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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): April 14, 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 a Purchase Agreement with Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Merrill Lynch & Co., Donaldson, Lufkin &
Jenrette Securities Corporation, J.P. Morgan & Co., Lehman Brothers Inc.,
Salomon Brothers Inc. and Schroder Wertheim & Co. and referenced as Exhibit 1.1
to the Registration Statement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
7(c) Exhibits.
1.01 Purchase Agreement.
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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: April 14, 1997 Title: Senior Vice President and
Treasurer
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HILTON HOTELS CORPORATION
(a Delaware corporation)
$375,000,000
$375,000,000 7.95% Senior Notes due 2007
PURCHASE AGREEMENT
April 10, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Donaldson, Lufkin & Jenrette
Securities Corporation
J.P. Morgan & Co.
Lehman Brothers Inc.
Salomon Brothers Inc
Schroder Wertheim & Co.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Hilton Hotels Corporation, a Delaware corporation (the "Company"), confirms
its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") 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 $375,000,000 aggregate principal amount of
the Company's 7.95% Senior Notes due 2007 (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.
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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 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").
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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 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 Merrill Lynch expressly for use in the
Registration Statement or Prospectus.
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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 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,
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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 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.
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(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 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
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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 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
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("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 collectively 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 1996 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, 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
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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 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
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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.
(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
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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").
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.
Merrill Lynch, 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
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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.
(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
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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 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
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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.
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 Merrill Lynch. Such counsel may also state that,
insofar as such opinion involves factual matters, they
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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 ("Material Adverse Change"), and the
Underwriters shall have received a certificate of the President or a Vice
President of the Company and of the chief 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 the time of the execution of this
Agreement, 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) BRING-DOWN COMFORT LETTER. At Closing Time, the Underwriters shall
have received from each of Arthur Andersen LLP and Ernst & Young LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the statements made
in the letters furnished pursuant to subsection (e) of this Section, except that
the specified date referred to shall be a date not more than three business days
prior to Closing Time.
(g) 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.
(h) 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
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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.
(i) 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.
(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 Merrill Lynch),
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;
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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 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 Merrill Lynch 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 Merrill Lynch, 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
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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 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.
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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 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.
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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 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.
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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 Merrill Lynch at 10900 Wilshire Boulevard,
Suite 900, Los Angeles, California 90024, attention of James Jackson, 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 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:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN & CO.
LEHMAN BROTHERS INC.
SALOMON BROTHERS INC
SCHRODER WERTHEIM & CO.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ Jim Jackson
---------------------------------------
Authorized Signatory
22
<PAGE>
SCHEDULE A
Principal
Amount of
7.95% Senior
Name of Underwriter Notes due 2007
------------------- --------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated. . . . . . . . . . . . . . . . . . $100,000,000
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . 75,000,000
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . 75,000,000
J.P. Morgan & Co.. . . . . . . . . . . . . . . . . . . . . 50,000,000
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . 50,000,000
Schroder Wertheim & Co.. . . . . . . . . . . . . . . . . . 25,000,000
-------------
Total $375,000,000
-----------
-----------
Sch A-1
<PAGE>
SCHEDULE B
HILTON HOTELS CORPORATION
$375,000,000 7.95% Senior Notes due 2007
1. The initial public offering price of the Securities shall be 99.592%
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 98.942% of the principal amount thereof.
3. The interest rate on the Securities shall be 7.95% 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. Such opinion shall not include any
Canadian "wrap" information sent to prospective purchasers of Notes in Canada or
filed with any Canadian governmental authorities.
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 posteffective 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 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 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. Such opinion shall not include any
Canadian "wrap" information sent to prospective purchasers of Notes in Canada or
filed with any Canadian governmental authorities.
A-2-4
