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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): December 17, 1997
Hilton Hotels Corporation
----------------------------
(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
--------------------------------
(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.
On October 16, 1997, Hilton Hotels Corporation ("Hilton" or the
"Company") filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-38047) (the
"Registration Statement"), as amended by Amendment No. 1 to the Registration
Statement filed with the Commission on December 5, 1997, relating to the
registration under the Securities Act of 1933, as amended, of up to $2.5
billion aggregate offering price of common stock, par value $2.50 per share,
preferred stock, par value $1.00 per share, debt securities, depositary
shares and/or warrants of the Company, which Registration Statement was
declared effective on December 8, 1997.
On December 17, 1997, the Company entered into a Purchase Agreement (the
"Purchase Agreement") with Salomon Brothers Inc, Donaldson, Lufkin &
Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and BancAmerica Robertson Stephens (collectively, the
"Underwriters"), referenced as Exhibit 1.1 to the Company's Registration
Statement, pursuant to which the Company agreed to issue and sell $200
million aggregate principal amount of 7.20% Senior Notes due 2009 and $200
million aggregate principal amount of 7.50% Senior Notes due 2017
(collectively, the "Notes"). The Purchase Agreement is attached hereto as
Exhibit 1.1.
The terms of the Notes have been established as set forth in the
Officers' Certificate, attached hereto as Exhibit 4.2.
On December 8, 1997, Hilton announced that it will record non-recurring
charges in the fourth quarter of 1997 which will result in a net charge to
earnings of approximately $.27 to $.29 per share, including recognition of
impairment losses related to the Flamingo Casino-Kansas City and the closure
of the Flamingo Casino-New Orleans riverboat casino and the write-off of
expenses related to Hilton's offer to acquire ITT Corporation ("ITT"), net of
the gain recognized on the sale of ITT stock previously purchased by Hilton.
In addition, Hilton announced that it expects fourth quarter earnings to
be lower than anticipated. The drop in earnings is primarily attributable to
three factors: (i) continued lower than expected growth in the major gaming
markets, (ii) delays in the opening of "Star Trek: The Experience at the Las
Vegas Hilton" and (iii) the closure of the Company's Flamingo Casino-New
Orleans riverboat casino.
From February 1994 through September 1997, the Company operated a 1,500
passenger riverboat casino located adjacent to the New Orleans Hilton
Riverside & Towers with a 20,000 square foot casino. The vessel is wholly
owned by the Company and leased to a joint venture, of which the Company owns
a 50% interest. In October 1996, the Company was granted general approval by
the Louisiana Gaming Control Board to relocate this vessel to Shreveport by
October 1, 1997 where the vessel would operate as a dockside casino on the
Red River. The Company subsequently abandoned its plan to relocate the
facility and on October 1, 1997, the riverboat ceased operations. The
Company is negotiating with the City of New Orleans and its partner with
respect to certain obligations related to the closure of the Flamingo
Casino-New Orleans.
In November 1997, the Missouri Supreme Court ruled that riverboat
casinos operating in man-made basins must meet certain requirements as to
contiguity with the Mississippi or Missouri
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rivers in order to comply with the Missouri constitution. The Missouri
Supreme Court's ruling, if made applicable to the Company's Flamingo
Casino-Kansas City riverboat casino, could, unless modified by judicial or
other governmental action, have a significant adverse effect upon its
operations.
On December 18, 1997, Hilton's Board of Directors extended its September
1996 authorization of the repurchase by the Company of up to 20 million
shares of its common stock pursuant to a stock repurchase program. Hilton is
not obligated to acquire any particular amount of common stock and the
program may be suspended at any time at Hilton's discretion.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
7(c) Exhibits.
1.1 Purchase Agreement.
4.1 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/ Cheryl Marsh
-------------------------------------
Name: Cheryl Marsh
Dated: December 18, 1997 Title: Vice President and Corporate
Secretary
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HILTON HOTELS CORPORATION
(a Delaware corporation)
$200,000,000 7.2% Senior Notes due 2009
$200,000,000 7.5% Senior Notes due 2017
PURCHASE AGREEMENT
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December 17, 1997
Salomon Brothers Inc
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
BancAmerica Robertson Stephens
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Hilton Hotels Corporation, a Delaware corporation (the "Company"), confirms
its agreement with Salomon Brothers Inc ("Salomon") 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 $200,000,000
aggregate principal amount of the Company's 7.2% Senior Notes due 2009 (the
"2009 Notes") and $200,000,000 aggregate principal amount of the Company's 7.5%
Senior Notes due 2017 (the "2017 Notes" and together with the 2009 Notes, 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 Resolutions (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. 333-38047) 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
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information furnished to the Company in writing
by any Underwriter through Merrill Lynch 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 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
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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 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 subject, or (3) contravene any order of
any court or governmental agency, body
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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 ("NGCB"), the
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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
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
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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 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 Latham &
Watkins, 633 West Fifth Street, 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 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
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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 credit
to the Underwriters at the Depository (as hereinafter defined) of the
Securities to be purchased by them. Salomon, 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. The Securities shall be in book-entry
only form and registered in the name of Cede & Co., as nominee of The
Depository Trust Company (the "Depositary"). The Securities shall be
credited to the account of Salomon at the Depositary at the Closing Time.
(d) QUALIFIED INDEPENDENT UNDERWRITER. The Company hereby confirms its
engagement of Salomon to render services as, a "qualified independent
underwriter," within the meaning of Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc. with respect to the offering
and sale of the Securities. Salomon, solely in its capacity as qualified
independent underwriter and not otherwise, is referred to herein as the
"QIU." The yield at which the 2009 Notes and the 2017 Notes will be sold to
the public shall not, in either case, be lower than the yield recommended by
Salomon acting as QIU.
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
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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.
(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,
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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 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
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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; PROVIDED HOWEVER, the
Underwriters shall reimburse the Company for its actual, accountable incurred
expenses in connection with the offering of the Notes.
(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, Schreck Morris, special Nevada gaming
counsel for the Company and Brown, Michael & Carroll, special New Jersey
gaming counsel for the Company, Lathrop & Gage, special Missouri 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, A-5 and A-6 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
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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
Salomon. 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 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 Baal 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.
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(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.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify and
hold harmless each Underwriter, the QIU and each person, if any, who controls
any Underwriter or the QIU 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
Salomon), 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,
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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 Salomon 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 Salomon, 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
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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 and the QIU 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 and the QIU 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 and the QIU 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 and
the QIU, 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 and
the QIU 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
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intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company, the QIU 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, neither the QIU nor any
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 or the QIU 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 or QIU, 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' and the QIU's 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.
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(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.
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
20
<PAGE>
telecommunication. Notices to the Underwriters shall be directed to Salomon
at Seven World Trade Center, New York, New York 10048, attention of Michael
Christensen, 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/ THOMAS E. GALLAGER
-----------------------------
Thomas E. Gallager
Executive Vice President and
General Counsel
CONFIRMED AND ACCEPTED,
as of the date first above written:
SALOMON BROTHERS INC
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BANCAMERICA ROBERTSON STEPHENS
By: SALOMON BROTHERS INC
By /s/ WENDELL M. BROOKS
---------------------
Authorized Signatory
<PAGE>
SCHEDULE A
Principal Amount Principal Amount
of 7.2% Senior of 7.5% Senior
Name of Underwriter Note Notes
due 2009 due 2017
---------------- ----------------
$74,000,000 $74,000,000
Salomon Brothers Inc . . . . . . . . .
Donaldson, Lufkin & Jenrette
$48,000,000 $48,000,000
Securities Corporation . . . . . . .
Merrill Lynch, Pierce, Fenner & Smith
$48,000,000 $48,000,000
Incorporated . . . . . . . . . . . .
$30,000,000 $30,000,000
BancAmerica Robertson Stephens . . . .
Total $200,000,000 $200,000,000
------------ ------------
------------ ------------
Sch A-1
<PAGE>
SCHEDULE B
HILTON HOTELS CORPORATION
$200,000,000 7.2% Senior Notes due 2009
$200,000,000 7.5% Senior Notes due 2017
1. The initial public offering price of the 2009 Notes shall be 99.844%
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 2009 Notes
shall be 99.169% of the principal amount thereof.
3. The interest rate on the 2009 Notes shall be 7.2% per annum.
4. The initial public offering price of the 2017 Notes shall be 99.369%
of the principal amount thereof, plus accrued interest, if any, from the date
of issuance.
5. The purchase price to be paid by the Underwriters for the 2017 Notes
shall be 98.494% of the principal amount thereof.
6. The interest rate on the 2017 Notes shall be 7.5% 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 Purchase
Agreement.
(2) The Purchase 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 Purchase 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
Purchase 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 Purchase 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 Purchase Agreement or the Indenture or in
connection with the offering, issuance or sale of the Securities under the
Purchase 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
Purchase 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 statement), at the time the Prospectus
A-1-2
<PAGE>
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 are a
A-2-1
<PAGE>
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 Purchase Agreement
and the Indenture and the consummation of the transactions contemplated by
the Purchase 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 Purchase 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 Purchase 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 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.
A-2-3
<PAGE>
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
1. The statements in the Prospectus under the caption "Riverboat
Casinos" and the statements regarding the State of Louisiana and the Louisiana
Gaming Control Board under the caption "Regulation and Licensing" are accurate
in all material respects (except for financial data included therein or omitted
therefrom, as to which counsel express no opinion); and we do not know of any
legal or governmental proceedings in the State of Louisiana where the Company
conducts, or proposes to conduct, gaming operations required to be described in
the Prospectus which are not described as required;
2. The statements in the Form 10-K under the caption "Riverboat
Casinos," "Louisiana Gaming Laws," and the statements regarding the State of
Louisiana and the Louisiana Gaming Control Board under the caption "Regulation
and Licensing" are accurate in all material respects (except as such statements
relate to the relocation of the riverboat casino to Shreveport, Louisiana, and
except for financial data included therein or omitted therefrom, as to which
counsel express no opinion); and we do not know of any legal or governmental
proceedings in the State of Louisiana where the Company conducts, or proposes to
conduct, gaming operations required to be described in the Form 10-K which are
not described as required; and
3. No facts have come to our attention that would lead us to believe
that the statements referred to in paragraphs (a) and (b) above contained, on
the date of the Supplement, or contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make such statements, in light of the circumstances under which they are made,
not misleading.
A-3-1
<PAGE>
Exhibit A-4
FORM OF OPINION OF SCHRECK, MORRIS
1. The statements in the Prospectus under the "Regulation and
Licensing--Nevada Gaming Laws" heading and in the Form 10-K under the
"Additional Information - Regulation and Licensing--Nevada Gaming Laws" heading
(except for financial data included therein or omitted therefrom, as to which we
express no opinion), have been reviewed by us and insofar as they constitute a
summary of the statutes, laws and applicable regulations of the State of Nevada
regarding the casino industry and gaming, they are accurate and correct in all
material respects.
2. Without assuming any responsibility for the accuracy,
completeness or fairness of the information or statements contained in the
Prospectus under the "Regulations and Licensing--Nevada Gaming Laws" heading
and in the Form 10-K under the "Additional Information--Regulation and
Licensing--Nevada Gaming Laws" heading, at the time of the filing thereof and
on the date of our opinion herein, such statements (except for financial data
included therein or omitted therefrom, as to which we express no opinion)
have been reviewed by us and insofar as they constitute a summary of the
statutes, laws and applicable regulations of the State of Nevada regarding
the casino industry and gaming, they contained and contain no untrue
statements of a material fact or omitted or omit to state any material fact
required to be stated therein or necessary to make such statements, in light
of the circumstances under which they were or are made, not misleading.
3. Insofar as the following relate to the statutes, laws and
applicable regulations of the State of Nevada regarding the casino industry and
gaming, no authorization, approval, consent or license issued by any Nevada
Gaming Authority or any other Nevada governmental body, agency or official is
necessary in connection with the issuance of the Securities and the due
authorization, execution, delivery and performance by the Company of the
Purchase Agreement, except such as have been obtained and are in full force and
effect, and except such as may be required under Nevada state securities laws.
A-4-1
<PAGE>
Exhibit A-5
FORM OF OPINION OF BROWN, MICHAEL & CARROLL
1. The statements in the Prospectus under the caption "New Jersey
Gaming Laws" found under the heading "Regulation and Licensing," insofar as
such statements as of the time such statements were made, constitute a
summary of New Jersey State Statutes, Laws, Regulations, Legal and
Governmental Proceedings of the State of New Jersey regarding the casino
industry and gaming have been reviewed by us and are accurate in all material
respects (except for financial data included therein or omitted therefrom, as
to which we express no opinion); and we do not know of any legal or
governmental proceedings in the State of New Jersey where the Company
conducts, or proposes to conduct, gaming operations required to be described
in the Prospectus which are not described as required.
2. Without assuming any responsibility for the accuracy,
completeness or fairness of the information or statements contained in the
Prospectus under the caption "New Jersey Gaming Laws" found under the heading
"Regulation and Licensing," at the time of the filing thereof and on the date
of our opinion herein, such statements (except for financial data included
thereon or omitted therefrom, as to which we express no opinion) have been
reviewed by us and insofar as they constitute a summary of the statutes, laws
and applicable regulations of the State of New Jersey regarding the casino
industry and gaming, they contained and contain no untrue statement of a
material fact or omitted or omit to state any material fact required to be
stated therein or necessary to make such statements, in light of the
circumstances under which they were or are made, not misleading.
3. Insofar as the following relate to the statutes, laws and
applicable regulations of the State of New Jersey regarding the casino
industry and gaming, no authorization, approval, consent or license issued by
any New Jersey Gaming Authority or any other New Jersey governmental body,
agency or official is necessary in connection with the issuance of the
Securities and the due authorization, execution, delivery and performance by
the Company of the Purchase Agreement, except such as have been obtained and
are in full force in effect, and except such as may be required under New
Jersey state non-gaming-related securities laws.
A-5-1
<PAGE>
Exhibit A-6
FORM OF OPINION OF LATHROP & GAGE
1. The statements in the Prospectus under the "Regulation and
Licensing--Missouri Gaming Laws" heading and in the Form 10-K under the
"Additional Information - Regulation and Licensing--Missouri Gaming Laws"
heading (except for financial data included therein or omitted therefrom, as
to which we express no opinion), have been reviewed by us and insofar as they
constitute a summary of the statutes, laws and applicable regulations of the
State of Missouri regarding the casino industry and gaming, they are accurate
and correct in all material respects.
2. Without assuming any responsibility for the accuracy,
completeness or fairness of the information or statements contained in the
Prospectus under the "Regulations and Licensing-- Missouri Gaming Laws"
heading and in the Form 10-K under the "Additional Information--Regulation
and Licensing--Missouri Gaming Laws" heading, at the time of the filing
thereof and on the date of our opinion herein, such statements (except for
financial data included therein or omitted therefrom, as to which we express
no opinion) have been reviewed by us and insofar as they constitute a summary
of the statutes, laws and applicable regulations of the State of Missouri
regarding the casino industry and gaming, they contained and contain no
untrue statements of a material fact or omitted or omit to state any material
fact required to be stated therein or necessary to make such statements, in
light of the circumstances under which they were or are made, not misleading.
3. Insofar as the following relate to the statutes, laws and
applicable regulations of the State of Missouri regarding the casino industry
and gaming, no authorization, approval, consent or license issued by any
Missouri Gaming Authority or any other Missouri governmental body, agency or
official is necessary in connection with the issuance of the Securities and
the due authorization, execution, delivery and performance by the Company of
the Purchase Agreement, except such as have been obtained and are in full
force and effect, and except such as may be required under Missouri state
securities laws.
A-6-1
<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 December 17, 1997, two series of Debt Securities (as
defined in the Indenture) to be issued under the Indenture have been
established: (i) the 7.20% Senior Notes due 2009 (the "2009 Notes") and (ii)
the 7.50% Senior Notes due 2017 (the "2017 Notes", and together with the 2009
Notes, the "Notes"), each series to have the following terms:
(1) The 2009 Notes shall constitute a series of Debt Securities
having the title "7.20% Senior Notes due 2009" and the 2017 Notes shall
constitute a series of Debt Securities having the title "7.50% Senior Notes
due 2017."
(2) The aggregate principal amount of 2009 Notes and 2017 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 $200,000,000 and $200,000,000, respectively.
(3) The entire outstanding principal of the 2009 Notes shall be
payable on December 15, 2009, and the entire outstanding principal of the
2017 Notes shall be payable on December 15, 2017 (each, a "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 7.20% per annum with respect to the 2009
Notes, and 7.50% per annum with respect to the 2017 Notes. The Notes shall
bear interest at the applicable 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 9.35% (with respect
to the 2009 Notes) and 9.65% (with respect to the 2017 Notes), subject to
change on the
<PAGE>
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 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 2009 Notes 2007 Notes
---------- ----------
--------------------- ------------------------------------------------
Baa3 or above BBB- or above 7.20% 7.50%
Ba1 BB+ 7.85% 8.15%
Ba2 BB 8.20% 8.50%
Ba3 BB- 8.60% 8.90%
B1 or below B+ or below 9.35% 9.65%
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
<PAGE>
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
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 December
22, 1997; the Interest Payment Dates on which such interest will be
payable shall be June 15 and December 15 of each year, beginning June
15, 1998; the Regular Record Dates for the interest payable on the Notes
on any Interest Payment Date shall be the preceding June 1 (in the case
of interest payable on any June 15); and December 1 (in the case of
interest payable on any December 15); 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.
3
<PAGE>
(B) There shall be the following additions to the covenants set
forth in the Indenture with respect to the Notes:
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
4
<PAGE>
Debt or Liens referred to in the foregoing clauses (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
July 22, 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.
"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
6
<PAGE>
$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 Rating Group, a divison of McGraw Hill.
"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.
(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.
7
<PAGE>
(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.
8
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto executed this
Officers' Certificate as of the 17th day of December, 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
