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<S><C>
As filed with the Securities and Exchange Commission on May 18, 1998 Registration No. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HARRAH'S ENTERTAINMENT, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 7993 62-1411755
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or Code Number)
organization)
1023 Cherry Road
MEMPHIS, TENNESSEE 38117
(901) 762-8600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
HARRAH'S OPERATING COMPANY, INC.
(Exact name of Registrant as specified in governing instruments)
DELAWARE 7993 75-1941623
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or Code Number)
organization)
1023 Cherry Road
MEMPHIS, TENNESSEE 38117
(901) 762-8600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
E. O. Robinson, Jr., Esq.
General Counsel
Harrah's Entertainment, Inc.
1023 Cherry Road
Memphis, Tennessee 38117
(901) 762-8600
Copy To:
Edward Sonnenschein, Jr., Esq.
David M. Hernand, Esq.
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
(213) 485-1234
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after this Registration Statement becomes effective as determined by market
conditions and other factors.
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If any of the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum
Title of Each Class of Securities Aggregate Amount of
to be Registered Offering Price (1) Registration Fee(2)
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Common Stock, par value $0.10 per share, of Harrah's Entertainment, Inc. ("HET") (3)....
Debt Securities of HET..................................................................
Preferred Stock, par value $100.00 per share, of HET (4)................................
Depositary Shares of HET................................................................
Debt Securities of Harrah's Operating Company, Inc. ("HOC").............................
Preferred Stock, par value $0.10 per share, of HOC (4)..................................
Depositary Shares of HOC................................................................
Guarantees by HET of the Debt Securities of HOC (5).....................................
Guarantees by HET of the Preferred Stock of HOC (5).....................................
Total (6).............................................................. $750,000,000 $221,250 (7)
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(1) The aggregate maximum public offering price of all securities issued
pursuant to this Registration Statement will not exceed $750,000,000,
which amount includes (i) the principal amount of any Debt Securities
issued at their principal amount and the issue price rather than the
principal amount of any Debt Securities issued at a discount, (ii) the
initial offering price for shares of Common Stock of HET and (iii) the
initial offering price for shares of Preferred Stock.
(2) Not specified as to each class of securities to be registered
hereunder pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933, as amended.
(3) Such indeterminate number of shares of Common Stock as may from time
to time be issued at indeterminate prices, together with Special Stock
Purchase Rights which are initially carried and traded with such
shares of Common Stock (and whose value is reflected on the value of
the Common Stock).
(4) Such indeterminate number of shares of Preferred Stock as may from
time to time be issued at indeterminate prices.
(5) Pursuant to Rule 457(n) under the Securities Act of 1933, no separate
fee is payable for the Guarantees.
(6) This Registration Statement also covers an indeterminate amount of
securities as may be issued upon conversion of, or in exchange for,
the securities registered hereunder.
(7) The registration fee has been calculated in accordance with Rule
457(o) under the Securities Act of 1933, as amended.
___________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED MAY__, 1998
$750,000,000
[LOGO]
HARRAH'S ENTERTAINMENT, INC. HARRAH'S OPERATING COMPANY, INC.
COMMON STOCK DEBT SECURITIES
DEBT SECURITIES PREFERRED STOCK
PREFERRED STOCK DEPOSITARY SHARES
DEPOSITARY SHARES
Harrah's Entertainment, Inc., a Delaware corporation ("HET"), and Harrah's
Operating Company, Inc., a Delaware corporation ("HOC"), as the case may be,
from time to time may offer, issue and sell the following: (i) shares of common
stock, par value $0.10 per share, of HET (the "Common Stock"), (ii) debt
securities consisting of debentures, notes or other evidence of indebtedness of
HET (the "HET Debt Securities"), (iii) shares or fractional shares of preferred
stock, par value $100.00 per share, of HET (the "HET Preferred Stock"), (iv)
shares of HET Preferred Stock represented by depositary shares (the "HET
Depositary Shares"), (v) debt securities consisting of debentures, notes or
other evidence of indebtedness of HOC (the "HOC Debt Securities"), (vi) shares
or fractional shares of preferred stock, par value $0.10 per share, of HOC (the
"HOC Preferred Stock") or (vii) shares of HOC Preferred Stock represented by
depositary shares (the "HOC Depositary Shares"), at an aggregate public offering
price for all such securities not to exceed $750,000,000. The payment of
principal and interest with respect to the HOC Debt Securities will be
unconditionally guaranteed by HET. See "Description of the Debt
Securities-Guarantee of HOC Debt Securities." With respect to the HOC Preferred
Stock, the payment of dividends, if and to the extent declared out of monies
held by HOC and legally available therefor, and payments on liquidation or
redemption will be guaranteed by HET to the extent described herein. See
"Description of the Preferred Stock-Guarantee of HOC Preferred Stock." The
Common Stock, HET Debt Securities, HOC Debt Securities, HET Preferred Stock, HOC
Preferred Stock, HET Depositary Shares and HOC Depositary Shares (collectively,
the "Securities") may be offered separately or together, in separate series, in
amounts, at prices and on terms determined by market conditions at the time of
sale and to be set forth in one or more supplements to this Prospectus (each, a
"Prospectus Supplement").
The specific terms of the Securities for which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement which will
include, where applicable: (i) in the case of Common Stock, the number of
shares, purchase price and terms of the offering and sale thereof; (ii) in the
case of Debt Securities, the specific title, aggregate principal amount, form
(which may be certificated or global), authorized denominations, maturity (which
may be fixed or extendible), interest rate (which may be fixed or variable) (or
manner of calculation thereof), if any, the time of payment of interest, if any,
any terms of redemption, conversion or exchange thereof, security, if any,
ranking and terms of subordination, any terms for sinking fund payments,
additional covenants, purchase price and other terms with respect to the Debt
Securities; (iii) in the case of Preferred Stock, the specific designation and
stated value per share, the number of shares and purchase price, any dividend,
liquidation, redemption, conversion, exchange, voting and other rights, and the
terms of HET's guarantee with respect to the HOC Preferred Stock; and (iv) in
the case of Depositary Shares, the aggregate number of shares offered, the
fractional share of HOC Preferred Stock represented by each such Depositary
Share and the Purchase Price. The Debt Securities may be sold at a substantial
discount below their principal amount and, if issued, certain terms thereof will
be set forth in a Prospectus Supplement related thereto. See "Description of
the Debt Securities."
HET's Common Stock is traded on The New York Stock Exchange (the "NYSE")
under the symbol HET. Any Common Stock sold pursuant to a Prospectus Supplement
will be listed on the NYSE. On May 15, 1998, the last reported sale price of
the Common Stock on the NYSE was $25.625 per share. The Company has not yet
determined whether any of the other Securities offered hereby will be listed on
any exchange or over-the-counter market. If the Company decides to seek listing
of any such Securities, a Prospectus Supplement relating thereto will disclose
such exchange or market.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
NO GAMING REGULATORY AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS.
The Securities may be offered directly to one or more purchasers, through
agents designated from time to time by the offeror or to or through underwriters
or dealers. If any agents or underwriters are involved in the sale of the
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in the applicable Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such Securities.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME
THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PRELIMINARY PROSPECTUS SHALL
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY STATE.
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AVAILABLE INFORMATION
HET and HOC (collectively, the "Company") have filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement on Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"), for the
registration of the Securities offered hereby. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain items of which are
contained in exhibits and schedules to, or incorporated by reference in, the
Registration Statement as permitted by the rules and regulations of the
Commission. For further information with respect to HET and HOC and the
Securities offered hereby, reference is made to the Registration Statement,
including the exhibits thereto, and financial statements and notes filed as a
part thereof or incorporated by reference therein. Statements made in this
Prospectus concerning the contents of any document referred to herein are not
necessarily complete. With respect to each such document filed with the
Commission as an exhibit to, or incorporated by reference in, the Registration
Statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
HET is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). In accordance therewith, HET
files consolidated reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information filed by HET may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices located at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60606, and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material may be obtained by mail from the Public
Reference Branch of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission also maintains a Web site at
http://www.sec.gov that contains reports, proxy statements and other information
regarding registrants that file electronically with the Commission. In
addition, HET's reports, proxy statements and other information filed with the
Commission may also be inspected and copied at the offices of the New York,
Chicago, Pacific and Philadelphia Stock Exchanges, on which exchanges the Common
Stock is listed.
HOC is not currently subject to the informational reporting requirements of
the Exchange Act. HOC will become subject to such requirements upon the
effectiveness of the Registration Statement, although it intends to seek and
expects to receive exemptions therefrom.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed with the Commission and are
incorporated by reference in this Prospectus: (i) HET's Annual Report on Form
10-K (File No. 1-10410) for the year ended December 31, 1997 ( the "1997 HET
Form 10-K "), (ii) HET's Quarterly Report on Form 10-Q for the period ended
March 31, 1998 and (iii) HET's Current Report on Form 8-K, filed with the
Commission on December 24, 1997. All documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Securities shall
be deemed to be incorporated herein by reference and to be a part hereof from
the respective dates of filing of such documents.
Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered, upon written or oral request. Copies of this
Prospectus, as amended or supplemented from time to time, and any other
documents (or parts of documents) that constitute part of the Prospectus under
Section 10(a) of the Securities Act will also be provided without charge to each
such person, upon written or oral request. Requests should be directed to
Harrah's Entertainment, Inc., at its principal executive offices at 1023 Cherry
Road, Memphis, Tennessee 38117, Attention: Corporate Secretary, (901) 762-8600.
<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS, INCLUDING ANY DOCUMENTS THAT ARE INCORPORATED BY REFERENCE AS
SET FORTH IN "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE," CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT AND SECTION 21E OF THE EXCHANGE ACT. SUCH STATEMENTS ARE INDICATED BY WORDS
OR PHRASES SUCH AS "ANTICIPATE," "ESTIMATE," "EXPECTS," "PROJECTS," "MANAGEMENT
BELIEVES," "THE COMPANY BELIEVES" AND SIMILAR WORDS AND PHRASES. SUCH
STATEMENTS ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES OR ASSUMPTIONS. SHOULD
ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING
ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE
ANTICIPATED, ESTIMATED OR PROJECTED.
THE COMPANY
The Company is one of the leading casino entertainment companies in the
United States and is unique in its broad geographic diversification. The
Company operates casino hotels in the five traditional U.S. gaming markets of
Reno, Lake Tahoe, Las Vegas and Laughlin, Nevada and Atlantic City, New Jersey.
It also operates riverboat or dockside casinos in Joliet, Illinois, Vicksburg
and Tunica, Mississippi, Shreveport, Louisiana, and North Kansas City and
Maryland Heights, Missouri; and manages casinos on four Indian reservations,
near Phoenix, Arizona, north of Seattle, Washington, in Cherokee, North Carolina
and north of Topeka, Kansas. HET is a holding company, the principal asset of
which is the capital stock of HOC. HOC directly owns certain of the assets and
directly and indirectly owns the stock of certain subsidiaries which operate the
Company's business. The principal executive offices of the Company are located
at 1023 Cherry Road, Memphis, Tennessee 38117, telephone (901) 762-8600.
On December 18, 1997, the Company entered into an agreement whereby it agreed
to acquire Showboat, Inc. ("Showboat"). Showboat owns and operates casinos in
Atlantic City, New Jersey and Las Vegas, Nevada. Showboat manages and is the
largest single shareholder of a casino in Sydney, New South Wales, Australia,
and owns 55% of a subsidiary which owns and manages a casino in East Chicago,
Indiana. It is anticipated that the acquisition of Showboat will be completed
in May 1998.
RATIO OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
the Company for each of the periods indicated.
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YEAR ENDED DECEMBER 31,
THREE MONTHS ENDED ----------------------------------------
MARCH 31, 1998 1997 1996 1995 1994 1993
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2.9 2.8 2.8 1.3 2.0 2.6
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For purposes of computing this ratio, earnings consist of income before
income taxes plus fixed charges (excluding capitalized interest) and minority
interests (relating to subsidiaries whose fixed charges are included in the
computation), excluding equity in undistributed earnings of less than 50% owned
investments. Fixed charges include interest whether expensed or capitalized,
amortization of debt expense, discount or premium related to indebtedness and
such portion of rental expense deemed by the Company to be representative of
interest. Where applicable, both earnings and fixed charges have been adjusted
to include 100% of the financial results of the Company's nonconsolidated,
majority-owned subsidiary.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Securities
for general corporate purposes, including acquisitions, capital expenditures and
working capital requirements; to repay, redeem or repurchase outstanding
indebtedness; or for such other purposes as may be specified in a Prospectus
Supplement. A description of any indebtedness to be refinanced with the
proceeds of the Debt Securities will be set forth in the applicable Prospectus
Supplement.
DESCRIPTION OF THE COMMON STOCK
The description of the Common Stock set forth below does not purport to be
complete and is qualified in its entirety by reference to HET's Certificate of
Incorporation (the "HET Certificate") and HET's Bylaws (the "HET Bylaws").
<PAGE>
GENERAL
The HET Certificate authorizes the issuance of up to 360,000,000 shares of
Common Stock with a par value of $0.10 per share. At March 31, 1998, HET had
101,099,242 shares of Common Stock issued and outstanding. In addition, HET has
reserved for issuance under its 1990 Stock Option Plan, as amended, and 1990
Restricted Stock Plan, as amended, an aggregate of 7,886,871 shares of Common
Stock (inclusive of additional options and restricted stock awards authorized
by HET's stockholders on May 1, 1998).
Subject to the limitations contained in the Company's debt instruments and
after provision for the payment of dividends on any series of preferred stock
which might be issued and which has a preference with respect to the payment of
dividends, holders of Common Stock are entitled to receive such dividends as may
be declared by the Board of Directors of HET (the "HET Board") from time to time
out of funds legally available for such purpose.
In the event of any liquidation, dissolution or winding up of the affairs of
HET, after payment of all debts and other liabilities and payment of any
liquidation preference on any series of preferred stock which might be issued
and which has a liquidation preference, the holders of shares of Common Stock
are entitled to share pro rata in all lawful distributions of the remaining
assets of HET.
The holders of Common Stock will be entitled to one vote per share.
Stockholders are not entitled to cumulative voting rights in the election of
directors.
All shares of Common Stock now outstanding are, and additional shares of
Common Stock offered will be when issued, fully paid and non-assessable. The
Common Stock has no conversion rights. No holder of Common Stock has any
preemptive right to subscribe for any stock or other securities of HET which may
be issued.
REDEMPTION
The Common Stock can be redeemed by HET if, among other circumstances, in the
judgment of the HET Board such redemption is necessary to avoid any regulatory
sanctions against, or to prevent the loss of, or to secure the reinstatement of,
any license, franchise or entitlement from any governmental agency held by HET,
any affiliate of HET, or any entity in which HET or an affiliate is an owner,
which license, franchise or entitlement (i) is needed to conduct any portion of
the business of HET, any such affiliate or other entity or which license,
franchise or entitlement is conditioned upon some or all of the holders of
Common Stock possessing prescribed qualifications, or (ii) needed to allow the
conduct of any portion of the business of HET or HOC, as the case may be, any
such affiliate or other entity.
RIGHTS AND SPECIAL STOCK
HET currently has 5,000,000 authorized shares of special stock, par value
$1.125 per share ("Special Stock"). The HET Board has the authority, without
further action by stockholders, to determine the rights, preferences and
privileges of the unissued Special Stock. Provisions could be included in the
shares of Special Stock, such as extraordinary voting, dividend, redemption or
conversion rights, which could discourage an unsolicited tender offer or
takeover proposal.
The HET Board has authorized that one special stock purchase right (a
"Right") be attached to each outstanding share of Common Stock. These Rights
are exercisable only if a person or group acquires 15% or more of the Common
Stock or announces a tender offer for 15% or more of the Common Stock. Each
Right entitles stockholders to buy one two-hundredth of a share (a "Unit") of
Series A Special Stock (the "Series A Stock") at a purchase price of $130.00 per
Unit, subject to certain antidilution adjustments (the "Purchase Price"). If a
person acquires 15% of more of the outstanding Common Stock, each Right entitles
its holder to purchase Common Stock having a market value at that time of twice
the Right's exercise price. Under certain conditions, each Right entitles its
holder to purchase stock of an acquiring company at a discount. Rights held by
the 15% owner will become void. The Rights will expire on October 5, 2006,
unless earlier redeemed by the HET Board at one cent per Right.
<PAGE>
PROHIBITED BUSINESS TRANSACTIONS
As a corporation organized under the laws of the State of Delaware, HET is
subject to Section 203 of the DGCL, which restricts certain business
combinations between HET and an "interested stockholder" (in general, a
stockholder owning 15% or more of the outstanding voting stock of HET) or such
stockholder's affiliates or associates for a period of three years following the
date on which the stockholder becomes an "interested stockholder." The
restrictions do not apply if: (i) prior to an interested stockholder becoming
such, the HET Board approves either the business combination or the transaction
by which such person became an interested stockholder; (ii) upon consummation of
the transaction, the interested stockholder owns at least 85% of the voting
stock of HET outstanding at the time the transaction commenced (excluding shares
owned by certain employee stock plans and persons who are both directors and
officers of HET); or (iii) at or subsequent to the time an interested
stockholder becomes such, the business combination is both approved by the HET
Board and authorized at an annual or special meeting of HET's stockholder by the
affirmative vote of at least two-thirds of the outstanding voting stock of HET
not owned by the interested stockholder.
The HET Certificate also prohibits business combinations with "Interested
Stockholders" and defines them to be anyone who is or intends to become the
beneficial owner of 10% or more of the voting stock of HET. Unless approved by
a majority of Continuing Directors (as defined in the HET Certificate) or the
Interested Stockholder satisfies a number of criteria relating to, among other
things, the consideration to be received by HET stockholders and the public
disclosure of the business combination, a proposed business combination with an
Interested Stockholder requires the affirmative vote of 75% of all the votes
entitled to be cast by holders of HET voting stock and not less than a majority
of votes entitled to be cast by holders of HET voting stock, excluding the votes
of the interested stockholder.
DESCRIPTION OF THE DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent to which such general
provisions may apply to the Debt Securities will be described in the Prospectus
Supplement relating to such Debt Securities.
The HET Debt Securities may be issued under an indenture and one or more
indentures supplemental thereto (the "HET Indenture") between HET and one or
more trustees, and the HOC Debt Securities may be issued under a separate
indenture and one or more indentures supplemental thereto (the "HOC Indenture")
between HOC, as obligor, HET, as guarantor, and one or more trustees. The HET
Indenture and the HOC Indenture are referred to collectively herein as the
"Indentures."
The terms of the Debt Securities include those stated in the Indentures and
those made part of the Indentures by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and holders of the Debt Securities
are referred to the Indentures and the Trust Indenture Act for a statement
thereof. A copy of the form of each Indenture is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Debt Securities and the Indentures, while
including a discussion of all material aspects or features thereof, do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Debt Securities and the Indentures,
including the definitions therein of certain terms which are not otherwise
defined in this Prospectus. Wherever particular provisions or defined terms of
the Indentures are referred to, such provisions or defined terms are
incorporated herein by reference. Certain capitalized terms used below but not
defined herein have the meanings ascribed to them in the Indentures.
GENERAL
The Indentures provide that the Debt Securities may be issued without limit
as to aggregate principal amount, in one or more series, in each case as
established from time to time in or pursuant to authority granted by a
resolution of the HET Board or the Board of Directors of HOC (the "HOC Board"),
as the case may be, or as established in one or more indentures supplemental to
the Indentures. All Debt Securities of one series need not be issued at the
same time and, unless otherwise provided, a series may be reopened, without the
consent of the holders of the Debt Securities of such series, for issuances of
additional Debt Securities of such series.
<PAGE>
The Indentures provide that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any trustee under
the Indentures (the "Trustee") may resign or be removed with respect to one or
more series of Debt Securities, and a successor Trustee may be appointed to act
with respect to such series. In the event that two or more persons are acting
as Trustees with respect to different series of Debt Securities, each such
Trustee shall be a Trustee of a trust under the Indentures separate and apart
from the trust administered by any other Trustee thereunder, and, except as
otherwise indicated herein, any action described herein to be taken by the
Trustee may be taken by each such Trustee with respect to, and only with respect
to, the one or more series of Debt Securities for which it is Trustee under the
Indentures.
Reference is made to the Prospectus Supplement relating to the series of Debt
Securities being offered for the specific terms thereof, including:
(1) The title of such Debt Securities;
(2) The aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(3) The percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion of
the principal amount thereof payable upon declaration of acceleration of the
maturity or upon redemption thereof and the rate or rates at which original
issue discount ("OID") will accrue;
(4) The date or dates on which the principal of such Debt Securities will
be payable (or the method by which such date or dates will be determined);
(5) The rate or rates (which may be fixed or variable) and, if applicable,
the method used to determine the rate, at which such Debt Securities will bear
interest, if any, the date or dates from which such interest will accrue, and
the circumstances, if any, in which HET or HOC, as the case may be, may defer
interest payments, the dates on which such interest shall be payable and the
record date for the interest payable on any interest payment date;
(6) The place or places where principal of, premium, if any, and interest
on such Debt Securities will be payable (or the method of such payment), and
such Debt Securities may be surrendered for conversion or registration of
transfer or exchange;
(7) The obligation, if any, of HET or HOC, as the case may be, to redeem
or purchase such Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of a holder thereof and the right, if any, of HET or
HOC, as the case may be, to redeem such Debt Securities and the period or
periods within which, the price or prices at which, and the terms and conditions
upon which, such Debt Securities may be redeemed;
(8) The denominations in which such Debt Securities are issuable, if other
than denominations of $1,000 and any integral multiple thereof;
(9) Whether such Debt Securities are to be issued at a discount and the
portion of the principal amount of such Debt Securities that shall be payable
upon acceleration, if other than the principal amount thereof;
(10) Provisions, if any, for the defeasance or discharge of certain
obligations with respect to such Debt Securities, which provisions may be in
addition to, in substitution for, or in modification of (or any combination of
the foregoing), the provisions of the Indentures;
(11) Whether such Debt Securities will be in registered or bearer form;
(12) The currency or currencies in which payment of principal of and
interest on such Debt Securities will be made;
(13) If payments of principal of, premium, if any, or interest on the Debt
Securities are to be made in currency other than the denominated currency, the
manner in which the exchange rate with respect to such payments will be
determined;
<PAGE>
(14) The manner in which the amounts of payment of principal of, premium,
if any, or interest on such Debt Securities will be determined, if such amounts
may be determined by reference to an index based on a currency or currencies
other than that in which such Debt Securities are denominated or designated to
be payable or by reference to a commodity, commodity index, stock exchange index
or financial index;
(15) Any addition to, or modification or deletion of, any Events of
Default or covenants set forth in the Indentures;
(16) A discussion of any material and/or special United States federal
income tax considerations applicable to such Debt Securities;
(17) Any depositaries, trustees, interest rate calculation agents,
exchange rate calculation agents or other agents with respect to the Debt
Securities other than those originally appointed;
(18) Whether such Debt Securities will be issued in the form of one or
more global securities and whether such global securities are to be issuable in
a temporary global form or permanent global form;
(19) Any rights of the holders of such Debt Securities to convert or
exchange such Debt Securities into or for other securities or property of HET or
HOC and, if so, the terms and conditions, which may be in addition to or in lieu
of the provisions contained in the Indentures, upon which such Debt Securities
will be convertible or exchangeable;
(20) The terms, if any, on which such Debt Securities will be subordinate
to other debt of HET or HOC, as the case may be;
(21) Any listing of the Debt Securities on a securities exchange;
(22) The provisions, if any, relating to any security provided for such
Debt Securities; and
(23) Any other terms of such Debt Securities, which other terms will not be
inconsistent with the provisions of the Indentures.
The Debt Securities may be sold at a discount below their principal amount.
Even if the Debt Securities are not issued at a discount below their principal
amount, such securities may, for United States federal income tax purposes, be
deemed to have been issued with OID because of certain interest payment
characteristics. Special United States federal income tax considerations
applicable to Debt Securities issued with OID will be described in more detail
in any applicable Prospectus Supplement. In addition, special United States
federal tax considerations or other restrictions or terms applicable to any Debt
Securities issuable in bearer form, offered exclusively to foreigners, or
denominated in a currency other than United States dollars will be set forth in
a Prospectus Supplement relating thereto.
GUARANTEE OF HOC DEBT SECURITIES
HET irrevocably and unconditionally will guarantee the payment of all
obligations of HOC under the HOC Debt Securities. If HOC defaults in the
payment of the principal of, premium, if any, or interest on such HOC Debt
Securities when and as the same shall become due, whether upon maturity,
acceleration, call for redemption or otherwise, without the necessity of action
by the Trustee or any holder of such HOC Debt Securities, HET shall be required
promptly and fully to make such payment. The Indentures provide for the release
of HET as guarantor of HOC Debt Securities in certain circumstances, including
(i) HOC ceases to be a wholly owned Subsidiary of HET, or (ii) a transfer by HOC
of all or substantially all of its assets or a merger of HOC which transfer or
merger is governed by the "Merger, Consolidation, or Sale of Assets" covenant,
and in connection with which the transferee entity assumes HOC's obligations
under the Indenture and such transfer or merger otherwise complies with the
requirements of such covenant.
HET conducts substantially all of its business through HOC and its
subsidiaries and does not own any material assets other than all of the stock of
HOC. HET's obligations under the guarantee are as a secondary obligor, and such
obligations are subordinated to all present and future senior indebtedness of
HET. HET is presently dependent on the receipt of dividends or other payments
from HOC to make payments on the guarantee of the HOC Debt Securities.
<PAGE>
EXCHANGE REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, payment
of principal, premium, if any, and any interest on the Debt Securities will be
registrable, at the office of the Trustee or at any other office or agency
maintained by HET or HOC, as the case may be, for such purpose subject to the
limitations of the Indenture. Unless otherwise indicated in the applicable
Prospectus Supplement, the Debt Securities will be issued in denominations of
U.S. $1,000 or integral multiples thereof. No service charge will be made for
any registration of transfer or exchange of the Debt Securities, but HET or HOC,
as the case may be, may require payment of a sum sufficient to cover any tax or
other governmental charge imposed in connection therewith.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities (the "Global Securities") that will be deposited with a
Depositary or its nominee identified in the applicable Prospectus Supplement.
In such a case, one or more Global Securities will be issued in a denomination
or aggregate denominations equal to the portion of the aggregate principal
amount of outstanding Debt Securities of the series to be represented by such
Global Securities. Each Global Security will be deposited with such Depositary
or nominee or a custodian therefor and will bear a legend regarding the
restrictions on exchanges and registration of transfer thereof referred to below
and any such other matters as may be provided for pursuant to the applicable
Indenture.
Notwithstanding any provision of the Indenture or any Debt Security described
herein, no Global Security may be transferred to, or registered or exchanged for
Debt Securities registered in the name of, any person or entity other than the
Depositary for such Global Security or any nominee of such Depositary, and no
such transfer may be registered, unless (i) the Depositary has notified HET or
HOC, as the case may be, that it is unwilling or unable to continue as
Depositary for such Global Security or has ceased to be qualified to act as such
as required by the applicable Indenture, (ii) HET or HOC, as the case may be,
executes and delivers to the Trustee an order that such Global Security shall be
so transferable, registrable and exchangeable, and such transfers shall be
registrable, or (iii) there shall exist such circumstances, if any, as may be
described in the applicable Prospectus Supplement. All Debt Securities issued
in exchange for a Global Security or any portion thereof will be registered in
such names as the Depositary may direct.
The specific terms of the Depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement. HET and HOC expect that the
following provisions will apply to Depositary arrangements:
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security registered
in the name of such Depositary or its nominee. Upon the issuance of such Global
Security, and the deposit of such Global Security with or on behalf of the
Depositary for such Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by HET or HOC, as the case may
be, if such Debt Securities are offered and sold directly by HET or HOC.
Ownership of beneficial interests in such Global Security will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests by participants in such Global Security will be shown
on, and the transfer of that ownership interest will be effected only through,
records maintained by the Depositary or its nominee for such Global Security.
Ownership of beneficial interests in such Global Security by persons that hold
through participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement,
owners of beneficial interests in such Global Security will not be entitled to
have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certified form and will not be
considered the holders thereof for any purposes under the Indenture.
Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Depositary and,
<PAGE>
if such person is not a participant, on the procedures of the participant
through which such person owns its interest, to exercise any rights of a holder
under the Indenture. If the Company requests any action of holders or if an
owner of a beneficial interest in such Global Security desires to give any
notice or take any action a holder is entitled to give or take under the
Indenture, the Depositary will authorize the participants to give such notice or
take such action, and participants would authorize beneficial owners owning
through such participants to give such notice or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
Notwithstanding any other provisions to the contrary in the Indenture, the
rights of the beneficial owners of the Debt Securities to receive payment of the
principal and premium, if any, of and interest on such Debt Securities, on or
after the respective due dates expressed in such Debt Securities, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
beneficial owners.
Principal of and any interest on a Global Security will be payable in the
manner described in the applicable Prospectus Supplement.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indentures provide that HET or HOC, as the case may be, may not
consolidate or merge with or into, or sell, assign, convey, transfer or lease
its properties and assets substantially in their entirety (computed on a
consolidated basis) to, another corporation, person or entity unless (i) either
(a) in the case of a merger or consolidation, HET or HOC, as the case may be, is
the surviving person or (b) the successor or transferee is a corporation
organized under the laws of the United States, any state thereof or the District
of Columbia and expressly assumes, by supplemental indenture, all the
obligations of HET or HOC, as the case may be, under the Debt Securities and the
Indentures, and (ii) immediately after such transaction no Default or Event of
Default shall exist.
EVENTS OF DEFAULT
Unless otherwise specified in the applicable Prospectus Supplement, the
following will constitute Events of Default under the Indentures with respect to
Debt Securities of any series: (a) failure to pay principal of any Debt
Security of that series when due and payable at maturity, upon redemption or
otherwise or failure to deposit a sinking fund payment when and as due in
respect of any Debt Security of that series; (b) failure to pay any interest on
any Debt Security of that series when due, and the Default continues for
30 days; (c) default in the performance, or breach, of any covenant or warranty
of HET or HOC, as the case may be, in the Indenture (other than a covenant or
warranty that has been included in the Indenture solely for the benefit of a
series of Debt Securities other than that series), which default continues
uncured for a period of 60 days after written notice to HET or HOC, as the case
may be, by the applicable Trustee or to HET or HOC, as the case may be, and the
applicable Trustee by the holders of at least 25% in principal amount of the
outstanding Debt Securities of that series as provided in the Indenture; (d) the
acceleration of the maturity of any indebtedness of HET or HOC, as the case may
be, (other than Non-recourse Indebtedness (as defined below)), at any one time,
in an amount in excess of the greater of (i) $25 million and (ii) 5% of
Consolidated Net Tangible Assets (as defined below), if such acceleration is not
annulled within 30 days after written notice to HET or HOC, as the case may be,
by the Trustee and the holders of at least 25% in principal amount of the
outstanding Debt Securities of that series; and (e) certain events of
bankruptcy, insolvency or reorganization. The Prospectus Supplement may provide
for any other Event of Default with respect to Debt Securities of that
particular series.
"Non-recourse Indebtedness" means indebtedness the terms of which provide
that the lender's claim for repayment of such indebtedness is limited solely to
a claim against the property which secures such indebtedness.
"Consolidated Net Tangible Assets" means the total amount of assets
(including investments in joint ventures) of HET or HOC, as the case may be, and
its subsidiaries (less applicable depreciation, amortization and other valuation
reserves) after deducting therefrom (a) all current liabilities of it and its
subsidiaries (excluding (i) the current portion of long-term indebtedness, (ii)
intercompany liabilities and (iii) any liabilities which are by their terms
renewable or extendible at the option of the obligor thereon to a time more than
12 months from the time as of which the amount thereof is being computed) and
(b) all goodwill, trade names, trademarks, patents, unamortized debt discount
and any other like intangibles, all as set forth on the consolidated balance
sheet of HET or HOC, as the case may be, for the most recently completed fiscal
quarter for which financial statements are available and computed in accordance
with generally accepted accounting principles.
If an Event of Default with respect to outstanding Debt Securities of any
series (other than an Event or Default relating to certain events of bankruptcy,
insolvency or reorganization) shall occur and be continuing, either the Trustee
or the holders of at least 25% in principal amount of the outstanding Debt
Securities of that series by notice, as provided in the Indenture, may declare
the unpaid principal amount (or, if the Debt Securities of that series initially
were issued at a discount, such lesser amount
<PAGE>
as may be specified in the terms of that series) of, and any accrued and unpaid
interest on, all Debt Securities of that series to be due and payable
immediately. However, at any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment or
decree based on such acceleration has been obtained, the holders of a majority
in principal amount of the outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration. For information as
to waiver of defaults, see "Modification and Waiver" below.
The Indenture will provide that, subject to the duty of the Trustee during an
Event of Default to act with the required standard of care, the Trustee will be
under no obligation to exercise any of its rights or powers under the applicable
Indenture at the request or direction of any of the holders, unless such holders
shall have offered to the Trustee reasonable security or indemnity. Subject to
certain provisions, including those requiring security or indemnification of the
Trustee, the holders of a majority in principal amount of the outstanding Debt
Securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the Debt
Securities of that series.
HET or HOC, as the case may be, will be required to furnish to the Trustee
under the Indenture annually a statement as to the performance by HET or HOC, as
the case may be, of its obligations under that Indenture and as to any default
in such performance.
MODIFICATION AND WAIVER
Subject to certain exceptions, HET or HOC, as the case may be, and the
Trustee may amend the Indenture or the Debt Securities with the written consent
of the holders of a majority in principal amount of the then outstanding Debt
Securities of each series affected by the amendment with each series voting as a
separate class. The holders of a majority in principal amount of the then
outstanding Debt Securities of any series may also waive compliance in a
particular instance by HET or HOC, as the case may be, with any provision of the
Indenture with respect to the Debt Securities of that series; provided, however,
that without the consent of each holder of Debt Securities affected, an
amendment or waiver may not (i) reduce the percentage of the principal amount of
Debt Securities whose holders must consent to an amendment or waiver; (ii)
reduce the rate or change the time for payment of interest on any Debt Security
(including default interest); (iii) reduce the principal of or premium, if any,
or change the fixed maturity of any Debt Security, reduce the amount of, or
postpone the date fixed for, redemption or the payment of any sinking fund or
analogous obligation with respect thereto or reduce the portion of the principal
amount payable upon acceleration of the maturity of any Debt Securities issued
at a discount; (iv) make any Debt Security payable in currency other than that
stated in the Debt Security; (v) make any change in the provisions concerning
waivers of Default or Events of Default by holders or the rights of holders to
recover the principal of, premium, if any, or interest on, any Debt Security; or
(vi) waive a default in the payment of the principal of, or interest on, any
Debt Security, except as otherwise provided in the Indenture. HET or HOC, as
the case may be, and the Trustee may amend the Indenture or the Debt Securities
without notice to or the consent of any holder of a Debt Security: (i) to cure
any ambiguity, defect or inconsistency; (ii) to comply with the Indenture's
provisions with respect to successor corporations; (iii) to comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the Trust Indenture Act; (iv) to provide for certificated or
unregistered Debt Securities and to make all appropriate changes for such
purpose; (v) to add to, change or eliminate any of the provisions of the
Indenture in respect of one of more series of Debt Securities, provided,
however, that any such addition, change or elimination (A) shall neither (1)
apply to any Debt Security of any series created prior to the execution of such
amendment and entitled to the benefit of such provision, nor (2) modify the
rights of a holder of any such Debt Security with respect to such provision, or
(B) shall become effective only when there is no outstanding Debt Security of
any series created prior to such amendment and entitled to the benefit of such
provision; (vi) to make any change that does not adversely affect in any
material respect the interest of any holder; or (vii) to establish additional
series of Debt Securities as permitted by the Indenture.
The holders of a majority in principal amount of the then outstanding Debt
Securities of any series, by notice to the Trustee, may waive an existing
Default or Event of Default and its consequences except a Default or Event of
Default in the payment of the principal of, or any interest on, any Debt
Security with respect to the Debt Securities of that series; PROVIDED, HOWEVER,
that the holders of a majority in principal amount of the outstanding Debt
Securities of any series may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration.
DEFEASANCE OF DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
DEFEASANCE AND DISCHARGE. The Indentures provide that HET or HOC, as the
case may be, may be discharged from any and all obligations in respect of the
Debt Securities of any series (except for certain obligations to pay additional
amounts, if any, upon the occurrence of certain tax, assessment or governmental
charge events with respect to payments on such Debt Securities, to register the
transfer or exchange of Debt Securities of such series, to replace stolen, lost
or mutilated
<PAGE>
Debt Securities of such series, to maintain paying agencies and to hold money
for payment in trust) upon the irrevocable deposit with the Trustee, in trust,
of money and/or government obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide money
in an amount sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay and discharge each installment of
principal (and premium, if any) and interest on, and any mandatory sinking fund
payments in respect of, the Debt Securities of such series on the dates such
payments are due. Such discharge may occur only if, among other things, the
Company shall have delivered to the Trustee an opinion of counsel or a ruling
from the United States Internal Revenue Service (an "IRS Ruling"), in either
case to the effect that holders of the Debt Securities of such series will not
recognize income, gain or loss for United States Federal income tax purposes as
a result of such deposit, defeasance and discharge.
DEFEASANCE OF CERTAIN COVENANTS. Upon compliance with certain conditions,
HET or HOC, as the case may be, may omit to comply with certain restrictive
covenants contained in the Indentures (or, if provided for in the applicable
Prospectus Supplement, any other restrictive covenant relating to any series of
Debt Securities provided for in a Board Resolution or supplemental indenture
which, by its terms may be defeased pursuant to the terms of such series of Debt
Securities) and any omission to comply with such obligations shall not
constitute a Default or Event of Default with respect to any Debt Securities.
The conditions include, among others: the deposit with the Trustee of money
and/or government obligations that, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide money
in an amount sufficient in the opinion of a nationally recognized firm of
independent public accountants to pay principal, premium, if any, and interest
on and any mandatory sinking fund payments in respect of the Debt Securities of
such series on the dates such payments are due; and the delivery to the Trustee
of an opinion of counsel or an IRS Ruling to the effect that the holders of the
Debt Securities of such series will not recognize income, gain or loss for
United States federal income tax purposes as a result of such deposit and
related covenant defeasance.
LIMITED LIABILITY OF CERTAIN PERSONS
The Indentures provide that no stockholder, incorporator, employee officer or
director, as such, past, present or future of HET or HOC, as the case may be,
its affiliates or any successor corporation shall have any personal liability in
respect of the obligations of HET or HOC, as the case may be, under the
Indentures or the Debt Securities by reason of his, her or its status as such
stockholder, incorporator, employee officer or director.
MANDATORY DISPOSITION PURSUANT TO GAMING LAWS
The casino entertainment operations of HET and HOC are subject to extensive
regulation by federal, state and local authorities in several jurisdictions.
See "Business and Properties -- Governmental Regulation" in the 1997 HET Form
10-K, incorporated by reference herein. The Indentures provide that each
holder, by accepting any of the Debt Securities subject thereto, shall be deemed
to have agreed that if the gaming authority of any jurisdiction of which HET or
HOC, as the case may be, or any of its subsidiaries conducts or proposes to
conduct gaming requires that a person who is a holder or the beneficial owner of
the Debt Securities of a holder must be licensed, qualified or found suitable
under applicable gaming laws, such holder or beneficial owner, as the case may
be, shall apply for a license, qualification or a finding of suitability within
the required time period. If such person fails to apply or become licensed or
qualified or is found unsuitable, HET or HOC, as the case may be, shall have the
right, at its election, (i) to require such person to dispose of its Debt
Securities or beneficial interest therein within 30 days of receipt of notice of
such election or such earlier date as may be requested or prescribed by such
gaming authority or (ii) to redeem such Debt Securities at a redemption price
equal to the lesser of (A) such person's cost or (B) 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the earlier of the
redemption date or the date of the finding of unsuitability, which may be less
than 30 days following the notice of redemption if so requested or prescribed by
the applicable gaming authority. HET or HOC, as the case may be, shall notify
the Trustee in writing of any such redemption as soon as practicable. HET or
HOC, as the case may be, shall not be responsible for any costs or expenses any
such holder may incur in connection with its application for a license,
qualification or a finding of suitability. The Indentures will require the
Trustee to report the names of the record holders of the Debt Securities to any
gaming authority when required by law.
<PAGE>
CONVERSION AND EXCHANGE RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into or exchangeable for other securities or property of HET or HOC
will be set forth in the applicable Prospectus Supplement relating thereto.
Such terms will include whether such Debt Securities are convertible into or
exchangeable for other securities or property of HET or HOC, the conversion or
exchange price (or manner of calculation thereof), the conversion or exchange
period, provisions as to whether conversion or exchange will be at the option of
the holders of such Debt Securities, the events requiring an adjustment of the
conversion or exchange price and provisions affecting conversion or exchange in
the event of the redemption of such Debt Securities.
DESCRIPTION OF THE PREFERRED STOCK
The description of Preferred Stock set forth below does not purport to be
complete and is qualified in its entirety by reference to the respective
Certificates of Incorporation and Bylaws of HET or HOC, as applicable. The
particular terms of a series of Preferred Stock offered by any Prospectus
Supplement will be described in the Prospectus Supplement relating to such
series.
GENERAL
The HET Certificate authorizes the issuance of 150,000 shares of HET
Preferred Stock with a par value of $100.00 per share, none of which was
outstanding as of the date of this Prospectus. HOC's Certificate of
Incorporation (the "HOC Certificate") authorizes the issuance of 1,000,000
shares of Preferred Stock with a par value of $.10 per share, none of which was
outstanding as of the date of this Prospectus. Shares of HET Preferred Stock
and HOC Preferred Stock may be issued from time to time, in one or more series,
as authorized by the HET Board and the HOC Board, respectively. Prior to
issuance of shares of each series, the HET Board or the HOC Board, as the case
may be, is required by their respective Certificates of Incorporation to fix for
each series the terms, preferences, rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or
conditions of redemptions. The Preferred Stock will, when issued, be fully paid
and nonassessable and will have no preemptive rights.
TERMS
The following description of the Preferred Stock sets forth certain general
terms and provisions of the Preferred Stock to which any Prospectus Supplement
may relate. The statements below describing the Preferred Stock are in all
respects subject to and qualified in their entirety by reference to the
applicable provisions of the respective Certificates of Incorporation and Bylaws
of HET or HOC and any applicable amendments thereto designating terms of a
series of Preferred Stock (a "Designating Amendment").
Reference is made to the Prospectus Supplement relating to the Preferred
Stock offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered, the
liquidation preference per share and the offering price of such
Preferred Stock;
(3) The dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred
Stock;
(4) The date from which dividends on such Preferred Stock shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Stock;
(6) The provision for a sinking fund, if any, for such Preferred
Stock;
<PAGE>
(7) The provision for redemption, if applicable, of such Preferred
Stock;
(8) Any listing of such Preferred Stock on any securities exchange;
(9) The voting rights, if any, of such Preferred Stock;
(10) Any rights of the holders of such Preferred Stock to convert or
exchange such Preferred Stock into or for other securities or
property of HET or HOC and, if so, the terms and conditions upon
which such Preferred Stock will be convertible or exchangeable;
(11) A discussion of federal income tax considerations applicable to
such Preferred Stock;
(12) The relative ranking and preference of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or
winding up of the affairs of HET or HOC, as the case may be;
(13) Any limitations on issuance of any series of Preferred Stock
ranking senior to or on a parity with such series of Preferred
Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of HET or HOC, as the
case may be;
(14) Whether dividends are payable in additional shares of Preferred
Stock; and
(15) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock.
RANK
Unless otherwise specified in a Prospectus Supplement, the Preferred Stock of
HET or HOC will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of HET or HOC, as the case may be, rank (i) senior to
all equity securities ranking junior to such Preferred Stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of HET or
HOC, as the case may be; (ii) on a parity with all equity securities issued by
the terms of which specifically provide that such equity securities rank on a
parity with such Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of HET or HOC, as the case may be; and
(iii) junior to all equity securities issued by HET or HOC, as the case may be,
the terms of which specifically provide that such equity securities rank senior
to such Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of HET or HOC, as the case may be. The
term "equity securities" does not include convertible debt securities.
GAMING REDEMPTION
Each of the Certificates of Incorporation of HET and HOC provide that any of
its equity securities can be redeemed by HET or HOC, as the case may be, if,
among other circumstances, in the judgment of the HET Board or the HOC Board, as
the case may be, such redemption is necessary to avoid any regulatory sanctions
against, or to prevent the loss of, or to secure the reinstatement of any
license, franchise or entitlement from any governmental agency held by it or any
of its affiliates, or any entity in which HET or HOC, as the case may be, or an
affiliate is an owner, which license, franchise or entitlement is (i) needed to
conduct any portion of the business of HET or HOC, as the case may be, any such
affiliate or other entity or which license, franchise or entitlement is
conditioned upon some or all of the holders of such security possessing
prescribed qualifications; or (ii) needed to allow the conduct of any portion of
the business of HET or HOC, as the case may be, or any such affiliate or other
entity.
GUARANTEE OF HOC PREFERRED STOCK
HET will irrevocably and unconditionally agree, to the extent set forth
herein, to pay in full to the holders of the HOC Preferred Stock of any series,
the Guarantee Payments (as defined below) (except to the extent paid by HOC), as
and when due, regardless of any defense, right of set-off or counterclaim which
HOC may have or assert. The following payments to the extent not paid by HOC
(the "Guarantee Payments") will be subject to such guarantee (without
duplication): (i) any accumulated and unpaid dividends which have been
theretofore declared on the HOC Preferred Stock of such series out of
<PAGE>
funds legally available therefor, (ii) the redemption price (including all
accumulated unpaid dividends) payable out of funds legally available therefor
with respect to HOC Preferred Stock of any series called for redemption by HOC
and (iii) upon the liquidation of HOC, the lesser of (a) the aggregate of the
stated liquidation preference and all accumulated and unpaid dividends (whether
or not declared) to the date of payment and (b) the amount of assets of HOC
legally available for distribution to holders of HOC Preferred Stock of such
series in liquidation. HET's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by HET to the holders of HOC
Preferred Stock of any series or by causing HOC to pay such amounts to such
holders.
In connection with the guarantee of HOC Preferred Stock, HET will covenant
that, so long as any shares of HOC Preferred Stock of any series remain
outstanding, neither HET nor any majority owned subsidiary of HET will declare
or pay any dividend on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of HET's capital stock or make any guarantee
payments with respect to the foregoing (other than payments under its guarantee
of HOC Preferred Stock, redemptions described under "Description of Common
Stock--Redemption," payments to redeem common share purchase rights under HET's
stockholder rights plan dated October 5, 1996, as amended, or the declaration of
a dividend of similar share purchase rights in the future), if at such time, HET
will be in default with respect to its payment or other obligations under such
guarantee.
HET's guarantee of HOC Preferred Stock will constitute an unsecured
obligation of HET and will rank (i) subordinate and junior in right of payment
to all other liabilities of HET, (ii) pari passu with the most senior preferred
stock hereafter issued by HET and with any guarantee now or hereafter entered
into by HET in respect of any preferred or preference stock of any affiliate of
HET and (iii) senior to HET's common stock. For purposes of clause (ii), pari
passu means that any payments to which beneficiaries of HET's guarantee of HOC
Preferred Stock are entitled must be shared with holders of any preferred or
preference stock to which such guarantee is stated to be pari passu ("Pari Passu
Stock") to the same extent as would be required under applicable law if instead
such guarantee constituted a class of preferred or preference stock of HET
ranking pari passu with such Pari Passu Stock as to such payments.
HET's guarantee of HOC Preferred Stock will constitute a guarantee of payment
and not of collection. Accordingly, a holder of HOC Preferred Stock may enforce
such guarantee directly against HET, and HET will waive any right or remedy to
require that any action be brought against HOC or any other person or entity
before proceeding against HET. HET's guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by HOC.
Since HET is a holding company, the rights of HET, and hence the rights of
creditors of HET (including the rights of holders of Preferred Stock under HET's
guarantee of HOC Preferred Stock), to participate in any distribution of the
assets of any subsidiary upon its liquidation or reorganization or otherwise is
necessarily subject to the prior claims of creditors of the subsidiary, except
to the extent that claims of HET itself as a creditor of the subsidiary may be
recognized.
CONVERSION AND EXCHANGE RIGHTS
The terms and conditions, if any, upon which shares of any series of
Preferred Stock are convertible into or exchangeable for other securities or
property of HET or HOC will be set forth in the applicable Prospectus Supplement
relating thereto. Such terms will include whether such Preferred Stock is
convertible into or exchangeable for other securities or property of HET or HOC,
the conversion or exchange price (or manner of calculation thereof), the
conversion or exchange period, provisions as to whether conversion or exchanges
will be at the option of the holders of such Preferred Stock, the events
requiring an adjustment of the conversion or exchange price and provisions
affecting conversion or exchange in the event of the redemption of such
Preferred Stock.
DEPOSITARY SHARES
GENERAL
HET or HOC may issue receipts ("Depositary Receipts") for Depositary Shares,
each of which will represent a fractional interest of a share of a particular
series of their respective Preferred Stock, as specified in the applicable
Prospectus Supplement. Shares of Preferred Stock of each series represented by
Depositary Shares will be deposited under a separate Deposit Agreement (each, a
"Deposit Agreement") among HET or HOC, as the case may be, the depositary named
therein
<PAGE>
(the "Preferred Stock Depositary") and the holders from time to time of the
Depositary Receipts. Subject to the terms of the Deposit Agreement, each owner
of a Depositary Receipt will be entitled, in proportion to the fractional
interest of a share of a particular series of Preferred Stock represented by the
Depositary Shares evidenced by such Depositary Receipt, to all the rights and
preferences of the Preferred Stock represented by such Depositary Shares
(including dividend, voting, conversion, exchange, redemption and liquidation
rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the applicable Deposit Agreement. Immediately following the
issuance and delivery of the Preferred Stock to the Preferred Stock Depositary,
HET or HOC, as the case may be, will cause the Preferred Stock Depositary to
issue, on behalf of HET or HOC, the Depositary Receipts. Copies of the
applicable form of Deposit Agreement and Depositary Receipt may be obtained from
HET upon request, and the statements made hereunder relating to the Deposit
Agreement and the Depositary Receipts to be issued thereunder are summaries of
certain provisions thereof and do not purport to be complete and are subject to,
and qualified in their entirety by reference to, all of the provisions of the
applicable Deposit Agreement and related Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the Preferred Stock to the record
holders of Depositary Receipts evidencing the related Depositary Shares in
proportion to the number of such Depositary Receipts owned by such holders,
subject to certain obligations of holders to file proofs, certificates and other
information and to pay certain charges and expenses to the Preferred Stock
Depositary.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Receipts entitled thereto, subject to certain obligations of holders
to file proofs, certificates and other information and to pay certain charges
and expenses to the Preferred Stock Depositary, unless the Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of HET or HOC,
as the case may be, sell such property and distribute the net proceeds from such
sale to such holders.
No distribution will be made in respect of any Depositary Share to the extent
that it represents any Preferred Stock converted into other securities.
WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Stock Depositary (unless the related Depositary Shares have
previously been called for redemption or converted into other securities), the
holders thereof will be entitled to delivery at such office, to or upon such
holder's order, of the number of whole or fractional shares of the Preferred
Stock and any money or other property represented by the Depositary Shares
evidenced by such Depositary Receipts. Holders of Depositary Receipts will be
entitled to receive whole or fractional shares of the related Preferred Stock on
the basis of the proportion of Preferred Stock represented by such Depositary
Share as specified in the applicable Prospectus Supplement, but holders of such
shares of Preferred Stock will not thereafter be entitled to receive Depositary
Shares therefor. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of Depositary Shares
representing the number of shares of Preferred Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever HET or HOC, as the case may be, redeems shares of Preferred Stock
held by the Preferred Stock Depositary, the Preferred Stock Depositary will
redeem as of the same redemption date the number of Depositary Shares
representing shares of the Preferred Stock so redeemed, provided HET or HOC, as
the case may be, shall have paid in full to the Preferred Stock Depositary the
redemption price of the Preferred Stock to be redeemed plus an amount equal to
any accrued and unpaid dividends thereon to the date fixed for redemption. The
redemption price per Depositary Share will be equal to the corresponding
proportion of the redemption price and any other amounts per share payable with
respect to the Preferred Stock. If fewer than all the Depositary Shares are to
be redeemed, the Depositary Shares to be redeemed will be selected pro
<PAGE>
rata (as nearly as may be practicable without creating fractional Depositary
Shares) or by any other equitable method determined by HET or HOC.
From and after the date fixed for redemption, all dividends in respect of the
shares of Preferred Stock so called for redemption will cease to accrue, the
Depositary Shares so called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the Depositary Receipts evidencing
the Depositary Shares so called for redemption will cease, except the right to
receive any moneys payable upon such redemption and any money or other property
to which the holders of such Depositary Receipts were entitled upon such
redemption and surrender thereof to the Preferred Stock Depositary.
VOTING OF THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Preferred Stock Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Receipts evidencing the Depositary Shares which represent such
Preferred Stock. Each record holder of Depositary Receipts evidencing
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled to instruct the Preferred Stock
Depositary as to the exercise of the voting rights pertaining to the amount of
Preferred Stock represented by such holder's Depositary Shares. The Preferred
Stock Depositary will vote the amount of Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and HET or HOC, as the
case may be, will agree to take all reasonable action which may be deemed
necessary by the Preferred Stock Depositary in order to enable the Preferred
Stock Depositary to do so. The Preferred Stock Depositary will abstain from
voting the amount of Preferred Stock represented by such Depositary Shares to
the extent it does not receive specific instructions from the holders of
Depositary Receipts evidencing such Depositary Shares. The Preferred Stock
Depositary shall not be responsible for any failure to carry out any instruction
to vote, or for the manner or effect of any such vote made, as long as such
action or non-action is in good faith and does not result from negligence or
willful misconduct of the Preferred Stock Depositary.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of HET or HOC, as
the case may be, whether voluntary or involuntary, the holders of each
Depositary Receipt will be entitled to the fraction of the liquidation
preference accorded each share of Preferred Stock represented by the Depositary
Shares evidenced by such Depositary Receipt, as set forth in the applicable
Prospectus Supplement.
CONVERSION AND EXCHANGE RIGHTS
The Depositary Shares, as such, are not convertible into or exchangeable for
any securities or property of HET or HOC. Nevertheless, if so specified in the
applicable Prospectus Supplement relating to an offering of Depositary Shares,
the Depositary Receipts may be surrendered by holders thereof to the Preferred
Stock Depositary with written instructions to the Preferred Stock Depositary to
instruct HET or HOC, as the case may be, to cause conversion or exchange of the
Preferred Stock represented by the Depositary Shares evidenced by such
Depositary Receipts into or for other securities or property of HET or HOC, and
each of HET and HOC has agreed that upon receipt of such instructions and any
amounts payable in respect thereof, it will cause the conversion or exchange
thereof utilizing the same procedures as those provided for delivery of
Preferred Stock to effect such conversion. If the Depositary Shares evidenced
by a Depositary Receipt are to be converted or exchanged in part only, a new
Depositary Receipt or Receipts will be issued for any Depositary shares not to
be converted or exchanged. No fractional shares of Common Stock will be issued
upon conversion or exchange, and if such conversion or exchange would result in
a fractional share being issued, an amount will be paid in cash by HET or HOC,
as the case may be, equal to the value of the fractional interest based upon the
closing price of the Common Stock on the last business day prior to the
conversion or exchange.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares which
represent the Preferred Stock and any provision of the Deposit Agreement may at
any time be amended by agreement between HET or HOC, as the case may be, and the
Preferred Stock Depositary. However, any amendment that materially and
adversely alters the rights of the holders of Depositary Receipts or that would
be materially and adversely inconsistent with the rights granted to the holders
of the
<PAGE>
related Preferred Stock will not be effective unless such amendment has been
approved by the existing holders of at least 66 2/3% of the Depositary Shares
evidenced by the Depositary Receipts then outstanding. No amendment shall
impair the right, subject to certain exceptions in the Depositary Agreement,
of any holder of Depositary Receipts to surrender any Depositary Receipt with
instructions to deliver to the holder the related Preferred Stock and all
money and other property, if any, represented thereby, except in order to
comply with law. Every holder of an outstanding Depositary Receipt at the
time any such amendment becomes effective shall be deemed, by continuing to
hold such Receipt, to consent and agree to such amendment and to be bound by
the Deposit Agreement as amended thereby.
The Deposit Agreement may be terminated by HET or HOC, as the case may be,
upon not less that 30 days' prior written notice to the Preferred Stock
Depositary if a majority of each series of Preferred Stock affected by such
termination consents to such termination, whereupon the Preferred Stock
Depositary shall deliver or make available to each holder of Depositary
Receipts, upon surrender of the Depositary Receipts held by such holder, such
number of whole or fractional shares of Preferred Stock as are represented by
the Depositary Shares evidenced by such Depositary Receipts together with any
other property held by the Preferred Stock Depositary with respect to such
Depositary Receipt. In addition, the Deposit Agreement will terminate
automatically if (i) all outstanding Depositary Shares shall have been redeemed,
(ii) there shall have been a final distribution in respect of the related
Preferred Stock in connection with any liquidation, dissolution or winding up of
HET or HOC, as the case may be, and such distribution shall have been
distributed to the holders of Depositary Receipts evidencing the Depositary
Shares representing such Preferred Stock or (iii) each share of the related
Preferred Stock shall have been converted into securities of HET or HOC not so
represented by Depositary Shares.
CHARGES OF PREFERRED STOCK DEPOSITARY
HET or HOC, as the case may be, will pay all transfer and other taxes and
governmental charges arising solely from the existence of the Deposit Agreement.
In addition, HET or HOC, as the case may be, will pay the fees and expenses of
the Preferred Stock Depositary in connection with the performance of its duties
under the Deposit Agreement. However holders of Depositary Receipts will pay
the fees and expenses of the Preferred Stock Depositary for any duties requested
by such holders to be performed which are outside of those expressly provided
for in the Deposit Agreement.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to HET or
HOC, as the case may be, notice of its election to do so, and HET or HOC, as the
case may be, may at any time remove the Preferred Stock Depositary, any such
resignation or removal to take effect upon the appointment of a successor
Preferred Stock Depositary. A successor Preferred Stock Depositary must be
appointed within 60 days after delivery of the notice of resignation or removal
and must be a bank or trust company having its principal office in the United
States and having a combined capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward to holders of Depositary Receipts
any reports and communications from HET or HOC, as the case may be, which are
received by the Preferred Stock Depositary with respect to the related Preferred
Stock.
Neither the Preferred Stock Depositary nor HET or HOC, as the case may be,
will be liable if it is prevented from or delayed in, by law or any
circumstances beyond its control, performing its obligations under the Deposit
Agreement. The obligations of HET or HOC, as the case may be, and the Preferred
Stock Depositary under the Deposit Agreement will be limited to performing their
duties thereunder in good faith and without negligence (in the case of any
action or inaction in the voting of Preferred Stock represented by the
Depositary Shares), gross negligence or willful misconduct, and HET or HOC, as
the case may be, and the Preferred Stock Depositary will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Receipts,
Depositary Shares or shares of Preferred Stock represented thereby unless
satisfactory indemnity is furnished. HET or HOC, as the case may be, and the
Preferred Stock Depositary may rely on written advice of counsel or accountants,
or information provided by persons presenting shares of Preferred Stock
represented thereby for deposit, holders of Depositary Receipts or other persons
believed in good faith to be competent to give such information, and on
documents believed in good faith to be genuine and signed by a proper party.
<PAGE>
PLAN OF DISTRIBUTION
HET and HOC may sell the Securities to one or more underwriters for public
offering and sale by them and may also sell the Securities to investors directly
or through agents. Any such underwriter, or agent involved in the offer and
sale of Securities will be named in the applicable Prospectus Supplement. HET
and HOC reserve the right to sell or exchange Securities directly to investors
on its own behalf in those jurisdictions where and in such manner as it is
authorized to do so.
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. Sales of Common Stock
offered hereby may be effected from time to time in one or more transactions
on the NYSE or in negotiated transactions or a combination of such methods.
HET and HOC may also, from time to time, authorize dealers, acting as agents
of HET and HOC, as the case may be, to offer and sell Securities upon the
terms and conditions as are set forth in the applicable Prospectus
Supplement. In connection with the sale of Securities, underwriters may
receive compensation from HET or HOC in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of the
Securities for whom they may act as agent. Underwriters may sell Securities
to or through dealers, and such dealers may receive compensation in the form
of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent. Any such
underwriter, dealer or agent will be identified, and any such compensation
received from HET or HOC will be described, in a Prospectus Supplement.
Unless otherwise indicated in a Prospectus Supplement, an agent will be
acting on a best efforts basis and a dealer will purchase Securities as a
principal, and may then resell such Securities at varying prices to be
determined by the dealer.
Any underwriting compensation paid by HET or HOC to underwriters or agents in
connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set forth
in the applicable Prospectus Supplement. Dealers and agents participating in
the distribution of Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of the Securities may be deemed to be underwriting discounts and
commissions. Underwriters, dealers and agents may be entitled, under agreements
entered into with HET or HOC, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act, and
to reimbursement by HET or HOC for certain expenses.
To facilitate an offering of a series of Securities, certain persons
participating in the offering may engage in transactions that stabilize,
maintain, or otherwise affect the price of the Securities. This may include
over-allotments or short sales of the Securities, which involves the sale by
persons participating in the offering of more Securities than have been sold to
them by HET or HOC. In such circumstances, such persons would cover such
over-allotments or short positions by purchasing in the open market or by
exercising the over-allotment option granted to such persons. In addition, such
persons may stabilize or maintain the price of the Securities by bidding for or
purchasing Securities in the open market or by imposing penalty bids, whereby
selling concessions allowed to dealers participating in any such offering may be
reclaimed if Securities sold by them are repurchased in connection with
stabilization transactions. The effect of these transactions may be to
stabilize or maintain the market price of the Securities at a level above that
which might otherwise prevail in the open market. Such transactions, if
commenced, may be discontinued at any time.
LEGAL MATTERS
Certain legal matters with respect to the Securities offered hereby will be
passed upon for HET and HOC by Latham & Watkins and E. O. Robinson, Jr., Senior
Vice President and General Counsel of HET and HOC.
EXPERTS
The audited financial statements and schedules incorporated by reference in
this Prospectus and in the Registration Statement, to the extent and for the
periods indicated in their reports, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below is an estimate of the fees and expenses, other than
underwriting discounts and commissions, payable and reimbursable by the
Company in connection with the issuance and distribution of the offered
Securities.
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . $221,250
Accountants' fees and expenses . . . . . . . . . . . . *
Legal fees and expenses (other than Blue Sky). . . . . *
Blue Sky Fees and expenses . . . . . . . . . . . . . . *
Printing and engraving expenses. . . . . . . . . . . . *
Trustee's and registrar's fees and expenses. . . . . . *
Miscellaneous. . . . . . . . . . . . . . . . . . . . . *
Total. . . . . . . . . . . . . . . . . . . . . . . . . $221,250
</TABLE>
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware empowers the Company
to indemnify, subject to the standards set forth therein, any person who is a
party in any action in connection with any action, suit or proceeding brought or
threatened by reason of the fact that the person was a director, officer,
employee or agent of such company, or is or was serving as such with respect to
another entity at the request of such company. The General Corporation Law of
Delaware also provides that the Company may purchase insurance on behalf of any
such director, officer, employee or agent.
Article Tenth of the HET Certificate provides for indemnification of the
officers and directors of HET to the full extent permitted by the Delaware
General Corporation Law.
Article VI of the HET Bylaws provides, in effect, for the indemnification by
HET of each director and officer of HET to the fullest extent permitted by
applicable law.
HET has entered into Indemnification Agreements with its directors, executive
officers and certain other officers. Generally, the Indemnification Agreements
provide that HET will indemnify such persons against any and all expenses,
judgments, fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in
respect to such expenses, judgments, fines, penalties or amounts paid in
settlement) of any Claim by reason of (or arising in part out of) an
Indemnifiable Event. "Claim" is defined as any threatened, pending or completed
action, suit or proceeding or any inquiry or investigation, whether conducted by
HET or any other party, that the indemnitee in good faith believes might lead to
the institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other. "Indemnifiable Event" is defined as any
event or occurrence related to the fact that indemnitee is or was a director,
officer, employee, trustee, agent or fiduciary of HET, or is or was serving at
the request of HET or a director, officer, employee, trustee, agent or fiduciary
of another corporation, partnership, joint venture, employee benefit plan, trust
or other enterprise, or by reason of anything done or not done by indemnitee in
any such capacity. Notwithstanding the foregoing, (i) the obligations of HET
shall be subject to the condition that the reviewing party (as defined) shall
not have determined (in a written opinion, in any case in which special,
independent counsel is involved) that indemnitee would not be permitted to be
indemnified under applicable law, and (ii) the obligation of HET to make an
expense advance shall be subject to the condition that, if, when and to the
extent that the reviewing party determines that indemnitee would not be
permitted to be so indemnified under applicable law, HET shall be entitled to be
reimbursed by indemnitee (who has agreed to reimburse HET, for any amounts
theretofore paid; provided, that if indemnitee has commenced legal proceedings
in a court of competent jurisdiction to secure a determination that indemnitee
should be
<PAGE>
indemnified under applicable law, any determination made by the reviewing party
that indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and indemnitee shall not be required to reimburse HET for
any expense advance until a final judicial determination is made with respect
thereto as to which all rights of appeal therefrom have been exhausted or
lapsed).
Section 102(b)(7) of the Delaware General Corporation Law enables a Delaware
corporation to provide in its certificate of incorporation for the elimination
or limitation of the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Any such provision cannot eliminate or limit a director's liability (1) for any
breach of the director's duty of loyalty to the corporation or its stockholders;
(2) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (3) under Section 174 of the Delaware
General Corporation Law (which imposes liability on directors for unlawful
payment of dividends or unlawful stock purchase or redemption); or (4) for any
transaction from which the director derived an improper personal benefit.
Article Thirteenth of the HET Certificate eliminates the liability of a director
of HET to HET or its stockholders for monetary damages for breach of fiduciary
duty as a director to the full extent permitted by the Delaware General
Corporation Law.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
<C> <S>
1.1 Form of Underwriting Agreement*
4.1 Certificate of Incorporation of The Promus Companies Incorporated;
Certificate of Amendment of Certificate of Incorporation of The
Promus Companies Incorporated dated April 29, 1994; Certificate of
Amendment of Certificate of Incorporation of The Promus Companies
Incorporated dated May 26, 1995; and Certificate of Amendment of
Certificate of Incorporation of The Promus Companies Incorporated
dated June 30, 1995, changing its name to Harrah's Entertainment,
Inc. (1)
4.2 Bylaws of Harrah's Entertainment, Inc., as amended December 12,
1997. (2)
4.3 Rights Agreement dated as of October 5, 1996, between Harrah's
Entertainment, Inc. and The Bank of New York, which includes the
form of Certificate of Designations of Series A Special Stock of
Harrah's Entertainment, Inc. as Exhibit A, the form of Right
Certificate as Exhibit B and the Summary of Rights to Purchase
Special Shares as Exhibit C. (3)
4.4 First Amendment, dated as of February 21, 1997, to Rights Agreement
between Harrah's Entertainment, Inc. and The Bank of New York. (4)
4.5 Second Amendment, dated as of April 25, 1997, to Rights Agreement,
dated as of October 25, 1996, between Harrah's Entertainment, Inc.
and The Bank of New York. (5)
4.6 Letter to Stockholders dated July 23, 1997 regarding Summary of
Rights to Purchase Special Shares As Amended Through April 25,
1997. (5)
4.7 Certificate of Elimination of Series B Special Stock of Harrah's
Entertainment, Inc., dated February 21, 1997. (4)
4.8 Certificate of Designations of Series A Special Stock of Harrah's
Entertainment, Inc., dated February 21, 1997. (4)
4.9 Certificate of Incorporation of Harrah's Operating Company, Inc.
(6)
4.10 Bylaws of Harrah's Operating Company, Inc. (6)
4.11 Certificate of Designation for HET Preferred Stock.*
4.12 Certificate of Designation for HOC Preferred Stock.*
<PAGE>
4.13 Form of HET Indenture.**
4.14 Form of HOC Indenture.**
5.1 Opinion of Latham & Watkins as to the legality of the securities
being registered.**
12.1 Statement regarding Computation of Ratios.**
23.1 Consent of Latham & Watkins (included in Exhibit 5.1).**
23.2 Consent of Arthur Andersen LLP.**
24 Power of Attorney (contained on Page 23).
</TABLE>
* To be filed by amendment or incorporated by reference in connection
with the offering of the Securities.
** Filed herewith.
FOOTNOTES
(1) Incorporated by reference from HET's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, filed March 6, 1996, File No. 1-10410.
(2) Incorporated by reference from HET's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, filed March 10, 1998, File No. 1-10410.
(3) Incorporated by reference from HET's Current Report on Form 8-K filed August
9, 1996, File No. 1-10410.
(4) Incorporated by reference from HET's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996, filed March 11, 1997, File No. 1-10410.
(5) Incorporated by reference from HET's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, filed May 13, 1997, File No. 1-10410.
(6) Incorporated by reference from Amendment No. 1 to Form S-3 Registration
Statement of HOC, File No. 33-62783, filed October 11, 1995.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement;
<PAGE>
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrants pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrants' annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
HARRAH'S ENTERTAINMENT SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Harrah's Entertainment, Inc. has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized at Memphis,
Tennessee on May 18, 1998.
HARRAH'S ENTERTAINMENT, INC.
Dated: May 18, 1998 By /s/ PHILIP G. SATRE
----------------------------------
Philip G. Satre
Chairman, President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Philip G. Satre and E. O. Robinson, Jr. and each
of them, each whom may act without joinder of the other, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all pre- and post-effective amendments to this
Registration Statement or any registration statement for the same offering that
is to be effective upon filing pursuant to 462(b) under the Securities Act, and
to file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, or the substitute or substitutes
of any or all of them, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in their
respective capacities with Harrah's Entertainment, Inc. on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ SUSAN CLARK-JOHNSON
-------------------------------- Director May 18, 1998
Susan Clark-Johnson
/s/ JAMES B. FARLEY Director May 18, 1998
--------------------------------
James B. Farley
/s/ RALPH HORN Director May 18, 1998
--------------------------------
Ralph Horn
/s/ JOE M. HENSON Director May 18, 1998
--------------------------------
Joe M. Henson
/s/ R. BRAD MARTIN Director May 18, 1998
--------------------------------
R. Brad Martin
/s/ WALTER J. SALMON Director May 18, 1998
--------------------------------
Walter J. Salmon
<PAGE>
/s/ PHILIP G. SATRE Director, Chairman, President May 18, 1998
-------------------------------- and Chief Executive Officer
Philip G. Satre
/s/ BOAKE A. SELLS Director May 18, 1998
--------------------------------
Boake A. Sells
/s/ EDDIE N. WILLIAMS Director May 18, 1998
--------------------------------
Eddie N. Williams
/s/ COLIN V. REED Chief Financial Officer May 18, 1998
--------------------------------
Colin V. Reed
/s/ JUDY T. WORMSER Controller and Principal May 18, 1998
-------------------------------- Accounting Officer
Judy T. Wormser
<PAGE>
HARRAH'S OPERATING SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Harrah's Operating Company, Inc. has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized at Memphis, Tennessee on May 18, 1998.
HARRAH'S OPERATING COMPANY, INC.
Dated: May 18, 1998 By /s/ PHILIP G. SATRE
----------------------------------------
Philip G. Satre
Chairman, President, and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Philip G. Satre and E. O. Robinson,
Jr. and each of them, each of whom may act without joinder of the other, his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all pre- and post-effective amendments to this
Registration Statement or any registration statement for the same offering
that is to be effective upon filing pursuant to 462(b) under the Securities
Act, and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, and each of them, or the
substitute or substitutes of any or all of them, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in their
respective capacities with Harrah's Operating Company, Inc. on
the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ PHILIP G. SATRE Director, Chairman, President
-------------------------------- and Chief Executive Officer May 18, 1998
Philip G. Satre
/s/ COLIN V. REED Chief Financial Officer
-------------------------------- May 18, 1998
Colin V. Reed
/s/ JUDY T. WORMSER Controller and Principal
-------------------------------- Accounting Officer May 18, 1998
Judy T. Wormser
<PAGE>
- --------------------------------------------------------------------------------
HARRAH'S ENTERTAINMENT, INC.
----------------------------
INDENTURE
Dated as of _________, 1998
---------------------------
[Name of Trustee]
Trustee
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . .1
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.2. Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . .7
Section 1.3. Incorporation by Reference of Trust Indenture Act. . . . . . . . .7
Section 1.4. Rules of Construction. . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE II. THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Section 2.1. Issuable in Series.. . . . . . . . . . . . . . . . . . . . . . . .8
Section 2.2. Establishment of Terms of Series of Securities.. . . . . . . . . .8
Section 2.3. Execution and Authentication.. . . . . . . . . . . . . . . . . . 11
Section 2.4. Registrar and Paying Agent.. . . . . . . . . . . . . . . . . . . 12
Section 2.5. Paying Agent to Hold Money in Trust. . . . . . . . . . . . . . . 13
Section 2.6. Securityholder Lists.. . . . . . . . . . . . . . . . . . . . . . 13
Section 2.7. Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . . 13
Section 2.8. Mutilated, Destroyed, Lost and Stolen Securities.. . . . . . . . 14
Section 2.9. Outstanding Securities.. . . . . . . . . . . . . . . . . . . . . 15
Section 2.10. Treasury Securities.. . . . . . . . . . . . . . . . . . . . . . 15
Section 2.11. Temporary Securities. . . . . . . . . . . . . . . . . . . . . . 16
Section 2.12. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.13. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.14. Global Securities.. . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.15. CUSIP Numbers.. . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III. REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.1. Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.2. Selection of Securities to be Redeemed.. . . . . . . . . . . . . 19
Section 3.3. Notice of Redemption.. . . . . . . . . . . . . . . . . . . . . . 19
Section 3.4. Effect of Notice of Redemption.. . . . . . . . . . . . . . . . . 20
Section 3.5. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . 20
Section 3.6. Securities Redeemed in Part. . . . . . . . . . . . . . . . . . . 20
ARTICLE IV. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.1. Payment of Principal and Interest. . . . . . . . . . . . . . . . 21
i
<PAGE>
Section 4.2. SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.3. Compliance Certificate.. . . . . . . . . . . . . . . . . . . . . 21
Section 4.4. Stay, Extension and Usury Laws.. . . . . . . . . . . . . . . . . 21
Section 4.5. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.6. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE V. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.1. When Company May Merge, Etc. . . . . . . . . . . . . . . . . . . 22
Section 5.2. Successor Corporation Substituted. . . . . . . . . . . . . . . . 23
ARTICLE VI. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.2. Acceleration of Maturity; Rescission and Annulment.. . . . . . . 25
Section 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.4. Trustee May File Proofs of Claim.. . . . . . . . . . . . . . . . 27
Section 6.5. Trustee May Enforce Claims Without Possession of Securities. . . 28
Section 6.6. Application of Money Collected.. . . . . . . . . . . . . . . . . 28
Section 6.7. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.8. Unconditional Right of Holders to Receive Principal and
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.9. Restoration of Rights and Remedies.. . . . . . . . . . . . . . . 29
Section 6.10. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . 30
Section 6.11. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . . 30
Section 6.12. Control by Holders. . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.13. Waiver of Past Defaults.. . . . . . . . . . . . . . . . . . . . 30
Section 6.14. Undertaking for Costs.. . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VII. TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.1. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.2. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . 33
Section 7.3. Individual Rights of Trustee.. . . . . . . . . . . . . . . . . . 33
Section 7.4. Trustee's Disclaimer.. . . . . . . . . . . . . . . . . . . . . . 34
Section 7.5. Notice of Defaults.. . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.6. Reports by Trustee to Holders. . . . . . . . . . . . . . . . . . 34
Section 7.7. Compensation and Indemnity.. . . . . . . . . . . . . . . . . . . 34
ii
<PAGE>
Section 7.8. Replacement of Trustee.. . . . . . . . . . . . . . . . . . . . . 35
Section 7.9. Successor Trustee by Merger, etc.. . . . . . . . . . . . . . . . 36
Section 7.10. Eligibility; Disqualification.. . . . . . . . . . . . . . . . . 36
Section 7.11. Preferential Collection of Claims Against Company.. . . . . . . 37
ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE. . . . . . . . . . . . . . . 37
Section 8.1. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . 37
Section 8.2. Application of Trust Funds; Indemnification. . . . . . . . . . . 38
Section 8.3. Legal Defeasance of Securities of any Series.. . . . . . . . . . 39
Section 8.4. Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.5. Repayment to Company.. . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE IX. AMENDMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.1. Without Consent of Holders.. . . . . . . . . . . . . . . . . . . 42
Section 9.2. With Consent of Holders. . . . . . . . . . . . . . . . . . . . . 43
Section 9.3. Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.4. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . 44
Section 9.5. Revocation and Effect of Consents. . . . . . . . . . . . . . . . 44
Section 9.6. Notation on or Exchange of Securities. . . . . . . . . . . . . . 45
Section 9.7. Trustee Protected. . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE X. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 10.1. Trust Indenture Act Controls. . . . . . . . . . . . . . . . . . 45
Section 10.2. Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 10.3. Communication by Holders with Other Holders.. . . . . . . . . . 46
Section 10.4. Certificate and Opinion as to Conditions Precedent. . . . . . . 46
Section 10.5. Statements Required in Certificate or Opinion.. . . . . . . . . 47
Section 10.6. Rules by Trustee and Agents.. . . . . . . . . . . . . . . . . . 47
Section 10.7. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 10.8. No Recourse Against Others. . . . . . . . . . . . . . . . . . . 47
Section 10.9. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.10. Governing Laws.. . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.11. No Adverse Interpretation of Other Agreements. . . . . . . . . 48
Section 10.12. Successors.. . . . . . . . . . . . . . . . . . . . . . . . . . 48
iii
<PAGE>
Section 10.13. Severability.. . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.14. Table of Contents, Headings, Etc.. . . . . . . . . . . . . . . 48
Section 10.15. Securities in a Foreign Currency or in ECU.. . . . . . . . . . 48
Section 10.16. Judgment Currency. . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XI. SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 11.1. Applicability of Article. . . . . . . . . . . . . . . . . . . . 50
Section 11.2. Satisfaction of Sinking Fund Payments with Securities.. . . . . 50
Section 11.3. Redemption of Securities for Sinking Fund.. . . . . . . . . . . 51
</TABLE>
iv
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of __________, 199_
<TABLE>
<CAPTION>
<S> <C>
Section 310(a)(1). . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.10
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . 2.6
(b) . . . . . . . . . . . . . . . . . . . . . . . . 10.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . 10.3
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(d) . . . . . . . . . . . . . . . . . . . . . . . . 7.6
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . 4.2, 10.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . 10.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . 10.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(d) . . . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(e) . . . . . . . . . . . . . . . . . . . . . . . . 10.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.5
(c) . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . 6.14
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . 2.10
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . 6.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . 6.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . 6.8
Section 317(a)(1). . . . . . . . . . . . . . . . . . . . . . . 6.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . 2.5
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . 10.1
</TABLE>
- -------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
i
<PAGE>
Indenture dated as of ___________, 1998 between Harrah's
Entertainment, Inc., a Delaware corporation ("Company"), and [Name of Trustee],
a ________________ ("Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Securities issued under
this Indenture.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. DEFINITIONS.
"Additional Amounts" means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes imposed on Holders specified
therein and which are owing to such Holders.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Service Agent.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the place in
connection with which the term is used. If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is
made or given by the Trustee shall constitute a sufficient publication of such
notice.
"Bearer" means anyone in possession from time to time of a Bearer
Security.
"Bearer Security" means any Security, including any interest coupon
appertaining thereto, that does not provide for the identification of the Holder
thereof.
"Board of Directors" means the Board of Directors of the Company or
any duly authorized committee thereof.
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"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant to authorization by the Board of Directors and to
be in full force and effect on the date of the certificate and delivered to the
Trustee.
"Business Day" means, unless otherwise provided by Board Resolution,
Officers' Certificate or supplemental indenture hereto for a particular Series,
any day except a Saturday, Sunday or a legal holiday in the City of New York on
which banking institutions are authorized or required by law, regulation or
executive order to close.
"Company" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name of the
Company by its Chairman of the Board, a President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the total amount of assets
(including investments in Joint Ventures) of the Company and its subsidiaries
(less applicable depreciation, amortization and other valuation reserves) after
deducting therefrom (a) all current liabilities of the Company and its
subsidiaries (excluding (i) the current portion of long-term indebtedness, (ii)
intercompany liabilities and (iii) any liabilities which are by their terms
renewable or extendible at the option of the obligor thereon to a time more than
12 months from the time as of which the amount thereof is being computed) and
(b) all goodwill, trade names, trademarks, patents, unamortized debt discount
and any other like intangibles, all as set forth on the consolidated balance
sheet of the Company for the most recently completed fiscal quarter for which
financial statements are available and computed in accordance with generally
accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered.
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"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Depository" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used with
respect to the Securities of any Series shall mean the Depository with respect
to the Securities of such Series.
"Discount Security" means any Security that provides for an amount
less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.
"Dollars" means the currency of The United States of America.
"ECU" means the European Currency Unit as determined by the Commission
of the European Union.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Foreign Currency" means any currency or currency unit issued by a
government other than the government of The United States of America.
"Foreign Government Obligations" means with respect to Securities of
any Series that are denominated in a Foreign Currency, (i) direct obligations of
the government that issued or caused to be issued such currency for the payment
of which obligations its full faith and credit is pledged or (ii) obligations of
a person controlled or supervised by or acting as an agency or instrumentality
of such government the timely payment of which is unconditionally guaranteed as
a full faith and credit obligation by such government, which, in either case
under clauses (i) or (ii), are not callable or redeemable at the option of the
issuer thereof.
"Gaming Laws" means the gaming laws of a jurisdiction or jurisdictions
to which the Company or a subsidiary of the Company is, or may at any time after
the date of this Indenture be, subject.
"Gaming Authority" means the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the New Jersey Casino Control Commission or any
similar commission or agency which has, or may at any time after the date of
this Indenture have, jurisdiction over the gaming activities of the Company or a
subsidiary of the Company or any successor thereto.
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"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.2
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.
"Holder" or "Securityholder" means a person in whose name a Security
is registered or the holder of a Bearer Security.
"Indenture" means this Indenture as amended from time to time and
shall include the form and terms of particular Series of Securities established
as contemplated hereunder.
"interest" with respect to any Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.
"Joint Venture" means any partnership, corporation or other entity, in
which up to and including 50% of the partnership interest, outstanding voting
stock or other equity interests in owned, directly or indirectly, by the Company
and/or one or more subsidiaries.
"Maturity," when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, notice of option to elect repayment or otherwise.
"Non-recourse Indebtedness" means indebtedness the terms of which
provide that the lender's claim for repayment of such indebtedness is limited
solely to a claim against the property which secures such indebtedness.
"Officer" means the Chairman of the Board, any President, any
Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the Company's principal executive officer, principal
financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.
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"person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on, and any Additional Amounts in respect
of, the Security.
"Responsible Officer" means any officer of the Trustee in its
Corporate Trust Office and also means, with respect to a particular corporate
trust matter, any other officer to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debentures, notes or other debt instruments of
the Company of any Series authenticated and delivered under this Indenture.
"Series" or "Series of Securities" means each series of debentures,
notes or other debt instruments of the Company created pursuant to Sections 2.1
and 2.2 hereof.
"Significant Subsidiary" means (i) any direct or indirect Subsidiary
of the Company that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933,
as amended, as such regulation is in effect on the date hereof, or (ii) any
group of direct or indirect Subsidiaries of the Company that, taken together as
a group, would be a "significant subsidiary" as defined in Article 1, Rule 1-02
of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as
amended, as such regulation is in effect on the date hereof.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any specified person means any corporation of which at
least a majority of the outstanding stock having by the terms thereof ordinary
voting power for the election of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by such person, or
by one or more other Subsidiaries, or by such person and one or more other
Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture; PROVIDED, HOWEVER,
that in the event the
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Trust Indenture Act of 1939 is amended after such date, "TIA" means,
to the extent required by any such amendment, the Trust Indenture Act as so
amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each person who is then a Trustee hereunder, and
if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of The United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of The United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by The United States of America, and which in the case of (i)
and (ii) are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
PROVIDED that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.
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Section 1.2. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
TERM DEFINED IN
- ---- SECTION
-------
<S> <C>
"Bankruptcy Law" 6.1
"Custodian" 6.1
"Event of Default" 6.1
"Journal" 10.15
"Judgment Currency" 10.16
"Legal Holiday" 10.7
"mandatory sinking fund payment" 11.1
"Market Exchange Rate" 10.15
"New York Banking Day" 10.16
"optional sinking fund payment" 11.1
"Paying Agent" 2.4
"Registrar" 2.4
"Required Currency" 10.16
"Service Agent" 2.4
"successor person" 5.1
</TABLE>
Section 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein are used herein as so defined.
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Section 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles;
(c) references to "generally accepted accounting principles" shall
mean generally accepted accounting principles in effect as of the time when
and for the period as to which such accounting principles are to be
applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the plural
include the singular; and
(f) provisions apply to successive events and transactions.
ARTICLE II.
THE SECURITIES
Section 2.1. ISSUABLE IN SERIES.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued
in one or more Series. All Securities of a Series shall be identical except as
may be set forth in a Board Resolution, a supplemental indenture or an Officers'
Certificate detailing the adoption of the terms thereof pursuant to the
authority granted under a Board Resolution. In the case of Securities of a
Series to be issued from time to time, the Board Resolution, Officers'
Certificate or supplemental indenture may provide for the method by which
specified terms (such as interest rate, maturity date, record date or date from
which interest shall accrue) are to be determined. Securities may differ
between Series in respect of any matters, provided that all Series of Securities
shall be equally and ratably entitled to the benefits of the Indenture.
Section 2.2. ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES.
At or prior to the issuance of any Securities within a Series, the
following shall be established (as to the Series generally, in the case of
Subsection 2.2.1 and either as to such Securities within the Series or as to the
Series generally in the case of Subsections 2.2.2 through
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2.2.22) by a Board Resolution, a supplemental indenture or an Officers'
Certificate pursuant to authority granted under a Board Resolution:
2.2.1. the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series);
2.2.2. the price or prices (expressed as a percentage of the
principal amount thereof) at which the Securities of the Series will be issued;
2.2.3. any limit upon the aggregate principal amount of the
Securities of the Series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.4. the date or dates on which the principal of the Securities
of the Series is payable;
2.2.5. the rate or rates (which may be fixed or variable) per annum
or, if applicable, the method used to determine such rate or rates (including,
but not limited to, any commodity, commodity index, stock exchange index or
financial index) at which the Securities of the Series shall bear interest, if
any, the date or dates from which such interest, if any, shall accrue, the date
or dates on which such interest, if any, shall commence and be payable and any
regular record date for the interest payable on any interest payment date;
2.2.6. the place or places where the principal of and interest, if
any, on the Securities of the Series shall be payable, or the method of such
payment, if by wire transfer, mail or other means;
2.2.7. if applicable, the period or periods within which, the price
or prices at which and the terms and conditions upon which the Securities of the
Series may be redeemed, in whole or in part, at the option of the Company;
2.2.8. the obligation, if any, of the Company to redeem or purchase
the Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which
Securities of the Series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
2.2.9. the dates, if any, on which and the price or prices at which
the Securities of the Series will be repurchased by the Company at the option of
the Holders thereof and other detailed terms and provisions of such repurchase
obligations;
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2.2.10. if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Securities of the Series shall
be issuable;
2.2.11. the forms of the Securities of the Series in bearer or fully
registered form (and, if in fully registered form, whether the Securities will
be issuable as Global Securities);
2.2.12. if other than the principal amount thereof, the portion of
the principal amount of the Securities of the Series that shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2;
2.2.13. the currency of denomination of the Securities of the
Series, which may be Dollars or any Foreign Currency, including, but not limited
to, the ECU, and if such currency of denomination is a composite currency other
than the ECU, the agency or organization, if any, responsible for overseeing
such composite currency;
2.2.14. the designation of the currency, currencies or currency
units in which payment of the principal of and interest, if any, on the
Securities of the Series will be made;
2.2.15. if payments of principal of or interest, if any, on the
Securities of the Series are to be made in one or more currencies or currency
units other than that or those in which such Securities are denominated, the
manner in which the exchange rate with respect to such payments will be
determined;
2.2.16. the manner in which the amounts of payment of principal of
or interest, if any, on the Securities of the Series will be determined, if such
amounts may be determined by reference to an index based on a currency or
currencies or by reference to a commodity, commodity index, stock exchange index
or financial index;
2.2.17. the provisions, if any, relating to any security provided
for the Securities of the Series;
2.2.18. any addition to or change in the Events of Default which
applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 6.2;
2.2.19. any addition to or change in the covenants set forth in
Articles IV or V which applies to Securities of the Series;
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2.2.20. any other terms of the Securities of the Series (which terms
shall not be inconsistent with the provisions of this Indenture, except as
permitted by Section 9.1, but which may modify or delete any provision of this
Indenture insofar as it applies to such Series); and
2.2.21. any depositories, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to Securities of such
Series if other than those appointed herein.
All Securities of any one Series need not be issued at the same time
and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture or Officers' Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in such Board
Resolution, supplemental indenture or Officers' Certificate.
Section 2.3. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate, upon receipt
by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate.
The aggregate principal amount of Securities of any Series outstanding
at any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution, supplemental indenture hereto or
Officers' Certificate delivered pursuant to Section 2.2, except as provided in
Section 2.8.
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Prior to the issuance of Securities of any Series, the Trustee shall
have received and (subject to Section 7.2) shall be fully protected in relying
on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers' Certificate complying with
Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
Section 2.4. REGISTRAR AND PAYING AGENT.
The Company shall maintain, with respect to each Series of Securities,
at the place or places specified with respect to such Series pursuant to
Section 2.2, an office or agency where Securities of such Series may be
presented or surrendered for payment ("Paying Agent"), where Securities of such
Series may be surrendered for registration of transfer or exchange
("Registrar") and where notices and demands to or upon the Company in respect of
the Securities of such Series and this Indenture may be served ("Service
Agent"). The Registrar shall keep a register with respect to each Series of
Securities and to their transfer and exchange. The Company will give prompt
written notice to the Trustee of the name and address, and any change in the
name or address, of each Registrar, Paying Agent or Service Agent. If at any
time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more
co-registrars, additional paying agents or additional service agents and may
from time to time rescind such designations; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent
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in each place so specified pursuant to Section 2.2 for Securities of any Series
for such purposes. The Company will give prompt written notice to the Trustee
of any such designation or rescission and of any change in the name or address
of any such co-registrar, additional paying agent or additional service agent.
The term "Registrar" includes any co-registrar; the term "Paying Agent" includes
any additional paying agent; and the term "Service Agent" includes any
additional service agent.
The Company hereby appoints the Trustee the initial Registrar, Paying
Agent and Service Agent for each Series unless another Registrar, Paying Agent
or Service Agent, as the case may be, is appointed prior to the time Securities
of that Series are first issued.
Section 2.5. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by
the Paying Agent for the payment of principal of or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for the money. If the Company or
a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of Securityholders of any Series of Securities all
money held by it as Paying Agent.
Section 2.6. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least ten days before each interest payment date and at such
other times as the Trustee may request in writing a list, in such form and as of
such date as the Trustee may reasonably require, of the names and addresses of
Securityholders of each Series of Securities.
Section 2.7. TRANSFER AND EXCHANGE.
Where Securities of a Series are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee
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shall authenticate Securities at the Registrar's request. No service charge
shall be made for any registration of transfer or exchange (except as otherwise
expressly permitted herein), but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer tax or similar governmental
charge payable upon exchanges pursuant to Sections 2.11, 3.6 or 9.6).
Neither the Company nor the Registrar shall be required (a) to issue,
register the transfer of, or exchange Securities of any Series for the period
beginning at the opening of business fifteen days immediately preceding the
mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.
Section 2.8. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of
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the Company, whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Securities of
that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 2.9. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on the Maturity of Securities of a Series money
sufficient to pay such Securities payable on that date, then on and after that
date such Securities of the Series cease to be outstanding and interest on them
ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
In determining whether the Holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.2.
Section 2.10. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any request, demand, authorization,
direction, notice, consent or waiver Securities of a Series owned by the Company
or an Affiliate shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
request, demand, authorization, direction, notice, consent or waiver only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.
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Section 2.11. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon a Company
Order. Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee upon request shall authenticate definitive Securities of the same
Series and date of maturity in exchange for temporary Securities. Until so
exchanged, temporary securities shall have the same rights under this Indenture
as the definitive Securities.
Section 2.12. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for transfer,
exchange, payment, replacement or cancellation and shall destroy such canceled
Securities (subject to the record retention requirement of the Exchange Act) and
deliver a certificate of such destruction to the Company, unless the Company
otherwise directs. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation.
Section 2.13. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date. The Company
shall fix the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of
interest to be paid. The Company may pay defaulted interest in any other lawful
manner.
Section 2.14. GLOBAL SECURITIES.
2.14.1. TERMS OF SECURITIES. A Board Resolution, a supplemental
indenture hereto or an Officers' Certificate shall establish whether the
Securities of a Series shall be issued in whole or in part in the form of one or
more Global Securities and the Depository for such Global Security or
Securities.
2.14.2. TRANSFER AND EXCHANGE. Notwithstanding any provisions to
the contrary contained in Section 2.7 of the Indenture and in addition thereto,
any Global Security shall be exchangeable pursuant to Section 2.7 of the
Indenture for Securities
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registered in the names of Holders other than the Depository for such Security
or its nominee only if (i) such Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Global Security or if at
any time such Depository ceases to be a clearing agency registered under the
Exchange Act, and, in either case, the Company fails to appoint a successor
Depository within 90 days of such event, (ii) the Company executes and delivers
to the Trustee an Officers' Certificate to the effect that such Global Security
shall be so exchangeable or (iii) an Event of Default with respect to the
Securities represented by such Global Security shall have happened and be
continuing. Any Global Security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Securities registered in such names as the
Depository shall direct in writing in an aggregate principal amount equal to the
principal amount of the Global Security with like tenor and terms.
Except as provided in this Section 2.14.2, a Global Security may not
be transferred except as a whole by the Depository with respect to such Global
Security to a nominee of such Depository, by a nominee of such Depository to
such Depository or another nominee of such Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such a successor
Depository.
2.14.3. LEGEND. Any Global Security issued hereunder shall bear a
legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository."
2.14.4. ACTS OF HOLDERS. The Depository, as a Holder, may appoint
agents and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under the Indenture.
2.14.5. PAYMENTS. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.2, payment of
the principal of and interest, if any, on any Global Security shall be made to
the Holder thereof.
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2.14.6. CONSENTS, DECLARATION AND DIRECTIONS. Except as provided in
Section 2.14.5, the Company, the Trustee and any Agent shall treat a person as
the Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depository with respect to such Global Security, for purposes of obtaining
any consents, declarations, waivers or directions required to be given by the
Holders pursuant to this Indenture.
Section 2.15. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
Section 2.16. MANDATORY DISPOSITION OF DEBT SECURITIES PURSUANT TO GAMING
LAWS
Each Holder and beneficial owner, by accepting or otherwise acquiring
an interest in the Debt Securities, shall be deemed to have agreed that if the
Gaming Authority of any jurisdiction in which the Company or any of its
subsidiaries conducts or proposes to conduct gaming requires that a Person who
is a Holder or beneficial owner must be licensed, qualified or found suitable
under the applicable Gaming Laws, such Holder or beneficial owner shall apply
for a license, qualification or a finding of suitability within the required
time period. If such Person fails to apply or become licensed or qualified or
is found unsuitable, then the Company shall have the right, at its option, (i)
to require such Person to dispose of its Debt Securities or beneficial interest
therein within 30 days of receipt of notice of the Company's election or such
earlier date as may be requested or prescribed by such Gaming Authority or (ii)
to redeem such Debt Securities at a redemption price equal to the lesser of (a)
such Person's cost or (b) 100% of the principal amount thereof, plus accrued and
unpaid interest to the earlier of the redemption date and the date of the
finding of unsuitability, which may be less than 30 days following the notice of
redemption if so requested or prescribed by the Gaming Authority. The Company
shall notify the Trustee in writing of any such redemption as soon as
practicable. The Company shall not be responsible for any costs or expenses any
such Holder or beneficial owner may incur in connection with its application for
a license, qualification or a finding of suitability.
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ARTICLE III.
REDEMPTION
Section 3.1. NOTICE TO TRUSTEE.
The Company may, with respect to any Series of Securities, reserve the
right to redeem and pay the Series of Securities or may covenant to redeem and
pay the Series of Securities or any part thereof prior to the Stated Maturity
thereof at such time and on such terms as provided for in such Securities. If a
Series of Securities is redeemable and the Company wants or is obligated to
redeem prior to the Stated Maturity thereof all or part of the Series of
Securities pursuant to the terms of such Securities, it shall notify the Trustee
of the redemption date and the principal amount of Series of Securities to be
redeemed. The Company shall give the notice at least 45 days before the
redemption date (or such shorter notice as may be acceptable to the Trustee).
Section 3.2. SELECTION OF SECURITIES TO BE REDEEMED.
Unless otherwise indicated for a particular Series by a Board
Resolution, a supplemental indenture or an Officers' Certificate, if less than
all the Securities of a Series are to be redeemed, the Trustee shall select the
Securities of the Series to be redeemed in any manner that the Trustee deems
fair and appropriate. The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities of the Series that
have denominations larger than $1,000. Securities of the Series and portions of
them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or,
with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series
and integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.
Section 3.3. NOTICE OF REDEMPTION.
Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose
Securities are to be redeemed and if any Bearer Securities are outstanding,
publish on one occasion a notice in an Authorized Newspaper.
The notice shall identify the Securities of the Series to be redeemed
and shall state:
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(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(e) that interest on Securities of the Series called for redemption
ceases to accrue on and after the redemption date; and
(f) any other information as may be required by the terms of the
particular Series or the Securities of a Series being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
Section 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed or published as provided in
Section 3.3, Securities of a Series called for redemption become due and payable
on the redemption date and at the redemption price. A notice of redemption may
not be conditional. Upon surrender to the Paying Agent, such Securities shall
be paid at the redemption price plus accrued interest to the redemption date.
Section 3.5. DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest, if any, on all Securities to be redeemed on that date.
Section 3.6. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security of the same Series and the same
maturity equal in principal amount to the unredeemed portion of the Security
surrendered.
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ARTICLE IV.
COVENANTS
Section 4.1. PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of the Holders of
each Series of Securities that it will duly and punctually pay the principal of
and interest, if any, on the Securities of that Series in accordance with the
terms of such Securities and this Indenture.
Section 4.2. SEC REPORTS.
The Company shall deliver to the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA Section 314(a).
Section 4.3. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
Section 4.4. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture or the Securities; and
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the Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law has been enacted.
Section 4.5. CORPORATE EXISTENCE.
Subject to Article V, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Significant
Subsidiary in accordance with the respective organizational documents of each
Significant Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and its Significant Subsidiaries; PROVIDED, HOWEVER,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Significant
Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Holders.
Section 4.6. TAXES.
The Company shall, and shall cause each of its Significant
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.
ARTICLE V.
SUCCESSORS
Section 5.1. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with or merge into, or convey,
transfer or lease all or substantially all of its properties and assets to, any
person (a "successor person"), and may not permit any person to merge into, or
convey, transfer or lease its properties and assets substantially as an
entirety to, the Company, unless:
(a) the successor person (if any) is a corporation, partnership,
trust or other entity organized and validly existing under the laws of any
U.S. domestic jurisdiction and expressly assumes the Company's obligations
on the Securities and under this Indenture and
(b) immediately after giving effect to the transaction, no Default or
Event of Default, shall have occurred and be continuing.
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The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
Section 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor person has been named
as the Company herein; PROVIDED, HOWEVER, that the predecessor Company in the
case of a sale, lease, conveyance or other disposition shall not be released
from the obligation to pay the principal of and interest, if any, on the
Securities.
ARTICLE VI.
DEFAULTS AND REMEDIES
Section 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein with respect to Securities of
any Series, means any one of the following events, unless in the establishing
Board Resolution, supplemental indenture or Officers' Certificate, it is
provided that such Series shall not have the benefit of said Event of Default:
(a) default in the payment of any interest on any Security of that
Series when it becomes due and payable, and continuance of such default for
a period of 30 days (unless the entire amount of such payment is deposited
by the Company with the Trustee or with a Paying Agent prior to the
expiration of such period of 30 days); or
(b) default in the payment of the principal of any Security of that
Series at its Maturity; or
(c) default in the deposit of any sinking fund payment, when and as
due in respect of any Security of that Series; or
(d) default in the performance or breach of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty that
has been included in this Indenture solely for the benefit of Series of
Securities other than that Series), which
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default continues uncured for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in principal
amount of the outstanding Securities of that Series a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(e) the acceleration of the maturity of any indebtedness of the
Company (other than Non-recourse Indebtedness), at any one time, in an
amount in excess of the greater of (i) $25 million and (ii) 5% of
Consolidated Net Tangible Assets, if such acceleration is not annulled
within 30 days after written notice to the Company by the Trustee and the
holders of at least 25% in principal amount of the outstanding Debt
Securities of that series;
(f) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) generally is unable to pay its debts as the same become due;
or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case,
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of its
property, or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days; or
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(h) any other Event of Default provided with respect to Securities of
that Series, which is specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate, in accordance with Section
2.2.18.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
Section 6.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Securities of any Series at the
time outstanding occurs and is continuing (other than an Event of Default
referred to in Section 6.1(f) or (g)) then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the outstanding Securities
of that Series may declare the principal amount (or, if any Securities of that
Series are Discount Securities, such portion of the principal amount as may be
specified in the terms of such Securities) of and accrued and unpaid interest,
if any, on all of the Securities of that Series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) and accrued and unpaid interest, if any, shall become immediately due
and payable. If an Event of Default specified in Section 6.1(f) or (g) shall
occur, the principal amount (or specified amount) of and accrued and unpaid
interest, if any, on all outstanding Securities shall IPSO FACTO become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after such a declaration of acceleration with respect to
any Series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the outstanding
Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest, if any, on all Securities of that
Series,
(ii) the principal of any Securities of that Series which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Securities,
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(iii) to the extent that payment of such interest is lawful,
interest upon any overdue principal and overdue interest at the rate
or rates prescribed therefor in such Securities, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(b) all Events of Default with respect to Securities of that Series,
other than the non-payment of the principal of Securities of that Series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Section 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of principal of any Security at
the Maturity thereof, or
(c) default is made in the deposit of any sinking fund payment when
and as due by the terms of a Security,
THEN, the Company will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal or any
overdue interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or
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final decree and may enforce the same against the Company or any other obligor
upon such Securities and collect the moneys adjudged or deemed to be payable in
the manner provided by law out of the property of the Company or any other
obligor upon such Securities, wherever situated.
If an Event of Default with respect to any Securities of any Series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
Series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding,
and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 6.6. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under
Section 7.7; and
Second: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
Third: To the Company.
Section 6.7. LIMITATION ON SUITS.
No Holder of any Security of any Series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
Series;
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(b) the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the outstanding Securities of that Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Security on
the Stated Maturity or Stated Maturities expressed in such Security (or, in the
case of redemption, on the redemption date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
Section 6.9. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
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Section 6.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 6.12. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the outstanding
Securities of any Series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability.
Section 6.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive
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any past Default hereunder with respect to such Series and its consequences,
except a Default in the payment of the principal of or interest on any Security
of such Series (provided, however, that the Holders of a majority in principal
amount of the outstanding Securities of any Series may rescind an acceleration
and its consequences, including any related payment default that resulted from
such acceleration). Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 6.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest on
any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption date).
ARTICLE VII.
TRUSTEE
Section 7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture
and use the same degree of care and skill in their exercise as a prudent
man would exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
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(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon Officers'
Certificates or Opinions of Counsel furnished to the Trustee and
conforming to the requirements of this Indenture; HOWEVER, in the case
of any such Officers' Certificates or Opinions of Counsel which by any
provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such Officers' Certificates and
Opinions of Counsel to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b)
of this Section.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it with respect to
Securities of any Series in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
outstanding Securities of such Series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such Series.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraph (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to risk
its own funds or otherwise incur any financial liability in the performance
of any of its duties, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for
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believing that repayment of such funds or adequate indemnity against such
risk is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent
shall be entitled to the protections, immunities and standard of care as
are set forth in paragraphs (a), (b) and (c) of this Section with respect
to the Trustee.
Section 7.2. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care. No
Depository shall be deemed an agent of the Trustee and the Trustee shall
not be responsible for any act or omission by any Depository.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction.
Section 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same
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rights it would have if it were not Trustee. Any Agent may do the same with
like rights. The Trustee is also subject to Sections 7.10 and 7.11.
Section 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its authentication.
Section 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing with respect
to the Securities of any Series and if it is known to a Responsible Officer of
the Trustee, the Trustee shall mail to each Securityholder of the Securities of
that Series and, if any Bearer Securities are outstanding, publish on one
occasion in an Authorized Newspaper, notice of a Default or Event of Default
within 90 days after it occurs or, if later, after a Responsible Officer of the
Trustee has knowledge of such Default or Event of Default. Except in the case
of a Default or Event of Default in payment of principal of or interest on any
Security of any Series, the Trustee may withhold the notice if and so long as
its corporate trust committee or a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of
Securityholders of that Series.
Section 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after May 15 in each year, the Trustee shall transmit
by mail to all Securityholders, as their names and addresses appear on the
register kept by the Registrar and, if any Bearer Securities are outstanding,
publish in an Authorized Newspaper, a brief report dated as of such May 15, in
accordance with, and to the extent required under, TIA Section 313.
A copy of each report at the time of its mailing to Securityholders of
any Series shall be filed with the SEC and each stock exchange on which the
Securities of that Series are listed. The Company shall promptly notify the
Trustee when Securities of any Series are listed on any stock exchange.
Section 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
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The Company shall indemnify the Trustee (including the cost of
defending itself) against any loss, liability or expense incurred by it except
as set forth in the next paragraph in the performance of its duties under this
Indenture as Trustee or Agent. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld. This indemnification shall
apply to officers, directors, employees, shareholders and agents of the Trustee.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee or by any officer, director, employee,
shareholder or agent of the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities of any Series on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign with respect to the Securities of one or more
Series by so notifying the Company. The Holders of a majority in principal
amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company. The Company may remove
the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
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(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee with respect to the Securities of any one or
more Series does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least 10% in principal amount of the Securities of the applicable Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee with respect to the Securities of any one or more
Series fails to comply with Section 7.10, any Securityholder of the applicable
Series may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series and, if any Bearer Securities are
outstanding, publish such notice on one occasion in an Authorized Newspaper.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 hereof shall continue for the benefit of
the retiring trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
Section 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always
have a combined capital and surplus of at least
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$25,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII.
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.1. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Order cease to be of further effect
(except as hereinafter provided in this Section 8.1), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered
(other than Securities that have been destroyed, lost or stolen and
that have been replaced or paid) have been delivered to the Trustee
for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee
for cancellation
(1) have become due and payable, or
(2) will become due and payable at their Stated
Maturity within one year, or
(3) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company, or
(4) are deemed paid and discharged pursuant to
Section 8.3, as applicable;
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and the Company, in the case of (1), (2) or (3) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust an amount sufficient
for the purpose of paying and discharging the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which have become due and payable on or prior to the date of such deposit) or to
the Stated Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.7, and, if money shall
have been deposited with the Trustee pursuant to clause (a) of this Section, the
provisions of Sections 2.4, 2.7, 2.8, 8.1 8.2 and 8.5 shall survive.
Section 8.2. APPLICATION OF TRUST FUNDS; INDEMNIFICATION.
(a) Subject to the provisions of Section 8.5, all money deposited
with the Trustee pursuant to Section 8.1, all money and U.S. Government
Obligations or Foreign Government Obligations deposited with the Trustee
pursuant to Section 8.3 or 8.4 and all money received by the Trustee in
respect of U.S. Government Obligations or Foreign Government Obligations
deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in
trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with
or received by the Trustee or to make mandatory sinking fund payments or
analogous payments as contemplated by Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against U.S. Government
Obligations or Foreign Government Obligations deposited pursuant to
Sections 8.3 or 8.4 or the interest and principal received in respect of
such obligations other than any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time to time
upon Company Request any U.S. Government Obligations or Foreign Government
Obligations
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or money held by it as provided in Sections 8.3 or 8.4 which, in the
opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Trustee, are then in excess of the amount thereof which then would have
been required to be deposited for the purpose for which such U.S.
Government Obligations or Foreign Government Obligations or money were
deposited or received. This provision shall not authorize the sale by the
Trustee of any U.S. Government Obligations or Foreign Government
Obligations held under this Indenture.
Section 8.3. LEGAL DEFEASANCE OF SECURITIES OF ANY SERIES.
Unless this Section 8.3 is otherwise specified, pursuant to
Section 2.2.20, to be inapplicable to Securities of any Series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of such Series, shall no
longer be in effect (and the Trustee, at the expense of the Company, shall, at
Company Request, execute proper instruments acknowledging the same), except as
to:
(a) the rights of Holders of Securities of such Series to receive,
from the trust funds described in subparagraph (d) hereof, (i) payment of
the principal of and each installment of principal of and interest on the
outstanding Securities of such Series on the Stated Maturity of such
principal or installment of principal or interest and (ii) the benefit of
any mandatory sinking fund payments applicable to the Securities of such
Series on the day on which such payments are due and payable in accordance
with the terms of this Indenture and the Securities of such Series;
(b) the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and
(c) the rights, powers, trust and immunities of the Trustee
hereunder;
provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of such Securities (i) in
the case of Securities of such Series denominated in Dollars, cash in
Dollars (or such other money or currencies as shall then be legal tender in
the United States) and/or U.S. Government Obligations, or (ii) in the case
of Securities of such Series denominated in a Foreign Currency (other than
a composite currency), money and/or Foreign Government Obligations, which
through the payment of interest and
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principal in respect thereof, in accordance with their terms, will provide
(and without reinvestment and assuming no tax liability will be imposed on
such Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge each
installment of principal (including mandatory sinking fund or analogous
payments) of and interest, if any, on all the Securities of such Series on
the dates such installments of interest or principal are due;
(e) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(f) no Default or Event of Default with respect to the Securities of
such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture,
there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Securities of such Series will not
recognize income, gain or loss for Federal income tax purposes as a result
of such deposit, defeasance and discharge and will be subject to Federal
income tax on the same amount and in the same manner and at the same times
as would have been the case if such deposit, defeasance and discharge had
not occurred;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities of such Series over any
other creditors of the company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company;
(i) such deposit shall not result in the trust arising from such
deposit constituting an investment company (as defined in the Investment
Company Act of 1940, as amended), or such trust shall be qualified under
such Act or exempt from regulation thereunder; and
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(j) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this
Section have been complied with.
Section 8.4. COVENANT DEFEASANCE.
Unless this Section 8.4 is otherwise specified pursuant to
Section 2.2.20 to be inapplicable to Securities of any Series, on and after the
91st day after the date of the deposit referred to in subparagraph (a) hereof,
the Company may omit to comply with any term, provision or condition set forth
under Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as any additional
covenants contained in a supplemental indenture hereto for a particular Series
of Securities or a Board Resolution or an Officers' Certificate delivered
pursuant to Section 2.2.20 (and the failure to comply with any such covenants
shall not constitute a Default or Event of Default under Section 6.1) and the
occurrence of any event described in clause (e) of Section 6.1 shall not
constitute a Default or Event of Default hereunder, with respect to the
Securities of such Series, provided that the following conditions shall have
been satisfied:
(a) With reference to this Section 8.4, the Company has deposited or
caused to be irrevocably deposited (except as provided in
Section 8.2(c)) with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities (i) in the case of Securities of such Series
denominated in Dollars, cash in Dollars (or such other money or currencies
as shall then be legal tender in the United States) and/or U.S. Government
Obligations, or (ii) in the case of Securities of such Series denominated
in a Foreign Currency (other than a composite currency), money and/or
Foreign Government Obligations, which through the payment of interest and
principal in respect thereof, in accordance with their terms, will provide
(and without reinvestment and assuming no tax liability will be imposed on
such Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the Trustee, to pay principal
and interest, if any, on and any mandatory sinking fund in respect of the
Securities of such Series on the dates such installments of interest or
principal are due;
(b) Such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(c) No Default or Event of Default with respect to the Securities of
such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
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(d) the Company shall have delivered to the Trustee an Opinion of
Counsel confirming that Holders of the Securities of such Series will not
recognize income, gain or loss for federal income tax purposes as a result
of such deposit and defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred;
(e) the Company shall have delivered to the Trustee an Officers'
Certificate stating the deposit was not made by the Company with the intent
of preferring the Holders of the Securities of such Series over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company; and
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated by
this Section have been complied with.
Section 8.5. REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.
ARTICLE IX.
AMENDMENTS AND WAIVERS
Section 9.1. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of one or more Series without the consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to make any change that does not adversely affect the rights of
any Securityholder;
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(e) to provide for the issuance of and establish the form and terms
and conditions of Securities of any Series as permitted by this Indenture;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee; or
(g) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Section 9.2. WITH CONSENT OF HOLDERS.
The Company and the Trustee may enter into a supplemental indenture
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a tender
offer or exchange offer for the Securities of such Series), for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Securityholders of each such Series. Except as
provided in Section 6.13, the Holders of at least a majority in principal amount
of the outstanding Securities of each Series affected by such waiver by notice
to the Trustee (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series) may waive compliance by the
Company with any provision of this Indenture or the Securities with respect to
such Series.
It shall not be necessary for the consent of the Holders of Securities
under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a supplemental indenture or waiver under
this section becomes effective, the Company shall mail to the Holders of
Securities affected thereby and, if any Bearer Securities affected thereby are
outstanding, publish on one occasion in an Authorized Newspaper, a notice
briefly describing the supplemental indenture or waiver. Any failure by the
Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
Section 9.3. LIMITATIONS.
Without the consent of each Securityholder affected, an amendment or
waiver may not:
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(a) change the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of interest
(including default interest) on any Security;
(c) reduce the principal or change the Stated Maturity of any
Security or reduce the amount of, or postpone the date fixed for, the
payment of any sinking fund or analogous obligation;
(d) reduce the principal amount of Discount Securities payable upon
acceleration of the maturity thereof;
(e) waive a Default or Event of Default in the payment of the
principal of or interest, if any, on any Security (except a rescission of
acceleration of the Securities of any Series by the Holders of at least a
majority in principal amount of the outstanding Securities of such Series
and a waiver of the payment default that resulted from such acceleration);
(f) make the principal of or interest, if any, on any Security
payable in any currency other than that stated in the Security;
(g) make any change in Sections 6.8, 6.13, 9.3 (this sentence), 10.15
or 10.16; or
(h) waive a redemption payment with respect to any Security or change
any of the provisions with respect to the redemption of any Securities.
Section 9.4. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Securities of one or more
Series shall be set forth in a supplemental indenture hereto that complies with
the TIA as then in effect.
Section 9.5. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
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Any amendment or waiver once effective shall bind every Securityholder
of each Series affected by such amendment or waiver unless it is of the type
described in any of clauses (a) through (g) of Section 9.3. In that case, the
amendment or waiver shall bind each Holder of a Security who has consented to it
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
Section 9.6. NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an amendment or
waiver on any Security of any Series thereafter authenticated. The Company in
exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the
amendment or waiver.
Section 9.7. TRUSTEE PROTECTED.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights.
ARTICLE X.
MISCELLANEOUS
Section 10.1. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control.
Section 10.2. NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail:
if to the Company:
Harrah's Entertainment, Inc.
1023 Cherry Road
Memphis, Tennessee 38117
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if to the Trustee:
[Name of Trustee]
[Address]
_______________________
_______________________
Attention: ______________
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar and,
if any Bearer Securities are outstanding, published in an Authorized Newspaper.
Failure to mail a notice or communication to a Securityholder of any Series or
any defect in it shall not affect its sufficiency with respect to other
Securityholders of that or any other Series.
If a notice or communication is mailed or published in the manner
provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 10.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders of any Series may communicate pursuant to TIA Section
312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this Indenture or the Securities of that Series or
all Series. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
Section 10.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
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Section 10.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Section 10.6. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders of one or more Series. Any Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 10.7. LEGAL HOLIDAYS.
Unless otherwise provided by Board Resolution, Officers' Certificate
or supplemental indenture for a particular Series, a "Legal Holiday" is any day
that is not a Business Day. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
Section 10.8. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
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Section 10.9. COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 10.10. GOVERNING LAWS.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH
STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
Section 10.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.12. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 10.13. SEVERABILITY.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 10.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 10.15. SECURITIES IN A FOREIGN CURRENCY OR IN ECU.
Unless otherwise specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate delivered pursuant to Section 2.2
of this Indenture with respect to a particular Series of Securities, whenever
for purposes of this Indenture any action may be taken
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by the Holders of a specified percentage in aggregate principal amount of
Securities of all Series or all Series affected by a particular action at the
time outstanding and, at such time, there are outstanding Securities of any
Series which are denominated in a coin or currency other than Dollars (including
ECUs), then the principal amount of Securities of such Series which shall be
deemed to be outstanding for the purpose of taking such action shall be that
amount of Dollars that could be obtained for such amount at the Market Exchange
Rate at such time. For purposes of this Section 10.15, "Market Exchange Rate"
shall mean the noon Dollar buying rate in New York City for cable transfers of
that currency as published by the Federal Reserve Bank of New York; PROVIDED,
HOWEVER, in the case of ECUs, Market Exchange Rate shall mean the rate of
exchange determined by the Commission of the European Union (or any successor
thereto) as published in the Official Journal of the European Union (such
publication or any successor publication, the "Journal"). If such Market
Exchange Rate is not available for any reason with respect to such currency, the
Trustee shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York or, in the case of ECUs,
the rate of exchange as published in the Journal, as of the most recent
available date, or quotations or, in the case of ECUs, rates of exchange from
one or more major banks in The City of New York or in the country of issue of
the currency in question or, in the case of ECUs, in Luxembourg or such other
quotations or, in the case of ECUs, rates of exchange as the Trustee, upon
consultation with the Company, shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent principal amount in respect
of Securities of a Series denominated in currency other than Dollars in
connection with any action taken by Holders of Securities pursuant to the terms
of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Company and all Holders.
Section 10.16. JUDGMENT CURRENCY.
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due in respect of the principal of
or interest or other amount on the Securities of any Series (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New
York the Required Currency with the Judgment Currency on the day on which final
unappealable judgment is entered, unless such day is not a New York Banking Day,
then, the rate of exchange used shall be the rate at which in accordance with
normal banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which final unappealable judgment is entered and (b) its
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obligations under this Indenture to make payments in the Required Currency
(i) shall not be discharged or satisfied by any tender, any recovery pursuant to
any judgment (whether or not entered in accordance with subsection (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable, and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York on which banking institutions are
authorized or required by law, regulation or executive order to close.
ARTICLE XI.
SINKING FUNDS
Section 11.1. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of the Securities of a Series, except as otherwise permitted
or required by any form of Security of such Series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of the Securities of any Series is herein referred to as a "mandatory
sinking fund payment" and any other amount provided for by the terms of
Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2. Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of such
Series.
Section 11.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of any Series to be made pursuant to
the terms of such Securities (1) deliver outstanding Securities of such Series
to which such sinking fund payment is applicable (other than any of such
Securities previously called for mandatory sinking fund redemption) and
(2) apply as credit Securities of such Series to which such sinking fund payment
is applicable and which have been redeemed either at the election of the Company
pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional sinking
fund payments or other optional redemptions
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pursuant to the terms of such Securities, provided that such Securities have not
been previously so credited. Such Securities shall be received by the Trustee,
together with an Officers' Certificate with respect thereto, not later than 15
days prior to the date on which the Trustee begins the process of selecting
Securities for redemption, and shall be credited for such purpose by the Trustee
at the price specified in such Securities for redemption through operation of
the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. If as a result of the delivery or credit of Securities in lieu of
cash payments pursuant to this Section 11.2, the principal amount of Securities
of such Series to be redeemed in order to exhaust the aforesaid cash payment
shall be less than $100,000, the Trustee need not call Securities of such Series
for redemption, except upon receipt of a Company Order that such action be
taken, and such cash payment shall be held by the Trustee or a Paying Agent and
applied to the next succeeding sinking fund payment, PROVIDED, HOWEVER, that the
Trustee or such Paying Agent shall from time to time upon receipt of a Company
Order pay over and deliver to the Company any cash payment so being held by the
Trustee or such Paying Agent upon delivery by the Company to the Trustee of
Securities of that Series purchased by the Company having an unpaid principal
amount equal to the cash payment required to be released to the Company.
Section 11.3. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days (unless otherwise indicated in the Board
Resolution, supplemental indenture hereto or Officers' Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days (unless otherwise indicated in the Board Resolution,
Officers' Certificate or supplemental indenture in respect of a particular
Series of Securities) before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.2 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
HARRAH'S ENTERTAINMENT, INC.
By:
------------------------------------
Name:
Its:
[Name of Trustee]
By:
------------------------------------
Name:
Its:
S - 1
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- --------------------------------------------------------------------------------
HARRAH'S OPERATING COMPANY, INC.
Issuer
------------------------------------
HARRAH'S ENTERTAINMENT, INC.
Guarantor
------------------------------------
INDENTURE
Dated as of _________, 1998
------------------------------------
[Name of Trustee]
Trustee
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . .1
Section 1.1. Definitions.. . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Other Definitions.. . . . . . . . . . . . . . . . . . . . . 6
Section 1.3. Incorporation by Reference of Trust Indenture Act.. . . . . 6
Section 1.4. Rules of Construction.. . . . . . . . . . . . . . . . . . . 7
ARTICLE II. THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.1. Issuable in Series. . . . . . . . . . . . . . . . . . . . . 7
Section 2.2. Establishment of Terms of Series of Securities. . . . . . . 8
Section 2.3. Execution and Authentication. . . . . . . . . . . . . . . .10
Section 2.4. Registrar and Paying Agent. . . . . . . . . . . . . . . . .11
Section 2.5. Paying Agent to Hold Money in Trust.. . . . . . . . . . . .12
Section 2.6. Securityholder Lists. . . . . . . . . . . . . . . . . . . .12
Section 2.7. Transfer and Exchange.. . . . . . . . . . . . . . . . . . .12
Section 2.8. Mutilated, Destroyed, Lost and Stolen Securities. . . . . .13
Section 2.9. Outstanding Securities. . . . . . . . . . . . . . . . . . .13
Section 2.10. Treasury Securities. . . . . . . . . . . . . . . . . . . .14
Section 2.11. Temporary Securities.. . . . . . . . . . . . . . . . . . .14
Section 2.12. Cancellation.. . . . . . . . . . . . . . . . . . . . . . .14
Section 2.13. Defaulted Interest.. . . . . . . . . . . . . . . . . . . .15
Section 2.14. Global Securities. . . . . . . . . . . . . . . . . . . . .15
Section 2.15. CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . .16
ARTICLE III. REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . .17
Section 3.1. Notice to Trustee.. . . . . . . . . . . . . . . . . . . . .17
Section 3.2. Selection of Securities to be Redeemed. . . . . . . . . . .17
Section 3.3. Notice of Redemption. . . . . . . . . . . . . . . . . . . .17
Section 3.4. Effect of Notice of Redemption. . . . . . . . . . . . . . .18
Section 3.5. Deposit of Redemption Price.. . . . . . . . . . . . . . . .18
Section 3.6. Securities Redeemed in Part.. . . . . . . . . . . . . . . .18
ARTICLE IV. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Section 4.1. Payment of Principal and Interest.. . . . . . . . . . . . .19
Section 4.2. SEC Reports.. . . . . . . . . . . . . . . . . . . . . . . .19
Section 4.3. Compliance Certificate. . . . . . . . . . . . . . . . . . .19
Section 4.4. Stay, Extension and Usury Laws. . . . . . . . . . . . . . .19
Section 4.5. Corporate Existence.. . . . . . . . . . . . . . . . . . . .20
Section 4.6. Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . .20
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ARTICLE V. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 5.1. When Company May Merge, Etc.. . . . . . . . . . . . . . . .20
Section 5.2. Successor Corporation Substituted.. . . . . . . . . . . . .21
ARTICLE VI. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . .21
Section 6.1. Events of Default.. . . . . . . . . . . . . . . . . . . . .21
Section 6.2. Acceleration of Maturity; Rescission and Annulment. . . . .22
Section 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.. . . . . . . . . . . . . . . . . . . . . . . . . .24
Section 6.4. Trustee May File Proofs of Claim. . . . . . . . . . . . . .24
Section 6.5. Trustee May Enforce Claims Without Possession of
Securities. . . . . . . . . . . . . . . . . . . . . . . . .25
Section 6.6. Application of Money Collected. . . . . . . . . . . . . . .25
Section 6.7. Limitation on Suits.. . . . . . . . . . . . . . . . . . . .26
Section 6.8. Unconditional Right of Holders to Receive Principal and
Interest. . . . . . . . . . . . . . . . . . . . . . . . . .26
Section 6.9. Restoration of Rights and Remedies. . . . . . . . . . . . .27
Section 6.10. Rights and Remedies Cumulative.. . . . . . . . . . . . . .27
Section 6.11. Delay or Omission Not Waiver.. . . . . . . . . . . . . . .27
Section 6.12. Control by Holders.. . . . . . . . . . . . . . . . . . . .27
Section 6.13. Waiver of Past Defaults. . . . . . . . . . . . . . . . . .28
Section 6.14. Undertaking for Costs. . . . . . . . . . . . . . . . . . .28
ARTICLE VII. TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Section 7.1. Duties of Trustee.. . . . . . . . . . . . . . . . . . . . .28
Section 7.2. Rights of Trustee.. . . . . . . . . . . . . . . . . . . . .30
Section 7.3. Individual Rights of Trustee. . . . . . . . . . . . . . . .30
Section 7.4. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . .31
Section 7.5. Notice of Defaults. . . . . . . . . . . . . . . . . . . . .31
Section 7.6. Reports by Trustee to Holders.. . . . . . . . . . . . . . .31
Section 7.7. Compensation and Indemnity. . . . . . . . . . . . . . . . .31
Section 7.8. Replacement of Trustee. . . . . . . . . . . . . . . . . . .32
Section 7.9. Successor Trustee by Merger, etc. . . . . . . . . . . . . .33
Section 7.10. Eligibility; Disqualification. . . . . . . . . . . . . . .33
Section 7.11. Preferential Collection of Claims Against Company. . . . .33
ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE. . . . . . . . . . . .34
Section 8.1. Satisfaction and Discharge of Indenture.. . . . . . . . . .34
Section 8.2. Application of Trust Funds; Indemnification.. . . . . . . .35
Section 8.3. Legal Defeasance of Securities of any Series. . . . . . . .35
Section 8.4. Covenant Defeasance.. . . . . . . . . . . . . . . . . . . .37
Section 8.5. Repayment to Company. . . . . . . . . . . . . . . . . . . .38
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ARTICLE IX. AMENDMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . . .38
Section 9.1. Without Consent of Holders. . . . . . . . . . . . . . . . .38
Section 9.2. With Consent of Holders.. . . . . . . . . . . . . . . . . .39
Section 9.3. Limitations.. . . . . . . . . . . . . . . . . . . . . . . .40
Section 9.4. Compliance with Trust Indenture Act.. . . . . . . . . . . .40
Section 9.5. Revocation and Effect of Consents.. . . . . . . . . . . . .40
Section 9.6. Notation on or Exchange of Securities.. . . . . . . . . . .41
Section 9.7. Trustee Protected.. . . . . . . . . . . . . . . . . . . . .41
ARTICLE X. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . .41
Section 10.1. Trust Indenture Act Controls.. . . . . . . . . . . . . . .41
Section 10.2. Notices. . . . . . . . . . . . . . . . . . . . . . . . . .41
Section 10.3. Communication by Holders with Other Holders. . . . . . . .42
Section 10.4. Certificate and Opinion as to Conditions Precedent.. . . .42
Section 10.5. Statements Required in Certificate or Opinion. . . . . . .42
Section 10.6. Rules by Trustee and Agents. . . . . . . . . . . . . . . .43
Section 10.7. Legal Holidays.. . . . . . . . . . . . . . . . . . . . . .43
Section 10.8. No Recourse Against Others.. . . . . . . . . . . . . . . .43
Section 10.9. Counterparts.. . . . . . . . . . . . . . . . . . . . . . .43
Section 10.10. Governing Laws. . . . . . . . . . . . . . . . . . . . . .43
Section 10.11. No Adverse Interpretation of Other Agreements.. . . . . .44
Section 10.12. Successors. . . . . . . . . . . . . . . . . . . . . . . .44
Section 10.13. Severability. . . . . . . . . . . . . . . . . . . . . . .44
Section 10.14. Table of Contents, Headings, Etc. . . . . . . . . . . . .44
Section 10.15. Securities in a Foreign Currency or in ECU. . . . . . . .44
Section 10.16. Judgment Currency.. . . . . . . . . . . . . . . . . . . .45
ARTICLE XI. SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 11.1. Applicability of Article.. . . . . . . . . . . . . . . . .46
Section 11.2. Satisfaction of Sinking Fund Payments with Securities. . .46
Section 11.3. Redemption of Securities for Sinking Fund. . . . . . . . .47
ARTICLE XII. GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . .47
Section 12.1. Guarantee. . . . . . . . . . . . . . . . . . . . . . . . .47
Section 12.2. Execution and Delivery of Guarantee.. . . . . . . . . . ..48
Section 12.3. Release of Guarantor.. . . . . . . . . . . . . . . . . . .49
Section 12.4. When Guarantor May Merge, etc. . . . . . . . . . . . . . .50
</TABLE>
iii
<PAGE>
HARRAH'S OPERATING COMPANY, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of __________, 199_
<TABLE>
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(a)(4) . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(a)(5) . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . 7.10
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . 2.6
(b) . . . . . . . . . . . . . . . . . . . . . . 10.3
(c) . . . . . . . . . . . . . . . . . . . . . . 10.3
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1) . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(2) . . . . . . . . . . . . . . . . . . . . . . 7.6
(c)(1) . . . . . . . . . . . . . . . . . . . . . . 7.6
(d) . . . . . . . . . . . . . . . . . . . . . . 7.6
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . 4.2, 10.5
(b) . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(c)(1) . . . . . . . . . . . . . . . . . . . . . . 10.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . 10.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(d) . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
(e) . . . . . . . . . . . . . . . . . . . . . . 10.5
(f) . . . . . . . . . . . . . . . . . . . . . . NOT APPLICABLE
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . 7.5
(c) . . . . . . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . . . . . . 6.14
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . 2.10
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . 6.12
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . 6.13
(b) . . . . . . . . . . . . . . . . . . . . . . 6.8
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . 6.3
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 6.4
(b) . . . . . . . . . . . . . . . . . . . . . . 2.5
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . 10.1
</TABLE>
- ---------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
i
<PAGE>
Indenture dated as of ___________, 1998 between Harrah's Operating
Company, Inc., a Delaware corporation ("Company"), Harrah's Entertainment, Inc.,
a Delaware corporation ("Guarantor"), and [Name of Trustee], a ________________
("Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Securities issued under
this Indenture.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. DEFINITIONS.
"Additional Amounts" means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes imposed on Holders specified
therein and which are owing to such Holders.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Service Agent.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the place in
connection with which the term is used. If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is
made or given by the Trustee shall constitute a sufficient publication of such
notice.
"Bearer" means anyone in possession from time to time of a Bearer
Security.
"Bearer Security" means any Security, including any interest coupon
appertaining thereto, that does not provide for the identification of the Holder
thereof.
"Board of Directors" means the Board of Directors of the Company or
any duly authorized committee thereof.
1
<PAGE>
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant to authorization by the Board of Directors and to
be in full force and effect on the date of the certificate and delivered to the
Trustee.
"Business Day" means, unless otherwise provided by Board Resolution,
Officers' Certificate or supplemental indenture hereto for a particular Series,
any day except a Saturday, Sunday or a legal holiday in the City of New York on
which banking institutions are authorized or required by law, regulation or
executive order to close.
"Company" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name of the
Company by its Chairman of the Board, a President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the total amount of assets
(including investments in Joint Ventures) of the Company and its subsidiaries
(less applicable depreciation, amortization and other valuation reserves) after
deduction therefrom (a) all current liabilities of the Company and its
subsidiaries (excluding (i) the current portion of long-term indebtedness, (ii)
intercompany liabilities and (iii) any liabilities which are by their terms
renewable or extendible at the option of the obligor thereon to a time more than
12 months from the time as of which the amount thereof is being computed) and
(b) all goodwill, trade names, trademarks, patents, unamortized debt discount
and any other like intangibles, all as set forth on the consolidated balance
sheet of the Company for the most recently completed fiscal quarter for which
financials are available and computed in accordance with generally accepted
accounting principles.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
2
<PAGE>
"Depository" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used with
respect to the Securities of any Series shall mean the Depository with respect
to the Securities of such Series.
"Discount Security" means any Security that provides for an amount
less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.
"Dollars" means the currency of The United States of America.
"ECU" means the European Currency Unit as determined by the Commission
of the European Union.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Foreign Currency" means any currency or currency unit issued by a
government other than the government of The United States of America.
"Foreign Government Obligations" means with respect to Securities of
any Series that are denominated in a Foreign Currency, (i) direct obligations of
the government that issued or caused to be issued such currency for the payment
of which obligations its full faith and credit is pledged or (ii) obligations of
a person controlled or supervised by or acting as an agency or instrumentality
of such government the timely payment of which is unconditionally guaranteed as
a full faith and credit obligation by such government, which, in either case
under clauses (i) or (ii), are not callable or redeemable at the option of the
issuer thereof.
"Gaming Laws" means the gaming laws of a jurisdiction or jurisdictions
to which the Company or a subsidiary of the Company is, or may at any time after
the date of this Indenture be, subject.
"Gaming Authority" means the Nevada Gaming Commission, the Nevada
State Gaming Control Board, the New Jersey Casino Control Commission or any
similar commission or agency which has, or may at any time after the date of
this Indenture have, jurisdiction over the gaming activities of the Company or a
subsidiary of the Company or any successor thereto.
"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.2
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.
"Guarantee" shall have the meaning set forth in Section 12.1 hereof.
3
<PAGE>
"Guarantor" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Holder" or "Securityholder" means a person in whose name a Security
is registered or the holder of a Bearer Security.
"Indenture" means this Indenture as amended from time to time and
shall include the form and terms of particular Series of Securities established
as contemplated hereunder.
"interest" with respect to any Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.
"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 interests is owned, directly or indirectly, by the Company
and/or more subsidiaries.
"Maturity," when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, notice of option to elect repayment or otherwise.
"Non-recourse Indebtedness" means indebtedness the terms of which
provide that the lender's claim for repayment of such indebtedness is limited
solely to a claim against the property which secures such indebtedness.
"Officer" means the Chairman of the Board, any President, any
Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the Company's principal executive officer, principal
financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.
"person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on, and any Additional Amounts in respect
of, the Security.
4
<PAGE>
"Responsible Officer" means any officer of the Trustee in its
Corporate Trust Office and also means, with respect to a particular corporate
trust matter, any other officer to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debentures, notes or other debt instruments of
the Company of any Series authenticated and delivered under this Indenture.
"Series" or "Series of Securities" means each series of debentures,
notes or other debt instruments of the Company created pursuant to Sections 2.1
and 2.2 hereof.
"Significant Subsidiary" means (i) any direct or indirect Subsidiary
of the Company that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933,
as amended, as such regulation is in effect on the date hereof, or (ii) any
group of direct or indirect Subsidiaries of the Company that, taken together as
a group, would be a "significant subsidiary" as defined in Article 1, Rule 1-02
of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as
amended, as such regulation is in effect on the date hereof.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any specified person means any corporation of which at
least a majority of the outstanding stock having by the terms thereof ordinary
voting power for the election of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by such person, or
by one or more other Subsidiaries, or by such person and one or more other
Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture; PROVIDED, HOWEVER,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act as so amended.
"Trustee" means the person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each person who is then a Trustee hereunder, and
if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
5
<PAGE>
"U.S. Government Obligations" means securities which are (i) direct
obligations of The United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of The United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by The United States of America, and which in the case of (i)
and (ii) are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
PROVIDED that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.
Section 1.2. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
- ---- -------
<S> <C>
"Bankruptcy Law" 6.1
"Custodian" 6.1
"Event of Default" 6.1
"Journal" 10.15
"Judgment Currency" 10.16
"Legal Holiday" 10.7
"mandatory sinking fund payment" 11.1
"Market Exchange Rate" 10.15
"New York Banking Day" 10.16
"optional sinking fund payment" 11.1
"Paying Agent" 2.4
"Registrar" 2.4
"Required Currency" 10.16
"Service Agent" 2.4
"successor person" 5.1
</TABLE>
Section 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
6
<PAGE>
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein are used herein as so defined.
Section 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles;
(c) references to "generally accepted accounting principles" shall
mean generally accepted accounting principles in effect as of the time when
and for the period as to which such accounting principles are to be
applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the plural
include the singular; and
(f) provisions apply to successive events and transactions.
ARTICLE II.
THE SECURITIES
Section 2.1. ISSUABLE IN SERIES.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued
in one or more Series. All Securities of a Series shall be identical except as
may be set forth in a Board Resolution, a supplemental indenture or an Officers'
Certificate detailing the adoption of the terms thereof pursuant to the
authority granted under a Board Resolution. In the case of Securities of a
Series to be issued from time to time, the Board Resolution, Officers'
Certificate or supplemental indenture may provide for the method by which
specified terms (such as interest rate, maturity date, record date or date from
which interest shall accrue) are to be determined. Securities may differ
between Series in respect of any matters, provided that all Series of Securities
shall be equally and ratably entitled to the benefits of the Indenture.
7
<PAGE>
Section 2.2. ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES.
At or prior to the issuance of any Securities within a Series, the
following shall be established (as to the Series generally, in the case of
Subsection 2.2.1 and either as to such Securities within the Series or as to the
Series generally in the case of Subsections 2.2.2 through 2.2.22) by a Board
Resolution, a supplemental indenture or an Officers' Certificate pursuant to
authority granted under a Board Resolution:
2.2.1. the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series);
2.2.2. the price or prices (expressed as a percentage of the
principal amount thereof) at which the Securities of the Series will be issued;
2.2.3. any limit upon the aggregate principal amount of the
Securities of the Series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.4. the date or dates on which the principal of the
Securities of the Series is payable;
2.2.5. the rate or rates (which may be fixed or variable) per
annum or, if applicable, the method used to determine such rate or rates
(including, but not limited to, any commodity, commodity index, stock exchange
index or financial index) at which the Securities of the Series shall bear
interest, if any, the date or dates from which such interest, if any, shall
accrue, the date or dates on which such interest, if any, shall commence and be
payable and any regular record date for the interest payable on any interest
payment date;
2.2.6. the place or places where the principal of and interest,
if any, on the Securities of the Series shall be payable, or the method of such
payment, if by wire transfer, mail or other means;
2.2.7. if applicable, the period or periods within which, the
price or prices at which and the terms and conditions upon which the Securities
of the Series may be redeemed, in whole or in part, at the option of the
Company;
2.2.8. the obligation, if any, of the Company to redeem or
purchase the Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which
Securities of the Series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
8
<PAGE>
2.2.9. the dates, if any, on which and the price or prices at
which the Securities of the Series will be repurchased by the Company at the
option of the Holders thereof and other detailed terms and provisions of such
repurchase obligations;
2.2.10. if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Securities of the Series shall
be issuable;
2.2.11. the forms of the Securities of the Series in bearer or
fully registered form (and, if in fully registered form, whether the Securities
will be issuable as Global Securities);
2.2.12. if other than the principal amount thereof, the portion
of the principal amount of the Securities of the Series that shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 6.2;
2.2.13. the currency of denomination of the Securities of the
Series, which may be Dollars or any Foreign Currency, including, but not limited
to, the ECU, and if such currency of denomination is a composite currency other
than the ECU, the agency or organization, if any, responsible for overseeing
such composite currency;
2.2.14. the designation of the currency, currencies or currency
units in which payment of the principal of and interest, if any, on the
Securities of the Series will be made;
2.2.15. if payments of principal of or interest, if any, on the
Securities of the Series are to be made in one or more currencies or currency
units other than that or those in which such Securities are denominated, the
manner in which the exchange rate with respect to such payments will be
determined;
2.2.16. the manner in which the amounts of payment of principal
of or interest, if any, on the Securities of the Series will be determined, if
such amounts may be determined by reference to an index based on a currency or
currencies or by reference to a commodity, commodity index, stock exchange index
or financial index;
2.2.17. the provisions, if any, relating to any security provided
for the Securities of the Series;
2.2.18. any addition to or change in the Events of Default which
applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 6.2;
2.2.19. any addition to or change in the covenants set forth in
Articles IV or V which applies to Securities of the Series;
9
<PAGE>
2.2.20. any other terms of the Securities of the Series (which
terms shall not be inconsistent with the provisions of this Indenture, except as
permitted by Section 9.1, but which may modify or delete any provision of this
Indenture insofar as it applies to such Series); and
2.2.21. any depositories, interest rate calculation agents,
exchange rate calculation agents or other agents with respect to Securities of
such Series if other than those appointed herein.
All Securities of any one Series need not be issued at the same time
and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture or Officers' Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in such Board
Resolution, supplemental indenture or Officers' Certificate.
Section 2.3. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate, upon receipt
by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate.
The aggregate principal amount of Securities of any Series outstanding
at any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution, supplemental indenture hereto or
Officers' Certificate delivered pursuant to Section 2.2, except as provided in
Section 2.8.
Prior to the issuance of Securities of any Series, the Trustee shall
have received and (subject to Section 7.2) shall be fully protected in relying
on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of
10
<PAGE>
Securities within that Series, (b) an Officers' Certificate complying with
Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
Section 2.4. REGISTRAR AND PAYING AGENT.
The Company shall maintain, with respect to each Series of Securities,
at the place or places specified with respect to such Series pursuant to
Section 2.2, an office or agency where Securities of such Series may be
presented or surrendered for payment ("Paying Agent"), where Securities of such
Series may be surrendered for registration of transfer or exchange
("Registrar") and where notices and demands to or upon the Company in respect of
the Securities of such Series and this Indenture may be served ("Service
Agent"). The Registrar shall keep a register with respect to each Series of
Securities and to their transfer and exchange. The Company will give prompt
written notice to the Trustee of the name and address, and any change in the
name or address, of each Registrar, Paying Agent or Service Agent. If at any
time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more
co-registrars, additional paying agents or additional service agents and may
from time to time rescind such designations; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 for Securities of any Series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the name or address of any
such co-registrar, additional paying agent or additional service agent. The
term "Registrar" includes any co-registrar; the term "Paying Agent" includes any
additional paying agent; and the term "Service Agent" includes any additional
service agent.
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The Company hereby appoints the Trustee the initial Registrar, Paying
Agent and Service Agent for each Series unless another Registrar, Paying Agent
or Service Agent, as the case may be, is appointed prior to the time Securities
of that Series are first issued.
Section 2.5. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by
the Paying Agent for the payment of principal of or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for the money. If the Company or
a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of Securityholders of any Series of Securities all
money held by it as Paying Agent.
Section 2.6. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least ten days before each interest payment date and at such
other times as the Trustee may request in writing a list, in such form and as of
such date as the Trustee may reasonably require, of the names and addresses of
Securityholders of each Series of Securities.
Section 2.7. TRANSFER AND EXCHANGE.
Where Securities of a Series are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or
9.6).
Neither the Company nor the Registrar shall be required (a) to issue,
register the transfer of, or exchange Securities of any Series for the period
beginning at the opening of business fifteen days immediately preceding the
mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or
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being called for redemption as a whole or the portion being redeemed of any such
Securities selected, called or being called for redemption in part.
Section 2.8. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 2.9. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.
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If a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on the Maturity of Securities of a Series money
sufficient to pay such Securities payable on that date, then on and after that
date such Securities of the Series cease to be outstanding and interest on them
ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
In determining whether the Holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.2.
Section 2.10. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities of a Series have concurred in any request, demand, authorization,
direction, notice, consent or waiver Securities of a Series owned by the Company
or an Affiliate shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
request, demand, authorization, direction, notice, consent or waiver only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.
Section 2.11. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon a Company
Order. Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee upon request shall authenticate definitive Securities of the same
Series and date of maturity in exchange for temporary Securities. Until so
exchanged, temporary securities shall have the same rights under this Indenture
as the definitive Securities.
Section 2.12. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for transfer,
exchange, payment, replacement or cancellation and shall destroy such canceled
Securities (subject to the record retention requirement of the Exchange Act) and
deliver
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a certificate of such destruction to the Company, unless the Company otherwise
directs. The Company may not issue new Securities to replace Securities that it
has paid or delivered to the Trustee for cancellation.
Section 2.13. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date. The Company
shall fix the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of
interest to be paid. The Company may pay defaulted interest in any other lawful
manner.
Section 2.14. GLOBAL SECURITIES.
2.14.1. TERMS OF SECURITIES. A Board Resolution, a supplemental
indenture hereto or an Officers' Certificate shall establish whether the
Securities of a Series shall be issued in whole or in part in the form of one or
more Global Securities and the Depository for such Global Security or
Securities.
2.14.2. TRANSFER AND EXCHANGE. Notwithstanding any provisions to
the contrary contained in Section 2.7 of the Indenture and in addition thereto,
any Global Security shall be exchangeable pursuant to Section 2.7 of the
Indenture for Securities registered in the names of Holders other than the
Depository for such Security or its nominee only if (i) such Depository notifies
the Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depository within 90 days of such event, (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable or (iii) an Event of Default with
respect to the Securities represented by such Global Security shall have
happened and be continuing. Any Global Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Securities registered in
such names as the Depository shall direct in writing in an aggregate principal
amount equal to the principal amount of the Global Security with like tenor and
terms.
Except as provided in this Section 2.14.2, a Global Security may not
be transferred except as a whole by the Depository with respect to such Global
Security to a nominee of such Depository, by a nominee of such Depository to
such Depository or another nominee of such Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such a successor
Depository.
2.14.3. LEGEND. Any Global Security issued hereunder shall bear
a legend in substantially the following form:
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"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository."
2.14.4. ACTS OF HOLDERS. The Depository, as a Holder, may
appoint agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture.
2.14.5. PAYMENTS. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.2, payment of
the principal of and interest, if any, on any Global Security shall be made to
the Holder thereof.
2.14.6. CONSENTS, DECLARATION AND DIRECTIONS. Except as provided
in Section 2.14.5, the Company, the Trustee and any Agent shall treat a person
as the Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depository with respect to such Global Security, for purposes of obtaining
any consents, declarations, waivers or directions required to be given by the
Holders pursuant to this Indenture.
Section 2.15. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
Section 2.16. MANDATORY DISPOSITION OF DEBT SECURITIES PURSUANT TO
GAMING LAWS
Each Holder and beneficial owner, by accepting or otherwise acquiring
an interest in the Debt Securities, shall be deemed to have agreed that if the
Gaming Authority of any jurisdiction in which the Company or any of its
subsidiaries conducts or proposes to conduct gaming requires that a Person who
is a Holder or beneficial owner must be licensed, qualified or found suitable
under the applicable Gaming Laws, such Holder or beneficial owner shall apply
for a license, qualification or a finding of suitability within the required
time period. If such Person fails to apply or become licensed or qualified or
is found unsuitable, then the Company shall have the right, at its option, (i)
to require such Person to dispose of its Debt Securities or
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beneficial interest therein within 30 days of receipt of notice of the Company's
election or such earlier date as may be requested or prescribed by such Gaming
Authority or (ii) to redeem such Debt Securities at a redemption price equal to
the lesser of (a) such Person's cost or (b) 100% of the principal amount
thereof, plus accrued and unpaid interest to the earlier of the redemption date
and the date of the finding of unsuitability, which may be less than 30 days
following the notice of redemption if so requested or prescribed by the Gaming
Authority. The Company shall notify the Trustee in writing of any such
redemption as soon as practicable. The Company shall not be responsible for any
costs or expenses any such Holder or beneficial owner may incur in connection
with its application for a license, qualification or a finding of suitability.
ARTICLE III.
REDEMPTION
Section 3.1. NOTICE TO TRUSTEE.
The Company may, with respect to any Series of Securities, reserve the
right to redeem and pay the Series of Securities or may covenant to redeem and
pay the Series of Securities or any part thereof prior to the Stated Maturity
thereof at such time and on such terms as provided for in such Securities. If a
Series of Securities is redeemable and the Company wants or is obligated to
redeem prior to the Stated Maturity thereof all or part of the Series of
Securities pursuant to the terms of such Securities, it shall notify the Trustee
of the redemption date and the principal amount of Series of Securities to be
redeemed. The Company shall give the notice at least 45 days before the
redemption date (or such shorter notice as may be acceptable to the Trustee).
Section 3.2. SELECTION OF SECURITIES TO BE REDEEMED.
Unless otherwise indicated for a particular Series by a Board
Resolution, a supplemental indenture or an Officers' Certificate, if less than
all the Securities of a Series are to be redeemed, the Trustee shall select the
Securities of the Series to be redeemed in any manner that the Trustee deems
fair and appropriate. The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities of the Series that
have denominations larger than $1,000. Securities of the Series and portions of
them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or,
with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series
and integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.
Section 3.3. NOTICE OF REDEMPTION.
Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail
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to each Holder whose Securities are to be redeemed and if any Bearer Securities
are outstanding, publish on one occasion a notice in an Authorized Newspaper.
The notice shall identify the Securities of the Series to be redeemed
and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(e) that interest on Securities of the Series called for redemption
ceases to accrue on and after the redemption date; and
(f) any other information as may be required by the terms of the
particular Series or the Securities of a Series being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
Section 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed or published as provided in
Section 3.3, Securities of a Series called for redemption become due and payable
on the redemption date and at the redemption price. A notice of redemption may
not be conditional. Upon surrender to the Paying Agent, such Securities shall
be paid at the redemption price plus accrued interest to the redemption date.
Section 3.5. DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest, if any, on all Securities to be redeemed on that date.
Section 3.6. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security of the same Series and the same
maturity equal in principal amount to the unredeemed portion of the Security
surrendered.
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ARTICLE IV.
COVENANTS
Section 4.1. PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of the Holders of
each Series of Securities that it will duly and punctually pay the principal of
and interest, if any, on the Securities of that Series in accordance with the
terms of such Securities and this Indenture.
Section 4.2. SEC REPORTS.
The Company shall deliver to the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA Section 314(a).
Section 4.3. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).
The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
Section 4.4. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture or the Securities; and the Company (to the
extent it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law and covenants that it will not, by resort to any such law,
hinder, delay
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or impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.5. CORPORATE EXISTENCE.
Subject to Article V, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Significant
Subsidiary in accordance with the respective organizational documents of each
Significant Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and its Significant Subsidiaries; PROVIDED, HOWEVER,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Significant
Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Holders.
Section 4.6. TAXES.
The Company shall, and shall cause each of its Significant
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.
ARTICLE V.
SUCCESSORS
Section 5.1. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with or merge into, or convey,
transfer or lease all or substantially all of its properties and assets to, any
person (a "successor person"), and may not permit any person to merge into, or
convey, transfer or lease its properties and assets substantially as an
entirety to, the Company, unless:
(a) the successor person (if any) is a corporation, partnership,
trust or other entity organized and validly existing under the laws of any
U.S. domestic jurisdiction and expressly assumes the Company's obligations
on the Securities and under this Indenture and
(b) immediately after giving effect to the transaction, no Default or
Event of Default, shall have occurred and be continuing.
The Company shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
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Section 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor person has been named
as the Company herein; PROVIDED, HOWEVER, that the predecessor Company in the
case of a sale, lease, conveyance or other disposition shall not be released
from the obligation to pay the principal of and interest, if any, on the
Securities.
ARTICLE VI.
DEFAULTS AND REMEDIES
Section 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein with respect to Securities of
any Series, means any one of the following events, unless in the establishing
Board Resolution, supplemental indenture or Officers' Certificate, it is
provided that such Series shall not have the benefit of said Event of Default:
(a) default in the payment of any interest on any Security of that
Series when it becomes due and payable, and continuance of such default for
a period of 30 days (unless the entire amount of such payment is deposited
by the Company with the Trustee or with a Paying Agent prior to the
expiration of such period of 30 days); or
(b) default in the payment of the principal of any Security of that
Series at its Maturity; or
(c) default in the deposit of any sinking fund payment, when and as
due in respect of any Security of that Series; or
(d) default in the performance or breach of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty that
has been included in this Indenture solely for the benefit of Series of
Securities other than that Series), which default continues uncured for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the outstanding
Securities of that Series a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(e) the acceleration of the maturity of any indebtedness of the
Company (other than Non-recourse Indebtedness), at any one time, in an
amount in excess of the greater
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of (i) $25 million and (ii) 5% of Consolidated Net Tangible Assets, if such
acceleration is not annulled within 30 days after written notice to the
Company by the Trustee and the holders of at least 25% in principal amount
of the outstanding Debt Securities of that Series.
(f) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is unable to pay its debts as the same become
due; or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries in an involuntary case,
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of its
property, or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days; or
(h) any other Event of Default provided with respect to Securities of
that Series, which is specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate, in accordance with Section
2.2.18.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
Section 6.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Securities of any Series at the
time outstanding occurs and is continuing (other than an Event of Default
referred to in Section 6.1(f)
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or (g)) then in every such case the Trustee or the Holders of not less than 25%
in principal amount of the outstanding Securities of that Series may declare the
principal amount (or, if any Securities of that Series are Discount Securities,
such portion of the principal amount as may be specified in the terms of such
Securities) of and accrued and unpaid interest, if any, on all of the Securities
of that Series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount) and accrued and unpaid interest, if
any, shall become immediately due and payable. If an Event of Default specified
in Section 6.1(f) or (g) shall occur, the principal amount (or specified
amount) of and accrued and unpaid interest, if any, on all outstanding
Securities shall IPSO FACTO become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration with respect to
any Series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the outstanding
Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest, if any, on all Securities of that
Series,
(ii) the principal of any Securities of that Series which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Securities,
(iii) to the extent that payment of such interest is lawful,
interest upon any overdue principal and overdue interest at the rate
or rates prescribed therefor in such Securities, and
(iv) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel;
and
(b) all Events of Default with respect to Securities of that Series,
other than the non-payment of the principal of Securities of that Series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
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Section 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of principal of any Security at
the Maturity thereof, or
(c) default is made in the deposit of any sinking fund payment when
and as due by the terms of a Security,
THEN, the Company will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal or any
overdue interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or deemed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to any Securities of any Series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
Series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue
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principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding,
and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 6.6. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
upon presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under
Section 7.7; and
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Second: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
Third: To the Company.
Section 6.7. LIMITATION ON SUITS.
No Holder of any Security of any Series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
Series;
(b) the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the outstanding Securities of that Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Security on
the Stated Maturity or Stated Maturities expressed in such Security (or, in the
case of redemption, on the redemption date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
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Section 6.9. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 6.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 6.12. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the outstanding
Securities of any Series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible
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Officer of the Trustee, determine that the proceeding so directed would
involve the Trustee in personal liability.
Section 6.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive any past Default hereunder with respect to such
Series and its consequences, except a Default in the payment of the principal of
or interest on any Security of such Series (provided, however, that the Holders
of a majority in principal amount of the outstanding Securities of any Series
may rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
Section 6.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest on
any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption date).
ARTICLE VII.
TRUSTEE
Section 7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture
and use the same degree of care and skill in their exercise as a prudent
man would exercise or use under the circumstances in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
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(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon Officers'
Certificates or Opinions of Counsel furnished to the Trustee and
conforming to the requirements of this Indenture; HOWEVER, in the case
of any such Officers' Certificates or Opinions of Counsel which by any
provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such Officers' Certificates and
Opinions of Counsel to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of paragraph
(b) of this Section.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it with respect to
Securities of any Series in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
outstanding Securities of such Series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such Series.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraph (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to risk
its own funds or otherwise incur any financial liability in the performance
of any of its duties, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for
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believing that repayment of such funds or adequate indemnity against such
risk is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent
shall be entitled to the protections, immunities and standard of care as
are set forth in paragraphs (a), (b) and (c) of this Section with respect
to the Trustee.
Section 7.2. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care. No
Depository shall be deemed an agent of the Trustee and the Trustee shall
not be responsible for any act or omission by any Depository.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction.
Section 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee is also subject to Sections 7.10
and 7.11.
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Section 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its authentication.
Section 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing with respect
to the Securities of any Series and if it is known to a Responsible Officer of
the Trustee, the Trustee shall mail to each Securityholder of the Securities of
that Series and, if any Bearer Securities are outstanding, publish on one
occasion in an Authorized Newspaper, notice of a Default or Event of Default
within 90 days after it occurs or, if later, after a Responsible Officer of the
Trustee has knowledge of such Default or Event of Default. Except in the case
of a Default or Event of Default in payment of principal of or interest on any
Security of any Series, the Trustee may withhold the notice if and so long as
its corporate trust committee or a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of
Securityholders of that Series.
Section 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after May 15 in each year, the Trustee shall transmit
by mail to all Securityholders, as their names and addresses appear on the
register kept by the Registrar and, if any Bearer Securities are outstanding,
publish in an Authorized Newspaper, a brief report dated as of such May 15, in
accordance with, and to the extent required under, TIA Section 313.
A copy of each report at the time of its mailing to Securityholders of
any Series shall be filed with the SEC and each stock exchange on which the
Securities of that Series are listed. The Company shall promptly notify the
Trustee when Securities of any Series are listed on any stock exchange.
Section 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee (including the cost of
defending itself) against any loss, liability or expense incurred by it except
as set forth in the next paragraph in the performance of its duties under this
Indenture as Trustee or Agent. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel
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and the Company shall pay the reasonable fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld. This indemnification shall apply to
officers, directors, employees, shareholders and agents of the Trustee.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee or by any officer, director, employee,
shareholder or agent of the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities of any Series on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign with respect to the Securities of one or more
Series by so notifying the Company. The Holders of a majority in principal
amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company. The Company may remove
the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
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If a successor Trustee with respect to the Securities of any one or
more Series does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least 10% in principal amount of the Securities of the applicable Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee with respect to the Securities of any one or more
Series fails to comply with Section 7.10, any Securityholder of the applicable
Series may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series and, if any Bearer Securities are
outstanding, publish such notice on one occasion in an Authorized Newspaper.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 hereof shall continue for the benefit of
the retiring trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
Section 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always
have a combined capital and surplus of at least $25,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
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ARTICLE VIII.
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.1. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Order cease to be of further effect
(except as hereinafter provided in this Section 8.1), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered
(other than Securities that have been destroyed, lost or stolen and
that have been replaced or paid) have been delivered to the Trustee
for cancellation; or
(ii) all such Securities not theretofore delivered to the
Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at their Stated
Maturity within one year, or
(3) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company, or
(4) are deemed paid and discharged pursuant to
Section 8.3, as applicable;
and the Company, in the case of (1), (2) or (3) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust an amount sufficient
for the purpose of paying and discharging the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which have become due and payable on or prior to the date of such deposit) or to
the Stated Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.7, and, if money shall
have been deposited with the Trustee pursuant to clause (a) of this Section, the
provisions of Sections 2.4, 2.7, 2.8, 8.1 8.2 and 8.5 shall survive.
Section 8.2. APPLICATION OF TRUST FUNDS; INDEMNIFICATION.
(a) Subject to the provisions of Section 8.5, all money deposited
with the Trustee pursuant to Section 8.1, all money and U.S. Government
Obligations or Foreign Government Obligations deposited with the Trustee
pursuant to Section 8.3 or 8.4 and all money received by the Trustee in
respect of U.S. Government Obligations or Foreign Government Obligations
deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in
trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the persons entitled thereto, of the
principal and interest for whose payment such money has been deposited with
or received by the Trustee or to make mandatory sinking fund payments or
analogous payments as contemplated by Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against U.S. Government
Obligations or Foreign Government Obligations deposited pursuant to
Sections 8.3 or 8.4 or the interest and principal received in respect of
such obligations other than any payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time to time
upon Company Request any U.S. Government Obligations or Foreign Government
Obligations or money held by it as provided in Sections 8.3 or 8.4 which,
in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered
to the Trustee, are then in excess of the amount thereof which then would
have been required to be deposited for the purpose for which such U.S.
Government Obligations or Foreign Government Obligations or money were
deposited or received. This provision shall not authorize the sale by the
Trustee of any U.S. Government Obligations or Foreign Government
Obligations held under this Indenture.
Section 8.3. LEGAL DEFEASANCE OF SECURITIES OF ANY SERIES.
Unless this Section 8.3 is otherwise specified, pursuant to
Section 2.2.20, to be inapplicable to Securities of any Series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of such Series, shall no
longer be in effect (and the Trustee, at the expense of the Company, shall, at
Company Request, execute proper instruments acknowledging the same), except as
to:
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(a) the rights of Holders of Securities of such Series to receive,
from the trust funds described in subparagraph (d) hereof, (i) payment of
the principal of and each installment of principal of and interest on the
outstanding Securities of such Series on the Stated Maturity of such
principal or installment of principal or interest and (ii) the benefit of
any mandatory sinking fund payments applicable to the Securities of such
Series on the day on which such payments are due and payable in accordance
with the terms of this Indenture and the Securities of such Series;
(b) the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and
(c) the rights, powers, trust and immunities of the Trustee
hereunder;
provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of such Securities (i) in
the case of Securities of such Series denominated in Dollars, cash in
Dollars (or such other money or currencies as shall then be legal tender in
the United States) and/or U.S. Government Obligations, or (ii) in the case
of Securities of such Series denominated in a Foreign Currency (other than
a composite currency), money and/or Foreign Government Obligations, which
through the payment of interest and principal in respect thereof, in
accordance with their terms, will provide (and without reinvestment and
assuming no tax liability will be imposed on such Trustee), not later than
one day before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge each installment of principal
(including mandatory sinking fund or analogous payments) of and interest,
if any, on all the Securities of such Series on the dates such installments
of interest or principal are due;
(e) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(f) no Default or Event of Default with respect to the Securities of
such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture,
there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Securities of such Series will not
recognize income, gain
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or loss for Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal income tax on the
same amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities of such Series over any
other creditors of the company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company;
(i) such deposit shall not result in the trust arising from such
deposit constituting an investment company (as defined in the Investment
Company Act of 1940, as amended), or such trust shall be qualified under
such Act or exempt from regulation thereunder; and
(j) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this
Section have been complied with.
Section 8.4. COVENANT DEFEASANCE.
Unless this Section 8.4 is otherwise specified pursuant to
Section 2.2.20 to be inapplicable to Securities of any Series, on and after the
91st day after the date of the deposit referred to in subparagraph (a) hereof,
the Company may omit to comply with any term, provision or condition set forth
under Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as any additional
covenants contained in a supplemental indenture hereto for a particular Series
of Securities or a Board Resolution or an Officers' Certificate delivered
pursuant to Section 2.2.20 (and the failure to comply with any such covenants
shall not constitute a Default or Event of Default under Section 6.1) and the
occurrence of any event described in clause (e) of Section 6.1 shall not
constitute a Default or Event of Default hereunder, with respect to the
Securities of such Series, provided that the following conditions shall have
been satisfied:
(a) With reference to this Section 8.4, the Company has deposited or
caused to be irrevocably deposited (except as provided in
Section 8.2(c)) with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities (i) in the case of Securities of such Series
denominated in Dollars, cash in Dollars (or such other money or currencies
as shall then be legal tender in the United States) and/or U.S. Government
Obligations, or (ii) in the case of Securities of such Series denominated
in a Foreign Currency (other than a composite currency), money and/or
Foreign Government Obligations, which through the payment of interest and
principal in respect thereof, in accordance with their terms, will provide
(and without reinvestment and assuming no tax liability will be imposed on
such Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent certified public accountants
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expressed in a written certification thereof delivered to the Trustee, to
pay principal and interest, if any, on and any mandatory sinking fund in
respect of the Securities of such Series on the dates such installments of
interest or principal are due;
(b) Such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(c) No Default or Event of Default with respect to the Securities of
such Series shall have occurred and be continuing on the date of such
deposit or during the period ending on the 91st day after such date;
(d) the Company shall have delivered to the Trustee an Opinion of
Counsel confirming that Holders of the Securities of such Series will not
recognize income, gain or loss for federal income tax purposes as a result
of such deposit and defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such deposit and defeasance had not occurred;
(e) the Company shall have delivered to the Trustee an Officers'
Certificate stating the deposit was not made by the Company with the intent
of preferring the Holders of the Securities of such Series over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company; and
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated by
this Section have been complied with.
Section 8.5. REPAYMENT TO COMPANY.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.
ARTICLE IX.
AMENDMENTS AND WAIVERS
Section 9.1. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Securities of one or more Series without the consent of any Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
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(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to make any change that does not adversely affect the rights of
any Securityholder;
(e) to provide for the issuance of and establish the form and terms
and conditions of Securities of any Series as permitted by this Indenture;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee; or
(g) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Section 9.2. WITH CONSENT OF HOLDERS.
The Company and the Trustee may enter into a supplemental indenture
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a tender
offer or exchange offer for the Securities of such Series), for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Securityholders of each such Series. Except as
provided in Section 6.13, the Holders of at least a majority in principal amount
of the outstanding Securities of each Series affected by such waiver by notice
to the Trustee (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series) may waive compliance by the
Company with any provision of this Indenture or the Securities with respect to
such Series.
It shall not be necessary for the consent of the Holders of Securities
under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a supplemental indenture or waiver under
this section becomes effective, the Company shall mail to the Holders of
Securities affected thereby and, if any Bearer Securities affected thereby are
outstanding, publish on one occasion in an Authorized Newspaper, a notice
briefly describing the supplemental indenture or waiver. Any failure by the
Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.
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Section 9.3. LIMITATIONS.
Without the consent of each Securityholder affected, an amendment or
waiver may not:
(a) change the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of interest
(including default interest) on any Security;
(c) reduce the principal or change the Stated Maturity of any
Security or reduce the amount of, or postpone the date fixed for, the
payment of any sinking fund or analogous obligation;
(d) reduce the principal amount of Discount Securities payable upon
acceleration of the maturity thereof;
(e) waive a Default or Event of Default in the payment of the
principal of or interest, if any, on any Security (except a rescission of
acceleration of the Securities of any Series by the Holders of at least a
majority in principal amount of the outstanding Securities of such Series
and a waiver of the payment default that resulted from such acceleration);
(f) make the principal of or interest, if any, on any Security
payable in any currency other than that stated in the Security;
(g) make any change in Sections 6.8, 6.13, 9.3 (this sentence), 10.15
or 10.16; or
(h) waive a redemption payment with respect to any Security or change
any of the provisions with respect to the redemption of any Securities.
Section 9.4. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Securities of one or more
Series shall be set forth in a supplemental indenture hereto that complies with
the TIA as then in effect.
Section 9.5. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
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Any amendment or waiver once effective shall bind every Securityholder
of each Series affected by such amendment or waiver unless it is of the type
described in any of clauses (a) through (g) of Section 9.3. In that case, the
amendment or waiver shall bind each Holder of a Security who has consented to it
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
Section 9.6. NOTATION ON OR EXCHANGE OF SECURITIES.
The Trustee may place an appropriate notation about an amendment or
waiver on any Security of any Series thereafter authenticated. The Company in
exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the
amendment or waiver.
Section 9.7. TRUSTEE PROTECTED.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights.
ARTICLE X.
MISCELLANEOUS
Section 10.1. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control.
Section 10.2. NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail:
if to the Company:
Harrah's Operating Company, Inc.
1023 Cherry Road
Memphis, Tennessee 38117
if to the Trustee:
[Name of Trustee]
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[Address]
_______________________
_______________________
Attention: ____________
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar and,
if any Bearer Securities are outstanding, published in an Authorized Newspaper.
Failure to mail a notice or communication to a Securityholder of any Series or
any defect in it shall not affect its sufficiency with respect to other
Securityholders of that or any other Series.
If a notice or communication is mailed or published in the manner
provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 10.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders of any Series may communicate pursuant to TIA Section
312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this Indenture or the Securities of that Series or
all Series. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
Section 10.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 10.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
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(a) a statement that the person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Section 10.6. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders of one or more Series. Any Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 10.7. LEGAL HOLIDAYS.
Unless otherwise provided by Board Resolution, Officers' Certificate
or supplemental indenture for a particular Series, a "Legal Holiday" is any day
that is not a Business Day. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
Section 10.8. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
Section 10.9. COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 10.10. GOVERNING LAWS.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS
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MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
Section 10.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.12. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 10.13. SEVERABILITY.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 10.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 10.15. SECURITIES IN A FOREIGN CURRENCY OR IN ECU.
Unless otherwise specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate delivered pursuant to Section 2.2
of this Indenture with respect to a particular Series of Securities, whenever
for purposes of this Indenture any action may be taken by the Holders of a
specified percentage in aggregate principal amount of Securities of all Series
or all Series affected by a particular action at the time outstanding and, at
such time, there are outstanding Securities of any Series which are denominated
in a coin or currency other than Dollars (including ECUs), then the principal
amount of Securities of such Series which shall be deemed to be outstanding for
the purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate at such time. For purposes
of this Section 10.15, "Market Exchange Rate" shall mean the noon Dollar buying
rate in New York City for cable transfers of that currency as published by the
Federal Reserve Bank of New York; PROVIDED, HOWEVER, in the case of ECUs, Market
Exchange Rate shall mean the rate of exchange determined by the Commission of
the European Union (or any successor thereto) as published in the Official
Journal of the European Union (such publication or any successor publication,
the "Journal"). If such Market Exchange Rate is not available for any reason
with respect to such currency, the Trustee shall use, in its sole discretion and
without liability on its
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part, such quotation of the Federal Reserve Bank of New York or, in the case of
ECUs, the rate of exchange as published in the Journal, as of the most recent
available date, or quotations or, in the case of ECUs, rates of exchange from
one or more major banks in The City of New York or in the country of issue of
the currency in question or, in the case of ECUs, in Luxembourg or such other
quotations or, in the case of ECUs, rates of exchange as the Trustee, upon
consultation with the Company, shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent principal amount in respect
of Securities of a Series denominated in currency other than Dollars in
connection with any action taken by Holders of Securities pursuant to the terms
of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Company and all Holders.
Section 10.16. JUDGMENT CURRENCY.
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due in respect of the principal of
or interest or other amount on the Securities of any Series (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New
York the Required Currency with the Judgment Currency on the day on which final
unappealable judgment is entered, unless such day is not a New York Banking Day,
then, the rate of exchange used shall be the rate at which in accordance with
normal banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which final unappealable judgment is entered and (b) its
obligations under this Indenture to make payments in the Required Currency
(i) shall not be discharged or satisfied by any tender, any recovery pursuant to
any judgment (whether or not entered in accordance with subsection (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable, and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York on which banking institutions are
authorized or required by law, regulation or executive order to close.
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ARTICLE XI.
SINKING FUNDS
Section 11.1. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of the Securities of a Series, except as otherwise permitted
or required by any form of Security of such Series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of the Securities of any Series is herein referred to as a "mandatory
sinking fund payment" and any other amount provided for by the terms of
Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2. Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of such
Series.
Section 11.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of any Series to be made pursuant to
the terms of such Securities (1) deliver outstanding Securities of such Series
to which such sinking fund payment is applicable (other than any of such
Securities previously called for mandatory sinking fund redemption) and
(2) apply as credit Securities of such Series to which such sinking fund payment
is applicable and which have been redeemed either at the election of the Company
pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional sinking
fund payments or other optional redemptions pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received by the Trustee, together with an Officers'
Certificate with respect thereto, not later than 15 days prior to the date on
which the Trustee begins the process of selecting Securities for redemption, and
shall be credited for such purpose by the Trustee at the price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly. If as a result of
the delivery or credit of Securities in lieu of cash payments pursuant to this
Section 11.2, the principal amount of Securities of such Series to be redeemed
in order to exhaust the aforesaid cash payment shall be less than $100,000, the
Trustee need not call Securities of such Series for redemption, except upon
receipt of a Company Order that such action be taken, and such cash payment
shall be held by the Trustee or a Paying Agent and applied to the next
succeeding sinking fund payment, PROVIDED, HOWEVER, that the Trustee or such
Paying Agent shall from time to time upon receipt of a Company Order pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee of Securities of that
Series purchased by the Company having an unpaid principal amount equal to the
cash payment required to be released to the Company.
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Section 11.3. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days (unless otherwise indicated in the Board
Resolution, supplemental indenture hereto or Officers' Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days (unless otherwise indicated in the Board Resolution,
Officers' Certificate or supplemental indenture in respect of a particular
Series of Securities) before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.2 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.
ARTICLE XII.
GUARANTEE
Section 12.1. GUARANTEE
(a) Subject to subsection (b), below, the Guarantor hereby
irrevocably and unconditionally guarantees (such guarantee being the
"Guarantee") to each Holder of a Security authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of this Indenture and the Securities
hereunder, that: (i) the principal of, premium, if any, and interest on the
Securities promptly will be paid in full when due, whether at the Maturity,
by acceleration, call for redemption or otherwise, and interest on the
overdue principal, premium, if any, and interest, if any, of the
Securities, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in
full or performed, all in accordance with the terms hereof and thereof, and
(ii) in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, the same will be promptly paid
in full when due or performed in accordance with the terms of the extension
or renewal, whether at Stated Maturity, by acceleration or otherwise.
Failing payment when due by the Company of any amount so guaranteed for
whatever reason, the Guarantor shall be obligated to pay the same
immediately. The Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any
action to enforce the same, any waiver or consent by
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any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to
enforce the same or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor. The Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice
and all demands whatsoever and covenants that this Guarantee shall not be
discharged except by complete performance of the oblgations contained in
the Securities and this Indenture. If any Holder or the Trustee is required
by any court or otherwise to return to the Company or any custodian,
Trustee, liquidator or other similar official acting in relation to the
Company, any amount paid by the Company to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect. The Guarantor agrees that it shall not be entitled
to any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations is
guaranteed hereby.
(b) It is the intention of the Guarantor and the Company that the
obligations of the Guarantor hereunder shall be, but not in excess of, the
maximum amount permitted by applicable law. Accordingly, if the
obligations in respect of the Guarantee would be annulled, avoided or
subordinated to the creditors of the Guarantor by a court of competent
jurisdiction in a proceeding actually pending before such court as a result
of a determination both that such Guarantee was made without fair
consideration and, immediately after giving effect thereto, the Guarantor
was insolvent or unable to pay its debts as they mature or left with an
unreasonably small capital, then the obligations of the Guarantor under the
Guarantee shall be reduced by such court if such reduction would result in
the avoidance of such annulment, avoidance or subordination; provided,
however, that any reduction pursuant to this paragraph shall be made in the
smallest amount as is strictly necessary to reach such result. For
purposes of this paragraph, "fair consideration," "insolvency," "unable to
pay its debts as they mature," "unreasonably small capital" and the
effective times of reductions, if any, required by this paragraph shall be
determined in accordance with applicable law.
(c) The Guarantor shall be subrogated to all rights of the Holders
against the Company in respect of any amounts paid by Guarantor pursuant to
the provisions of the Guarantee or this Indenture; provided, however, that
the Guarantor shall not be entitled to enforce or to receive any payments
arising out of, or based upon, such right of subrogation until the
principal of, premium, if any, and interest on all Securities issued
hereunder shall have been paid in full.
Section 12.2. EXECUTION AND DELIVERY OF GUARANTEE.
To evidence the Guarantee set forth in Section 12.2, the Company and
the Guarantor hereby agree that a notation of such Guarantee shall be endorsed
on each Security authenticated and delivered by the Trustee, that such notation
of such Guarantee shall be in such
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form as shall be established by or pursuant to a Board Resolution or in one or
more indentures supplemental hereto, in each case with such appropriate
provisions as are required or permitted by this Indenture, and that this
Indenture shall be executed on behalf of the Guarantor by its Chairman of the
Board, one of its Vice Chairmen of the Board, its President or one of its Vice
Presidents under a facsimile of its seal reproduced thereon and attested to by
another officer other than the officer executing the Indenture, as the case may
be.
The Guarantor hereby agrees that the Guarantee set forth in Section
12.1 shall remain in full force and effect notwithstanding any failure to
endorse on each Security a notation of the Guarantee.
If an officer whose signature is on this Indenture no longer holds
that office at the time the Trustee authenticates the Security on which the
Guarantee is endorsed, the Guarantee shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantor.
Section 12.3. RELEASE OF GUARANTOR.
The Guarantor shall be released from all of its obligations under the
Guarantee and under this Indenture if:
(a) (i) the Company or the Guarantor has transferred all or
substantially all of its properties and assets to any Person (whether by
sale, merger or consolidation or otherwise), or has merged into or
consolidated with another Person, pursuant to a transaction in compliance
with this Indenture;
(ii) the corporation to whom all or substantially all of the
properties and assets of the Company or the Guarantor are transferred,
or whom the Company or the Guarantor has merged into or consolidated
with, has expressly assumed, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Guarantor under the Guarantee and
this Indenture;
(iii) immediately before and immediately after giving effect to
such transaction, no Event of Default, and no event or condition
which, after notice or lapse of time or both, would become and Event
of Default, shall have occurred and be continuing; and
(iv) the Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture
comply with this Section 12.3 and that all
49
<PAGE>
conditions precedent herein provided for relating to such transaction
have been complied with; or
(b) the Guarantor liquidates (other than pursuant to any Bankruptcy
Law) and complies, if applicable, with the provisions of this Indenture;
provided that if a Person and its Affiliates, if any, shall acquire all or
substantially all of the assets of the Guarantor upon such liquidation the
Guarantor shall liquidate only if:
(i) the Person and each such Affiliate (or the common corporate
parent of such Person and its Affiliates, if such Person and its
Affiliates are wholly owned by such parent) which acquire or will
acquire all or a portion of the assets of the Guarantor shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Guarantor, under the Guarantee and this Indenture
and such Person or any of such Affiliates (or such parent) shall be a
corporation organized and existing under the laws of the United States
or any State thereof or the District of Columbia;
(ii) immediately after giving effect to such transaction, no
Event of Default, and no event or condition which, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing; and
(iii) the Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
liquidation and such supplemental indenture comply with this Section
12.3 and that all conditions precedent herein provided for relating to
such transaction have been complied with; or
(c) the Company ceases for any reason to be a "wholly owned
subsidiary" of the Guarantor (as such term is defined in Rule 1-02(z) of
the Regulation S-X promulgated by the Commission).
Upon any assumption of the Guarantee by any Person pursuant to this
Section 12.3, such Person may exercise every right and power of the Guarantor
under this Indenture with the same effect as if such successor corporation had
been named as the Guarantor herein, and all the obligations of the Guarantor,
hereunder and under the Guarantee and the Indenture shall terminate.
Section 12.4. WHEN GUARANTOR MAY MERGE, ETC.
The Guarantor shall not consolidate with or merge with or into
any other Person or, directly or indirectly, sell, lease or convey all or
substantially all of its assets (computed on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person,
unless:
50
<PAGE>
(a) either the Guarantor shall be the continuing person, or the
Person (if other than the Guarantor) formed by such consolidation or into
which the Guarantor is merged or to which the assets of the Guarantor are
transferred shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia
and shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Guarantor under the Guarantee and this Indenture;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event or condition which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred and be
continuing; and
(c) the Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, conveyance or lease and such supplemental
indenture comply with this Section 12.4 and that all conditions precedent
herein provided for relating to such transaction have been complied with.
Upon any consolidation or merger, or any sale, conveyance or lease of
all or substantially all of the assets of the Guarantor, in accordance with this
Section 12.4, the successor corporation formed by such consolidation or into
which the Guarantor is merged or to which such transfer is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Guarantor under this Indenture with the same effect as if such successor
corporation had been named as the Guarantor herein, and all the obligations of
the predecessor Guarantor hereunder and under the Guarantee and the Indenture
shall terminate.
51
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
HARRAH'S OPERATING COMPANY, INC.
By:
------------------------------------
Name:
Its:
HARRAH'S ENTERTAINMENT, INC.
By:
------------------------------------
Name:
Its:
[Name of Trustee]
By:
------------------------------------
Name:
Its:
S-1
<PAGE>
[LETTERHEAD]
May 18, 1998
Harrah's Entertainment, Inc.
Harrah's Operating Company, Inc.
1023 Cherry Road
Memphis, Tennessee 38117
Re: $750,000,000 Aggregate Offering Price of Securities of
Harrah's Entertainment, Inc. and Harrah's Operating Company, Inc.
-----------------------------------------------------------------
Ladies and Gentlemen:
At your request, we have examined the registration statement on Form
S-3 (the "Registration Statement") being filed by Harrah's Entertainment, Inc.
("HET") and Harrah's Operating Company, Inc. ("HOC") with the Securities and
Exchange Commission in connection with the registration under the Securities Act
of 1933, as amended, of up to $750,000,000 aggregate offering price of
securities (the "Securities"), consisting of (i) shares of Common Stock, par
value $0.10 per share, of HET (the "Common Stock"), (ii) one or more series of
debt securities of HET (the "HET Debt Securities"), (iii) shares or fractional
shares of preferred stock, par value $100.00 per share, of HET (the "HET
Preferred Stock"), (iv) shares of HET Preferred Stock represented by Depositary
Shares (the "HET Depositary Shares"), (v) one or more series of debt securities
of HOC (the "HOC Debt Securities"), (vi) shares or fractional shares of
preferred stock, par value $0.10 per share, of HOC (the "HOC Preferred Stock"),
and (vii) shares of HOC Preferred Stock represented by Depositary Shares (the
"HOC Depositary Shares"). The payment of principal and interest with respect to
the HOC Debt Securities and certain payment obligations with respect to the HOC
Preferred Stock will be guaranteed by HET (collectively, the "Guarantees"). The
HET Debt Securities and HOC Debt Securities are collectively referred to as
<PAGE>
Harrah's Entertainment, Inc.
Harrah's Operating Company, Inc.
May 18, 1998
Page 2
the "Debt Securities." The HET Preferred Stock and HOC Preferred Stock are
collectively referred to as the "Preferred Stock." The HET Depositary Shares
and the HOC Depositary Shares are collectively referred to as the "Depositary
Shares." The Common Stock, the Debt Securities, the Preferred Stock, the
Depositary Shares and the Guarantees are collectively referred to as the
"Securities."
You have provided us with a draft prospectus (the "Prospectus") which
is part of the Registration Statement. The Prospectus provides that it will be
supplemented in the future by one or more supplements to the Prospectus (each, a
"Prospectus Supplement"). We also have examined the form of indenture to be
entered into by HET and a trustee relating to the HET Debt Securities (the "HET
Indenture") and the form of indenture to be entered into by and between HOC, HET
as guarantor and a trustee relating to the HOC Debt Securities (the "HOC
Indenture"). The HET Debt Securities and the HOC Debt Securities may be issued
pursuant to the HET Indenture or the HOC Indenture, respectively, or one or more
supplements thereto (collectively, the "Indentures"). The Depositary Shares
will be issued under one or more deposit agreements (each, a "Deposit
Agreement"), by and among HET or HOC, as the case may be, and a financial
institution identified therein as the Depositary (each, a "Depositary"). HET or
HOC may issue receipts ("Depositary Receipts") for Depositary Shares, each of
which will represent a fractional share of Preferred Stock.
In our capacity as your counsel in connection with such registration,
we are familiar with the proceedings taken and proposed to be taken by the
Company in connection with the authorization and issuance of the Securities and,
for the purposes of this opinion, have assumed such proceedings will be timely
and properly completed in the manner presently proposed and the terms of each
issuance will otherwise be in compliance with applicable law.
We have made such legal and factual examination and inquiries,
including an examination of originals or copies certified or otherwise
identified to our satisfaction of such documents, corporate records and
instruments, as we have deemed necessary or appropriate for purposes of this
opinion. In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.
We have been furnished with, and with your consent have relied
upon, certificates of officers of the Company with respect to certain factual
matters. In addition, we have obtained and relied upon such certificates and
assurances from public officials as we have deemed necessary.
We are opining herein as to the effect on the subject transaction only
of the federal laws of the United States, the General Corporation Law of the
State of Delaware and, with respect to opinion paragraphs 2, 3 and 7 below, the
internal laws of the State of New York, and we express no opinion with respect
to the applicability thereto, or the effect thereon, of the laws
<PAGE>
Harrah's Entertainment, Inc.
Harrah's Operating Company, Inc.
May 18, 1998
Page 3
of any other jurisdiction or, in the case of Delaware, any other laws, or as to
any matters of municipal law or the laws of any local agencies within any state.
Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:
1. HET has the authority pursuant to its Certificate of
Incorporation to issue up to 360,000,000 shares of Common Stock. Upon adoption
by the HET Board of a resolution in form and content as required by applicable
law and upon issuance and delivery of and payment for such shares in the manner
contemplated by the Registration Statement, the Prospectus and the related
Prospectus Supplement(s) and by such resolution, such shares of Common Stock
(including any Common Stock duly issued upon the conversion or exchange of Debt
Securities or Preferred Stock that are convertible or exchangeable into Common
Stock) will be validly issued, fully paid and nonassessable.
2. When (a) the HET Debt Securities have been duly established in
accordance with the terms of the applicable Indenture (including, without
limitation, the adoption by the Board of Directors of HET (the "HET Board")
of a resolution duly authorizing the issuance and delivery of the HET Debt
Securities), duly authenticated by the Trustee and duly executed and
delivered on behalf of HET against payment therefor in accordance with the
terms and provisions of the applicable Indenture and as contemplated by the
Registration Statement, the Prospectus and the related Prospectus
Supplement(s), and (b) the Registration Statement and any required
post-effective amendment thereto have all become effective under the
Securities Act, and (c) assuming that the terms of the HET Debt Securities as
executed and delivered are as described in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s), and (d) assuming that
the HET Debt Securities as executed and delivered do not violate any law
applicable to HET or result in a default under or breach of any agreement or
instrument binding upon HET, and (e) assuming that the HET Debt Securities as
executed and delivered comply with all requirements and restrictions, if any,
applicable to HET, whether imposed by any court or governmental or regulatory
body having jurisdiction over HET, and (f) assuming that the HET Debt
Securities are then issued as contemplated in the Registration Statement, the
Prospectus and the related Prospectus Supplement(s), the HET Debt Securities
will constitute valid and legally binding obligations of HET, enforceable
against HET in accordance with the terms of the HET Debt Securities.
3. When (a) the HOC Debt Securities have been duly established in
accordance with the terms of the applicable Indentures (including, without
limitation, the adoption by the Board of Directors of HOC (the "HOC Board") of a
resolution duly authorizing the issuance and delivery of the HOC Debt
Securities), the HOC Debt Securities have been duly executed and delivered and
the HOC Debt Securities have been duly authenticated by the Trustee and duly
executed and delivered on behalf of HOC against payment therefor in accordance
with the terms
<PAGE>
Harrah's Entertainment, Inc.
Harrah's Operating Company, Inc.
May 18, 1998
Page 4
and provisions of the applicable Indenture and as contemplated by the
Registration Statement, the Prospectus and the related Prospectus Supplement(s),
and (b) each of the Registration Statement and any required post-effective
amendment thereto have all become effective under the Securities Act, and (c)
assuming that the terms of the HOC Debt Securities as executed and delivered are
as described in the Registration Statements, the Prospectus and the related
Prospectus Supplement(s), and (d) assuming that the HOC Debt Securities as
executed and delivered do not violate any law applicable to HOC or result in a
default under or breach of any agreement or instrument binding upon HOC, and (e)
assuming that the HOC Debt Securities as executed and delivered comply with all
requirements and restrictions, if any, applicable to HOC, whether imposed by any
court or governmental or regulatory body having jurisdiction over HOC, and (f)
assuming that the HOC Debt Securities are then issued as contemplated in the
Registration Statement, the Prospectus and the related Prospectus Supplement(s),
the HOC Debt Securities will constitute valid and legally binding obligations of
HOC, enforceable against HOC in accordance with the terms of the HOC Debt
Securities.
4. HET has the authority pursuant to its Certificate of
Incorporation to issue up to 150,000 shares of HET Preferred Stock. Upon (a)
designation by the HET Board of one or more series of HET Preferred Stock to
distinguish each such series from any other outstanding series of HET Preferred
Stock; (b) setting by the HET Board of the number of shares of HET Preferred
Stock to be included in such series; (c) establishment by the HET Board of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of such series of HET Preferred Stock; (d) filing by HET with the
Secretary of State of the State of Delaware of Articles Supplementary setting
forth a description of such series of Preferred Stock, including the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption as set by the HET Board and a statement that such series of HET
Preferred Stock has been classified by the HET Board under the authority
contained in HET's Certificate of Incorporation and Bylaws and certain
resolutions adopted and actions taken by the HET Board on or before the date
hereof, and the acceptance for record thereof by the Secretary of State of the
State of Delaware; (e) due authorization by the HET Board of a designated number
of shares of such series of HET Preferred Stock for issuance at a minimum price
or value of consideration to be set by the HET Board; (f) reservation and due
authorization by the HET Board of any shares of any other series of HET
Preferred Stock or any other Securities issuable upon conversion or exchange of
such series of HET Preferred Stock, the HET Preferred Stock will have been duly
authorized by HET, and when the HET Preferred Stock has been duly established in
accordance with HET's Certificate of Incorporation and applicable law, and, upon
issuance, delivery and payment therefor in the manner contemplated by the
Registration Statement, the Prospectus and the related Prospectus Supplement(s),
the HET Preferred Stock will be validly issued, fully paid and nonassessable.
<PAGE>
Harrah's Entertainment, Inc.
Harrah's Operating Company, Inc.
May 18, 1998
Page 5
5. HOC has the authority pursuant to its Certificate of
Incorporation to issue up to 1,000,000 shares of HOC Preferred Stock. Upon (a)
designation by the HOC Board of one or more series of HOC Preferred Stock to
distinguish each such series from any other outstanding series of HOC Preferred
Stock; (b) setting by the HOC Board of the number of shares of HOC Preferred
Stock to be included in such series; (c) establishment by the HOC Board of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of such series of Preferred Stock; (d) filing by HOC with the
Secretary of State of the State of Delaware of Articles Supplementary setting
forth a description of such series of Preferred Stock, including the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption as set by the HOC Board and a statement that such series of HOC
Preferred Stock has been classified by the HOC Board under the authority
contained in HOC's Certificate of Incorporation and Bylaws and certain
resolutions adopted and actions taken by the HOC Board on or before the date
hereof, and the acceptance for record thereof by the Secretary of State of the
State of Delaware; (e) due authorization by the HOC Board of a designated number
of shares of such series of HOC Preferred Stock for issuance at a minimum price
or value of consideration to be set by the HOC Board; (f) reservation and due
authorization by the HOC Board of any shares of any other series of HOC
Preferred Stock or any other Securities issuable upon conversion or exchange of
such series of HOC Preferred Stock, the HOC Preferred Stock will have been duly
authorized by HOC, and when the HOC Preferred Stock has been duly established in
accordance with HOC's Certificate of Incorporation and applicable law, and, upon
issuance, delivery and payment therefor in the manner contemplated by the
Registration Statement, the Prospectus and the related Prospectus Supplement(s),
the HOC Preferred Stock will be validly issued, fully paid and nonassessable.
6. When the specific terms of a particular issuance of Depositary
Shares have been duly established in accordance with a Deposit Agreement and
applicable law, and when the Depositary Receipts in the form contemplated and
authorized by the Deposit Agreement have been duly executed and delivered by the
Depositary and delivered to and paid for by the purchasers thereof in the manner
contemplated by the Registration Statement, the Prospectus and the related
Prospectus Supplement(s), and when all corporate action necessary for the
issuance of such Depositary Shares and the underlying Preferred Stock has been
taken and HET or HOC, as the case may be, has received legal consideration in
excess of the par value of the underlying Preferred Stock for the issuance
thereof, such Depositary Shares will be validly issued and will entitle the
holders thereof to the rights specified in the Depositary Receipts and such
Depositary Agreement for such Depositary Receipts.
7. When (a) the terms of the HET Guarantees have been duly
established in accordance with the terms of the applicable Indenture and/or by
adoption of the HET Board of a resolution duly authorizing the issuance and
delivery of the HET Guarantees, and duly executed and delivered on behalf of HET
in connection with the delivery of HOC Debt Securities or HOC
<PAGE>
Harrah's Entertainment, Inc.
Harrah's Operating Company, Inc.
May 18, 1998
Page 6
Preferred Stock, as the case may be, as contemplated by the Registration
Statement, the Prospectus and the related Prospectus Supplement(s), and (b) the
Registration Statement and any required post-effective amendment thereto have
all become effective under the Securities Act, and (c) assuming that the terms
of the HET Guarantees as executed and delivered are as described in the
Registration Statement, the Prospectus and the related Prospectus Supplement(s),
and (d) assuming that the HET Guarantees as executed and delivered do not
violate any law applicable to HET or result in a default under or breach of any
agreement or instrument binding upon HET, and (e) assuming that the HET
Guarantees as executed and delivered comply with all requirements and
restrictions, if any, applicable to HET, whether imposed by any court or
governmental or regulatory body having jurisdiction over HET, and (f) assuming
that the HET Guarantees are then issued as contemplated in the
Registration Statement, the Prospectus and the related Prospectus Supplement(s),
the HET Guarantees will constitute valid and legally binding obligations of HET,
enforceable against HET in accordance with the terms of the HET Guarantees.
The opinions set forth in paragraphs 2, 3 and 7 above are subject
to the following exceptions, limitations and qualifications: (i) the effect
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting the
rights and remedies of creditors; (ii) the effect of general principles of
equity regardless of whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which any proceeding
therefor may be brought; (iii) the unenforceability under certain
circumstances under law or court decisions of provisions providing for the
indemnification of, or contribution to, a party with respect to a liability
where such indemnification or contribution is contrary to public policy; (iv)
we express no opinion concerning the enforceability of any waiver of rights
or defenses with respect to stay, extension or usury laws; and (v) we express
no opinion with respect to whether acceleration of Debt Securities may affect
the collectibility of any portion of the stated principal amount thereof
which might be determined to constitute unearned interest thereon.
We assume for purposes of this opinion that each of HET and HOC has
been duly incorporated and is validly existing as a corporation under the laws
of the State of Delaware and has the corporate power and authority to issue and
sell the Securities; that the applicable Indenture has been duly authorized by
all necessary corporate action by HET and HOC, has been duly executed and
delivered by HET and HOC and constitutes the legally valid, binding and
enforceable obligation of each of HET and HOC enforceable against each of HET
and HOC in accordance with its terms; and the Trustee for each Indenture is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; that the Trustee is duly qualified to engage in
the activities contemplated by the applicable Indenture; that the applicable
Indenture has been duly authorized, executed and delivered by the Trustee and
constitutes a
<PAGE>
Harrah's Entertainment, Inc.
Harrah's Operating Company, Inc.
May 18, 1998
Page 7
legally valid and binding obligation of the Trustee, enforceable against the
Trustee in accordance with its terms; and the Trustee is in compliance,
generally and with respect to acting as Trustee under the applicable
Indenture, with all applicable laws and regulations; and that the Trustee has
the requisite organizational and legal power and authority to perform its
obligations under the applicable Indenture.
We consent to your filing this opinion as an exhibit to the
Registration Statement, to the incorporation by reference of this opinion into
any registration statement of HET and HOC filed pursuant to Rule 462(b) of the
Securities Act in relation to the Registration Statement, and to the reference
to our firm under the caption "Legal Matters" in the prospectus included
therein.
Very truly yours,
/s/ LATHAM & WATKINS
<PAGE>
EXHIBIT 12.1
HARRAH'S ENTERTAINMENT, INC.
COMPUTATIONS OF RATIOS
(IN THOUSANDS, EXCEPT RATIO AMOUNTS)
<TABLE>
<CAPTION>
FOR THE
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, -------------------------------------------------------------------
1998 1997(a) 1996(b) 1995(c) 1994(d) 1993
-------------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED CHARGES(e)
Income from continuing operations. . . . . . $ 24,903 $ 107,522 $ 98,897 $ 78,810 $ 49,984 $ 74,867
Add:
Provision for income taxes . . . . . . . . 15,921 68,746 67,316 60,677 75,391 59,394
Interest expense . . . . . . . . . . . . . 19,326 79,071 69,968 73,890 76,363 73,080
Interest included in rental expense. . . . 1,819 7,692 7,663 6,738 5,244 7,207
Amortization of capitalized interest . . . 171 606 763 580 628 892
(Income) or loss from equity
investments . . . . . . . . . . . . . . . 63 (473) (473) - - (89)
Adjustment to include 100% of
nonconsolidated, majority-owned
subsidiary(f) . . . . . . . . . . . . . . - - - (34,775) (7,438) -
--------- ---------- --------- --------- --------- ----------
Earnings as defined. . . . . . . . . . . . . $ 62,203 $ 263,164 $ 244,134 $ 185,920 $ 200,172 $ 215,351
--------- ---------- --------- --------- --------- ----------
--------- ---------- --------- --------- --------- ----------
Fixed charges:
Interest expenses. . . . . . . . . . . . . $ 19,326 $ 79,071 $ 69,968 $ 73,890 $ 76,363 $ 73,080
Capitalized interest . . . . . . . . . . . 97 6,860 11,025 3,636 3,764 3,107
Interest included in rental expense. . . . 1,819 7,692 7,663 6,738 5,244 7,207
Adjustment to include 100% of
nonconsolidated, majority-owned
subsidiary(f) . . . . . . . . . . . . . . - - - 56,652 17,069 -
--------- ---------- --------- --------- --------- ----------
Total fixed charges. . . . . . . . . . . . . $ 21,242 $ 93,623 $ 88,656 $ 140,916 $ 102,440 $ 83,394
--------- ---------- --------- --------- --------- ----------
--------- ---------- --------- --------- --------- ----------
Ratio of earnings to fixed charges . . . . 2.9 2.8 2.8 1.3 2.0 2.6
--------- ---------- --------- --------- --------- ----------
--------- ---------- --------- --------- --------- ----------
</TABLE>
- ---------------------------------
(a) 1997 includes $13.8 million in pretax charges for write-downs and reserves
and a $37.4 million gain on the sale of equity in New Zealand subsidiary.
(b) 1996 includes $52.2 million in pretax charges for write-downs and reserves.
(c) 1995 includes $93.3 million in pretax charges for write-downs.
(d) 1994 includes a $53.4 million provision for settlement of all claims and
related cost related to the Merger Agreement and Tax Sharing Agreement
arising from the 1990 spin-off of HET and acquisition of the Holiday Inn
business by Bass PLC.
(e) As discussed in Note 12 to the Consolidated Financial Statements in the
1997 Harrah's Entertainment, Inc. Annual Report, HET has guaranteed
certain third party loans in connection with its casino development
activities. The above ratio computation excludes estimated fixed charges
associated with these guarantees as follows: 1997, $7.8 million; 1996, $5.2
million; 1995, $6.8 million; 1994, $5.5 million; and 1993, $3.1 million.
(f) Prior to November 1995, HET owned a majority interest in Harrah's
Jazz Company. However, voting control was shared equally among three
partners. As a result, Harrah's Jazz was not consolidated into HET's
financial statements. As required by Item 503(d)(2), HET's ratio of
earnings to fixed charges ratio computation for 1995 and 1994 has been
adjusted to include Harrah's Jazz financial results as if this entity
were consolidated.
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated February 3,
1998 included (or incorporated by reference) in Harrah's Entertainment, Inc.'s
Form 10-K for the year ended December 31, 1997 and to all references to our Firm
in this registration statement.
ARTHUR ANDERSEN LLP
Memphis, Tennessee
May 15, 1998
