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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 4, 1997
Hilton Hotels Corporation
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(Exact Name of Registrant as
Specified in Charter)
Delaware 1-3427 36-2058176
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(State or Other (Commission (IRS Employer
Jurisdiction of File Identification
Incorporation) Number No.)
9336 Civic Center Drive
Beverly Hills, California 90210
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(Address of Principal
Executive Offices)
(310) 278-4321
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(Registrant's telephone
number, including area code)
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ITEM 5. OTHER EVENTS.
(a) Registrant has entered into an Underwriting Agreement with
Donaldson, Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and J.P. Morgan & Co., attached hereto as
Exhibit 1.01.
The terms of the Registrant's $300,000,000 7.375% Senior Notes
due 2002 have been established pursuant to the Officers' Certificate,
attached hereto as Exhibit 99.01.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
7(c) EXHIBITS.
1.01 Underwriting Agreement.
99.01 Officers' Certificate (including form of Note).
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Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
HILTON HOTELS CORPORATION
By: /s/ Scott A. LaPorta
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Name: Scott A. LaPorta
Dated: June 4, 1997 Title: Senior Vice President and Treasurer
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HILTON HOTELS CORPORATION
(a Delaware corporation)
$300,000,000 7.375% Senior Notes due 2002
UNDERWRITING AGREEMENT
May 28, 1997
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. Morgan & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Hilton Hotels Corporation, a Delaware corporation (the "Company"), confirms
its agreement with Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ")
and each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters"), which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), with respect to the issue and sale
by the Company and the purchase by the Underwriters, acting severally and not
jointly, of the respective principal amounts set forth in Schedule A of
$300,000,000 aggregate principal amount of the Company's 7.375% Senior Notes due
2002 (the "Securities"). The Securities are to be issued pursuant to an
indenture dated as of April 15, 1997 (the "Indenture") between the Company and
BNY Western Trust Company, as trustee (the "Trustee"). The term "Indenture," as
used herein, includes the Board Resolution (as defined in the Indenture)
establishing the form and terms of the Securities pursuant to Section 3.01 of
the Indenture.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-18523) for the
registration of the Securities (and certain other securities of the Company
under the Securities Act of 1933, as
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amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"), and the Company has filed such
post-effective amendments thereto as may be required prior to the execution of
this Agreement. Such registration statement (as so amended, if applicable) has
been declared effective by the Commission and the Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
Such registration statement (as so amended, if applicable), is referred to
herein as the "Registration Statement"; and the prospectus constituting a part
of the Registration Statement, and the final prospectus supplement relating to
the offering of the Securities, in the form first furnished to the Underwriters
by the Company for use in connection with the offering of the Securities, are
collectively referred to herein as the "Prospectus;" PROVIDED, that if any
revised prospectus shall be provided to the Underwriters by the Company for use
in connection with the offering of the Securities which differs from the
prospectus on file (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the
term "Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Underwriters for such use. All references to the
"Prospectus" shall also be deemed to include all documents incorporated therein
by reference pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), prior to the execution of this Agreement. If the Company files a
registration statement with the Commission pursuant to Rule 462(b) of the 1933
Act Regulations (the "Rule 462 Registration Statement"), then, after such
filing, all references to "Registration Statement" shall also be deemed to
include the Rule 462 Registration Statement; and provided, further, that if the
Company elects to rely upon Rule 434 of the 1933 Act Regulations, then all
references to "Prospectus" shall also be deemed to include the final or
preliminary prospectus supplement and the applicable term sheet or abbreviated
term sheet (the "Term Sheet"), as the case may be, in the form first furnished
to the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations (the "Rule 434 Information"), and all references in this Agreement
to the date of the Prospectus shall mean the date of the Term Sheet. A
"preliminary prospectus" shall be deemed to refer to any preliminary prospectus
supplement, accompanying the prospectus filed as part of the Registration
Statement, that omitted the Rule 434 Information or other information with
respect to the Securities to be included upon pricing in a form of prospectus
supplement filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, that was used after such effectiveness and prior to the execution
and delivery of this Agreement. For purposes of this Agreement, all references
to the Registration Statement, Prospectus, Term Sheet or preliminary prospectus
or to any amendment or supplement to any of the foregoing shall be deemed to
include any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "described," "disclosed,"
"referred to" or "stated" in the Registration Statement, any preliminary
prospectus or the Prospectus (or other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration Statement,
any preliminary prospectus or the Prospectus, as the case may be; and all
references in this
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Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is incorporated by reference in
the Registration Statement, such preliminary prospectus or the Prospectus, as
the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each Underwriter as of the date hereof and as of the Closing
Time referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules
and regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at the
time the Prospectus or any such amendment or supplement was issued and at
the Closing Time, included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If Rule 434 is used, the
Company will comply with the requirements of Rule 434. The representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing
by any Underwriter through DLJ expressly for use in the Registration
Statement or Prospectus.
The prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the 1933 Act, complied when so filed in all material
respects with the 1933 Act Regulations and each preliminary prospectus and
the Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof
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filed with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T promulgated by the Commission ("Regulation S-T").
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), as applicable, and,
when read together with the other information in the Prospectus, at the
time the Registration Statement became effective, at the date of the
Prospectus and at the Closing Time, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary (a) in the case of the Registration
Statement, to make the statements therein not misleading or (b) in the case
of the Prospectus, in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The consolidated financial statements,
together with related schedules and notes, set forth or incorporated by
reference in the Prospectus and the Registration Statement, comply as to
form in all material respects with the requirements of the 1933 Act and
fairly present the consolidated financial position of each of the Company
and its consolidated subsidiaries and Bally Entertainment Corporation and
its subsidiaries (collectively referred to hereafter as "Bally") at the
respective dates indicated and the results of their respective operations
and their respective cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout such periods (except as may be indicated in
the notes thereto).
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Subsequent to the
respective dates as of which information is presented in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, which are material to the Company and its subsidiaries, taken
as a whole, nor entered into any transaction not in the ordinary course of
business and there has not been, singly or in the aggregate, any material
adverse change or any development which would involve a material adverse
change, in the business, results of operations, condition (financial or
otherwise), or prospects of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Change").
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of
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Delaware and has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the operation,
ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not result in a
Material Adverse Effect (as hereinafter defined).
(vii) GOOD STANDING OF SUBSIDIARIES. Each "significant subsidiary"
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the operation, ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of
each such Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Subsidiary.
(viii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus or pursuant
to the exercise of up to 600,000 options granted to Arthur M. Goldberg in
connection with his Consulting and Employment Agreement). The shares of
issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; none
of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder
of the Company.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) AUTHORIZATION OF THE INDENTURE. The Indenture has been duly
authorized by the Company and duly qualified under the 1939 Act and, when
duly executed and delivered by the Company and the Trustee, will constitute
a valid and legally binding
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agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xi) AUTHORIZATION OF THE SECURITIES. The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the
Company and, when authenticated, executed, issued and delivered in the
manner provided for in the Indenture and delivered against payment of the
purchase price therefor as provided in this Agreement, will constitute
valid and legally binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and will be in the form contemplated by,
and entitled to the benefits of, the Indenture.
(xii) DESCRIPTION OF THE SECURITIES AND THE INDENTURE. The
Securities and the Indenture will conform in all material respects to the
respective statements relating thereto contained in the Prospectus and will
be in substantially the respective forms filed with or incorporated by
reference into, as the case may be, the Registration Statement.
(xiii) ABSENCE OF DEFAULTS AND CONFLICTS. The execution and delivery
of this Agreement, the Indenture and the Securities by the Company, the
issuance and sale of the Securities, the performance of this Agreement and
the Indenture, and the consummation of the transaction contemplated by this
Agreement and the Indenture, will not (1) conflict with or result in a
breach or violation of any of the respective charters or bylaws of the
Company or any of the Subsidiaries, (2) constitute a default or cause an
acceleration of any obligation under or result in the imposition or
creation of (or the obligation to create or impose) any security interest,
mortgage, pledge, claim, lien, encumbrance or adverse interest of any
nature (each, a "Lien") with respect to, any obligation, bond, agreement,
note, debenture, or other evidence of indebtedness, or any indenture,
mortgage, deed of trust or other agreement, lease or instrument to which
the Company or any of the Subsidiaries is a party or by which it or any of
them is bound, or to which any properties of the Company or any of the
Subsidiaries is or may be subject, or (3) contravene any order of any court
or governmental agency, body or official having jurisdiction over the
Company or any of its subsidiaries or any of their properties, or violate
or conflict with any statute, rule or regulation or administrative
regulation or decree or court decree applicable to the Company or any of
the Subsidiaries, or any of their respective assets or properties except,
in the case of clauses (2) and (3) above, for such conflicts or violations
which would not, singly or in the
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aggregate, have a material adverse effect on the business, results of
operations, condition (financial or otherwise) or prospects of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect").
(xiv) ABSENCE OF PROCEEDINGS. There is no action, suit, or
proceeding before or by any court or governmental agency or body, domestic
or foreign, pending against or affecting the Company or any of its
subsidiaries, or any of their respective assets or properties, which is
required to be disclosed in the Registration Statement or the Prospectus
and is not so disclosed, or which have, or which would result in, singly or
in the aggregate, a Material Adverse Effect, or which could reasonably be
expected to materially and adversely affect the Company's performance of
its obligations pursuant to this Agreement or the transactions contemplated
hereby, and to the best of the Company's knowledge, no such action, suit,
or proceeding is contemplated or threatened.
(xv) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xvi) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, other than those which would not, singly or in the
aggregate, have a Material Adverse Effect, and neither the Company nor any
of its subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xvii) ABSENCE OF FURTHER REQUIREMENTS. No authorization, approval or
consent or order of, or filing with, any court or governmental body, agency
or official is necessary in connection with the transactions contemplated
by this Agreement including the Nevada Gaming Commission (the "NGC"), the
Nevada State Gaming Control Board ("NGCB"), the Clark County Liquor and
Gaming Licensing Board ("CCLB"), the City of Reno ("Reno"), the New Jersey
Casino Control Commission (the "NJC"), the Mississippi Gaming Commission
(the "MGC"), the Mississippi State Tax Commission (the "MTC"), the
Louisiana Gaming Control Board ("LGCB"), the Missouri Gaming Commission
(the "MSGC") and the Ontario Casino Corporation ("OCC") (the NGC, NGCB,
CCLB, Reno, NJC, MGC, MTC, LGCB, MSGC and OCC are hereinafter col-
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lectively referred to as the "Gaming Authorities"), except (i) such as may
be required by the NASD or have been obtained and made under the 1933 Act,
the 1939 Act or state securities or Blue Sky laws or regulations and (ii)
such as may have been obtained under the Nevada Control Act, the New Jersey
Casino Control Act, the Mississippi Gaming Control Act, the Missouri Gaming
Law, the Louisiana Riverboat Economic Development and Gaming Control Act,
the Mississippi Gaming Law and the respective regulations promulgated
thereunder and the Louisiana Riverboat Economic Development and Gaming
Control Act (collectively, the "Gaming Laws").
(xviii)POSSESSION OF LICENSES AND PERMITS. (i) Each of the Company
and its subsidiaries and each of the persons listed under the caption
"Summary Compensation Table" in the Company's Proxy Statement for the 1997
Annual Meeting of stockholders (the "Management") has all certificates,
consents, exemptions, orders, permits, licenses, authorizations, or other
approvals or rights (each, an "Authorization") of and from, and has made
all declarations and filings with, all Federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, including, without limitation, all such Authorizations
with respect to engaging in gaming operations in the States of Nevada,
Louisiana, New Jersey, Mississippi, Missouri or Ontario, Canada, if such
person is required to be licensed in such jurisdictions, necessary or
required to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except as
would not have, singly or in the aggregate, a Material Adverse Effect, (ii)
all such Authorizations are valid and in full force and effect, except as
would not have, singly or in the aggregate, a Material Adverse Effect,
(iii) the Company and its subsidiaries and each of the Management are in
compliance in all material respects with the terms and conditions of all
such Authorizations and with the rules and regulations of the regulatory
authorities and governing bodies having jurisdiction with respect thereto,
except as would not have, singly or in the aggregate, a Material Adverse
Effect, and (iv) neither the Company nor any of its subsidiaries nor any of
the Management has received any notice of proceedings relating to the
revocation or modification of any such Authorization and no such
Authorization contains any restrictions that are materially burdensome to
any of them. Neither the Company nor any of its subsidiaries has any
reason to believe that any Gaming Authorities are considering modifying,
limiting, conditioning, suspending, revoking or not renewing any such
Authorizations of the Company, any of its subsidiaries or any of the
Management or that either the Gaming Authorities or any other governmental
agencies are investigating the Company or any of its subsidiaries or
related parties (other than normal overseeing reviews of the Gaming
Authorities incident to the gaming, riverboat or casino activities, as the
case may be, of the Company and its subsidiaries). Neither the Company nor
any of its subsidiaries has any reason to believe that there exists a
reasonable basis for the Gaming Authorities to deny the renewal of the
current casino and gaming licenses held by the Company or any of its
subsidiaries.
(xix) TITLE TO PROPERTY. Except as would not result in a Material
Adverse Effect, (i) the Company and its subsidiaries have good and
marketable title to all real
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property owned by the Company and its subsidiaries and good title to all
other properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described or referred to in
the Prospectus or (b) do not affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; (ii) all of the leases and subleases of
the Company and its subsidiaries, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus, are in full
force and effect, and (iii) neither the Company nor any subsidiary has any
notice of any claim of any sort that has been asserted by anyone adverse to
the rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xx) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xxi) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
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(xxii) GOVERNMENTAL ACTION. No action has been taken and no statute,
rule, regulation or order has been enacted, adopted or issued by any
governmental body, agency or official which prevents the issuance of the
Securities, suspends the effectiveness of the Registration Statement,
prevents or suspends the use of any preliminary prospectus or suspends the
sale of the Securities in any jurisdiction referred to in Section 3(f)
hereof; no injunction, restraining order, or order of any nature by any
Federal or state court has been issued with respect to the Company or any
of its subsidiaries which would prevent or suspend the issuance or sale of
the Securities, the effectiveness of the Registration Statement, or the use
of any preliminary prospectus or Prospectus in any jurisdiction referred to
in Section 3(f) hereof; no action, suit or proceeding before any court or
arbitrator or any governmental body, agency or official, domestic or
foreign, is pending against or, to the best of the Company's knowledge
threatened against, the Company or any of its subsidiaries which, if
adversely determined, could interfere with or adversely affect the issuance
of the Securities or in any manner draw into question the validity of this
Agreement, the Indenture, or the Securities and the Company has complied
with every request of the Commission or any securities authority or agency
of any jurisdiction for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) in all material
respects.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Underwriters or to counsel
for the Underwriters shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) SECURITIES. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price set forth in Schedule B, the aggregate principal amount of Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Skadden, Arps,
Slate, Meagher & Flom LLP, 300 South Grand Avenue, Los Angeles, California, or
at such other place as shall be agreed upon by the Underwriters and the Company,
at 7:00 A.M. (California time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriters and the Company (such time and date of payment and
delivery being herein called the "Closing Time").
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Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriters of certificates for the Securities to be purchased by them.
DLJ, individually and not as representative of the Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Securities to be
purchased by any Underwriter whose funds have not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(c) DENOMINATIONS; REGISTRATION. Certificates for the Securities shall be
in such denominations ($1,000 or integral multiples thereof) and registered in
such names as the Underwriters may request in writing at least one full business
day before the Closing Time. The Securities will be made available for
examination and packaging by the Underwriters in The City of New York not later
than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will comply with the requirements of Rule 434,
as applicable, and will notify the Underwriters immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Underwriters notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, whether pursuant
to the 1933 Act, the 1934 Act or otherwise, will furnish the Underwriters with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which the Underwriters or counsel for the Underwriters shall reasonably object.
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(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Underwriters and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Underwriters, without charge, a conformed
copy of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations and the 1939 Act and the 1939 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Underwriters may designate; provided, however, that the Company shall not
be obligated to file any general consent to
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service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. The Company will also supply the Underwriters with
such information as is necessary for the determination of the legality of the
Securities for investment under the laws of such jurisdictions as the
Underwriters may request.
(g) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds".
(i) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. PAYMENT OF EXPENSES. (a) EXPENSES. The Company will pay
all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters, the Indenture and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, (iv) the reasonable fees and disbursements
of the Company's counsel, accountants and other advisors, (v) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of the Trustee, including the reasonable fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities, and (ix) any fees payable in connection with the rating of the
Securities.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
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SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus shall have
been filed with the Commission in accordance with Rule 424(b) or, if the Company
has elected to rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 424(b).
(b) OPINIONS OF COUNSEL FOR COMPANY. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of Latham &
Watkins, counsel for the Company, Cheryl L. Marsh, Vice President and Corporate
Secretary for the Company, Smith Martin, special Louisiana gaming counsel for
the Company, Jones, Jones, Close & Brown, special Nevada gaming counsel for the
Company and Brown, Michael & Carroll, special New Jersey gaming counsel for the
Company, each in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letters for each
of the other Underwriters, to the effect set forth in Exhibits A-1, A-2, A-3,
A-4 and A-5 hereto, respectively, and to such further effect as counsel to the
Underwriters may reasonably request.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters, satisfactory to the Underwriters. In giving such opinion, such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York, the federal law of the United States and
the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to DLJ. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(d) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriters shall have
received a certificate of the President or a Vice President of the Company and
of the chief
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financial or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i) there has been no such Material Adverse Change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
pending or, to the best knowledge of the Company, are contemplated by the
Commission.
(e) ACCOUNTANT'S COMFORT LETTER. At Closing Time, the Underwriters shall
have received from each of Arthur Andersen LLP and Ernst & Young LLP a letter
dated such date, in form and substance satisfactory to the Underwriters,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(f) MAINTENANCE OF RATING. At Closing Time, the Securities shall be rated
at least Baa3 by Moody's Investor's Service Inc. and BBB+ by Standard & Poor's
Ratings Group, a division of McGraw-Hill, Inc.; and since the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Securities or any of the Company's other securities by any "nationally
recognized statistical rating agency", as that term is defined by the Commission
for purposes of Rule 436(g)(2) under the 1933 Act, and no such organization
shall have publicly announced that it has under surveillance or review its
rating of the Securities or any of the Company's other securities, except as
disclosed in the Prospectus.
(g) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(h) TERMINATION OF AGREEMENT. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Underwriters by notice to the Company at any
time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7 and 8 shall survive any such termination and remain
in full force and effect.
SECTION 6. INDEMNIFICATION.
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(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 434 Information, if
applicable, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto), or the omission
or alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by DLJ), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission that is (x) made
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 434 Information deemed to be a part
thereof, if applicable, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or (y) with respect to the Underwriter from
whom the person asserting any such loss, liability, claim, damage or expense
purchased Securities (or any person controlling such Underwriter), made in any
preliminary prospectus if a copy of the Prospectus (as amended or supplemented,
if the Company shall have furnished the Underwriters with such amendments or
supplements thereto on a timely basis) was not delivered by or on behalf of such
Underwriter to the person asserting any such loss, liability, claim, damage or
expense, if required by law to have been so delivered by the Underwriter seeking
indemnification, at or prior to the written
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confirmation of the sale of the Securities, and it shall be finally determined
by a court of competent jurisdiction, in a judgment not subject to appeal or
review, that the Prospectus (as so amended or supplemented) would have corrected
such untrue statement or omission.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through DLJ expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by DLJ, and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Company. An indemnifying party may participate
at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and
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expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a) (ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or
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defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Underwriters may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Underwriters, impracticable to market the Securities or to enforce contracts for
the sale of the Securities, or (iii) if trading in any securities of the Company
has been suspended or materially
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limited by the Commission or the New York Stock Exchange, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at Closing Time to purchase the Securities which
it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Underwriters shall have the right, but not the obligation,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Underwriters shall not
have completed such arrangements within such 24-hour period, then this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter.
No action pursuant to this Section shall relieve any defaulting Underwriter
from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Underwriters or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangement.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Donaldson, Lufkin, Jenrette Securities
Corporation at 2121 Avenue of the Stars, Suite 3000, Los Angeles, California
90067, attention of Don Kinsey, with a copy to Skadden, Arps, Slate, Meagher &
Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California 90071,
attention of Nicholas P. Saggese, Esq.; and notices to the Company shall be
directed to it at Hilton Hotels Corporation, 9336 Civic Center Drive, Beverly
Hills, California 90210, attention of the General Counsel, with a copy to Latham
& Watkins, 633 West 5th Street, Suite 4000, Los Angeles, California 90071,
attention of Brian Cartwright, Esq.
SECTION 12. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or
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mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
21
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
HILTON HOTELS CORPORATION
By /s/ Scott A. LaPorta
--------------------------------------------
Name: Scott A. LaPorta
Title: Senior Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By /s/ Don Kinsey
---------------------------------------
Authorized Signatory
22
<PAGE>
SCHEDULE A
Principal
Amount of
7.375% Senior
Name of Underwriter Notes due 2002
------------------- --------------
Donaldson, Lufkin & Jenrette
Securities Corporation.............................. $120,000,000
J.P. Morgan & Co...................................... $90,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................... $90,000,000
--------------
Total $300,000,000
--------------
--------------
Sch A-1
<PAGE>
SCHEDULE B
HILTON HOTELS CORPORATION
$300,000,000 7.375% Senior Notes due 2002
1. The initial public offering price of the Securities shall be 99.598%
of the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be 98.998% of the principal amount thereof.
3. The interest rate on the Securities shall be 7.375% per annum.
Sch B-1
<PAGE>
Exhibit A-1
FORM OF OPINION OF LATHAM & WATKINS
(1) The Company has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement.
(2) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(3) The Securities have been duly authorized by the Company for issuance
and sale to the Underwriters pursuant to the Underwriting Agreement. The
Securities, when executed by the Company and authenticated by the Trustee in the
manner provided for in the Indenture (assuming the due authorization, execution
and delivery of the Indenture by the Trustee) and delivered to the Underwriters
against payment of the purchase price therefor specified in the Underwriting
Agreement, will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law). The Securities are in the form contemplated by the Indenture.
(4) The Indenture has been qualified under the 1939 Act, and has been duly
authorized, executed and delivered by the Company and (assuming due
authorization, execution and delivery thereof by the Trustee) constitutes a
valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(5) The Securities being sold pursuant to the Underwriting Agreement and
the Indenture conform in all material respects to the descriptions thereof
contained in the Prospectus under the headings "Description of Notes" and
"Description of Debt Securities" and in the Registration Statement.
A-1-1
<PAGE>
(6) The statements set forth in the Prospectus under the heading "Certain
Federal Income Tax Considerations", insofar as such statements constitute a
summary of legal matters, are accurate in all material respects.
(7) The Registration Statement has been declared effective under the 1933
Act. Any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b). To the
best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been initiated or are pending or threatened by the Commission.
(8) The Registration Statement and the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated by
reference therein, in each case as of their respective effective or issue dates
(other than the financial statements and notes thereto, schedules and other
financial data included or incorporated by reference therein or omitted
therefrom and the Trustee's Statement of Eligibility on Form T-1 (the "Form
T-1"), as to which we express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations.
(9) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any federal, New York, or California
court or governmental authority or agency is legally required for the execution
and delivery of the Underwriting Agreement or the Indenture or in connection
with the offering, issuance or sale of the Securities under the Underwriting
Agreement, other than those which have been obtained or those under the 1933
Act, the 1933 Act Regulations, the 1939 Act and the 1939 Act Regulations, which
have been obtained, or as may be required under state securities or blue sky
laws.
(10) The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
Nothing has come to our attention that would lead us to believe that the
Registration Statement or any posteffective amendment thereto (except for
financial statements and notes thereto and schedules and other financial data
included therein or omitted therefrom and for the Form T-1, as to which we make
no statement), at the time the Registration Statement or any posteffective
amendment thereto became effective or at the date of the Underwriting Agreement,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
therein or omitted therefrom, as to which we make no
A-1-2
<PAGE>
statement), at the time the Prospectus was issued, at the time any such amended
or supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
Such opinion may be limited to the federal laws of the United States, the
internal laws of the States of California and New York, and the General
Corporation Law of the State of Delaware.
A-1-3
<PAGE>
Exhibit A-2
FORM OF OPINION OF CHERYL L. MARSH
(1) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(2) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership, operation or
leasing of property or the conduct of business, except where the failure to so
qualify or be in good standing would not result in a Material Adverse Effect.
(3) Each Subsidiary has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership, operation or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing would
not result in a Material Adverse Effect. Except as otherwise stated in the
Registration Statement and the Prospectus, all of the issued and outstanding
capital stock of each Subsidiary has been duly authorized and is validly issued,
fully paid and non-assessable and, to the best of my knowledge, is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. None of the
outstanding shares of capital stock of any Subsidiary was issued in violation of
preemptive or other similar rights of any securityholder of such Subsidiary.
(4) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans referred to in the Prospectus
or pursuant to the exercise of convertible securities or options referred to in
the Prospectus). The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(5) To the best of my knowledge, no default exists and no event has
occurred that with notice, lapse of time, or both, would constitute a default in
the due performance and observance of any term, covenant or condition of any
agreement to which the Company or the Subsidiaries
A-2-1
<PAGE>
are a party or by which any of them is bound, which default is or would result
in a Material Adverse Effect.
(6) The execution, delivery and performance of the Underwriting Agreement
and the Indenture and the consummation of the transactions contemplated by the
Underwriting Agreement and in the Indenture (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the Securities as
described under the caption "Use of Proceeds") and compliance by the Company
with its obligations thereunder do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument,
known to me, to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the assets, properties
or operations of the Company or any of its Subsidiaries is subject, except for
such conflicts, breaches, defaults, events or liens, charges or encumbrances
that would not result in a Material Adverse Effect, nor will such action result
in any violation of the provisions of the charter or by-laws of the Company or
any of its Subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to me, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its Subsidiaries or any of their assets, properties or
operations.
(7) To the best of my knowledge and except as disclosed in the Prospectus,
there is not pending or threatened any action, suit, proceeding, inquiry or
investigation to which the Company or any of its subsidiaries thereof is a party
or to which the assets, properties or operations of the Company or any of its
subsidiaries thereof is subject, before or by any court or governmental agency
or body, domestic or foreign, which might reasonably be expected to result in a
Material Adverse Effect or which might reasonably be expected to materially and
adversely affect the assets, properties or operations of the Company and its
subsidiaries taken as a whole or the consummation of the transactions
contemplated under the Underwriting Agreement, the Indenture or the performance
by the Company of its obligations thereunder.
(8) All descriptions in the Registration Statement and the Prospectus of
statutes, legal and governmental proceedings and contracts and other documents
are accurate in all material respects and fairly present the information
required to be shown. To the best of my knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
A-2-2
<PAGE>
(9) To the best of my knowledge, there are no statutes or regulations that
are required to be described in the Prospectus that are not described as
required.
(10) The documents incorporated by reference in the Prospectus (other than
the financial statements and notes thereto, schedules and other financial data
included in, incorporated by reference in or omitted therefrom, as to which I
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder.
(11) (A) The authorized capital stock of the Company conforms to the
description thereof contained in the Registration Statement and the Prospectus
under the caption, "Description of Capital Stock"; and (B) The shares of issued
and outstanding Common Stock have been duly authorized and are validly issued
and are fully paid and nonassessable and not subject to any preemptive or
similar rights pursuant to the Delaware General Corporation Law or the Company's
charter or bylaws.
(12) To the best of my knowledge, no holder of any security of the Company
has any right to require registration of shares of Common Stock or any other
security of the Company, on the Registration Statement.
(13) Each of the Company and the Subsidiaries has such Authorizations from
all regulatory or governmental officials, bodies and tribunals as are necessary
to own, lease and operate its respective properties and to conduct its business
in the manner described in the Prospectus, except where the failure to obtain
such Authorizations would not have, singly or in the aggregate, a Material
Adverse Effect.
Nothing has come to my attention that would lead me to believe that the
Registration Statement or any post-effective amendment thereto (except for
financial statements and notes thereto, schedules and other financial data
included therein or omitted therefrom and for the Form T-1, as to which I make
no statement), at the time the Registration Statement or any post-effective
amendment thereto (including the filing of the Company's Annual Report on Form
10-K with the Commission) became effective or at the date of the Underwriting
Agreement, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any amendment or
supplement thereto (except for financial statements and schedules and other
financial data included therein or omitted therefrom, as to which I make no
statement), at the time the Prospectus was issued, at the time any such amended
or supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact
A-2-3
<PAGE>
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
Such opinion shall be limited to the federal laws of the United States and
the internal laws of the State of California.
A-2-4
<PAGE>
Exhibit A-3
FORM OF OPINION OF SMITH MARTIN
A-3-1
<PAGE>
Exhibit A-4
FORM OF OPINION OF JONES, JONES, CLOSE & BROWN
A-4-1
<PAGE>
Exhibit A-5
FORM OF OPINION OF BROWN, MICHAEL & CARROLL
A-5-1
<PAGE>
OFFICERS' CERTIFICATE
The undersigned, Scott A. LaPorta and Cheryl L. Marsh, do hereby
certify that they are the duly appointed and acting Senior Vice President and
Treasurer and Vice President and Corporate Secretary, respectively, of HILTON
HOTELS CORPORATION, a Delaware corporation (the "Company"). Each of the
undersigned also hereby certifies, pursuant to the Indenture, dated as of April
15, 1997, between the Company and BNY Western Trust Company, as Trustee (the
"Indenture"), that:
A. Pursuant to resolutions duly adopted by the Finance Committee of
the Company on May 28, 1997, a series of Debt Securities (as defined in the
Indenture) to be issued under the Indenture has been established (the "Notes"),
with the following terms:
(1) The Notes shall constitute a series of Debt Securities having the
title "7.375% Senior Notes due 2002."
(2) The aggregate principal amount of Notes that may be authenticated
and delivered under the Indenture (except for Notes authenticated and
delivered upon transfer of, or in exchange for, or in lieu of, other Notes
pursuant to Sections 3.04, 3.05, 3.06, 11.06 or 13.07 of the Indenture)
shall be $300,000,000.
(3) The entire outstanding principal of the Notes shall be payable on
June 1, 2002 (the "Maturity Date").
(4) The interest rate payable on the Notes shall be subject to
adjustment in the event of an Acquisition Related Rating Change. The
"Initial Interest Rate" means 7.375% per annum. The Notes shall bear
interest at the Initial Interest Rate from the date of issuance of the
Notes to but excluding the calendar day, if any, on which the first
Acquisition Related Rating Change occurs. Each calendar day on which an
Acquisition Related Rating Change occurs is a "Reset Date." Beginning with
each Reset Date, if any (unless such Reset Date occurs between a record
date and an Interest Payment Date in which case beginning on such Interest
Payment Date), the Notes shall bear interest at the rate per annum equal to
the Adjusted Coupon as set forth in the table below (if only one rating is
available) or the average of the Moody's and S&P Adjusted Coupons (if both
ratings are available) shown in the table below, according to the
applicable ratings of Moody's and S&P in effect at the close of business on
that Reset Date; PROVIDED, HOWEVER, that if either such rating is B1 or
below by Moody's or B+ or below by S&P, independent of the other rating,
then the Notes shall bear interest at 9.525%, subject to change on the next
Reset Date, if any. In the event (i) there has been an Acquisition Related
Rating Change relating to an Acquisition Event, and (ii) either (a) the
consummation of such Acquisition Event has not occurred and as a result the
Company's senior unsecured debt rating is increased by either S&P or
Moody's, or (b) within 365 days following the consummation of such
Acquisition Event the Company's senior unsecured debt rating is changed by
either S&P or Moody's, then the interest rate on the Notes will be reset
based on the
<PAGE>
methodology set forth above (with such change in rating taking the place of
an Acquisition Related Rating Change in such methodology).
RATING CATEGORY ADJUSTED COUPON
---------------------------------------------------------------------------
MOODY'S S&P
-------------------- -----------------
Baa3 or above BBB- or above 7.375%
Ba1 BB+ 8.025
Ba2 BB 8.375
Ba3 BB- 8.775
B1 or below B+ or below 9.525
When any change in the interest rate on the Notes occurs during any
interest payment period, the amount of interest to be paid with respect to
such period shall be calculated at a rate per annum equal to the weighted
average of the interest rate in effect immediately prior to such change and
the Adjusted Coupon or Initial Interest Rate, as applicable, in effect
during such interest payment period, calculated by multiplying each such
rate by the number of days such rate is in effect during each month of such
interest payment period, determining the sum of such products and dividing
such sum by the number of days in such interest payment period. All
calculations pursuant to the preceding sentence and of interest on the
Notes will be computed on the basis of a year of twelve 30-day months, and
all such changes shall be announced promptly by the Company in a written
press release detailing the days during which any such interest rate has
been (and assuming no further change in interest rate prior to the next
applicable record date, will be) in effect during such interest payment
period and the amount of the interest payment due on the next Interest
Payment Date (assuming no further change in interest rate prior to the next
applicable record date).
In the event the Company elects to defease the Notes pursuant to
Article Fifteen of the Indenture, the interest rate in effect for the Notes
on the date of the irrevocable deposit of the money and/or U.S. Government
Obligations as trust funds in trust for the benefit of the holders of the
Notes shall be the rate used by the Company in calculating the requisite
interest and principal payments necessary to defease the Notes (the
"Defeasance Coupon"). The Adjusted Coupon and the Defeasance Coupon shall
not thereafter be affected by any change in rating.
If (a) neither Moody's nor S&P has issued a current rating, or (b) the
rating system employed by either such organization is changed from that
which is currently employed, the Company shall, in the case of clause (a),
with the approval of the Trustee, designate such additional nationally
recognized statistical rating organization, as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act, or, in the case of
clause (b), make such adjustments in the relationship between the rating
2
<PAGE>
and the Adjusted Coupon in a manner that is reasonably equivalent to the
ratings set forth in the table above.
(5) The date from which such interest shall accrue shall be June 2,
1997; the Interest Payment Dates on which such interest will be payable
shall be June 1 and December 1 of each year, beginning December 1, 1997;
the Regular Record Dates for the interest payable on the Notes on any
Interest Payment Date shall be the preceding May 15 (in the case of
interest payable on any June 1); and November 15 (in the case of interest
payable on any December 1); and the basis upon which interest shall be
calculated shall be that of a 360-day year consisting of twelve 30-day
months.
(6) Payments in respect of the Notes represented by Global Notes
(including principal, premium, if any, and interest) will be made in
immediately available funds to the accounts specified by the U.S.
Depositary.
(7) The Notes shall not be redeemable at the option of the Company.
(8) The Notes shall not be redeemable at the option of any Holder
thereof, upon the occurrence of any particular circumstances or otherwise.
The Notes will not have the benefit of any sinking fund.
(9) The Notes shall be issued in denominations of $1,000 and any
integral multiple thereof.
(10) The Trustee shall be the Security Registrar and Paying Agent.
(11) The entire outstanding principal amount of the Notes shall be
payable upon declaration of acceleration of the maturity of such series
pursuant to Section 5.02 of the Indenture.
(12) Payments of the principal of and interest on the Notes shall be
made in Dollars, and the Notes shall be denominated in Dollars.
(13) The Notes will be payable at Maturity in an amount equal to the
principal amount thereof plus unpaid interest accrued to such Maturity.
(14)The Holders of the Notes shall have no special rights in addition
to those provided in the Indenture upon the occurrence of any particular
events.
(15) (A) There shall be no deletions from, modifications of or
additions to the Events of Default with respect to the Notes set forth in
the Indenture.
(B) There shall be the following additions to the covenants set
forth in the Indenture with respect to the Notes:
3
<PAGE>
LIMITATION ON LIENS. Other than as set forth below under "--Exempted
Liens and Sale and Lease-Back Transactions," neither the Company nor any
Restricted Subsidiary will create, assume or suffer to exist any Lien (i)
upon any Principal Property, (ii) upon any shares of capital stock of any
Restricted Subsidiary owned by the Company or any Restricted Subsidiary or
(iii) securing Debt of any Restricted Subsidiary, without equally and
ratably securing the Notes with (or prior to) the Debt secured by such
Lien, for so long as such Debt shall be so secured, PROVIDED, HOWEVER, that
this limitation will not apply to (a) Liens existing on the date of
issuance of the Notes; (b) Liens existing (i) on property at the time of
acquisition thereof by the Company or a Restricted Subsidiary (whether such
property is acquired through a merger, a consolidation or otherwise), or
(ii) on property or securing Debt of, or an equity interest in, any
corporation, partnership or other entity at the time such corporation,
partnership or other entity becomes a Restricted Subsidiary; (c) Liens to
secure Debt with respect to all or any part of the acquisition cost or the
cost of construction or improvement of property, PROVIDED, such Debt is
incurred and related Liens are created within 24 months of the acquisition,
completion of construction or improvement or commencement of full
operation, whichever is later, and such Debt does not exceed the aggregate
amount of the acquisition cost and/or the construction cost thereof; (d)
Liens on shares of capital stock or property of a Restricted Subsidiary to
secure Debt with respect to all or part of the acquisition cost of such
Restricted Subsidiary, PROVIDED that such Debt is incurred and related
Liens are created within 24 months of the acquisition of such Restricted
Subsidiary and such Debt does not exceed the acquisition cost of such
Restricted Subsidiary; (e) Liens to secure Debt incurred to construct
additions to, or to make Capital Improvements to, properties of the Company
or any Restricted Subsidiary, PROVIDED such Debt is incurred and related
Liens are created within 24 months of completion of construction or Capital
Improvements and such indebtedness does not exceed the cost of such
construction or Capital Improvements; (f) Liens in favor of the Company or
another Restricted Subsidiary; (g) Liens to secure Debt on which interest
payments are exempt from Federal income tax under Section 103 of the
Internal Revenue Code of 1986, as amended; (h) Liens on the capital stock,
partnership or other equity interests of the Company or any Restricted
Subsidiary in any Joint Venture or any Restricted Subsidiary which owns an
equity interest in such Joint Venture to secure Debt, PROVIDED the amount
of such Debt is contributed and/or advanced solely to such Joint Venture;
(i) any extension, renewal or replacement, in whole or in part, of any
Liens referred to in the foregoing clauses (a) through (h) or of any Debt
secured thereby, including premium, if any, PROVIDED that the aggregate
principal amount secured does not exceed (x) the greater of (i) the
principal amount secured thereby at the time of such extension, renewal or
replacement, or, as the case may be, repayment or extinguishment and (ii)
80% of the fair market value (in the opinion of the Company's board of
directors) of the properties subject to such extension, renewal or
replacement plus (y) any reasonable fees and expenses associated with such
extension, renewal or replacement, and PROVIDED, FURTHER, that in the case
of a replacement thereof, such Debt is incurred and related Liens are
created within 24 months of the repayment or extinguishment of the Debt or
Liens referred to in the foregoing clauses
4
<PAGE>
(a) through (h); (j) purchase money liens on personal property; (k) Liens
to secure payment of workers' compensation or insurance premiums, or
relating to tenders, bids or contracts (except contracts for the payment of
money); (l) Liens in connection with tax assessments or other governmental
charges, or as security required by law or governmental regulation as a
condition to the transaction of any business or the exercise of any
privilege or right; (m) mechanic's, materialman's, carrier's or other like
Liens, arising in the ordinary course of business; and (n) Liens in favor
of any domestic or foreign government or governmental body in connection
with contractual or statutory obligations.
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. Other than as
provided below under "--Exempted Liens and Sale and Lease-Back
Transactions," neither the Company nor any Restricted Subsidiary will enter
into any arrangement with any lessor (other than the Company or a
Restricted Subsidiary), providing for the lease to the Company or a
Restricted Subsidiary for a period of more than three years (including
renewals at the option of the lessee) of any Principal Property that has
been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such lessor or to any other Person, and for which funds have
been or are to be advanced by such lessor or other Person on the security
of the leased property ("Sale and Lease-Back Transaction"), unless either
(a) the Company or such Restricted Subsidiary would be entitled, pursuant
to the provisions described in clauses (a) through (n) under "--Limitation
on Liens" above, to create, assume or suffer to exist a Lien on the
property to be leased without equally and ratably securing the Notes, or
(b) an amount equal to (i) the greater of the net cash proceeds of such
sale or the fair market value of such property (in the opinion of the
Company's board of directors) less (ii) the fair market value (in the
opinion of the Company's board of directors) of any noncash proceeds of the
sale of such property (PROVIDED such noncash proceeds constitute "Principal
Property," acquired on the date the property sold in the Sale and
Lease-Back Transaction was acquired by the Company or any of its Restricted
Subsidiaries), is applied within 180 days to the retirement or other
discharge of the Notes or Debt ranking on a parity with the Notes.
EXEMPTED LIENS AND SALE AND LEASE-BACK TRANSACTIONS. Notwithstanding
the restrictions set forth above under "--Limitation on Liens" and
"--Limitation on Sale and Lease-Back Transactions, the Company or any
Restricted Subsidiary may create, assume or suffer to exist Liens or enter
into Sale and Lease-Back Transactions not otherwise permitted as described
above, PROVIDED that at the time of such event, and after giving effect
thereto, the sum of outstanding Debt secured by such Liens (not including
Liens permitted under "--Limitation on Liens" above) plus all Attributable
Debt in respect of such Sale and Lease-Back Transactions entered into (not
including Sale and Lease-Back Transactions permitted under "Limitation on
Sale and Lease-Back Transactions"), measured, in each case, at the time any
such Lien is incurred or any such Sale and Lease-Back Transaction is
entered into, by the Company and Restricted Subsidiaries does not exceed
15% of Consolidated Net Tangible Assets.
5
<PAGE>
(C) As used in paragraphs (4) and 15(B) above, the following
terms have the meanings set forth below:
"Acquisition Event" means a transaction or series of transactions that
constitute related steps that are part of a single transaction, with
respect to which a Public Notice has been given at any time on or before
June 2, 2000, the aggregate consideration of which exceeds $1,000,000,000,
and which involves a merger or consolidation, whether direct or indirect,
of any Person, with or into the Company or of the Company with or into any
Person, or any sale, transfer or other conveyance, whether direct or
indirect, of any assets of any Person to the Company or of substantially
all of the assets of the Company to any Person.
"Acquisition Related Rating Change" means the occurrence on or within
90 days after the date of a Public Notice (which period shall be extended
so long as the rating of the Company's senior unsecured debt is (i) under
review by Moody's, other than for possible upgrade or (ii) on CreditWatch
by S&P, other than with positive implications) of a decrease in the rating
of the Company's senior unsecured debt by Moody's or S&P attributable in
whole or in part, directly or indirectly, to an Acquisition Event.
"Attributable Debt" with respect to any Sale and Lease-Back
Transaction that is subject to the restrictions described under
"--Limitation on Sale and Lease-Back Transactions" means the present value
of the minimum rental payments called for during the term of the lease
(including any period for which such lease has been extended), determined
in accordance with generally accepted accounting principles, discounted at
a rate that, at the inception of the lease, the lessee would have incurred
to borrow over a similar term the funds necessary to purchase the leased
assets.
"Capital Improvements" means additions to properties or renovations or
refurbishing of properties which are designed to substantially upgrade such
properties or significantly modernize the operation thereof.
"Debt" means notes, bonds, debentures or other similar evidences of
Debt for borrowed money or any guarantee of any of the foregoing.
"Joint Venture" means any partnership, corporation or other entity, in
which up to and including 50% of the partnership interests, outstanding
voting stock or other equity interest is owned, directly or indirectly, by
the Company and/or one or more Subsidiaries.
"Lien" means any mortgage, pledge, lien, encumbrance or other security
interest to secure payment of Debt.
"Moody's" means Moody's Investors Service, Inc.
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"Principal Property" means any real estate or other physical facility
or depreciable asset, the net book value of which on the date of
determination exceeds the greater of $25 million or 2% of Consolidated Net
Tangible Assets of the Company.
"Public Notice" means a written press release, governmental filing or
statement of a representative of the Company reported in the media
announcing that the Company has engaged, will engage, intends or seeks to
engage in an Acquisition Event.
"Restricted Subsidiary" means any Subsidiary of the Company organized
and existing under the laws of the United States of America and the
principal business of which is carried on within the United States of
America (x) which owns, or is a lessee pursuant to a capital lease of, any
Principal Property or (y) in which the investment of the Company and all
its Subsidiaries exceeds 5% of Consolidated Net Tangible Assets as of the
date of such determination other than, in the case of either clause (x) or
(y), (i) each Subsidiary whose business primarily consists of finance,
banking, credit, leasing, insurance, financial services or other similar
operations, or any combination thereof, (ii) each Subsidiary formed or
acquired after the date hereof for the purpose of developing new assets or
acquiring the business or assets of another Person and which does not
acquire any part of the business or assets of the Company or any Restricted
Subsidiary and (iii) Subsidiaries whose principal business is conducting
the Company's timeshare businesses.
"S&P" means Standard & Poor's Corporation.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation is, at the time,
directly or indirectly, owned by the Company or by one or more Subsidiaries
thereof, or by the Company and one or more Subsidiaries.
(16) The Notes shall be issuable only as Registered Securities in
permanent global forms (without coupons). Beneficial owners of interests
in the Global Notes may exchange such interests for Notes of like tenor or
any authorized form and denomination only in the manner provided in Section
3.04(c) of the Indenture. The Depository Trust Company shall be the U.S.
Depositary with respect to each Global Note. The form of such Global Notes
attached hereto as Exhibit A is hereby approved.
(17) The Notes shall not be issuable as Bearer Securities.
(18) Interest on any Note shall be payable only to the Person in whose
name that Note (or one or more predecessor Notes thereof) is registered at
the close of business on the Regular Record Date for such interest.
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<PAGE>
(19) Article 15 of the Indenture shall be applicable to the Notes.
(20) The Notes shall not be issuable in definitive form except under
the circumstances described in Section 3.04 of the Indenture.
(21) The Notes will be authenticated and delivered as provided in
Section 3.03 of the Indenture.
(22) The Notes shall not be convertible into Common Stock or other
securities or property of the Company.
(23) The Notes shall not be subordinated to any other Debt of the
Company, and shall constitute senior unsecured obligations of the Company.
(24) Compliance with the covenants set forth in paragraph 15(B) above
may not be waived by the Trustee unless the holders of at least a majority
in principal amount of all outstanding Notes consent to such waiver as set
forth in the Indenture; PROVIDED, HOWEVER, that the Company need not comply
with such covenants in the event it elects to comply with the provisions of
Article 15 set forth in the Indenture and the Company. The Trustee may
amend the terms of such covenants with the written consent of the holders
of not less than a majority in principal amount of the outstanding Notes as
set forth in the Indenture.
(25) Each holder of a Note, by accepting any Note, shall be deemed to
have agreed to be bound by the requirements imposed on holders of Debt
Securities of the Company by the gaming authority of any jurisdiction of
which the Company or any of its subsidiaries conducts or proposes to
conduct gaming activities.
B. The form of the Notes attached hereto as Exhibit A is approved.
C. The foregoing form and terms of the Notes have been established
in conformity with the provisions of the Indenture.
D. Each of the undersigned has read the Indenture and the
definitions relating thereto and has examined the resolutions referred to in
paragraph A above and the Notes and has made such examination or investigation
as is necessary to enable the undersigned to represent as to whether or not all
conditions precedent provided in the Indenture relating to the establishment,
authentication and delivery of the Notes have been complied with. On the basis
of the foregoing, all such conditions precedent have been complied with.
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IN WITNESS WHEREOF, the undersigned have hereunto executed this
Officers' Certificate as of the 2nd day of June, 1997.
HILTON HOTELS CORPORATION,
a Delaware corporation
By: /s/ Scott A. LaPorta
-----------------------------------
Name: Scott A. LaPorta
Title: Senior Vice President and Treasurer
By: /s/ Cheryl L. Marsh
-----------------------------------
Name: Cheryl L. Marsh
Title: Vice President and Corporate Secretary
9
<PAGE>
Form of Note
THIS DEBT SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS DEBT SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY DEBT SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR
OR IN LIEU OF, THIS DEBT SECURITY SHALL BE A GLOBAL NOTE SUBJECT TO THE
FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
HILTON HOTELS CORPORATION
7.375% Senior Note due 2002
CUSIP
No. 432848 AP4 $_____________
HILTON HOTELS CORPORATION, a Delaware corporation (herein referred to as
the "Company," which term includes any successor corporations under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to Cede & Co. or registered assigns the principal sum of
_____________________ on June 1, 2002 (the "Stated Maturity Date") and to pay
interest thereon from June 2, 1997 or from the most recent interest payment
date to which interest has been paid or duly provided for, semi-annually on June
1 and December 1 in each year (each, an "Interest Payment Date"), commencing
December 1, 1997 at the rate of 7.375% per annum (the "Initial Interest Rate"),
subject to adjustment as provided below, until the principal hereof is paid or
duly provided for.
The interest rate payable on this Debt Security shall be subject to
adjustment in the event of an Acquisition Related Rating Change. This Debt
Security shall bear interest at the Initial Interest Rate from the date of
issuance of this Debt Security to but excluding the calendar day, if any, on
which the first Acquisition Related Rating Change occurs. Each calendar day on
which an Acquisition Related Rating Change occurs is a "Reset Date." Beginning
with each Reset Date, if any (unless such Reset Date occurs between a record
date and an Interest Payment Date in which case beginning on such Interest
Payment Date), this Debt Security shall bear interest at the rate per annum
equal to the Adjusted Coupon as set forth in the table below (if only one rating
is available) or the average of the Moody's and S&P Adjusted Coupons (if both
ratings are available) shown in the table below, according to the applicable
ratings of Moody's and S&P in effect at the close of business on that Reset
Date; PROVIDED, HOWEVER, that if either such rating is B1 or below by Moody's or
B+ or below by S&P, independent of the other rating, then this Debt Security
shall bear interest at a rate per annum equal to 9.525%, subject to change on
the next Reset Date, if any. In the event (i) there has been an Acquisition
Related Rating Change relating to an Acquisition Event, and (ii) either (a) the
consummation of such Acquisition Event has not occurred and as a result the
Company's senior unsecured debt rating is increased by either S&P or Moody's, or
(b) within 365 days following the consummation of
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such Acquisition Event the Company's senior unsecured debt rating is changed by
either S&P or Moody's, then the interest rate on this Debt Security will be
reset based on the methodology set forth above (with such change in rating
taking the place of an Acquisition Related Rating Change in such methodology).
RATING CATEGORY ADJUSTED COUPON
-------------------------------------------------------------------------
MOODY'S S&P
-------------------- -----------------
Baa3 or above BBB- or above 7.375%
Ba1 BB+ 8.025
Ba2 BB 8.375
Ba3 BB- 8.775
B1 or below B+ or below 9.525
When any change in the interest rate on this Debt Security occurs during
any interest payment period, the amount of interest to be paid with respect to
such period shall be calculated at a rate per annum equal to the weighted
average of the interest rate in effect immediately prior to such change and the
Adjusted Coupon or Initial Interest Rate, as applicable, in effect during such
interest payment period, calculated by multiplying each such rate by the number
of days such rate is in effect during each month of such interest payment
period, determining the sum of such products and dividing such sum by the number
of days in such interest payment period. All calculations pursuant to the
preceding sentence and of interest on this Debt Security will be computed on the
basis of a year of twelve 30-day months, and all such changes shall be announced
promptly by the Company in a written press release detailing the days during
which any such interest rate has been (and assuming no further change in
interest rate prior to the next applicable record date, will be) in effect
during such interest payment period and the amount of the interest payment due
on the next Interest Payment Date (assuming no further change in interest rate
prior to the next applicable record date).
In the event the Company elects to defease this Debt Security pursuant to
Article Fifteen of the Indenture, the interest rate in effect for this Debt
Security on the date of the irrevocable deposit of the money and/or U.S.
Government Obligations as trust funds in trust for the benefit of the holders of
this Debt Security shall be the rate used by the Company in calculating the
requisite interest and principal payments necessary to defease this Debt
Security (the "Defeasance Coupon"). The Adjusted Coupon and the Defeasance
Coupon shall not thereafter be affected by any change in rating.
If (a) neither Moody's nor S&P has issued a current rating, or (b) the
rating system employed by either such organization is changed from that which is
currently employed, the Company shall, in the case of clause (a), with the
approval of the Trustee, designate such additional nationally recognized
statistical rating organization, as such term is defined for purposes of Rule
436(g)(2) under the Securities Act, or, in the case of clause (b), make such
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<PAGE>
adjustments in the relationship between the rating and the Adjusted Coupon in a
manner that is reasonably equivalent to the ratings set forth in the table
above.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Holder
in whose name this Debt Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the May 15 or November 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date, and may be paid to the Holder
in whose name this Debt Security (or one or more Predecessor Debt Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Debt Securities of this series not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Debt Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The principal of this Debt Security payable on the Stated Maturity Date
will be paid against presentation of this Debt Security at the office or agency
of the Company maintained for that purpose in the City of New York, in such coin
or currency of the United States as at the time of payment is legal tender for
the payment of public and private debts.
Interest payable on this Debt Security on any Interest Payment Date and on
the Stated Maturity Date will include interest accrued from and including the
next preceding Interest Payment Date in respect of which interest has been paid
or duly provided for (or from and including June 2, 1997, if no interest has
been paid on this Debt Security) to but excluding such Interest Payment Date or
the Stated Maturity Date. If any Interest Payment Date or the Stated Maturity
Date falls on a day that is not a Business Day, principal, premium, if any,
and/or interest payable with respect to such Interest Payment Date or Stated
Maturity Date will be paid on the next succeeding Business Day with the same
force and effect as if it were paid on the date such payment was due, and no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date or Stated Maturity Date. "Business Day" means any
day, other than a Saturday or Sunday, on which banks in New York are not
required or authorized by law or executive order to close.
All payments of principal, premium, if any, and interest in respect of this
Debt Security will be made by the Company in immediately available funds.
Reference is hereby made to the further provisions of this Debt Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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<PAGE>
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature of one of its authorized signatories, this Debt
Security shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its facsimile corporate seal.
Dated June 2, 1997 HILTON HOTELS CORPORATION
By:
---------------------------------------------
Name:
Title:
Attest:
By:
------------------------
Name:
Title:
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<PAGE>
[Reverse of Debt Security]
HILTON HOTELS CORPORATION
This Debt Security is one of a duly authorized issue of securities of the
Company, issued and to be issued in one or more series under an Indenture, dated
as of April 15, 1997 (herein called the "Indenture") between the Company and BNY
Western Trust Company, as Trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture with respect to the series of
which this Debt Security is a part), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Debt Securities, and of the terms upon which
the Debt Securities are, and are to be, authenticated and delivered. This Debt
Security is one of the duly authorized series of Debt Securities designated on
the face hereof (collectively, the "Debt Securities"), and the aggregate
principal amount of the securities to be issued under such series is limited to
$300,000,000 (except for Debt Securities authenticated and delivered upon
transfer of, or in exchange for, or in lieu of other Debt Securities). All
terms used in this Debt Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
If an Event of Default shall occur and be continuing, the principal of the
Debt Securities of this series may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Debt Securities may not be redeemed prior to the Stated Maturity Date.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities under the Indenture
at any time by the Company and the Trustee with the consent of the Holders of
not less than at least a majority of the aggregate principal amount of the
Outstanding Debt Securities affected thereby. The Indenture also contains
provisions permitting the Holders of not less than at least a majority of the
aggregate principal amount of the Outstanding Debt Securities, on behalf of the
Holders of all such Debt Securities, to waive compliance by the Company with
certain provisions of the Indenture. Furthermore, provisions in the Indenture
permit the Holders of not less than at least a majority of the aggregate
principal amount, in certain instances, of the Outstanding Debt Securities of
any series to waive, on behalf of all of the Holders of Debt Securities of such
series, certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Debt Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Debt Security
and other Debt Securities issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Debt Security.
No reference herein to the Indenture and no provision of this Debt Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Debt Security at the times, rates and in the coin or currency,
herein prescribed.
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<PAGE>
As provided in the Indenture and subject to certain limitations therein,
the transfer of this Debt Security is registrable in the Security Register of
the Company upon surrender of this security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Debt Security are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder hereof or by
his attorney duly authorized in writing, and thereupon one or more new Debt
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debt Security is exchangeable for a like aggregate principal amount
of Debt Securities of different authorized denominations but otherwise having
the same terms and conditions, as requested by the Holder hereof surrendering
the same.
The Debt Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debt Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Debt Security is registered as the owner
hereof for all purposes, whether or not this Debt Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
No recourse shall be had for the payment of the principal of or premium, if
any, or the interest on this Debt Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any past, present or future
incorporator, stockholder, employee, officer or director, as such, of the
Company or of any successor or Affiliate of the Company, either directly or
through the Company or any successor, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
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The Indenture and the Debt Securities shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the series of Debt Securities issued under the
within-mentioned Indenture.
BNY WESTERN TRUST COMPANY, as
Trustee
By
-----------------------------
Authorized Signatory
17
