Senior Unsecured Interim Loan Agreement

Exhibit 10.3

EXECUTION COPY


$6,775,000,000 SENIOR UNSECURED INTERIM LOAN AGREEMENT

Dated as of January 28, 2008,

Among

HARRAH' S OPERATING COMPANY, INC.,

as Borrower,

THE LENDERS PARTY HERETO,

CITIBANK, N.A., as Administrative Agent,

DEUTSCHE BANK AG NEW YORK BRANCH,

as Syndication Agent,

BANC OF AMERICA BRIDGE LLC,

CREDIT SUISSE,

CAYMAN ISLANDS BRANCH,

JPMORGAN CHASE BANK, N.A.,

and

MERRILL LYNCH CAPITAL CORPORATION, as Co-Documentation Agents,

CITIGROUP GLOBAL MARKETS INC.,

DEUTSCHE BANK SECURITIES, INC.,

BANC OF AMERICA SECURITIES LLC,

CREDIT SUISSE SECURITIES (USA) LLC, J.P. MORGAN SECURITIES INC.

and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Joint Bookrunners,


CITIGROUP GLOBAL MARKETS INC.

and

DEUTSCHE BANK SECURITIES INC.,

as Joint Lead Arrangers


TABLE OF CONTENTS

Page ARTICLE I DEFINITIONS 1

SECTION 1.01

Defined Terms 1

SECTION 1.02

Terms Generally 54

SECTION 1.03

Effectuation of Transactions 55

SECTION 1.04

Times of Day 55 ARTICLE II THE CREDITS 55

SECTION 2.01

The Loans 55

SECTION 2.02

Borrowing, Conversions and Continuations of Loans 55

SECTION 2.03

[Reserved] 57

SECTION 2.04

[Reserved] 57

SECTION 2.05

[Reserved] 57

SECTION 2.06

[Reserved] 57

SECTION 2.07

[Reserved] 57

SECTION 2.08

Termination of Commitments 57

SECTION 2.09

Repayment of Loans; Evidence of Debt 58

SECTION 2.10

[Reserved] 58

SECTION 2.11

Prepayment of Loans 58

SECTION 2.12

Fees 63

SECTION 2.13

Interest 63

SECTION 2.14

Alternate Rate of Interest 65

SECTION 2.15

Increased Costs 66

SECTION 2.16

Break Funding Payments 67

SECTION 2.17

Taxes 67

SECTION 2.18

Payments Generally; Pro Rata Treatment; Sharing of Set-offs 69

SECTION 2.19

Mitigation Obligations; Replacement of Lenders 71

SECTION 2.20

Illegality 72

SECTION 2.21

Permanent Refinancing 73 ARTICLE III REPRESENTATIONS AND WARRANTIES 75

SECTION 3.01

Organization; Powers 75

SECTION 3.02

Authorization 75

SECTION 3.03

Enforceability 76

SECTION 3.04

Governmental Approvals 76

SECTION 3.05

Financial Statements 76

SECTION 3.06

No Material Adverse Effect 77

SECTION 3.07

Title to Properties; Possession Under Leases 77


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TABLE OF CONTENTS

(continued)

Page

SECTION 3.08

Subsidiaries 78

SECTION 3.09

Litigation; Compliance with Laws 78

SECTION 3.10

Federal Reserve Regulations 79

SECTION 3.11

Investment Company Act 79

SECTION 3.12

[Reserved] 79

SECTION 3.13

Tax Returns 79

SECTION 3.14

No Material Misstatements 79

SECTION 3.15

Employee Benefit Plans 80

SECTION 3.16

Environmental Matters 81

SECTION 3.17

[Reserved] 81

SECTION 3.18

[Reserved] 81

SECTION 3.19

Solvency 81

SECTION 3.20

Labor Matters 82

SECTION 3.21

No Default 82

SECTION 3.22

Intellectual Property; Licenses, Etc. 82

SECTION 3.23

Senior Debt 82 ARTICLE IV CONDITIONS OF LENDING 83

SECTION 4.01

Conditions to Borrowing 83 ARTICLE V COVENANTS 86

SECTION 5.01

Reports and Other Information 86

SECTION 5.02

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock 88

SECTION 5.03

Limitation on Restricted Payments 94

SECTION 5.04

Dividend and Other Payment Restrictions Affecting Subsidiaries 103

SECTION 5.05

Transactions with Affiliates 105

SECTION 5.06

Change of Control 109

SECTION 5.07

Compliance Certificate 110

SECTION 5.08

Further Instruments and Acts 111

SECTION 5.09

Future Guarantors 111

SECTION 5.10

Liens 111

SECTION 5.11

Exchange Note Indenture 111

SECTION 5.12

Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets 111

SECTION 5.13

Asset Sales 115


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TABLE OF CONTENTS

(continued)

Page ARTICLE VI COVENANT SUSPENSION 115

SECTION 6.01

Covenant Suspension 115 ARTICLE VII EVENTS OF DEFAULT 116

SECTION 7.01

Events of Default 116

SECTION 7.02

Remedies upon Event of Default 118

SECTION 7.03

Application of Funds 119 ARTICLE VIII THE AGENTS 119

SECTION 8.01

Appointment 119

SECTION 8.02

Delegation of Duties 119

SECTION 8.03

Exculpatory Provisions 120

SECTION 8.04

Reliance by Administrative Agent 120

SECTION 8.05

Notice of Default 120

SECTION 8.06

Non-Reliance on Administrative Agent and Other Lenders 121

SECTION 8.07

Indemnification 121

SECTION 8.08

Agent in its Individual Capacity 122

SECTION 8.09

Successor Agents 122

SECTION 8.10

Payments Set Aside 122

SECTION 8.11

Administrative Agent May File Proofs of Claim 123

SECTION 8.12

[Reserved] 123

SECTION 8.13

Agents and Arrangers 123 ARTICLE IX MISCELLANEOUS 124

SECTION 9.01

Notices; Communications 124

SECTION 9.02

Survival of Agreement 125

SECTION 9.03

Binding Effect 125

SECTION 9.04

Successors and Assigns 125

SECTION 9.05

Expenses; Indemnity 129

SECTION 9.06

Right of Set-off 131

SECTION 9.07

Applicable Law 131

SECTION 9.08

Waivers; Amendment 131

SECTION 9.09

Interest Rate Limitation 133

SECTION 9.10

Entire Agreement 133

SECTION 9.11

WAIVER OF JURY TRIAL 133

SECTION 9.12

Severability 134

SECTION 9.13

Counterparts 134

SECTION 9.14

Headings 134

SECTION 9.15

Jurisdiction; Consent to Service of Process 134


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TABLE OF CONTENTS

(continued)

Page

SECTION 9.16

Confidentiality 135

SECTION 9.17

Platform; Borrower Materials 135

SECTION 9.18

Release of Guarantees 136

SECTION 9.19

Judgment Currency 136

SECTION 9.20

USA PATRIOT Act Notice 137

SECTION 9.21

No Advisory or Fiduciary Responsibility 137

SECTION 9.22

Application of Gaming Laws 138

Exhibits and Schedules

Exhibit A Form of Assignment and Acceptance Exhibit B Form of Solvency Certificate Exhibit C Form of Borrowing Request Exhibit D Form of Interest Election Request Exhibit E Form of Guarantee Exhibit F Form of Senior Exchange Notes Registration Rights Agreement Exhibit G Form of Senior Interim Cash Pay Loan Note Exhibit H Form of Senior Interim Toggle Loan Note Exhibit I Description of Senior Notes Indenture Schedule 1.01A Certain U.S. Subsidiaries Schedule 1.01B Mandatory Costs Schedule 2.01 Commitments Schedule 3.01 Organization and Good Standing Schedule 3.04 Governmental Approvals Schedule 3.07(b) Possession under Leases Schedule 3.07(c) Intellectual Property Schedule 3.08(a) Subsidiaries Schedule 3.08(b) Subscriptions Schedule 3.13 Taxes Schedule 3.16 Environmental Matters Schedule 3.22 Intellectual Property Schedule 4.02(b) Local Counsel Schedule 9.01 Notice Information


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SENIOR UNSECURED INTERIM LOAN AGREEMENT dated as of January 28, 2008 (this " Agreement" ), among HARRAH' S OPERATING COMPANY, INC., a Delaware corporation (the " Borrower" ), the LENDERS party hereto from time to time, CITIBANK, N.A., as administrative agent for the Lenders, DEUTSCHE BANK AG NEW YORK BRANCH, as syndication agent (in such capacity, the " Syndication Agent" ), and BANC OF AMERICA BRIDGE LLC, CREDIT SUISSE, CAYMAN ISLANDS BRANCH, JPMORGAN CHASE BANK, N.A., and MERRILL LYNCH CAPITAL CORPORATION, as co-documentation agents (in such capacity, the " Documentation Agents" ), CITIGROUP GLOBAL MARKETS INC., DEUTSCHE BANK SECURITIES, INC., BANC OF AMERICA SECURITIES LLC, CREDIT SUISSE SECURITIES (USA) LLC, J.P. MORGAN SECURITIES INC. and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as joint bookrunners (in such capacity, the " Joint Bookrunners" ), and CITIGROUP GLOBAL MARKETS INC. and DEUTSCHE BANK SECURITIES INC., as joint lead arrangers (in such capacity, the " Joint Lead Arrangers" ).

WHEREAS, Apollo Management VI, L.P. and other affiliated co-investment partnerships (collectively, " Apollo" ) and TPG Partners V, L.P. and other affiliated co-investment partnerships (collectively, " TPG" ) have indirectly formed Hamlet Merger Inc., a Delaware Corporation (" Merger Inc." ), for the purpose of entering into that certain Agreement and Plan of Merger by and among Hamlet Holdings LLC (" Parent" ), Merger Inc. and Harrah' s Entertainment, Inc., a Delaware corporation (the " Company" ), dated as of December 19, 2006 (as amended or supplemented as of the date hereof, the " Merger Agreement" ), pursuant to which Merger Inc. will merge (the " Merger" ) with and into the Company, with the Company surviving as a Wholly Owned Subsidiary of Parent; and

WHEREAS, in connection with the consummation of the Merger, the Borrower has requested the Lenders to extend credit in the form of Senior Interim Loans in an aggregate principal amount of $6,775,000,000, which shall initially consist of (a) $5,275,000,000 in aggregate principal amount of Senior Interim Cash Pay Loans and (b) $1,500,000,000 in aggregate principal amount of Senior Interim Toggle Loans.

NOW, THEREFORE, the Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01 Defined Terms . As used in this Agreement, the following terms shall have the meanings specified below:

" ABR" shall mean, 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 announced from time to time by Citibank as its " prime rate" . The " prime rate" is a rate set by Citibank based upon various factors including Citibank' s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans,


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which may be priced at, above, or below such announced rate. Any change in such rate announced by Citibank shall take effect at the opening of business on the day specified in the public announcement of such change.

" ABR Loan" shall mean any Loan bearing interest at a rate determined by reference to the ABR in accordance with the provisions of Article II.

" Acquired Indebtedness" shall mean, with respect to any specified Person:

(a) Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and

(b) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

" Administrative Agent" shall mean Citibank in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

" Administrative Agent' s Office" shall mean the Administrative Agent' s address and, as appropriate, account as set forth on Schedule 9.01 or such other address or account with as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

" Administrative Questionnaire" shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent.

" Affiliate" of any specified Person shall mean any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, " control" (including, with correlative meanings, the terms " controlling," " controlled by" and " under common control with" ), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

" Affiliate Transaction" shall have the meaning assigned to such term in Section 5.05(a).

" Agent Parties" shall have the meaning assigned to such term in Section 9.17.

" Agents" shall mean the Administrative Agent, the Syndication Agent, the Documentation Agents, the Joint Bookrunners and the Joint Lead Arrangers.

" Agreement" shall have the meaning assigned to such term in the introductory paragraph of this Agreement.

" Agreement Currency" shall have the meaning assigned to such term in Section 9.19.


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" AHYDO Repayment Date" shall have the meaning assigned to such term in Section 2.11(c).

" Apollo" shall have the meaning assigned to such term in the first recital hereto. " Applicable ABR Margin" shall mean at any date, with respect to each ABR Loan, 2.75% per annum. If the Loans have not been repaid in whole within the six-month period following the Closing Date, the Applicable ABR Margin will increase by 0.50% per annum at the end of such six-month period and shall increase by an additional 0.50% per annum at the end of each three-month period thereafter until the Rollover Date. At the Rollover Date, the Applicable ABR Margin will increase by 0.50% per annum and shall increase by an additional 0.50% per annum at the end of each three-month period thereafter until the applicable Maturity Date. Notwithstanding the foregoing, the Applicable ABR Margin shall be adjusted such that the applicable interest rate (i) in the case of Senior Cash Pay Loans, shall not be less than 9.25% at any time and shall not exceed 10.75% at any time and (ii) in the case of Senior Toggle Loans, excluding the effect of the PIK Margin, shall not be less than 9.25% at any time and shall not exceed 10.75% at any time. " Applicable Eurocurrency Margin" shall mean at any date, with respect to each Eurocurrency Loan, 3.75% per annum. If the Loans have not been repaid in full within the six-month period following the Closing Date, the Applicable Eurocurrency Margin will increase by 0.50% per annum at the end of such six-month period and shall increase by an additional 0.50% per annum at the end of each three-month period thereafter until the Rollover Date. At the Rollover Date, the Applicable Eurocurrency Margin will increase by 0.50% per annum and shall increase by an additional 0.50% per annum at the end of each three-month period thereafter until the applicable Maturity Date. Notwithstanding the foregoing, the Applicable Eurocurrency Margin shall be adjusted such that the applicable interest rate (i) in the case of Senior Cash Pay Loans, shall not be less than 9.25% at any time and shall not exceed 10.75% at any time and (ii) in the case of Senior Toggle Loans, excluding the effect of the PIK Margin, shall not be less than 9.25% at any time and shall not exceed 10.75% at any time.

" Approved Fund" shall have the meaning assigned to such term in Section 9.04(b). " Asset Sale" shall mean:

(a) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) outside the ordinary course of business of the Borrower or any Restricted Subsidiary of the Borrower (each referred to in this definition as a " disposition" ) or (b) the issuance or sale of Equity Interests (other than directors' qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to the Borrower or another Restricted Subsidiary of the Borrower) (whether in a single transaction or a series of related transactions),

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in each case other than: (i) a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;

(ii) the disposition of all or substantially all of the assets of the Borrower in a manner permitted pursuant to Section 5.12 or any disposition that constitutes a Change of Control;

(iii) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 5.03;

(iv) any disposition of assets of the Borrower or any Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity Interests so disposed or issued have an aggregate Fair Market Value (as determined in good faith by the Borrower) of less than $50,000,000;

(v) any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary of the Borrower to the Borrower or by the Borrower or a Restricted Subsidiary of the Borrower to a Restricted Subsidiary of the Borrower; (vi) any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of the Borrower and its Restricted Subsidiaries as a whole, as determined in good faith by the Borrower; (vii) foreclosure or any similar action with respect to any property or other asset of the Borrower or any of its Restricted Subsidiaries;

(viii) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary; (ix) the lease, assignment or sublease of any real or personal property in the ordinary course of business; (x) any sale of inventory or other assets in the ordinary course of business; (xi) any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;

(xii) in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or


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greater value or usefulness to the business of the Borrower and its Restricted Subsidiaries as a whole, as determined in good faith by the Borrower;

(xiii) a transfer of accounts receivable and related assets of the type specified in the definition of " Receivables Financing" (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;

(xiv) any financing transaction with respect to property built or acquired by the Borrower or any Restricted Subsidiary after the Closing Date, including any Sale/Leaseback Transaction or asset securitization permitted by this Agreement;

(xv) any disposition in connection with the Post-Closing CMBS Transaction; (xvi) dispositions in connection with Permitted Liens; (xvii) any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Borrower or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;

(xviii) any disposition made pursuant to an Operations Management Agreement;

(xix) the sale of any property in a Sale/Leaseback Transaction within six months of the acquisition of such property;

(xx) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements; and (xxi) any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind.

" Asset Sale Offer" shall have the meaning assigned to such term in Section 2.11(b)(ii)(B). " Asset Sale Offer Payment Date" shall have the meaning assigned to such term in Section 2.11(b)(ii)(D)(2). " Assignee" shall have the meaning assigned to such term in Section 9.04(b).

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" Assignment and Acceptance" shall mean an assignment and acceptance entered into by a Lender and an Assignee, and accepted by the Administrative Agent and the Borrower (if required by Section 9.04), in the form of Exhibit A or such other form as shall be approved by the Administrative Agent and reasonably satisfactory to the Borrower.

" Bank Indebtedness" shall mean any and all amounts payable under or in respect of the Credit Agreement and the other Credit Agreement Documents as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Borrower whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.

" Board" shall mean the Board of Governors of the Federal Reserve System of the United States of America.

" Board of Directors" shall mean, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

" Borrower" shall have the meaning assigned to such term in the introductory paragraph of this Agreement.

" Borrower Materials" shall have the meaning assigned to such term in Section 9.17(a).

" Borrowing" shall mean the borrowing of the Senior Interim Loans on the Closing Date pursuant to Section 2.01, having, in the case of Eurocurrency Loans, the same Interest Period.

" Borrowing Request" shall mean a request by the Borrower in accordance with the terms of Section 2.02 and substantially in the form of Exhibit C .

" Business Day" shall 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 where the Administrative Agent' s Office is located and if such day relates to any interest rate settings as to a Eurocurrency Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market.

" Capital Stock" shall mean:

(a) in the case of a corporation, corporate stock or shares;

(b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;


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(c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

" Capitalized Lease Obligations" shall mean at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

" Capitalized Software Expenditures" shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and is Restricted Subsidiaries during such period in respect of purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of such Person and such Restricted Subsidiaries.

" Cash Equivalents" shall mean:

(a) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business; (b) securities issued or directly and fully guaranteed or insured by the U.S. government or any country that is a member of the European Union or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;

(c) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250,000,000 and whose long-term debt is rated " A" or the equivalent thereof by Moody' s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

(d) repurchase obligations for underlying securities of the types described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c) above;

(e) commercial paper issued by a corporation (other than an Affiliate of the Borrower) rated at least " A-1" or the equivalent thereof by Moody' s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;


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(f) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody' s or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

(g) Indebtedness issued by Persons (other than the Sponsors or any of their Affiliates) with a rating of " A" or higher from S&P or " A-2" or higher from Moody' s (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition; and

(h) investment funds investing at least 95% of their assets in securities of the types described in clauses (a) through (g) above.

" Cash Interest" shall have the meaning assigned to such term in Section 2.13.

" Change of Control" shall mean the occurrence of either of the following:

(a) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Borrower and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or

(b) the Borrowe ...