders appoint a successor
agent as provided for above.

                  10.10    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 any Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on 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, L/C Obligations and all other Obligations that are owing and
         unpaid and to file such other documents as may be necessary or
         advisable in order to have the claims of the Lenders 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
         Article 3 and Section 11.3) 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

                                      -77-


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 Article 3 and Section 11.3.
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.

                  10.11    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," "documentation agent," "co-agent,"
"book manager," "lead manager," "arranger," "lead arranger" or "co-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.

                  10.12    Proportionate Interest in any Collateral. The
Administrative Agent, on behalf of all the Lenders, shall hold in accordance
with the Loan Documents all items of any collateral or interests therein
received or held by the Administrative Agent. Subject to the Administrative
Agent's and the Lenders' rights to reimbursement for their costs and expenses
hereunder (including reasonable attorneys' fees and disbursements and other
professional services and the reasonably allocated costs of attorneys employed
by the Administrative Agent or a Lender) and subject to the application of
payments in accordance with Section 9.2(d), each Lender shall have an interest
in the Lenders' interest in the collateral or interests therein in the same
proportions that the aggregate Obligations owed such Lender under the Loan
Documents bear to the aggregate Obligations owed under the Loan Documents to all
the Lenders, without priority or preference among the Lenders, except that
Obligations owed to any Lender under a Related Swap Agreement shall be secured
on an equal, ratable and pari passu basis with all other Obligations in an
amount equal to (i) the marked to market exposure under the ISDA Master
Agreement covering the Related Swap Agreement, or (ii) if not governed by an
ISDA Master Agreement, an amount equal the Administrative Agent's then customary
credit risk factor for Swap Agreements times the notional amount of Indebtedness
covered by such Related Swap Agreement and, in each case shall be secured on a
subordinate basis as to amounts in excess of such amount.

                  10.13    Foreclosure on Collateral. In the event of
foreclosure or enforcement of the Lien created by any of the Loan Documents,
title to any collateral encumbered thereby shall be taken and held (a) by the
Collateral Agent pursuant to the Intercreditor Agreement or (b) by
Administrative Agent (or an Affiliate or designee thereof) pro rata for the
benefit of the Lenders in accordance with the Obligations outstanding to each of
them and shall be administered in accordance with the standard form of
collateral holding participation agreement used by the Administrative Agent in
comparable syndicated credit facilities.

                  10.14    Intercreditor Arrangements; Attornment Agreements.
Each of the Creditors and the other Parties acknowledges that the Collateral for
the Obligations, and the rights of the Administrative Agent to take action with
respect thereto, are subject to the terms of the Intercreditor Agreement.
Provided that no Default or Event of Default has then occurred, the
Administrative Agent is hereby irrevocably authorized by the other Creditors to:

                                      -78-


                           (a)      take any discretionary action, or exercise
         any prerogatives, provided to a Creditor Representative pursuant to the
         Intercreditor Agreement;

                           (b)      enter into attornment, non-disturbance and
         estoppel agreements acceptable to the Administrative Agent with lessees
         of interests in leases of real property from Borrower and its
         Restricted Subsidiaries permitted hereby;

                           (c)      provided that no Default or Event of Default
         has occurred and remains continuing, enter into or approve, as Creditor
         Representative, such amendments to the Collateral Documents as are
         required to secure additional Qualified Obligations designated by the
         Borrower in accordance with the terms of the Intercreditor Agreement;
         and

                           (d)      provided that no Default or Event of Default
         has occurred and remains continuing, enter into such instruments,
         documents or agreements as are reasonably required to release or
         partially release, or authorize the Collateral Agent to release or
         partially release, the Liens of the Collateral Documents under the
         circumstances described in, and subject to the conditions set forth in,
         Section 2.12(a) or Section 11.2, as applicable.

                  10.15    No Obligations of Borrower and the Co-Borrowers.
Nothing contained in this Article 10 shall be deemed to impose upon Borrower or
any Co-Borrower any obligation in respect of the due and punctual performance by
the Administrative Agent of its obligations to the Lenders under any provision
of this Agreement, and Borrower and the Co-Borrowers shall have no liability to
the Administrative Agent or any of the Lenders in respect of any failure by the
Administrative Agent or any Lender to perform any of its obligations to the
Creditors under this Agreement. Without limiting the generality of the
foregoing, where any provision of this Agreement relating to the payment of any
amounts due and owing under the Loan Documents provides that such payments shall
be made by Borrower or the Co-Borrower to the Administrative Agent for the
account of the Lenders, Borrower's and the Co-Borrowers' obligations to the
Lenders in respect of such payments shall be deemed to be satisfied upon the
making of such payments to the Administrative Agent in the manner provided by
this Agreement.

                                      -79-


                                   ARTICLE 11
                                  MISCELLANEOUS

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

                  11.2     Amendments; Consents. Each amendment, modification,
supplement, extension, termination, waiver, approval and consent under this
Agreement and the other Loan Documents shall be subject to the terms of all
applicable Laws, including Gaming Laws. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by Borrower, the Co-Borrowers or any other Party therefrom, may in any
event be effective unless in writing signed by the Administrative Agent with the
approval of Requisite Lenders (and, in the case of any amendment, modification
or supplement of or to any Loan Document to which Borrower or any of its
Subsidiaries is a Party, signed by each such Party, and, in the case of any
amendment, modification or supplement to Article 10, signed by the
Administrative Agent), and then only in the specific instance and for the
specific purpose given; and, without the approval in writing of all the Lenders,
no amendment, modification, supplement, termination, waiver or consent may be
effective:

                           (a)      Without the consent of each affected Lender,
         (i) to reduce the principal of, or the amount of principal, principal
         prepayments or the rate of interest payable on, any Note, or (ii) to
         increase the amount of the Commitments or the Pro Rata Share of any
         Lender or (iii) to reduce the amount of any Unused Fee payable to any
         Revolving Lender, or any other fee or amount payable to any Lender
         under the Loan Documents or (iv) to waive an Event of Default
         consisting of the failure of Borrower or the Co-Borrowers to pay when
         due principal, interest or any Unused Fee or other fee;

                           (b)      To postpone any date fixed for any payment
         of principal of, prepayment of principal of or any installment of
         interest on, any Note or any installment of any Unused Fee, or to
         extend the term of either of the Commitments;

                           (c)      To permit the term of any Letter of Credit
         to exceed one year (provided that this shall not be construed to
         prohibit the provision of automatic renewal clauses in Letters of
         Credit issued hereunder) or extend beyond the Maturity Date;

                           (d)      To release the Guaranty, the Collateral
         Documents or any other material portion of any collateral for the
         Obligations, or to permit the Collateral Agent to take any such action
         (except in accordance with the provisions of the Intercreditor
         Agreement), provided that if no Default or Event of Default exists, the
         Administrative Agent may without the consent of any Lender (and shall
         at the request of Borrower), (i) release its Lien in any personal
         property financed or leased by Borrower or its Subsidiaries and granted
         a Lien in accordance with Section

                                      -80-


         6.6(e), (ii) release its Lien in any collateral as otherwise may be
         expressly provided for in any Loan Document, (iii) release its Lien in
         the equity securities of, and all Guaranty Obligations executed by, any
         Subsidiary which is the subject of a Disposition not prohibited by
         Section 6.2, (iv) subordinate its Lien with respect to any Property
         which is the subject of a Disposition not prohibited by Section 6.2,
         (v) release its Lien in any Property which is the subject of a
         Distribution not prohibited by this Agreement, and (vi) release all of
         the Liens under the Loan Documents in a Collateral Release under
         Section 2.12, or shall, in each case to the extent such Lien or
         Guaranty Obligations are held by the Collateral Agent, shall to the
         extent permitted by the Intercreditor Agreement direct the Collateral
         Agent to take such actions.

                           (e)      To amend the provisions of the definitions
         of "Requisite Lenders" or "Maturity Date";

                           (f)      To amend or waive Article 8, Section 6.4 or
         this Section; or

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

Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section shall apply equally to, and shall be binding upon, all of the
Creditors. Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Pro Rata Share of the Commitments of such Lender may
not be increased or extended without the consent of such Lender.

                  11.3     Attorney Costs, Expenses and Taxes.

                           (a)      Borrower and the Co-Borrowers agree (a) to
         pay or reimburse the Administrative Agent for all 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 costs and expenses incurred 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 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 11.3 shall be payable within five Business Days after demand
         therefor. The agreements in this Section shall survive the termination
         of the Commitments and repayment of all other Obligations.

                           (b)      Borrower and the Co-Borrowers shall pay any
         and all documentary and other taxes, excluding (1) taxes imposed on or
         measured in whole or in part by overall net income, gross income or
         gross receipts and franchise taxes imposed on any Lender by (A) any
         jurisdiction (or political subdivision thereof) in which it is
         organized or maintains its principal office or LIBOR Lending Office or
         (B) any jurisdiction (or political subdivision thereof) in which it is
         "doing business", (2) any withholding taxes or other taxes based on
         gross income imposed by

                                      -81-


         the United States of America that are not attributable to any change in
         any Law or the interpretation or administration of any Law by any
         Governmental Agency and (3) any withholding tax or other taxes based on
         gross income imposed by the United States of America for any period
         with respect to which it has failed to provide Borrower with the
         appropriate form or forms required by Section 11.21, to the extent such
         forms are then required by applicable Laws, and all costs, expenses,
         fees and charges payable or determined to be payable in connection with
         the filing or recording of this Agreement, any other Loan Document or
         any other instrument or writing to be delivered hereunder or
         thereunder, or in connection with any transaction pursuant hereto or
         thereto, and shall reimburse, hold harmless and indemnify on the terms
         set forth in Section 11.11 the Creditors from and against any and all
         loss, liability or legal or other expense with respect to or resulting
         from any delay in paying or failure to pay any such tax, cost, expense,
         fee or charge or that any of them may suffer or incur by reason of the
         failure of any Party to perform any of its Obligations. Any amount
         payable to the Administrative Agent or any Lender under this Section
         shall bear interest from the second Business Day following the date of
         demand for payment at the Default Rate.

                  11.4     Nature of Lenders' Obligations. The obligations of
the Lenders hereunder to make Loans and to fund participations in Letters of
Credit and Swing Line Loans are several and not joint. The failure of any Lender
to make any Loan or to fund any such participation on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan or purchase its participation. Nothing
contained in this Agreement or any other Loan Document and no action taken by
the Creditors or any of them pursuant hereto or thereto may, or may be deemed
to, make the Lenders a partnership, an association, a joint venture or other
entity, either among themselves or with Borrower, the Co-Borrowers or any
Affiliate of Borrower. Each Lender's obligation to make any Advance pursuant
hereto is several and not joint or joint and several, and in the case of the
initial Advance only is conditioned upon the performance by all other Lenders of
their obligations to make initial Advances. A default by any Lender will not
increase the Pro Rata Share of any other Lender. Any Lender not in default may,
if it desires, assume in such proportion as the non-Defaulting Lenders agree the
obligations of any Lender in default, but is not obligated to do so. The
Administrative Agent agrees that it will use its best efforts either to induce
the other Lenders to assume the obligations of a Lender in default or to obtain
another Lender, reasonably satisfactory to Borrower and the Co-Borrowers, to
replace such a Lender in default.

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

                  11.6     Notices.

                           (a)      General. 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

                                      -82-


         notices and other communications expressly permitted hereunder to be
         given by telephone shall be made to the applicable telephone number, as
         follows:

                                    (1)      if to Borrower, the Administrative
                  Agent, the Issuing Lender or the Swing Line Lender, to the
                  address, facsimile number, electronic mail address or
                  telephone number specified for such Person on Schedule 11.6 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

                                    (2)      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 Borrower, the Administrative Agent, the
                  Issuing Lender and the Swing Line Lender.

         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, the Issuing Lender and the
         Swing Line Lender pursuant to Article 2 shall not be effective until
         actually received by such Person. In no event shall a voicemail message
         be effective as a notice, communication or confirmation hereunder.

                           (b)      Effectiveness of Facsimile Documents and
         Signatures. Loan Documents may be transmitted 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, the Administrative Agent
         and the Lenders. 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.

                           (c)      Limited Use of Electronic Mail. Electronic
         mail and Internet and intranet websites may be used only to distribute
         routine communications, such as financial statements and other
         information as provided in Section 7.1, and to distribute Loan
         Documents for execution by the parties thereto, and may not be used for
         any other purpose.

                           (d)      Reliance by Administrative Agent and
         Lenders. The Administrative Agent and the Lenders shall be entitled to
         rely and act upon any notices (including telephonic requests for Loans
         and Swing Line Loans) that, in the reasonable judgment of the
         Administrative Agent and the Lenders, are purportedly given by or on
         behalf of Borrower or any Co-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. Borrower and the Co-Borrowers shall jointly and
         severally 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 that, in the reasonable judgment of such
         Agent-Related Person, is purportedly given by or on behalf of Borrower
         or any Co-Borrower. All telephonic notices to and other communications

                                      -83-


         with the Administrative Agent may be recorded by the Administrative
         Agent, and each of the parties hereto hereby consents to such
         recording.

                           (e)      Notice to Borrower is Notice to
         Co-Borrowers. Borrower and the Co-Borrower expressly agree that the
         credit facilities provided hereunder are being provided for the joint
         convenience of Borrower and its Restricted Subsidiaries, including the
         Co-Borrowers, and that (despite the joint and several nature of the
         Obligations), it is expected that Borrower shall administer the
         Advances and Letters of Credit on behalf of itself and the
         Co-Borrowers. Accordingly, Borrower and the Co-Borrowers agree that any
         notice provided to Borrower hereunder shall be deemed to constitute the
         same notice to the Co-Borrowers, without the requirement that separate
         notices be provided to the Co-Borrowers.

                  11.7     Execution of Loan Documents. Unless the
Administrative Agent otherwise specifies with respect to any Loan Document, (a)
this Agreement and any other Loan Document may be executed in any number of
counterparts and any party hereto or thereto may execute any counterpart, each
of which when executed and delivered will be deemed to be an original and all of
which counterparts of this Agreement or any other Loan Document, as the case may
be, when taken together will be deemed to be but one and the same instrument and
(b) execution of any such counterpart may be evidenced by a telecopier
transmission of the signature of such party followed by prompt transmission of
an original signature. The execution of this Agreement or any other Loan
Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.

                  11.8     Binding Effect; Assignment.

                           (a)      This Agreement and the other Loan Documents
         to which Borrower and the Co-Borrowers are a Party will be binding upon
         and inure to the exclusive benefit of Borrower, the Co-Borrowers, the
         Creditors, and their respective successors and assigns, except that
         Borrower and the Co-Borrowers may not assign their respective rights
         hereunder or thereunder or any interest herein or therein without the
         prior written consent of all the Lenders. Each Lender represents that
         it is not acquiring its Notes with a view to the distribution thereof
         within the meaning of the Securities Act of 1933, as amended (subject
         to any requirement that disposition of its Notes must be within the
         control of such Lender). Any Lender may at any time pledge its Notes or
         any other instrument evidencing its rights as a Lender under this
         Agreement to a Federal Reserve Bank, but no such pledge shall release
         that Lender from its obligations hereunder or grant to such Federal
         Reserve Bank the rights of a Lender hereunder absent foreclosure of
         such pledge.

                           (b)      From time to time, each Lender may assign to
         one or more Eligible Assignees all or any portion of its Pro Rata Share
         of either or both of the Commitments, provided that (i) such Eligible
         Assignee, if not then a Lender or an Affiliate of the assigning Lender,
         shall be approved by each of the Administrative Agent and (if no Event
         of Default then exists) Borrower and the Co-Borrowers (none of which
         approvals shall be unreasonably withheld or delayed), (ii) in the case
         of assignments of a Pro Rata Share of the Revolving Commitment, such
         Eligible Assignee, if not then a Revolving Lender or an Affiliate of
         the assigning Lender, shall be approved by each of the Administrative
         Agent and (if no Event of Default then exists) Borrower and the
         Co-Borrowers (none of which approvals shall be unreasonably withheld or
         delayed), (iii) such assignment shall be evidenced by an Assignment
         Agreement, a copy of which shall be furnished to the Administrative
         Agent as hereinbelow provided, (iv) except in the case of an assignment
         to an Affiliate of the assigning Lender, to another Lender or of the
         entire remaining Pro Rata Share of the relevant Commitment by the
         assigning Lender, the assignment shall not

                                      -84-


         assign a Pro Rata Share that is less than $1,000,000, (v) the effective
         date of any such assignment shall be as specified in the Assignment
         Agreement, but not earlier than the date which is five Business Days
         after the date the Administrative Agent has received the Assignment
         Agreement, (vi) such assignment shall be of a constant and non-varying
         percentage of the Pro Rata Share of the assigning Lender, and (vii) the
         assignor Lender shall have paid a $3500 assignment fee to the
         Administrative Agent. Upon the effective date of such Assignment
         Agreement, the Eligible Assignee named therein shall be a Lender for
         all purposes of this Agreement, with the Pro Rata Share set forth
         therein and, to the extent of such Pro Rata Share, the assigning Lender
         shall be released from its further obligations under this Agreement.
         Borrower and the Co-Borrowers agree that they shall execute and deliver
         (against delivery by the assigning Lender to Borrower of appropriate
         Notes) to such assignee Lender, a Committed Advance Note evidencing
         that assignee Lender's Pro Rata Share of the appropriate Commitment and
         a Competitive Revolving Note, and to the assigning Lender, a Committed
         Advance Note evidencing the remaining balance Pro Rata Share of the
         appropriate Commitment retained by the assigning Lender.

                           (c)      By executing and delivering a Assignment
         Agreement, the Eligible Assignee thereunder acknowledges and agrees
         that: (i) other than the representation and warranty that it is the
         legal and beneficial owner of the Pro Rata Share being assigned thereby
         free and clear of any adverse claim, the assigning Lender has made no
         representation or warranty and assumes no responsibility with respect
         to any statements, warranties or representations made in or in
         connection with this Agreement or the execution, legality, validity,
         enforceability, genuineness or sufficiency of this Agreement or any
         other Loan Document; (ii) the assigning Lender has made no
         representation or warranty and assumes no responsibility with respect
         to the financial condition of Borrower or its Subsidiaries or the
         performance by Borrower and its Subsidiaries of the Obligations; (iii)
         it has received a copy of this Agreement, together with copies of the
         most recent financial statements delivered pursuant to Section 7.1 and
         such other documents and information as it has deemed appropriate to
         make its own credit analysis and decision to enter into such Assignment
         Agreement; (iv) it will, independently and without reliance upon the
         Administrative Agent or any Lender and based on such documents and
         information as it shall deem appropriate at the time, continue to make
         its own credit decisions in taking or not taking action under this
         Agreement; (v) it appoints and authorizes the Administrative Agent to
         take such action and to exercise such powers under this Agreement as
         are delegated to the Administrative Agent by this Agreement; and (vi)
         it will perform in accordance with their terms all of the obligations
         which by the terms of this Agreement are required to be performed by it
         as a Lender.

                           (d)      The Administrative Agent shall maintain at
         the Administrative Agent's Office a copy of each Assignment Agreement
         delivered to it and a register (the "Register") of the names and
         address of each of the Lenders and the Pro Rata Share held by each
         Lender, giving effect to each Assignment Agreement. The Register shall
         be available during normal business hours for inspection by Borrower,
         the Co-Borrowers or any Lender upon reasonable prior notice to the
         Administrative Agent. Borrower, the Co-Borrowers and the Creditors
         shall deem and treat the Persons listed as Lenders in the Register as
         the holders and owners of the Pro Rata Share listed therein for all
         purposes hereof, and no assignment or transfer of any such Pro Rata
         Share shall be effective, in each case unless and until a Assignment
         Agreement effecting the assignment or transfer thereof shall have been
         accepted by the Administrative Agent and recorded in the Register as
         provided above. Prior to such recordation, all amounts owed with
         respect to the applicable Pro Rata Share shall be owed to the Lender
         listed in the Register as the owner thereof, and any request, authority
         or consent of any Person who, at the time of making such request or
         giving such authority or consent, is listed in the Register as a Lender
         shall be conclusive and binding on any subsequent holder, assignee or
         transferee of the corresponding Pro Rata Share.

                                      -85-


                           (e)      Each Lender may from time to time grant
         participations to one or more banks or other financial institutions
         (including another Lender) in a portion of its Pro Rata Share (or in
         Competitive Advances made by that Lender); provided, however, 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, (iii) the participating
         banks or other financial institutions shall not be a Lender hereunder
         for any purpose except, if the participation agreement so provides, for
         the purposes of Sections 3.7, 3.8, 11.11 and 11.22 but only to the
         extent that the cost of such benefits to Borrower and the Co-Borrowers
         does not exceed the cost which Borrower and the Co-Borrowers would have
         incurred in respect of such Lender absent the participation, (iv)
         Borrower, the Co-Borrowers, 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, (v) the participation interest shall be expressed as a
         percentage of the granting Lender's Pro Rata Share as it then exists
         and shall not restrict an increase in the Commitments, or in the
         granting Lender's Pro Rata Share, so long as the amount of the
         participation interest is not affected thereby, and (vi) the consent of
         the holder of such participation interest shall not be required for
         amendments or waivers of provisions of the Loan Documents other than
         those which (A) extend the Maturity Date or any other date upon which
         any payment of money is due to the Lenders, (B) reduce the rate of
         interest on the Notes, any fee or any other monetary amount payable to
         the Lenders, (C) reduce the amount of any installment of principal due
         under the Notes, (D) release the Guaranty, or (E) change the definition
         of "Requisite Lenders."

                           (f)      Notwithstanding anything in this Section to
         the contrary, the rights of the Lenders to make assignments of, and
         grant participations in, their Pro Rata Shares of the Commitments shall
         be subject to the approval of any Gaming Board, to the extent required
         by applicable Gaming Laws, and to compliance with applicable securities
         laws, if any.

                           (g)      Notwithstanding anything to the contrary
         contained herein, any Lender (a "Granting Lender") may grant to one or
         more SPC's established or maintained by that Granting Lender the option
         to provide all or any part of any Loan or Advance that such Granting
         Lender would otherwise be obligated to make pursuant to Sections 2.1,
         2.2, 2.3 or 2.6, provided that (i) nothing herein shall constitute a
         commitment to make any Loan by any SPC, (ii) if a SPC elects not to
         exercise such option or otherwise fails to provide all or any part of
         such Loan, the Granting Lender shall be obligated to make such Loan
         pursuant to the terms hereof, and (iii) the rights of any such SPC
         shall be derivative of the rights of the Granting Lender, and each SPC
         shall be subject to all of the restrictions upon the Granting Lender
         herein contained. Each SPC shall be conclusively presumed to have made
         arrangements with its Granting Lender for the exercise of voting and
         other rights hereunder in a manner which is acceptable to the SPC, and
         the Administrative Agent, the other Creditors, Borrower, the
         Co-Borrowers and each other Party shall be entitled to rely upon and
         deal solely with the Granting Lender with respect to Loans and Advances
         made by or through its SPC. The making of a Loan by a SPC hereunder
         shall utilize the Commitments of the Granting Lender (and, if such Loan
         is a Competitive Advance, shall be deemed to utilize the Revolving
         Commitments of the Lenders) to the same extent, and as if, such Loan
         were made by the Granting Lender. Each party hereto hereby agrees that
         no SPC shall be liable for any indemnity or similar payment obligation
         under this Agreement (all liability for which shall remain with the
         related 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 senior indebtedness 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 proceedings or similar
         proceedings under the laws of the United States or any State thereof,

                                      -86-


         provided that the Granting Lender for each SPC hereby agrees to
         indemnify, save, and hold harmless each other party hereto for any
         loss, cost, damage and expense arising out of their inability to
         institute any such proceeding against its SPC. In addition,
         notwithstanding anything to the contrary contained in this Section
         11.8, any SPC may (i) with notice to, but without the prior written
         consent of, Borrower, the Co-Borrowers or the Administrative Agent and
         without paying any processing fee therefor, assign all or a portion of
         its interests in any Loans to its Granting Lender or to any financial
         institutions providing liquidity and/or credit facilities to or for the
         account of such SPC to fund the Loans made by such SPC or to support
         the securities (if any) issued by such SPC to fund such Loans (but
         nothing contained herein shall be construed in derogation of the
         obligation of the Granting Lender to make Loans hereunder), provided
         that neither the consent of the SPC or of any such assignee shall be
         required for amendments or waivers of provisions of the Loan Documents
         except for those amendments or waivers for which the consent of
         participants is required under Section 11.8(e)(vi), and (ii) disclose
         on a confidential basis (in the same manner described in Section 11.14)
         any non-public information relating to its Loans to any rating agency,
         commercial paper dealer or provider of a surety, guarantee or credit or
         liquidity enhancement to such SPC.

                  11.9     Right of Setoff. If an Event of Default has occurred
and is continuing, the Administrative Agent or any Lender (but in each case only
with the consent of the Requisite Lenders) may exercise its rights under Article
9 of the Uniform Commercial Code and other applicable Laws and, to the extent
permitted by applicable Laws, apply any funds in any deposit account maintained
with it by Borrower, the Co-Borrowers and/or any of their Property in its
possession against the Obligations.

                  11.10    Sharing of Setoffs. Each Lender severally agrees that
if it, through the exercise of any right of setoff, banker's lien or
counterclaim against Borrower, any Co-Borrower, or otherwise, receives payment
of the Obligations held by it that is ratably more than any other Lender,
through any means, receives in payment of the Obligations held by that Lender,
then, subject to applicable Laws: (a) the Lender exercising the right of setoff,
banker's lien or counterclaim or otherwise receiving such payment shall
purchase, and shall be deemed to have simultaneously purchased, from the other
Lender a participation in the Obligations held by the other Lender and shall pay
to the other Lender a purchase price in an amount so that the share of the
Obligations held by each Lender after the exercise of the right of setoff,
banker's lien or counterclaim or receipt of payment shall be in the same
proportion that existed prior to the exercise of the right of setoff, banker's
lien or counterclaim or receipt of payment; and (b) such other adjustments and
purchases of participations shall be made from time to time as shall be
equitable to ensure that all of the Lenders share any payment obtained in
respect of the Obligations ratably in accordance with each Lender's share of the
Obligations immediately prior to, and without taking into account, the payment;
provided that, if all or any portion of a disproportionate payment obtained as a
result of the exercise of the right of setoff, banker's lien, counterclaim or
otherwise is thereafter recovered from the purchasing Lender by Borrower, any
Co-Borrower or any Person claiming through or succeeding to the rights of
Borrower or a Co-Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the recovery,
but without interest. Each Lender that purchases a participation in the
Obligations pursuant to this Section shall from and after the purchase have the
right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. Borrower and each Co-Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in an Obligation so purchased may exercise any and all
rights of setoff, banker's lien or counterclaim with respect to the
participation as fully as if the Lender were the original owner of the
Obligation purchased.

                                      -87-


                  11.11    Indemnification by Borrower and the Co-Borrowers.
Whether or not the transactions contemplated hereby are consummated, Borrower
and each Co-Borrower jointly and severally shall indemnify and hold harmless
each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and 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, Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Issuing Lender to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit) 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, consequential, special or punitive 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 Closing Date). All
amounts due under this Section 11.11 shall be payable within 10 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.

                  11.12    Nonliability of the Lenders. Borrower and each
Co-Borrower acknowledges and agrees that:

                           (a)      Any inspections of any Property of Borrower
         and its Subsidiaries made by or through the Creditors are for purposes
         of administration of the Loans and Letters of Credit only and Borrower
         and its Affiliates are not entitled to rely upon the same (whether or
         not such inspections are at the expense of Borrower or its
         Subsidiaries);

                           (b)      By accepting or approving anything required
         to be observed, performed, fulfilled or given to the Creditors pursuant
         to the Loan Documents, neither the Administrative Agent nor the Lenders
         shall be deemed to have warranted or represented the sufficiency,
         legality, effectiveness or legal effect of the same, or of any term,
         provision or condition thereof, and such acceptance or approval thereof
         shall not constitute a warranty or representation to anyone with
         respect thereto by the Creditors;

                           (c)      The relationship between Borrower and the
         Co-Borrowers and the Creditors is, and shall at all times remain,
         solely that of borrowers and lenders; neither the Administrative Agent
         nor the Lenders shall under any circumstance be construed to be
         partners or joint venturers of Borrower or its Affiliates; neither the
         Administrative Agent nor the Lenders shall under any circumstance be
         deemed to be in a relationship of confidence or trust or a

                                      -88-


         fiduciary or other "special" relationship with Borrower or its
         Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates;
         neither the Administrative Agent nor the Lenders undertake or assume
         any responsibility or duty to Borrower or its Affiliates to select,
         review, inspect, supervise, pass judgment upon or inform Borrower or
         its Affiliates of any matter in connection with their Property or the
         operations of Borrower or its Affiliates; Borrower and its Affiliates
         shall rely entirely upon their own judgment with respect to such
         matters; and any review, inspection, supervision, exercise of judgment
         or supply of information undertaken or assumed by the Creditors in
         connection with such matters is solely for the protection of the
         Creditors and neither Borrower, the Co-Borrowers nor any other Person
         is entitled to rely thereon; and

                           (d)      The Creditors shall not be responsible or
         liable to any Person for any loss, damage, liability or claim of any
         kind relating to injury or death to Persons or damage to Property
         caused by the actions, inaction or negligence of Borrower and/or its
         Affiliates and Borrower and the Co-Borrowers hereby indemnify and hold
         the Creditors harmless on the terms set forth in Section 11.11 from any
         such loss, damage, liability or claim.

                  11.13    No Third Parties Benefited. This Agreement is made
for the purpose of defining and setting forth certain obligations, rights and
duties of Borrower, the Co-Borrowers and the Creditors in connection with the
Loans, and is made for the sole benefit of Borrower, the Co-Borrowers, the
Creditors, and the Creditors' successors and assigns. Except as provided in
Sections 11.8, 11.11, and 11.28 no other Person shall have any rights of any
nature hereunder or by reason hereof.

                  11.14    Confidentiality. Each Lender agrees to hold any
confidential information that it may receive from Borrower and the Co-Borrowers
pursuant to this Agreement in confidence, except for disclosure: (a) to other
Creditors (or, subject to appropriate confidentiality restrictions, Affiliates
of any Creditor); (b) to legal counsel and accountants for Borrower and the
Co-Borrowers or any Lender; (c) to other professional advisors to Borrower and
the Co-Borrowers or any Lender, provided that the recipient has accepted such
information subject to a confidentiality agreement substantially similar to this
Section; (d) to regulatory officials having jurisdiction over that Lender; (e)
to any Gaming Board having regulatory jurisdiction over Borrower or its
Subsidiaries, provided that each Lender agrees to use its best efforts to notify
Borrower and the Co-Borrowers of any such disclosure unless prohibited by
applicable Laws; (f) as required by Law or legal process or in connection with
any legal proceeding to which that Lender and Borrower or any of its
Subsidiaries 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 Notes, 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 Borrower or its Subsidiaries reasonably
considered by Borrower 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 Borrower
or its Subsidiaries to any Person not associated with Borrower without a
confidentiality agreement or obligation substantially similar to this Section.
Notwithstanding anything herein to the contrary, "confidential information"
shall not include, and the Administrative Agent and each Lender may disclose
without limitation of any kind, any information with respect to 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 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, Letters of Credit and
transactions contemplated

                                      -89-


hereby. Nothing in this Section shall be construed to create or give rise to any
fiduciary duty on the part of the Creditors to Borrower or any other Party.

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

                  11.16    Integration. This Agreement, the other Loan Documents
and the letter agreements referred to in Sections 3.2, 3.3, 3.5 and 3.6,
comprise the complete and integrated agreements of the parties on the subject
matter hereof and supersedes all prior agreements, written or oral, on the
subject matter hereof. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
rights or remedies in favor of the Creditors in any other Loan Document shall
not be deemed a conflict with this Agreement. Each Loan Document was drafted
with the joint participation of the respective parties thereto and shall be
construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.

                  11.17    Governing Law. Except to the extent otherwise
provided therein, each Loan Document shall be governed by, and construed and
enforced in accordance with, the local Laws of Nevada.

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

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

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

                  11.21    Foreign Lenders and Participants.

                           (a)      Tax Forms.

                                    (1)      Each Lender that is not a "United
                  States person" within the meaning of Section 7701(a)(30) of
                  the Code (a "Foreign Lender") shall deliver to the
                  Administrative Agent, prior to receipt of any payment subject
                  to withholding under the Code (or upon accepting an assignment
                  of an interest herein), two duly signed completed copies of
                  either IRS Form W-8BEN or any successor thereto (relating to
                  such Foreign Lender and entitling it to an exemption from, or
                  reduction of, withholding tax on all payments to be made to
                  such Foreign Lender by Borrower pursuant to this Agreement) or
                  IRS Form W-8ECI or any successor thereto (relating to all
                  payments to be made to such Foreign Lender by Borrower
                  pursuant to this Agreement) or such other evidence
                  satisfactory to Borrower and the Administrative Agent that
                  such Foreign Lender is entitled to an exemption from, or
                  reduction of, U.S. withholding tax, including any

                                      -90-


                  exemption pursuant to Section 881(c) of the Code. Thereafter
                  and from time to time, each such Foreign Lender shall (A)
                  promptly submit to the Administrative Agent such additional
                  duly completed and signed copies of one of such forms (or such
                  successor forms as shall be adopted from time to time by the
                  relevant United States taxing authorities) as may then be
                  available under then current United States laws and
                  regulations to avoid, or such evidence as is satisfactory to
                  Borrower and the Administrative Agent of any available
                  exemption from or reduction of, United States withholding
                  taxes in respect of all payments to be made to such Foreign
                  Lender by Borrower pursuant to this Agreement, (B) promptly
                  notify the Administrative Agent of any change in circumstances
                  which would modify or render invalid any claimed exemption or
                  reduction, and (C) take such steps as shall not be materially
                  disadvantageous to it, in the reasonable judgment of such
                  Lender, and as may be reasonably necessary (including the
                  re-designation of its Lending Office) to avoid any requirement
                  of applicable Laws that Borrower make any deduction or
                  withholding for taxes from amounts payable to such Foreign
                  Lender.

                                    (2)      Each Foreign Lender, to the extent
                  it does not act or ceases to act for its own account with
                  respect to any portion of any sums paid or payable to such
                  Lender under any of the Loan Documents (for example, in the
                  case of a typical participation by such Lender), shall deliver
                  to the Administrative Agent on the date when such Foreign
                  Lender ceases to act for its own account with respect to any
                  portion of any such sums paid or payable, and at such other
                  times as may be necessary in the determination of the
                  Administrative Agent (in the reasonable exercise of its
                  discretion), (A) two duly signed completed copies of the forms
                  or statements required to be provided by such Lender as set
                  forth above, to establish the portion of any such sums paid or
                  payable with respect to which such Lender acts for its own
                  account that is not subject to U.S. withholding tax, and (B)
                  two duly signed completed copies of IRS Form W-8IMY (or any
                  successor thereto), together with any information such Lender
                  chooses to transmit with such form, and any other certificate
                  or statement of exemption required under the Code, to
                  establish that such Lender is not acting for its own account
                  with respect to a portion of any such sums payable to such
                  Lender.

                                    (3)      Borrower shall not be required to
                  pay any additional amount to any Foreign Lender under Section
                  3.12(d) (A) with respect to any taxes required to be deducted
                  or withheld on the basis of the information, certificates or
                  statements of exemption such Lender transmits with an IRS Form
                  W-8IMY pursuant to this Section 11.21(a) or (B) if such Lender
                  shall have failed to satisfy the foregoing provisions of this
                  Section 11.21(a); provided that if such Lender shall have
                  satisfied the requirement of this Section 11.21(a) on the date
                  such Lender became a Lender or ceased to act for its own
                  account with respect to any payment under any of the Loan
                  Documents, nothing in this Section 11.21(a) shall relieve
                  Borrower of its obligation to pay any amounts pursuant to
                  Section 3.12(d) in the event that, as a result of any change
                  in any applicable law, treaty or governmental rule, regulation
                  or order, or any change in the interpretation, administration
                  or application thereof, such Lender is no longer properly
                  entitled to deliver forms, certificates or other evidence at a
                  subsequent date establishing the fact that such Lender or
                  other Person for the account of which such Lender receives any
                  sums payable under any of the Loan Documents is not subject to
                  withholding or is subject to withholding at a reduced rate.

                                    (4)      The Administrative Agent may,
                  without reduction, withhold any Taxes required to be deducted
                  and withheld from any payment under any of the Loan

                                      -91-


                  Documents with respect to which Borrower is not required to
                  pay additional amounts under this Section 11.21(a).

                           (b)      Form W-9. Upon the request of the
         Administrative Agent, each Lender that is a "United States person"
         within the meaning of Section 7701(a)(30) of the Code shall deliver to
         the Administrative Agent two duly signed completed copies of IRS Form
         W-9. If such Lender fails to deliver such forms, then the
         Administrative Agent may withhold from any interest payment to such
         Lender an amount equivalent to the applicable back-up withholding tax
         imposed by the Code, without reduction.

                           (c)      Withholding. If any Governmental Agency
         asserts that the Administrative Agent did not properly withhold or
         backup withhold, as the case may be, any tax or other amount from
         payments made to or for the account of any Lender, such Lender shall
         indemnify the Administrative Agent therefor, including all penalties
         and interest, any taxes imposed by any jurisdiction on the amounts
         payable to the Administrative Agent under this Section, and costs and
         expenses (including Attorney Costs) of the Administrative Agent. The
         obligation of the Lenders under this Section shall survive the
         termination of the Commitments, repayment of all other Obligations
         hereunder and the resignation of the Administrative Agent.

                  11.22    Hazardous Material Indemnity. Borrower and each
Co-Borrower hereby agrees to indemnify, hold harmless and defend (by counsel
reasonably satisfactory to the Administrative Agent) the Administrative Agent
and each of the Lenders (and any successor to a Lender) and their respective
directors, officers, employees and agents from and against any and all claims,
losses, damages, liabilities, fines, penalties, charges, administrative and
judicial proceedings and orders, judgments, remedial action requirements,
enforcement actions of any kind, and all costs and expenses incurred in
connection therewith (including reasonable attorneys' fees and the reasonably
allocated costs of attorneys employed by the Administrative Agent or any Lender,
and expenses to the extent that the defense of any such action has not been
assumed by Borrower and the Co-Borrowers), arising directly or indirectly out of
(i) the presence on, in, under or about any Real Property of any Hazardous
Materials, or any releases or discharges of any Hazardous Materials on, under or
from any Real Property and (ii) any activity carried on or undertaken on or off
any Real Property by Borrower its Subsidiaries or any of their predecessors in
title, whether prior to or during the term of this Agreement, and whether by
Borrower, its Subsidiaries or any predecessor in title or any employees, agents,
contractors or subcontractors of Borrower, its Subsidiaries or any predecessor
in title, or any third persons at any time occupying or present on any Real
Property (other than a Lender or a representative of a Lender), in connection
with the handling, treatment, removal, storage, decontamination, clean-up,
transport or disposal of any Hazardous Materials at any time located or present
on, in, under or about any Real Property; provided that, anything to the
contrary herein notwithstanding (including Exhibit K), the liability of Detroit
shall be limited to that portion of the Obligations which are actually borrowed
or received by Detroit. The foregoing indemnity shall further apply to any
residual contamination on, in, under or about any Real Property, or affecting
any natural resources, and to any contamination of any Property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such Hazardous Materials, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Laws, but the foregoing indemnity shall not apply to Hazardous
Materials on any Real Property, the presence of which is caused by the
Creditors. Borrower and each Co-Borrower hereby acknowledges and agrees that,
notwithstanding any other provision of this Agreement or any of the other Loan
Documents to the contrary, the obligations of Borrower and the Co-Borrowers
under this Section (and under Sections 4.17 and 5.4, with respect to compliance
with Hazardous Materials Laws) shall be unlimited corporate obligations of
Borrower and the Co-Borrowers and shall not be secured by any deed of trust or
mortgage on any Real Property. Any obligation or liability of Borrower and the
Co-Borrowers to any Indemnitee under this Section shall survive the expiration
or termination of this Agreement, the repayment of all

                                      -92-


Loans, the expiration or termination of all Letters of Credit and the payment
and performance of all other Obligations owed to the Lenders.

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

                  11.24    Lien Releases. The Administrative Agent shall release
any Lien granted to or held by the Administrative Agent on any collateral for
the Obligations (and shall consent to the release by the Collateral Agent of any
Liens held by the Collateral Agent) which is (i) sold, transferred or otherwise
disposed of in connection with any transaction not prohibited by the Loan
Documents, (ii) constituting Property leased to Borrower or its Subsidiaries
under a lease which has expired or been terminated in a transaction not
prohibited by the Loan Documents or which will concurrently expire and which has
not been, and is not intended by Borrower or the relevant Subsidiary to be,
renewed or extended, (iii) consisting of an instrument, if the Indebtedness
evidenced by such instrument has been finally repaid in full, (iv) if approved
or consented to by those of the Lenders required by Section 11.2, (v) for the
avoidance of doubt, of the Golden Nugget Properties (and the stock of entities
owning the Golden Nugget Properties) upon any permitted sale, transfer or other
disposition of the Golden Nugget Properties, or (vi) as otherwise expressly
required by the Loan Documents, provided in each case that any Liens securing
the other Senior Indebtedness are concurrently released. If the collateral so
released consists of capital stock of a Subsidiary which is sold, transferred or
otherwise disposed of in connection with any transaction not prohibited by the
Loan Documents, then the Administrative Agent shall concurrently also release
such Subsidiary from its obligations under the Guaranty. Each of the Creditors
hereby consent to the arrangements set forth in this Section and, upon the
request of the Administrative Agent, each Lender shall promptly provide written
confirmation of the authority of the Administrative Agent to release such Liens
(or to consent to such release by the Collateral Agent) upon any one or more
items of collateral under this Section.

                  11.25    Termination; Release of Liens. In addition to any
Collateral Release as contemplated in Section 2.12, upon (a) the expiration or
termination of the Commitments, (b) the full and final payment in Cash of the
Loans, all interest and fees with respect thereto, (c) the reimbursement of all
draws under Letters of Credit and the payment of all fees with respect thereto,
(d) the expiration of all Letters of Credit or the deposit of Cash collateral
with the Issuing Lender in the effective face amount thereof, (e) the payment of
all amounts then demanded by any Lender or indemnitee under Sections 3.7, 3.8,
11.11 and 11.22 and (f) the payment of all other amounts then due under the Loan
Documents, the Administrative Agent is hereby authorized by the Lenders to, and
the Administrative Agent shall, upon the request of Borrower and the
Co-Borrowers, execute and deliver to Borrower and the Co-Borrowers discharges
from further compliance with the covenants contained in Articles 5, 6, and 7 and
releases of the Liens created by the Loan Documents, and shall return any
Property pledged to the Administrative Agent as collateral for the Obligations,
notwithstanding the survival of any provisions of this Agreement herein provided
for.

                  11.26    Removal of a Lender. Borrower and the Co-Borrowers
shall have the right to remove a Lender as a party to this Agreement in
accordance with this Section (a) under the circumstances set forth in Sections
2.11, 3.7, 3.8(g) and 3.12(d) and (b) if such Lender is the subject of a
Disqualification. If Borrower and the Co-Borrowers are entitled to remove a
Lender pursuant to this Section either:

                                      -93-


                  (x)      Upon notice from Borrower and the Co-Borrowers, the
                  Lender being removed shall execute and deliver a Assignment
                  Agreement covering that Lender's Pro Rata Share in favor of
                  one or more Eligible Assignees designated by Borrower and the
                  Co-Borrowers (and acceptable to the Administrative Agent,
                  which acceptance shall not be unreasonably delayed or
                  withheld), subject to (i) payment of a purchase price by such
                  Eligible Assignee equal to all principal and accrued interest,
                  fees and other amounts payable to such Lender under this
                  Agreement through the date of assignment and (ii) the written
                  release of the Issuing Lender and the Swing Line Lender of
                  such Lender's obligations under Sections 2.4(c) and 2.6(d) or
                  delivery by such Eligible Assignee of such appropriate
                  assurances and indemnities (which may include letters of
                  credit) as such Lender may reasonably require with respect to
                  its participation interest in any Letters of Credit then
                  outstanding or any Swing Line Outstandings; or

                  (y)      Except in the case of the removal of a Lender
                  pursuant to Section 2.11, Borrower and the Co-Borrowers may
                  reduce the Commitments pursuant to Section 2.9 (and, for this
                  purpose, the numerical requirements of such Section shall not
                  apply) by an amount equal to that Lender's Pro Rata Share, pay
                  and provide to such Lender the amounts, assurances and
                  indemnities described in subclauses (i) and (ii) of clause (x)
                  above and release such Lender from its Pro Rata Share.

                  11.27    Joint and Several. Borrower and each of the
Co-Borrowers shall be obligated for all of the Obligations on a joint and
several basis, notwithstanding which of them may have directly received the
proceeds of any particular Loan or Advance or the benefit of a particular Letter
of Credit, provided that, anything to the contrary herein notwithstanding
(including Exhibit K), the liability of Detroit shall be limited to that portion
of the Obligations which are actually borrowed or received by Detroit. Borrower
and each of the Co-Borrowers acknowledge and agree that, for purposes of the
Loan Documents, Borrower, the Co-Borrowers and the Guarantors constitute a
single integrated financial enterprise and that each receives a benefit from the
availability of credit under this Agreement. Borrower and the Co-Borrowers each
waive all defenses arising under the Laws of suretyship, to the extent such Laws
are applicable, in connection with their joint and several obligations under
this Agreement. Without limiting the foregoing, Borrower and each of the
Co-Borrowers agree to the Joint Borrower Provisions set forth in Exhibit K,
incorporated by this reference.

                  11.28    Non-Involvement of Tracinda. The parties hereto
acknowledge that neither Kirk Kerkorian nor Tracinda Corporation, individually
or collectively, is a party to this Agreement or any of the other Loan Documents
executed on the Closing Date. Accordingly, the parties hereto hereby agree that
in the event (i) there is any alleged breach or default by any Party under this
Agreement or any such Loan Document, or (ii) any party hereto has any claim
arising from or relating to any such Loan Document, no party hereto, nor any
party claiming through it (to the extent permitted by applicable Law), shall
commence any proceedings or otherwise seek to impose any liability whatsoever
against Mr. Kerkorian or Tracinda Corporation by reason of such alleged breach,
default or claim.

                  11.29    Pledged Stock in Gaming Companies. If and to the
extent that the capital stock or other equity securities of any Person which
holds a gaming license are at any time pledged to the Creditors, the Creditors
shall, to the extent required by applicable Gaming Laws (a) in the case of any
such Person holding a Nevada gaming license, retain possession of such pledged
capital stock or other equity securities within the State of Nevada at a
location designated to the Nevada State Gaming Control Board, and (b) in the
case of any Person holding a gaming license from another jurisdiction, shall
retain possession of such pledged stock or other equity securities at a location
in that jurisdiction designated to the Gaming Board of that jurisdiction, if so
required by the Gaming Board of that jurisdiction.

                                      -94-


                  11.30    Payments Set Aside. To the extent that any payment by
or on behalf of Borrower or any Co-Borrower is made to the Administrative Agent
or any Lender, or the Administrative Agent or any Lender exercises its right of
set-off, and such payment or the proceeds of such set-off or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay to
the Administrative Agent upon demand its applicable share of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect.

                  11.31    Waiver of Right to Trial by Jury. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

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

                                      -95-


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

                                MGM MIRAGE,
                                a Delaware corporation

                                By:     /s/ BRYAN L. WRIGHT
                                        --------------------------------------
                                        Bryan Wright, Vice President-Assistant
                                        General Counsel and Assistant Secretary

                                MGM GRAND DETROIT, LLC

                                By: MGM Grand Detroit, Inc., managing member

                                    By: /s/ BRYAN L. WRIGHT
                                        --------------------------------------
                                        Bryan Wright, Assistant Secretary

                                                                  Signature Page
                                                                  Loan Agreement



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

                                  By:     /s/ JANICE HAMMOND
                                          --------------------------------------
                                          Janice Hammond, Vice President

                                                                  Signature Page
                                                                  Loan Agreement


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

                                  By:     /s/ SCOTT L. FABER
                                          --------------------------------------
                                          Scott L. Faber, Managing Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  JPMORGAN CHASE BANK,
                                  as a Lender

                                  By:     /s/ DONALD S. SHOKRIAN
                                          --------------------------------------
                                  Name:   Donald S. Shokrian
                                  Title:  Managing Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  CITICORP USA, INC.,
                                  as a Lender

                                  By:     /s/ ROBERT F. PARR
                                          --------------------------------------
                                  Name:   Robert F. Parr
                                  Title:  Managing Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  WELLS FARGO BANK, N.A.,
                                  as a Lender

                                  By:     /s/ CATHRYN SANTORO
                                          --------------------------------------
                                  Name:   Cathryn Santoro
                                  Title:  AVP, Relationship Manager

                                                                  Signature Page
                                                                  Loan Agreement



                                  DEUTSCHE BANK TRUST COMPANY AMERICAS,
                                  as a Lender

                                  By:     /s/ GEORGE R. REYNOLDS
                                          --------------------------------------
                                  Name:   George R. Reynolds
                                  Title:  Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  THE ROYAL BANK OF SCOTLAND PLC,
                                  as a Lender

                                  By:     /s/ MARIA AMARAL-LEBLANC
                                          --------------------------------------
                                  Name:   Maria Amaral-LeBlanc
                                  Title:  Senior Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  COMMERZBANK AG, NEW YORK AND GRAND CAYMAN
                                  BRANCHES,
                                  as a Lender

                                  By:     /s/ CHRISTIAN JAGENBERG
                                          --------------------------------------
                                  Name:   Christian Jagenberg
                                  Title:  SVP and Manager

                                  By:     /s/ WERNER SCHMIDBAUER
                                          --------------------------------------
                                  Name:   Werner Schmidbauer
                                  Title:  SVP

                                                                  Signature Page
                                                                  Loan Agreement



                                  BANK OF SCOTLAND,
                                  as a Lender

                                  By:     /s/ JOSEPH FRATUS
                                          --------------------------------------
                                  Name:   Joseph Fratus
                                  Title:  First Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  THE BANK OF NOVA SCOTIA,
                                  as a Lender

                                  By:     /s/ MICHAEL A. MITCHELL
                                          --------------------------------------
                                  Name:   Michael A. Mitchell
                                  Title:  Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  SCOTIABANC, INC.,
                                  as a Lender

                                  By:     /s/ WILLIAM E. ZARRETT
                                          --------------------------------------
                                  Name:   William E. Zarrett
                                  Title:  Managing Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  SOCIETE GENERALE,
                                  as a Lender

                                  By:     /s/ THOMAS K. DAY
                                          --------------------------------------
                                  Name:   Thomas K. Day
                                  Title:  Managing Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  BARCLAYS BANK PLC,
                                  as a Lender

                                  By:     /s/ L. PETER YETMAN
                                          --------------------------------------
                                  Name:   L. Peter Yetman
                                  Title:  Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  WACHOVIA BANK, NATIONAL ASSOCIATION,
                                  as a Lender

                                  By:     /s/ DANIEL L. EVANS
                                          --------------------------------------
                                  Name:   Daniel L. Evans
                                  Title:  Managing Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  FLEET NATIONAL BANK,
                                  as a Lender

                                  By:     /s/ THOMAS BROWER
                                          --------------------------------------
                                  Name:   Thomas Brower
                                  Title:  Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  BANK ONE, N.A.,
                                  as a Lender

                                  By:     /s/ KANDIS A. JAFFREY
                                          --------------------------------------
                                  Name:   Kandis A. Jaffrey
                                  Title:  Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  THE BANK OF NEW YORK,
                                  as a Lender

                                  By:     /s/ MEHRASA RAYGANI
                                          --------------------------------------
                                  Name:   Mehrasa Raygani
                                  Title:  Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  KEYBANK NATIONAL ASSOCIATION,
                                  as a Lender

                                  By:     /s/ MICHAEL J. VEGH
                                          --------------------------------------
                                  Name:   Michael J. Vegh
                                  Title:  Portfolio Manager

                                                                  Signature Page
                                                                  Loan Agreement



                                  CIBC INC.,
                                  as a Lender

                                  By:     /s/ PAUL J. CHAKMAK
                                          --------------------------------------
                                  Name:   Paul J. Chakmak
                                  Title:  Managing Director
                                          CIBC World Markets Corp.,
                                          AS AGENT

                                                                  Signature Page
                                                                  Loan Agreement



                                  BNP PARIBAS,
                                  as a Lender

                                  By:     /s/ JANICE  S. H. HO
                                          --------------------------------------
                                  Name:   Janice S. H. Ho
                                  Title:  Director

                                  By:     /s/ MITCHELL M. OZAWA
                                          --------------------------------------
                                  Name:   Mitchell M. Ozawa
                                  Title:  Managing Director

                                                                  Signature Page
                                                                  Loan Agreement



                                  MIZUHO CORPORATE BANK, LIMITED,
                                  as a Lender

                                  By:     /s/ MARK GRONICH
                                          --------------------------------------
                                  Name:   Mark Gronich
                                  Title:  Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  COMERICA BANK,
                                  as a Lender

                                  By:     /s/ EOIN P. COLLINS
                                          --------------------------------------
                                  Name:   Eoin P. Collins
                                  Title:  Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  SUMITOMO MITSUI BANKING CORPORATION,
                                  as a Lender

                                  By:     /s/ AL GALLUZZO
                                          --------------------------------------
                                  Name:   Al Galluzzo
                                  Title:  Senior Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                             THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND,
                             as a Lender

                             By:     /s/ TOM HAYES          /s/ DAVID WALSH
                                     ---------------------  --------------------
                             Name:   Tom Hayes              David Walsh
                             Title:  Authorised Signatory   Authorised Signatory

                                                                  Signature Page
                                                                  Loan Agreement



                                  PB CAPITAL CORPORATION,
                                  as a Lender

                                  By:     /s/ MARIA C. LEVY
                                          --------------------------------------
                                  Name:   Maria C. Levy
                                  Title:  Vice President

                                  By:     /s/ STEVEN ALEXANDER
                                          --------------------------------------
                                  Name:   Steven Alexander
                                  Title:  Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  UFJ BANK LIMITED,
                                  as a Lender

                                  By:     /s/ TOSHIKO BOYD
                                          --------------------------------------
                                  Name:   Toshiko Boyd
                                  Title:  Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  STANDARD FEDERAL BANK,
                                  as a Lender

                                  By:     /s/ ANNETTE GORDON
                                          --------------------------------------
                                  Name:   Annette Gordon
                                  Title:  First Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  ALLIED IRISH BANK,
                                  as a Lender

                                  By:     /s/ MARGARET  BRENNAN
                                          --------------------------------------
                                  Name:   Margaret Brennan
                                  Title:  Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  HSH NORDBANK AG, NEW YORK BRANCH,
                                  as a Lender

                                  By:     /s/ DREW VON GLAHN
                                          --------------------------------------
                                  Name:   Drew von Glahn
                                  Title:  Senior Vice President
                                          Head of Corporate Banking
                                          HSH Nordbank, New York Branch

                                  By:     /s/ AMY CHEN LU
                                          --------------------------------------
                                  Name:   Amy Chen Lu
                                  Title:  Corporate Banking
                                          HSH Nordbank AG, New York Branch

                                                                  Signature Page
                                                                  Loan Agreement



                                  ERSTE BANK NEW YORK BRANCH,
                                  as a Lender

                                  By:     /s/ ROBERT J. WAGMAN
                                          --------------------------------------
                                  Name:   Robert J. Wagman
                                  Title:  Vice President
                                          Erste Bank New York Branch

                                  By:     /s/ BRYAN J. LYNCH
                                          --------------------------------------
                                  Name:   Bryan J. Lynch
                                  Title:  First Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  OAK BROOK BANK,
                                  as a Lender

                                  By:     /s/ GLENN KRIETSCH
                                          --------------------------------------
                                  Name:   Glenn Krietsch
                                  Title:  Executive Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  BANK OF HAWAII,
                                  as a Lender

                                  By:     /s/ SCOTT NAHME
                                          --------------------------------------
                                  Name:   Scott Nahme
                                  Title:  Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  BANK OF CHINA, LOS ANGELES BRANCH,
                                  as a Lender

                                  By:     /s/ KARL K. Y. PAN
                                          --------------------------------------
                                  Name:   Karl K. Y. Pan
                                  Title:  FVP and Senior Relationship Manager

                                                                  Signature Page
                                                                  Loan Agreement



                                  THE PEOPLES BANK, BILOXI, MISSISSIPPI,
                                  as a Lender

                                  By:     /s/ CHEVIS C. SWETMAN
                                          --------------------------------------
                                  Name:   Chevis C. Swetman
                                  Title:  President

                                                                  Signature Page
                                                                  Loan Agreement



                                  TRUSTMARK NATIONAL BANK,
                                  as a Lender

                                  By:     /s/ SARAH B. ADAMS
                                          --------------------------------------
                                  Name:   Sarah B. Adams
                                  Title:  Assistant Vice President

                                                                  Signature Page
                                                                  Loan Agreement



                                  GENERAL ELECTRIC CAPITAL CORPORATION,
                                  as a Lender

                                  By:     /s/ KARL KIEFFER
                                          --------------------------------------
                                  Name:   Karl Kieffer
                                  Title:  Duly Authorized Signatory

                                                                  Signature Page
                                                                  Loan Agreement

EX-21

exv21

EX-23

exv23

EX-31.1

exv31w1

EX-31.2

exv31w2

EX-32.1

exv32w1

EX-32.2

exv32w2