EXHIBIT 99.01
OFFICERS' CERTIFICATE
The undersigned, Scott A. LaPorta and Wes Allison, do hereby
certify that they are duly appointed and the Executive Vice President and Chief
Financial Officer, and Vice President and Controller, respectively, of PARK
PLACE ENTERTAINMENT CORPORATION, a Delaware corporation (the "Company"). Each of
the undersigned also hereby certifies, pursuant to the Indenture, dated as of
November 9, 1999, between the Company and Wells Fargo Bank Minnesota, N.A.
(formerly Norwest Bank Minnesota, N.A.), as Trustee (the "Indenture"), that:
A. Pursuant to resolutions duly adopted by the Note Committee
of the Company on September 12, 2000, a series of Debt Securities (as defined in
the Indenture) to be issued under the Indenture has been established (the
"Notes"), with the following terms (capitalized terms used herein and not
otherwise defined herein have the meanings and references to Article numbers
are to those set forth in the Indenture):
(1) The Notes shall constitute a series of Debt Securities
having the title "8.875 % Senior Subordinated Notes due 2008."
(2) The aggregate principal amount of Notes that may be
authenticated and delivered under the Indenture (except for Notes
authenticated and delivered upon transfer of, or in exchange for, or in
lieu of, other Notes pursuant to Sections 3.04, 3.05, 3.06, 11.06 or
13.07 of the Indenture) shall be $400,000,000.
(3) The entire outstanding principal of the Notes shall be
payable on September 15, 2008 (the "Maturity Date").
(4) The date from which such interest shall accrue shall be
September 19, 2000; the Interest Payment Dates on which such interest
will be payable shall be March 15 and September 15 of each year,
beginning March 15, 2001; the Regular Record Dates for the interest
payable on the Notes on any Interest Payment Date shall be the
preceding March 1 (in the case of interest payable on any March 15) and
September 1 (in the case of interest payable on any September 15); and
the basis upon which interest shall be calculated shall be that of a
360-day year consisting of twelve 30-day months.
(5) Payments in respect of the Notes represented by Global
Notes (including principal, premium, if any, and interest) will be made
in immediately available funds to the accounts specified by the U.S.
Depositary.
(6) Upon not less than 30 nor more than 60 days' notice, the
Company may redeem the Notes in whole but not in part at any time at a
redemption price equal to 100% of the principal amount thereof plus the
Make-Whole Premium (as defined in paragraph 14(D)), together with
accrued and unpaid interest thereon, if any, to the applicable
Redemption Date. Notices of redemption shall be mailed by first class
mail at least 30 but not more than 60 days before the Redemption Date
to each holder of Notes to be redeemed at its registered address. Notes
called for redemption become due on the
date fixed for redemption. On and after the Redemption Date, interest
ceases to accrue on Notes called for redemption.
(7) The Notes will not have the benefit of any sinking fund.
(8) The Notes shall be issued in denominations of $1,000 and
any integral multiple thereof.
(9) The Trustee shall be the Security Registrar and Paying
Agent.
(10) The entire outstanding principal amount of the Notes
shall be payable upon declaration of acceleration of the maturity of
such series pursuant to Section 5.02 of the Indenture.
(11) Payments of the principal and interest on the Notes shall
be made in Dollars, and the Notes shall be denominated in Dollars.
(12) The Notes will be payable at Maturity in an amount equal
to the principal amount thereof plus unpaid interest accrued to such
Maturity.
(13) The Holders of the Notes shall have no special rights in
addition to those provided in the Indenture upon the occurrence of any
particular events.
(14) (A) There shall be the following additions and changes to
the Events of Default set forth in the Indenture with respect to the
Notes:
The following additional remedy will apply to the
Notes: In the case of an Event of Default arising from certain events
of bankruptcy or insolvency of Park Place, all outstanding Notes will
become due and payable immediately without further action or notice by
the holders of Notes or the trustee.
The following Event of Default replaces the fifth
Event of Default identified in Section 5.01 of the Indenture under
"Events of Default" with respect to the Notes:
(5) the acceleration of the maturity of Debt of the
Company (other than Non-recourse Debt), at any one time, in an
aggregate 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 Notes.
(B) There shall be the following additions to the
covenants set forth in the Indenture with respect to the Notes:
LIMITATION ON LIENS. Other than as set forth below under
"Exempted Liens and Sale and Lease-Back Transactions," neither the
Company nor any of its Subsidiaries may create, assume or suffer to
exist any Lien:
2
(1) upon any Principal Property;
(2) upon any shares of Capital Stock of any Restricted
Subsidiary owned by the Company or any Restricted Subsidiary; or
(3) securing Debt of any Restricted Subsidiary,
without equally and ratably securing the Notes with, or prior to, the
Debt secured by such Lien, for so long as such Debt shall be so
secured,
PROVIDED, HOWEVER, that this limitation will not apply to:
(a) Liens existing on the date of issuance of the
Notes;
(b) Liens existing:
- on property at the time of acquisition
through a merger, a consolidation or
otherwise by the Company or a Restricted
Subsidiary; or
- Liens existing on property or securing
Debt of, or Capital Stock of any
corporation, partnership or other entity
at the time such corporation,
partnership or other entity becomes a
Restricted Subsidiary;
(c) Liens to secure Debt with respect to all or any
part of the acquisition cost or the cost of construction or
improvement of property, PROVIDED, such Debt is incurred and
related Liens are created within 24 months of the acquisition,
completion of construction or improvement or commencement of
full operation, whichever is later, and such Debt does not
exceed the aggregate amount of the acquisition cost and/or the
construction cost thereof;
(d) Liens on shares of Capital Stock or property of a
Restricted Subsidiary to secure Debt with respect to all or
part of the acquisition cost of such Restricted Subsidiary,
PROVIDED that such Debt is incurred and related Liens are
created within 24 months of the acquisition of such Restricted
Subsidiary and such Debt does not exceed the acquisition cost
of such Restricted Subsidiary;
(e) Liens to secure Debt incurred to construct
additions to, or to make Capital Improvements to, properties
of the Company or any Restricted Subsidiary, PROVIDED such
Debt is incurred and related Liens are created within 24
months of completion of construction or Capital Improvements
and such Debt does not exceed the cost of such construction or
Capital Improvements;
(f) Liens in favor of the Company or another
Restricted Subsidiary;
3
(g) Liens to secure Debt on which interest payments
are exempt from Federal income tax under Section 103 of the
Internal Revenue Code of 1986, as amended;
(h) Liens on the equity interest of the Company or
any Restricted Subsidiary in any Joint Venture or any
Restricted Subsidiary which owns an equity interest in such
Joint Venture to secure Debt, PROVIDED the amount of such Debt
is contributed and/or advanced solely to such Joint Venture;
(i) Liens securing Senior Debt and Liens on assets of
a Subsidiary securing Debt of that Subsidiary;
(j) any extension, renewal or replacement, in whole
or in part, of any Liens referred to in the foregoing clauses
(a) through (i) or of any Debt secured thereby, including
premium, if any, PROVIDED that the aggregate principal amount
secured does not exceed:
- the greater of (1) the principal amount
secured thereby at the time of such
extension, renewal or replacement, or, as
the case may be, repayment or
extinguishment, and (2) 80% of the fair
market value (in the opinion of the
Company's Board of Directors) of the
properties subject to such extension,
renewal or replacement, plus
- any reasonable fees and expenses associated
with such extension, renewal or replacement,
and PROVIDED, FURTHER, that in the case of a replacement
thereof, such Debt is incurred and related Liens are created
within 24 months of the repayment or extinguishment of the
Debt or Liens referred to in the foregoing clauses (a) through
(i);
(k) purchase money liens on personal property;
(l) Liens to secure payment of workers' compensation
or insurance premiums, or relating to tenders, bids or
contracts (except contracts for the payment of money);
(m) Liens in connection with tax assessments or other
governmental charges, or as security required by law or
governmental regulation as a condition to the transaction of
any business or the exercise of any privilege or right;
(n) mechanic's, materialman's, carrier's or other
like Liens, arising in the ordinary course of business; and
(o) Liens in favor of any domestic or foreign
government or governmental body in connection with contractual
or statutory obligations.
4
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. Other than as
provided below under "--Exempted Liens and Sale and Lease-Back
Transactions," neither the Company nor any Restricted Subsidiary will
enter into any arrangement with any lessor (other than the Company or a
Restricted Subsidiary), providing for the lease to the Company or a
Restricted Subsidiary for a period of more than three years (including
renewals at the option of the lessee) of any Principal Property that
has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such lessor or to any other Person, and for
which funds have been or are to be advanced by such lessor or other
Person on the security of the leased property ("Sale and Lease-Back
Transaction"), unless either:
(a) the Company or such Restricted Subsidiary would
be entitled, pursuant to the provisions described in clauses
(a) through (o) under "--Limitation on Liens" above, to
create, assume or suffer to exist a Lien on the property to be
leased without equally and ratably securing the Notes; or
(b) an amount equal to:
- the greater of the net cash proceeds of
such sale or the fair market value of
such property (in the opinion of the
Company's Board of Directors), less
- the fair market value (in the opinion of
the Company's Board of Directors) of any
noncash proceeds of the sale of such
property (provided such noncash proceeds
constitute "Principal Property,"
acquired on the date the property sold
in the Sale and Lease-Back Transaction
was acquired by the Company or any of
its Restricted Subsidiaries),
is applied within 180 days to the retirement or other
discharge of the Notes or Pari Passu Debt.
EXEMPTED LIENS AND SALE AND LEASE-BACK TRANSACTIONS.
Notwithstanding the restrictions set forth in "--Limitation on Liens"
and "--Limitation on Sale and Lease-Back Transactions," the Company or
any Restricted Subsidiary may create, assume or suffer to exist Liens
or enter into Sale and Lease-Back Transactions not otherwise permitted
as described above, PROVIDED that at the time of such event, and after
giving effect thereto, the sum of outstanding Debt secured by such
Liens (not including Liens permitted under "--Limitation on Liens"
above) plus all Attributable Debt in respect of such Sale and
Lease-Back Transactions entered into (not including Sale and Lease-Back
Transactions permitted under "--Limitation on Sale and Lease-Back
Transactions"), measured, in each case, at the time any such Lien is
incurred, or any such Sale and Lease-Back Transaction is entered into,
by the Company and Restricted Subsidiaries does not exceed 15% of
Consolidated Net Tangible Assets.
REPORTS. Whether or not required by the Commission, so long as
any Notes are outstanding, the Company will file with the applicable
trustee such of the
5
supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 or Section 15(d) of the Exchange Act
in respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations.
(C) The following additional provisions shall apply to the
Notes:
SECURITIES SUBORDINATE TO SENIOR DEBT. The Company covenants
and agrees, and each Holder of a Note, by its acceptance thereof,
likewise covenants and agrees, for the benefit of the Holders, from
time to time, of Senior Debt that, to the extent and in the manner
hereinafter set forth in this paragraph 14(C), the Debt represented by
the Notes and the payment of the principal of (and premium, if any) and
interest on each and all of the Notes are hereby expressly made
subordinate and subject in right of payment as provided in this
paragraph 14(C) to the prior payment in full in cash or cash
equivalents of all Senior Debt; PROVIDED, HOWEVER, that the Notes, the
Debt represented thereby and the payment of the principal of (and
premium, if any) and interest on the Notes in all respects shall rank
equally with, or prior to, all existing and future senior subordinated
indebtedness (including, without limitation, Debt) of the Company that
is subordinated to Senior Debt and shall rank PARI PASSU with the
Company's 9 3/8% Senior Subordinated Notes due 2007.
PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In the event
of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or to its
assets, or (b) any liquidation, dissolution or other winding-up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or other marshaling of assets or liabilities of the Company
(except in connection with the consolidation or merger of the Company
or its liquidation or dissolution following the conveyance, transfer or
lease of its properties and assets substantially as an entirety upon
the terms and conditions described under Article Ten), then and in any
event:
- the Holders of Senior Debt will be entitled
to receive payment in full in cash or Cash
Equivalents of all Senior Debt (including
interest after the commencement of any
bankruptcy, insolvency or similar proceeding
at the rate specified in the applicable
Senior Debt, whether or not such interest is
an allowed claim in any such proceeding), or
provision shall be made for such payment in
full, before the Holders of Notes will be
entitled to receive any payment or
distribution of any kind or character (other
than any payment made pursuant to Article
Fifteen from monies or U.S. Government
Obligations previously deposited with the
Trustee) on account of principal of, or
premium, if any, or interest on the Notes;
and
- any payment or distribution of assets of the
Company of any kind or character, whether in
cash, property or securities (other than
payments made pursuant to Article Fifteen
from monies or U.S.
6
Government Obligations previously deposited
with the Trustee), by set-off or otherwise,
to which the Holders of the Notes or the
Trustee would be entitled but for the
provisions of the Indenture shall be paid by
the liquidating trustee or agent or other
Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise,
directly to the Holders of Senior Debt or
their representative or representatives
ratably according to the aggregate amounts
remaining unpaid on account of the Senior
Debt to the extent necessary to make payment
in full of all Senior Debt remaining unpaid,
after giving effect to any concurrent
payment or distribution to the Holders of
such Senior Debt.
The consolidation of the Company with, or the merger
of the Company into, another Person or the liquidation or
dissolution of the Company following the conveyance, transfer
or lease of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set
forth in Article Ten shall not be deemed a dissolution,
winding up, liquidation, reorganization, assignment for the
benefit of creditors or marshaling of assets and liabilities
of the Company for the purposes of this paragraph 14(C) if the
Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance, transfer
or lease such properties and assets substantially as an
entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in Article Ten.
SUSPENSION OF PAYMENT WHEN DESIGNATED SENIOR DEBT IN
DEFAULT.
(a) Upon the occurrence and continuance beyond the
applicable grace period of a Payment Default, no payment or
distribution of any assets of the Company of any kind or character,
whether in cash, property or securities (other than payments made
pursuant to Article Fifteen from monies or U.S. Government Obligations
previously deposited with the Trustee), may be made by or on behalf of
the Company on account of principal of, premium, if any, or interest on
the Notes or on account of the purchase, redemption or other
acquisition of Notes until such Payment Default shall have been cured
or waived in writing from any representative of a Holder of Designated
Senior Debt or shall have ceased to exist or such Designated Senior
Debt shall have been discharged or paid in full in cash or cash
equivalents, after which the Company shall resume making any and all
required payments in respect of the Notes, including any missed
payments.
(b) Unless the provisions of "--Payment Over of
Proceeds Upon Dissolution, Etc." shall be applicable upon (i) the
occurrence of a Non-Payment Default or (ii) receipt by the Trustee of
written notice thereof from the Company or any representative of a
Holder of Designated Senior Debt (a "Payment Blockage Notice"), then no
payment or distribution of any assets of the Company of any kind or
character, whether in cash, property or securities (other than payments
made pursuant to Article
7
Fifteen from monies or U.S. Government Obligations previously deposited
with the Trustee), may be made by or on behalf of the Company on
account of principal of, premium, if any, or interest on the Notes or
on account of the purchase, redemption or other acquisition of Notes
for a period (a "Payment Blockage Period") commencing on the date of
receipt by the Trustee of a Payment Blockage Notice and shall end on
the earliest of (i) 179 days thereafter (PROVIDED that any Designated
Senior Debt as to which notice was given shall not theretofore have
been accelerated, in which case the provisions of paragraph (a) shall
apply), (ii) the date on which such Non-Payment Default is cured,
waived or ceases to exist or such Designated Senior Debt is discharged
or paid in full in cash or Cash Equivalents or (iii) the date on which
such Payment Blockage Period shall have been terminated by written
notice to the Trustee or the Company from such representative
initiating such Payment Blockage Period, after which the Company will
resume making any and all required payments in respect of the Notes,
including any missed payments. In any event, no new Payment Blockage
Notice may be delivered unless and until 360 days have elapsed since
the effectiveness of the immediately prior Payment Blockage Notice. No
Non-Payment Default that existed or was continuing on the date of the
delivery of any Payment Blockage Notice to the Trustee shall be, or can
be made, the basis for the commencement of a subsequent Payment
Blockage Notice, unless such default has been cured or waived for a
period of not less than 180 consecutive days subsequent to the
commencement of such initial Payment Blockage Period.
In the event that, notwithstanding the foregoing and
the provisions of "--Payment Over of Proceeds Upon Dissolution, Etc.,"
any payments or distribution shall be made to the Trustee which is
prohibited by the foregoing provisions of this Section and the
provisions of "--Payment Over of Proceeds Upon Dissolution, Etc.," then
and in such event such payment shall be paid over and delivered
forthwith by the Trustee to any representative of Holders of Designated
Senior Debt, as their interests may appear, for application to the
Designated Senior Debt.
PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in
this paragraph 14(C) or elsewhere in the Indenture or in any of the
Notes shall prevent the Company, at any time except during the pendency
of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets
and liabilities of the Company referred to in the provisions of
"--Payment Over of Proceeds Upon Dissolution, Etc." or under the
conditions described in the provisions of "--Suspension of Payment When
Designated Senior Debt in Default," from making payments at any time of
principal of, and premium, if any, or interest on the Notes.
SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full of all Senior Debt, the Holders of the
Notes shall be subrogated (equally and ratably with the Holders of all
Pari Passu Debt of the Company) to the rights of the Holders of such
Senior Debt to receive payments and distributions of cash, property and
securities applicable to the Senior Debt to the extent that
distributions otherwise payable to the Holders of the Notes have been
applied to the payment of Senior Debt. For purposes of such
subrogation, no payments or distributions to the Holders of Senior Debt
of any cash, property or securities to which the Holders of the Notes
or the
8
Trustee would be entitled except for the provisions of this paragraph
14(C), and no payments over pursuant to the provisions of this
paragraph 14(C) to the Holders of Senior Debt by Holders of the Notes
or on their behalf or by the Trustee, shall, as among the Company, its
creditors other than Holders of Senior Debt, and the Holders of the
Notes, be deemed to be a payment or distribution by the Company to or
on account of the Senior Debt; it being understood that the provisions
of this paragraph 14(C) are intended solely for the purpose of
determining the relative rights of the Holders of Notes, on the one
hand, and the Holders of Senior Debt, on the other hand.
PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this paragraph 14(C) are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand
and the Holders of Senior Debt on the other hand. Nothing contained in
this paragraph 14(C) or elsewhere in the Indenture or in the Notes is
intended to or shall (a) impair, as between the Company and the
Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of, and premium, if
any, and interest on the Notes as and when the same shall become due
and payable in accordance with their terms; or (b) affect the relative
rights against the Company of the Holders and creditors of the Company
other than the Holders of Senior Debt; or (c) prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by
applicable law upon default under the Indenture, subject to the rights,
if any, under this paragraph 14(C) of the Holders of Senior Debt.
TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of a
Note by its acceptance thereof authorizes and directs the Trustee on
its behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this paragraph 14(C) and
appoints the Trustee his attorney-in-fact for any and all such
purposes.
NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future Holder of any
Senior Debt to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act
on the part of the Company or by any act or failure to act, in good
faith, by any such Holder, or by any non-compliance by the Company with
the terms, provisions and covenants of the Indenture, regardless of any
knowledge thereof any such Holder may have or be otherwise charged
with.
(b) Without in any way limiting the generality of
paragraph (a) of this Section, the Holders of Senior Debt may, at any
time and from time to time, without the consent of or notice to the
Trustee or the Holders, without incurring responsibility to the Holders
and without impairing or releasing the subordination provided in this
paragraph 14(C) or the obligations hereunder of the Holders to the
Holders of Senior Debt, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Debt or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior
9
Debt; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to Holders of Senior Debt,
the distribution may be made and the notice given to the applicable
trustee, agent or representative for the Holders of such Senior Debt (a
"Representative").
Upon any payment or distribution of assets of the
Company referred to in this paragraph 14(C), the Trustee and the
Holders shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction or upon any certificate of such
Representative or of the liquidating trustee or agent or other Person
making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the Holders of the Senior Debt and other Debt of the
Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other acts pertinent thereto or to
this paragraph 14(C).
The Company must promptly notify Holders of Senior
Debt if payment of the Notes is accelerated because of an Event of
Default.
NOTICE TO TRUSTEE.
(a) The Company shall give prompt written notice to
the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Notes.
Notwithstanding the provisions of this paragraph 14(C) or any other
provision of the Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making
of any payment to or by the Trustee in respect of the Notes, unless and
until the Trustee shall have received written notice thereof from the
Company, a Holder of Senior Debt or from any trustee, fiduciary or
agent therefor; and, prior to the receipt of any such written notice,
the Trustee, subject to Sections 315(a) through 315(d) of the Trust
Indenture Act, shall be entitled in all respects to assume that no such
facts exist; PROVIDED, HOWEVER, that, if the Trustee shall not have
received the notice provided for in this Section at least three
Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without
limitation, the payment of the principal of, and premium, if any, or
interest on any Notes), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such
money was received and shall not be affected by any notice to the
contrary which may be received by it within three Business Days prior
to such date.
(b) Subject to Sections 315(a) through 315(d) of the
Trust Indenture Act, the Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing itself to
be a Holder of Senior Debt (or a trustee, fiduciary or agent therefor)
to establish that such notice has been given by a Holder of Senior Debt
(or a trustee, fiduciary or agent therefor). In the event that the
Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a Holder of
10
Senior Debt to participate in any payment or distribution pursuant to
this paragraph 14(C), the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Debt held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this paragraph 14(C)
and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right
of such Person to receive such payment.
RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT. Upon any payment or distribution of assets of the
Company referred to in this paragraph 14(C), the Trustee, subject to
Sections 315(a) through 315(d) of the Trust Indenture Act, and the
Holders of the Notes shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the
Trustee or to the Holders of Notes, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the
Holders of Senior Debt and other Debt of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this paragraph
14(C); PROVIDED that such court, trustee, receiver, custodian,
assignee, agent or other Person has been apprised of, or the order,
decree or certificate makes reference to, the provisions of this
paragraph 14(C).
RIGHTS OF TRUSTEE AS A HOLDER OF SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS. The Trustee in its individual
capacity shall be entitled to all the rights set forth in this
paragraph 14(C) with respect to any Senior Debt which may at any time
be held by it, to the same extent as any other Holder of Senior Debt,
and nothing in the Indenture shall deprive the Trustee of any of its
rights as such Holder.
ARTICLE APPLICABLE TO PAYING AGENTS. In case at any
time any Paying Agent other than the Trustee shall have been appointed
by the Company and be then acting hereunder, the term "Trustee" as used
in this paragraph 14(C) shall in such case (unless the context
otherwise requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes
as if such Paying Agent were named in this paragraph 14(C) in addition
to or in place of the Trustee; provided, however, that the provisions
of "--Article Applicable to Payment Agent" shall not apply to the
Company or any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.
NO SUSPENSION OF REMEDIES. If the Company fails to
make any payments on the Notes when due or within any applicable grace
period, whether or not on account of the subordination provisions
referred to in this paragraph 14(C), such failure would constitute an
Event of Default under the Indenture and would enable the Holders of
the Notes to accelerate the maturity thereof pursuant to Article Five.
Nothing contained in this paragraph 14(C) shall limit the right of the
Trustee or the Holders of
11
Notes to take any action to accelerate the maturity of the Notes
pursuant to Article Five or to pursue any rights or remedies hereunder
or under applicable law, except as provided in Article Five.
TRUST MONEYS NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary, payments from cash or the
proceeds of U.S. Government Obligations held in trust under Article
Fifteen by the Trustee (or other qualifying trustee) and which were
deposited in accordance with the terms of Article Fifteen and not in
violation of the provisions of "--Suspension of Payment when Designated
Senior Debt in Default" hereof for the payment of principal of (and
premium, if any) and interest on the Notes shall not be subordinated to
the prior payment of any Senior Debt or subject to the restrictions set
forth in this paragraph 14(C), and none of the Holders shall be
obligated to pay over any such amount to the Company or any Holder of
Senior Debt or any other creditor of the Company.
TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT. The
Trustee shall not be deemed to owe any fiduciary duty to the Holders of
Senior Debt and shall not be liable to any such Holders if the Trustee
shall mistakenly, in the absence of gross negligence or willful
misconduct, pay over or distribute to Holders of Notes or to the
Company or to any other person cash, property or securities to which
any Holders of Senior Debt shall be entitled by virtue of this
paragraph 14(C) or otherwise. With respect to the Holders of Senior
Debt, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this
paragraph 14(C) and no implied covenants or obligations with respect to
Holders of Senior Debt shall be read into the Indenture against the
Trustee.
(D) As used in paragraphs 14(A), 14(B) and 14(C) above, the
following terms have the meanings set forth below:
"Attributable Debt" with respect to any Sale and Lease-Back
Transaction that is subject to the restrictions described under
"--Limitation on Sale and Lease-Back Transactions" means the present
value of the minimum rental payments called for during the term of the
lease (including any period for which such lease has been extended),
determined in accordance with GAAP, discounted at a rate that, at the
inception of the lease, the lessee would have incurred to borrow over a
similar term the funds necessary to purchase the leased assets.
"Capital Improvements" means additions to properties or
renovations or refurbishing of properties which are designed to
substantially upgrade such properties or significantly modernize the
operation thereof.
"Capital Stock" means with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents
(however designated) of such Person's Capital Stock, and any rights
(other than debt securities convertible into Capital Stock), warrants
or options exchangeable for or convertible into such Capital Stock.
12
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (PROVIDED that the full faith and
credit of the United States of America is pledged in support thereof)
in each case maturing within one year after the date of acquisition,
(ii) time deposits and certificates of deposit and commercial paper
issued by the parent corporation of any domestic commercial bank of
recognized standing having capital and surplus in excess of $500
million and commercial paper issued by others rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's and in each case maturing within one year after the date of
acquisition and (iii) investments in money market funds substantially
all of whose assets comprise securities of the types described in
clauses (i) and (ii) above.
"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 most recent consolidated balance sheet of the Company and
computed in accordance with GAAP.
"Credit Facilities" means, with respect to the Company, one or
more debt facilities or commercial paper facilities, in each case with
banks or other institutional lenders providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.
"Debt" means notes, bonds, debentures or other similar
evidences of Debt for borrowed money or guarantee of any of the
foregoing.
"Designated Senior Debt" means any Senior Debt permitted under
the Indenture the principal amount of which is $100 million or more and
that has been designated by the Company as "Designated Senior Debt."
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which
are in effect from time to time.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under:
13
(1) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements; and
(2) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates.
"Joint Venture" means any partnership, corporation or other
entity, in which up to and including 50% of the partnership interests,
outstanding voting stock or other equity interest is owned, directly or
indirectly, by the Company and/or one or more Subsidiaries.
"Lien" means any mortgage, pledge, lien, encumbrance or other
security interest to secure payment of Debt.
"Make-Whole Premium" means, with respect to any Notes at any
Redemption Date, the excess, if any, of (a) the present value of the
sum of the principal amount and premium, if any, that would be payable
on such Notes on its maturity date and all remaining interest payments
(not including any portion of such payments of interest accrued as of
the Redemption Date) to and including such maturity date, discounted on
a semi-annual bond equivalent basis from such maturity date to the
Redemption Date at a per annum interest rate equal to the sum of the
Treasury Yield (determined on the Business Day immediately preceding
the date of such redemption), plus 50 basis points, over (b) the
principal amount of the Note being redeemed.
"Non-Payment Default" means any Event of Default (other than a
Payment Default) the occurrence of which entitles one or more Persons
to accelerate the maturity of any Designated Senior Debt.
"Non-recourse Debt" means Debt the terms of which provide that
the lender's claim for repayment of such Debt is limited solely to a
claim against the property which secures such Debt.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Debt.
"Pari Passu Debt" means any Debt of the Company which ranks
PARI PASSU in right of payment to the Notes.
"Payment Default" means any default in payment (whether at
Stated Maturity, upon scheduled installment, by acceleration or
otherwise) of principal of, premium, if any, or interest on Designated
Senior Debt.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, estate, unincorporated organization or government or any agency
or political subdivision thereof or any other entity.
14
"Principal Property" means any real estate or other physical
facility or depreciable asset, the net book value of which on the date
of determination exceeds the greater of $25 million or 2% of
Consolidated Net Tangible Assets of the Company.
"Redeemable Capital Stock" means any class or series of
Capital Stock that, either by its terms or by the terms of any security
into which it is convertible or exchangeable by contract or otherwise,
is or upon the happening of an event or passage of time would be,
required to be redeemed prior to the stated maturity of the Notes or is
redeemable at the option of the Holder thereof at any time prior to the
stated maturity of the Notes, or is convertible into or exchangeable
for debt securities at any time prior to the stated maturity of the
Notes.
"Restricted Subsidiary" means any Subsidiary of the Company
organized and existing under the laws of the United States of America
and the principal business of which is carried on within the United
States of America (x) which owns, or is a lessee pursuant to a capital
lease of, any Principal Property or (y) in which the investment of the
Company and all its Subsidiaries exceeds 5% of Consolidated Net
Tangible Assets as of the date of such determination other than, in the
case of either clause (x) or (y), (i) each Subsidiary whose business
primarily consists of finance, banking, credit, leasing, insurance,
financial services or other similar operations, or any combination
thereof, and (ii) each Subsidiary formed or acquired after the date
hereof for the purpose of developing new assets or acquiring the
business or assets of another Person and which does not acquire any
part of the business or assets of the Company or any Restricted
Subsidiary.
"Senior Debt" means (a) all Debt outstanding under Credit
Facilities and all Hedging Obligations with respect thereto; (b) any
other Debt, unless the instrument under which such Debt is incurred
expressly provides that it is on a parity with or subordinated in right
of payment to the Notes or to other Debt which ranks equally with, or
is subordinated to, the Notes; and (c) all Obligations with respect to
the items listed in the preceding clauses (a) and (b). Notwithstanding
anything to the contrary in the preceding, Senior Debt will not
include: (1) any liability for Federal, state, local and other taxes
owed or owing by the Company; (2) any Debt of the Company to any of its
Subsidiaries or other Affiliates; or (3) any trade payables.
"Significant Subsidiary" of the Company means any Restricted
Subsidiary of the Company that is a "significant subsidiary" as defined
in Rule 1.02(v) of Regulation S-X under the Securities Act.
"Subsidiary" means any corporation of which at least a
majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
is, at the time, directly or indirectly owned by the Company or by one
or more Subsidiaries thereof, or by the Company and one or more
Subsidiaries.
"Treasury Securities" mean any investment in obligations
issued or guaranteed by the United States government or any agency
thereof.
15
"Treasury Yield" means the yield to maturity at the time of
computation of Treasury Securities with a constant maturity (as
compiled by and published in the most recent Federal Reserve
Statistical Release H.15 (519) which has become publicly available at
least two business days prior to the date fixed for redemption (or, if
such Statistical Release is no longer published, any publicly available
source of similar data)) most nearly equal to the then remaining
average life of the Notes, PROVIDED that if the average life of the
Notes is not equal to the constant maturity of a Treasury Security for
which a weekly average yield is given, the Treasury yield shall be
obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the weekly average yields of Treasury Securities for
which such yields are given, except that if the average life of the
Notes is less than one year, the weekly average yield on actually
traded Treasury Securities adjusted to a constant maturity of one year
shall be used.
"wholly owned" with respect to any Subsidiary, means any
Subsidiary of any Person of which at least 99% of the outstanding
Capital Stock is owned by such Person or another wholly-owned
Subsidiary of such Person. For purposes of this definition, any
directors' qualifying shares or investments by foreign nationals
mandated by applicable law shall be disregarded in determining the
ownership of a Subsidiary.
(15) The Notes shall be issuable only as Registered Securities
in permanent global forms (without coupons). Beneficial owners of
interests in the Global Notes may exchange such interests for Notes of
like tenor or any authorized form and denomination only in the manner
provided in Section 3.04(c) of the Indenture. The Depository Trust
Company shall be the U.S. Depositary with respect to each Global Note.
The form of such Global Notes attached hereto as Exhibit A is hereby
approved.
(16) The Notes shall not be issuable as Bearer Securities.
(17) Interest on any Note shall be payable only to the Person
in whose name that Note (or one or more predecessor Notes thereof) is
registered at the close of business on the Regular Record Date for such
interest.
(18) Article Fifteen of the Indenture shall be applicable to
the Notes.
(19) The Notes shall not be issuable in definitive form except
under the circumstances described in Section 3.04 of the Indenture.
(20) The Notes will be authenticated and delivered as provided
in Section 3.03 of the Indenture.
(21) The Notes shall not be convertible into Common Stock or
other securities or property of the Company.
(22) Compliance with the covenants set forth in paragraph
14(B) and 14 (C) above may not be waived by the Trustee unless the
holders of at least a majority in principal amount of all outstanding
Notes consent to such waiver as set forth in the Indenture; PROVIDED,
HOWEVER, that the Company need not comply with such covenants in the
event it elects to comply with the provisions of Article Fifteen set
forth in the
16
Indenture. The Trustee may amend the terms of such covenants with the
written consent of the holders of not less than a majority in principal
amount of outstanding Notes as set forth in the Indenture.
(23) Each holder of a Note, by accepting any Note, shall be
deemed to have agreed to be bound by the requirements imposed on
holders of Debt Securities of the Company by the gaming authority of
any jurisdiction of which the Company or any of its subsidiaries
conducts or proposes to conduct gaming activities.
(24) To the extent that any of the terms set forth in
paragraphs 1 through 23 above are inconsistent with the Indenture, the
terms in paragraphs 1 through 23 above shall govern.
B. The form of the Notes attached hereto as Exhibit A is
approved.
C. The foregoing form and terms of the Notes have been
established in conformity with the provisions of the Indenture.
D. Each of the undersigned has read the Indenture and the
definitions relating thereto and has examined the resolutions referred
to in paragraph A above and the Notes and has made such examination or
investigation as is necessary to enable the undersigned to represent as
to whether or not all conditions precedent provided in the Indenture
relating to the establishment, authentication and delivery of the Notes
have been complied with. On the basis of the foregoing, all such
conditions precedent have been complied with.
17
IN WITNESS WHEREOF, the undersigned have hereunto executed
this Officers' Certificate as of the 12th day of September, 2000.
PARK PLACE ENTERTAINMENT CORPORATION,
a Delaware corporation
By: /s/ SCOTT A. LAPORTA
--------------------------------
Name: Scott A. LaPorta
Title: Executive Vice President and
Chief Financial Officer
By: /s/ WES ALLISON
--------------------------------
Name: Wes Allison
Title: Vice President and Controller
18