PARK PLACE ENTERTAINMENT CORPORATION, AS ISSUER,
AND
FIRST UNION NATIONAL BANK, AS TRUSTEE
-----------------
INDENTURE
DATED AS OF DECEMBER 21, 1998
-----------------
$400,000,000
7 7/8% SENIOR SUBORDINATED NOTES DUE 2005
Reconciliation and tie between Trust Indenture Act of 1939,as amended, and
Indenture, dated as of December 21, 1998
Trust Indenture Indenture
Act Section
-----------
Section
--------
Section 310 (a)(1) 6.09
(a)(2) 6.09
(b) 6.07, 6.10
Section 311 (a) 6.13
Section 312 (a) 7.01
(c) 7.02
Section 313 (a) 7.03
(c) 7.03, 10.09
Section 314 (a) 7.04
(c)(1) 1.03
(c)(2) 1.03
(d) 12.1(c)
(e) 1.03
Section 315 (a) 6.01(b)
(b) 6.02
(c) 6.01(a)
(d) 6.01(c), 6.03
(e) 5.14
Section 316 (a)(last sentence) 1.01
(a)(1)(A) 5.02, 5.12
(a)(1)(B) 5.13
(b) 5.08
(c) 1.05
Section 317 (a)(1) 5.03
(a)(2) 5.04
(b) 10.03
Section 318 (a) 1.08
- - ---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of this Indenture.
TABLE OF CONTENTS
ARTICLE IDEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION . . . . . . . . . .1
Section 1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
"Additional Interest" . . . . . . . . . . . . . . . . . . . . . . . .2
"Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
"Applicable Procedures" . . . . . . . . . . . . . . . . . . . . . . .2
"Attributable Debt" . . . . . . . . . . . . . . . . . . . . . . . . .2
"Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . . . . . . .2
"Board of Directors". . . . . . . . . . . . . . . . . . . . . . . . .2
"Board Resolution". . . . . . . . . . . . . . . . . . . . . . . . . .2
"Book-Entry Security" . . . . . . . . . . . . . . . . . . . . . . . .2
"Business Day". . . . . . . . . . . . . . . . . . . . . . . . . . . .2
"Capital Improvements". . . . . . . . . . . . . . . . . . . . . . . .3
"Capital Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Cash Equivalents". . . . . . . . . . . . . . . . . . . . . . . . . .3
"Code". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Commission". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Common Stock". . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Company Order" . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Company Request" . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Consolidated". . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Consolidated Net Tangible Assets". . . . . . . . . . . . . . . . . .4
"Corporate Trust Office". . . . . . . . . . . . . . . . . . . . . . .4
"Credit Facilities" . . . . . . . . . . . . . . . . . . . . . . . . .4
"Debt". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
"Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
"Depositary" . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
"Designated Senior Debt". . . . . . . . . . . . . . . . . . . . . . .4
"Event of Default". . . . . . . . . . . . . . . . . . . . . . . . . .4
"Exchange Act". . . . . . . . . . . . . . . . . . . . . . . . . . . .4
"Exchange Global Securities". . . . . . . . . . . . . . . . . . . . .5
"Exchange Offer". . . . . . . . . . . . . . . . . . . . . . . . . . .5
"Exchange Offer Registration Statement" . . . . . . . . . . . . . . .5
"Exchange Securities" . . . . . . . . . . . . . . . . . . . . . . . .5
"GAAP". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
"Global Securities" . . . . . . . . . . . . . . . . . . . . . . . . .5
"Grand" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
"Grand Distribution . . . . . . . . . . . . . . . . . . . . . . . . .5
"Hedging Obligations" . . . . . . . . . . . . . . . . . . . . . . . .5
"Hilton". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
"Hilton Debt" . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
"Hilton Distribution" . . . . . . . . . . . . . . . . . . . . . . . .6
"Holder". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
"Indenture" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
"Indenture Obligations" . . . . . . . . . . . . . . . . . . . . . . .6
"Initial Securities". . . . . . . . . . . . . . . . . . . . . . . . .6
"Initial Purchasers". . . . . . . . . . . . . . . . . . . . . . . . .6
"Interest Payment Date" . . . . . . . . . . . . . . . . . . . . . . .6
"Issue Date". . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
"Joint Venture" . . . . . . . . . . . . . . . . . . . . . . . . . . .7
"Lakes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
"Lien". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
"Make-Whole Premium". . . . . . . . . . . . . . . . . . . . . . . . .7
"Maturity". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
"Merger". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
"Moody's" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
"Non-Payment Default" . . . . . . . . . . . . . . . . . . . . . . . .7
"Non-recourse Debt" . . . . . . . . . . . . . . . . . . . . . . . . .7
"Obligations" . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
"Offering Memorandum" . . . . . . . . . . . . . . . . . . . . . . . .8
"Officers' Certificate" . . . . . . . . . . . . . . . . . . . . . . .7
"Opinion of Counsel". . . . . . . . . . . . . . . . . . . . . . . . .8
"Opinion of Independent Counsel". . . . . . . . . . . . . . . . . . .8
"Outstanding" . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
"Pari Passu Debt" . . . . . . . . . . . . . . . . . . . . . . . . . .9
"Paying Agent". . . . . . . . . . . . . . . . . . . . . . . . . . . .9
"Payment Default" . . . . . . . . . . . . . . . . . . . . . . . . . .9
"Permitted Lien". . . . . . . . . . . . . . . . . . . . . . . . . . .9
"Person". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
"Predecessor Security". . . . . . . . . . . . . . . . . . . . . . . 11
"Principal Property". . . . . . . . . . . . . . . . . . . . . . . . 11
"QIB" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
"Redeemable Capital Stock". . . . . . . . . . . . . . . . . . . . . 11
"Redemption Date" . . . . . . . . . . . . . . . . . . . . . . . . . 11
"Redemption Price". . . . . . . . . . . . . . . . . . . . . . . . . 11
"Registration Rights Agreement" . . . . . . . . . . . . . . . . . . 11
"Regular Record Date" . . . . . . . . . . . . . . . . . . . . . . . 11
"Responsible Officer" . . . . . . . . . . . . . . . . . . . . . . . 11
"Restricted Security" . . . . . . . . . . . . . . . . . . . . . . . 12
"Restricted Subsidiary" . . . . . . . . . . . . . . . . . . . . . . 12
"Rule 144A" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
"Rule 144A Global Securities" . . . . . . . . . . . . . . . . . . . 12
"S&P" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
"Securities". . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
"Securities Act". . . . . . . . . . . . . . . . . . . . . . . . . . 12
"Security Agreement". . . . . . . . . . . . . . . . . . . . . . . . 12
"Security Intermediary" . . . . . . . . . . . . . . . . . . . . . . 12
"Senior Debt". . . . . . . . . . . . . . . . . . . . . . . . . 12
"Series A Securities". . . . . . . . . . . . . . . . . . . . . 13
"Series B Securities". . . . . . . . . . . . . . . . . . . . . 13
"Significant Subsidiary" . . . . . . . . . . . . . . . . . . . 13
"Special Record Date". . . . . . . . . . . . . . . . . . . . . 13
"Special Redemption Date". . . . . . . . . . . . . . . . . . . 13
"Stated Maturity". . . . . . . . . . . . . . . . . . . . . . . 13
"Subordinated Debt". . . . . . . . . . . . . . . . . . . . . . 13
"Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . . . 13
"Successor Security" . . . . . . . . . . . . . . . . . . . . . 13
"Transactions" . . . . . . . . . . . . . . . . . . . . . . . . 13
"Treasury Securities". . . . . . . . . . . . . . . . . . . . . 14
"Treasury Yield" . . . . . . . . . . . . . . . . . . . . . . . 14
"Trustee". . . . . . . . . . . . . . . . . . . . . . . . . . . 14
"Trust Indenture Act". . . . . . . . . . . . . . . . . . . . . 14
"wholly-owned" . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 1.02 Other Definitions. . . . . . . . . . . . . . . . . . . . . . . 14
Section 1.03 Compliance Certificates and Opinions . . . . . . . . . . . . . 15
Section 1.04 Form of Documents Delivered to Trustee . . . . . . . . . . . . 16
Section 1.05 Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.06 Notices, etc., to the Trustee and the Company. . . . . . . . . 18
Section 1.07 Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . 18
Section 1.08 Conflict with Trust Indenture Act. . . . . . . . . . . . . . . 19
Section 1.09 Effect of Headings and Table of Contents . . . . . . . . . . . 19
Section 1.10 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 19
Section 1.11 Separability Clause. . . . . . . . . . . . . . . . . . . . . . 19
Section 1.12 Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . 19
Section 1.13 No Personal Liability of Directors, Officers,
Employee and Stockholders. . . . . . . . . . . . . . . . . . 20
Section 1.14 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 1.15 Legal Holidays; Payment of Securities. . . . . . . . . . . . . 20
Section 1.16 Independence of Covenants. . . . . . . . . . . . . . . . . . . 20
Section 1.17 Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . 20
Section 1.18 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 1.19 Communications by Holders with other Holders . . . . . . . . . 21
Section 1.20 No Adverse Interpretation of Other Agreements. . . . . . . . . 21
Section 1.21 Qualification of Indenture . . . . . . . . . . . . . . . . . . 21
Section 1.22 Registration Rights. . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE II
SECURITY FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.01 Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.02 Form of Face of Security . . . . . . . . . . . . . . . . . . . 22
Section 2.03 Form of Reverse of Securities. . . . . . . . . . . . . . . . . 30
ARTICLE III
THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.01 Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.02 Denominations. . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.03 Execution, Authentication, Delivery and Dating . . . . . . . . 37
Section 3.04 Temporary Securities . . . . . . . . . . . . . . . . . . . . . 38
Section 3.05 Registration, Registration of Transfer and Exchange. . . . . . 39
Section 3.06 Book Entry Provisions for Global Securities. . . . . . . . . . 40
Section 3.07 Special Transfer and Exchange Provisions . . . . . . . . . . . 42
Section 3.08 Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . 43
Section 3.09 Payment of Interest; Interest Rights Preserved . . . . . . . . 44
Section 3.10 CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 3.11 Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . 45
Section 3.12 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 3.13 Computation of Interest. . . . . . . . . . . . . . . . . . . . 46
ARTICLE IV
DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . 46
Section 4.01 Company's Option to Effect Defeasance or
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . 46
Section 4.02 Defeasance and Discharge . . . . . . . . . . . . . . . . . . . 46
Section 4.03 Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . 47
Section 4.04 Conditions to Defeasance or Covenant Defeasance. . . . . . . . 47
Section 4.05 Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions . . . . . . . . . . 49
Section 4.06 Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE V
REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.01 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.02 Acceleration of Maturity; Rescission and Annulment . . . . . . 51
Section 5.03 Collection of Debt and Suits for Enforcement
by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.04 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . 53
Section 5.05 Trustee May Enforce Claims without Possession
of Securities. . . . . . . . . . . . . . . . . . . . . . . . 54
Section 5.06 Application of Money Collected . . . . . . . . . . . . . . . . 54
Section 5.07 Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 54
Section 5.08 Unconditional Right of Holders to Receive
Principal, Premium and Interest. . . . . . . . . . . . . . . 55
Section 5.09 Restoration of Rights and Remedies . . . . . . . . . . . . . . 55
Section 5.10 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . 56
Section 5.11 Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . 56
Section 5.12 Control by Holders . . . . . . . . . . . . . . . . . . . . . . 56
Section 5.13 Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 56
Section 5.14 Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . 57
Section 5.15 Waiver of Stay, Extension or Usury Laws. . . . . . . . . . . . 57
Section 5.16 Remedies Subject to Applicable Law . . . . . . . . . . . . . . 57
ARTICLE VI
THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.01 Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.02 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.03 Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . 59
Section 6.04 Trustee Not Responsible for Recitals, Dispositions
of Securities or Application of Proceeds Thereof . . . . . . 60
Section 6.05 Trustee and Agents May Hold Securities;
Collections; etc . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.06 Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . 61
Section 6.07 Compensation and Indemnification of Trustee and
Its Prior Claim. . . . . . . . . . . . . . . . . . . . . . . 61
Section 6.08 Conflicting Interests. . . . . . . . . . . . . . . . . . . . . 62
Section 6.09 Trustee Eligibility. . . . . . . . . . . . . . . . . . . . . . 62
Section 6.10 Resignation and Removal; Appointment of Successor Trustee. . . 62
Section 6.11 Acceptance of Appointment by Successor . . . . . . . . . . . . 64
Section 6.12 Merger, Conversion, Consolidation or Succession4
to Business . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 6.13 Preferential Collection of Claims Against Company. . . . . . . 65
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE . . . . . . . . . . . . . . . . . . . . 65
Section 7.01 Company to Furnish Trustee Names and Addresses
of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.02 Disclosure of Names and Addresses of Holders . . . . . . . . . 66
Section 7.03 Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . 66
Section 8.01 Company May Consolidate, etc., Only on
Certain Terms. . . . . . . . . . . . . . . . . . . . . . . . 66
Section 8.02 Successor Substituted. . . . . . . . . . . . . . . . . . . . . 67
ARTICLE IX
SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 9.01 Supplemental Indentures and Agreements
without Consent of Holders . . . . . . . . . . . . . . . . . 67
Section 9.02 Supplemental Indentures and Agreements with
Consent of Holders . . . . . . . . . . . . . . . . . . . . . 68
Section 9.03 Execution of Supplemental Indentures or Agreements . . . . . . 69
Section 9.04 Effect of Supplemental Indentures. . . . . . . . . . . . . . . 69
Section 9.05 Conformity with Trust Indenture Act. . . . . . . . . . . . . . 69
Section 9.06 Reference in Securities to Supplemental Indentures . . . . . . 69
Section 9.07 Notice of Supplemental Indentures. . . . . . . . . . . . . . . 70
ARTICLE X
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 10.01 Payment of Principal, Premium and Interest . . . . . . . . . . 70
Section 10.02 Maintenance of Office or Agency. . . . . . . . . . . . . . . . 71
Section 10.03 Money for Security Payments to Be Held in Trust. . . . . . . . 72
Section 10.04 Corporate Existence. . . . . . . . . . . . . . . . . . . . . . 72
Section 10.05 Payment of Taxes and Other Claims. . . . . . . . . . . . . . . 72
Section 10.06 Maintenance of Insurance . . . . . . . . . . . . . . . . . . . 73
Section 10.07 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . 73
Section 10.08 Limitation on Sale and Leaseback Transactions. . . . . . . . . 73
Section 10.09 Rule 144A Information Requirement. . . . . . . . . . . . . . . 74
Section 10.10 Statement by Officers as to Default. . . . . . . . . . . . . . 74
Section 10.11 Reports by Company . . . . . . . . . . . . . . . . . . . . . . 75
Section 10.12 Waiver of Certain Covenants. . . . . . . . . . . . . . . . . . 76
ARTICLE XI
REDEMPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.01 Rights of Redemption . . . . . . . . . . . . . . . . . . . . . 76
Section 11.02 Applicability of Article . . . . . . . . . . . . . . . . . . . 76
Section 11.03 Election to Redeem; Notice to Trustee. . . . . . . . . . . . . 76
Section 11.04 Securities to Be Redeemed In Part. . . . . . . . . . . . . . . 76
Section 11.05 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . 77
Section 11.06 Deposit of Redemption Price. . . . . . . . . . . . . . . . . . 78
Section 11.07 Securities Payable on Redemption Date. . . . . . . . . . . . . 78
Section 11.08 Securities Redeemed or Purchased in Part . . . . . . . . . . . 78
Section 11.09 Special Redemption . . . . . . . . . . . . . . . . . . . . . . 79
Section 11.10 Mandatory Disposition Pursuant to Gaming Laws. . . . . . . . . 80
Section 11.11 Redemption Procedures. . . . . . . . . . . . . . . . . . . . . 80
ARTICLE XII
SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 12.01 Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE XIII
SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 13.01 Securities Subordinate to Senior Debt. . . . . . . . . . . . . 82
Section 13.02 Payment over of Proceeds upon Dissolution, etc . . . . . . . . 82
Section 13.03 Suspension of Payment When Designated Senior
Debt in Default. . . . . . . . . . . . . . . . . . . . . . . 83
Section 13.04 Payment Permitted If No Default. . . . . . . . . . . . . . . . 84
Section 13.05 Subrogation to Rights of Holders of Senior Debt. . . . . . . . 84
Section 13.06 Provisions Solely to Define Relative Rights. . . . . . . . . . 85
Section 13.07 Trustee to Effectuate Subordination. . . . . . . . . . . . . . 85
Section 13.08 No Waiver of Subordination Provisions. . . . . . . . . . . . . 85
Section 13.09 Distribution or Notice to Representative . . . . . . . . . . . 86
Section 13.10 Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . . 86
Section 13.11 Reliance on Judicial Order or Certificate of
Liquidating Agent. . . . . . . . . . . . . . . . . . . . . . 87
Section 13.12 Rights of Trustee as a Holder of Senior Debt;
Preservation of Trustee's Rights . . . . . . . . . . . . . . 87
Section 13.13 Article Applicable to Paying Agents. . . . . . . . . . . . . . 87
Section 13.14 No Suspension of Remedies. . . . . . . . . . . . . . . . . . . 87
Section 13.15 Trust Moneys Not Subordinated. . . . . . . . . . . . . . . . . 88
Section 13.16 Trustee Not Fiduciary for Holders of Senior Debt . . . . . . . 88
ARTICLE XIV
SATISFACTION AND DISCHARGE. . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 14.01 Satisfaction and Discharge of Indenture. . . . . . . . . . . . 88
Section 14.02 Application of Trust Money . . . . . . . . . . . . . . . . . . 89
EXHIBIT A Restricted Security Certificate . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Unrestricted Security Certificate . . . . . . . . . . . . . . . . B-1
APPENDIX I Form of Transferee Certificate for Initial Securities . . . . . . I-1
APPENDIX II Form of Transferee Certificate for Exchange Securities. . . . . . II-1
INDENTURE, dated as of December 21, 1998, between Park Place
Entertainment Corporation, a Delaware corporation (the "Company"), and First
Union National Bank, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 7 7/8%
Series A Senior Subordinated Notes due 2005 and an issue of 7 7/8% Series B
Senior Subordinated Notes due 2005 to be exchanged for the 7 7/8% Series A
Senior Subordinated Notes due 2005, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture and the
Securities (as defined herein);
All acts and things necessary have been done to make the
Securities, when duly issued and executed by the Company and authenticated
and delivered hereunder, the valid obligations of the Company and to make
this Indenture a valid agreement of the Company in accordance with the terms
of this Indenture;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
Each party hereto agrees for the benefit of the other parties and
for the equal and proportionate benefit of all Holders (as defined herein) of
the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01 DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article,
Section or other subdivision;
(e) all references to $, US$, dollars or United States dollars shall
refer to the lawful currency of the United States of America; and
(f) all references herein to particular Sections or Articles refer to
this Indenture unless otherwise so indicated.
"Additional Interest" means the additional interest rate borne by the
Securities pursuant to the Registration Rights Agreement.
"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 term "controlling,"
"controlled by" and "under common control with") as used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through ownership of voting securities, by
agreement or otherwise.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security to the extent
applicable to such transaction and as in effect at the time of such transfer
or transaction.
"Attributable Debt" with respect to any Sale and Lease-Back
Transaction described in Section 10.08 means the present value of the minimum
rental payments called for during the terms 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.
"Bankruptcy Law" means the United States Bankruptcy Code of 1978,
codified in Title 11 of the United States Code, as amended, or any similar
United States federal or state law relating to bankruptcy, insolvency,
receivership, winding up, liquidation, reorganization or relief of debtors or
any amendment to, succession to or change in any such law.
"Board of Directors" means the board of directors of the Company or
any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Book-Entry Security" means any Global Securities bearing the
Global Legend specified in Section 2.02 evidencing all or part of a series of
Securities, authenticated and delivered to the Depositary for such series or
its nominee, and registered in the name of such Depositary or nominee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions or trust companies in
The City of New York or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law, regulation or
executive order to close.
"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.
"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.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act then
the body performing such duties at such time.
"Common Stock" means the common stock, par value $.01 per share, of
the Company.
"Company" means Park Place Entertainment Corporation, a corporation
incorporated under the laws of Delaware, until a successor Person shall have
become a successor to the Company pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such successor Person.
"Company Order" or "Company Request" means a written request or
order signed in the name of the Company by any one of its Chairman of the
Board, its President, its Chief Executive Officer, its Chief Financial
Officer or a Vice President (regardless of Vice Presidential designation),
and by any one of its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Consolidated" means, with respect to any Person, the consolidated
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP.
"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 (i) all current liabilities of the Company and its
Subsidiaries (excluding (A) the current portion of long-term indebtedness,
(B) intercompany liabilities and (C) 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 (ii) 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.
"Corporate Trust Office" means the office of the Trustee or an
affiliate or agent thereof at which at any particular time the corporate
trust business for the purposes of this Indenture shall be principally
administered, which office at the date of execution of this Indenture is
located at 40 Broad Street, Suite 550, Fifth Floor, New York, New York 1004.
"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 or time.
"Debt" means notes, bonds, debentures, letters of credit or other
similar evidence of Debt for borrowed money or any guarantee of any of the
foregoing.
"Default" means any event that after notice or lapse of time or
both, would become an Event of Default.
"Depositary" means, with respect to the Securities issued in the
form of one or more Book-Entry Securities, The Depositary Trust Company
("DTC"), its nominees and successors, or another Person designated as
Depositary by the Company, which must be a clearing agency registered under
the Exchange Act.
"Designated Senior Debt" means any Senior Debt permitted under this
Indenture the principal amount of which is $100 million or more and that has
been designated by the Company as "Designated Senior Debt."
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.
"Exchange Global Securities" means one or more permanent Global
Securities in registered form representing the aggregate principal amount of
Exchange Securities exchanged for Initial Securities pursuant to the Exchange
Offer.
"Exchange Offer" means the Company's offer to exchange the Exchange
Securities for the Initial Securities pursuant to the terms of the
Registration Rights Agreement.
"Exchange Offer Registration Statement" has the meaning specified
in the Registration Rights Agreement.
"Exchange Securities" means the 7 7/8% Series B Senior Subordinated
Notes due 2005, as supplemented from time to time in accordance with the
terms hereof, to be issued pursuant to this Indenture in connection with the
Exchange Offer. The Exchange Securities shall contain the information
referred to in Sections 2.02(b) and 2.03(b) of this Indenture.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principals 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.
"Global Securities" means the Rule 144A Global Securities and the
Exchange Global Securities to be issued as Book-Entry Securities issued to
the Depositary in accordance with Section 3.06.
"Grand" means Grand Casinos, Inc., a Minnesota corporation.
"Grand Distribution" means the separation of Grand's Mississippi
business (which includes the Grand Casino Biloxi, Grand Casino Gulfport and
Grand Casino Tunica properties) from its non-Mississippi business. Grand's
non-Mississippi business is comprised primarily of the management of two
Indian-owned casinos, an interest in the development of the Polo Plaza in Las
Vegas, up to $33 million in cash and certain other assets and liabilities.
Specifically, the Grand distribution consists of (i) the transfer of all of
the assets and liabilities of Grand's non-Mississippi business to Lakes and
(ii) the distribution of all of the outstanding shares of Lakes to the
holders of Grand common stock, all substantially on the terms described in
the Offering Memorandum and in the documentation for the Transactions as
currently in effect on December 14, 1998 (without regard to any material
amendment, supplement or waiver thereto that is (A) entered into after
December 14, 1998 and (B) not contemplated in the Offering Memorandum).
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under: (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements; and (ii)
other arrangements or arrangements designated to protect such Person against
fluctuations in interest rates.
"Hilton" means Hilton Hotels Corporation, a Delaware corporation.
"Hilton Debt" means indebtedness under the Hilton credit facility
as in effect on the date hereof.
"Hilton Distribution" means the separation of Hilton's gaming
business from its lodging business and consists of (i) Hilton's transfer of
all of the assets and liabilities of its gaming business (with certain
exceptions described in the Offering Memorandum) to the Company and (ii) the
distribution of all of the Company's outstanding shares of Common Stock to
the holders of Hilton common stock, all substantially on the terms described
in the Offering Memorandum and in the documentation for the Transactions as
currently in effect on December 14, 1998 (without regard to any material
amendment, supplement or waiver thereto that is (A) entered into after
December 14, 1998 and (B) not contemplated in the Offering Memorandum).
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indenture" means this instrument as originally executed (including
all exhibits and schedules thereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and
any other obligor under this Indenture or under the Securities, to pay
principal of, premium, if any, and interest when due and payable, and all
other amounts due or to become due under or in connection with this
Indenture, the Securities and the performance of all other obligations to the
Trustee and the holders under this Indenture and the Securities, according to
the respective terms thereof.
"Initial Securities" means the 7 7/8% Series A Senior Subordinated
Notes due 2005, as supplemented from time to time in accordance with the
terms hereof, issued under this Indenture. The Initial Securities shall
contain the information referred to in Sections 2.02(a) and 2.03(a) of this
Indenture.
"Initial Purchasers" means Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, NationsBanc Montgomery Securities LLC,
SG Cowen Securities Corporation, Credit Suisse First Boston Corporation, BNY
Capital Markets, Inc., PNC Capital Markets, Inc., First Chicago Capital
Markets, Inc., First Union Capital Markets and Ladenburg Thalmann & Co. Inc.
"Interest Payment Date" means June 15 and December 15 of each year
commencing June 15, 1999.
"Issue Date" means the date on which the Initial Securities are
originally issued under this Indenture.
"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 Capital Stock is owned, directly or indirectly, by the
Company and/or one or more Subsidiaries.
"Lakes" means Lakes Gaming, Inc., a Minnesota corporation,.
"Lien" means, with respect to any assets, any mortgage, pledge,
lien, encumbrance or other security interest to secure payment of Debt.
"Make-Whole Premium" means, with respect to any Security at any
Redemption Date, the excess, if any, of (i) the aggregate present value of
the sum of the principal amount and premium that would be payable on such
Security on December 15, 2005 and all remaining interest payments to and
including December 15, 2005 discounted on a semi-annual bond equivalent basis
from December 15, 2005 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 (ii) the aggregate principal amount of the Security being redeemed. The
Company in consultation with its certified independent accountants shall
determine the Make-Whole Premium.
"Maturity" means, when used with respect to the Securities, the
date on which the principal of the Securities becomes due and payable as
therein provided or as provided in this Indenture, whether at Stated
Maturity, the Redemption Date and whether by declaration of acceleration,
call for redemption or otherwise.
"Merger" means the Company's acquisition of Grand's Mississippi
business following the Hilton Distribution and immediately after the Grand
Distribution which will be accomplished by the merger of one of the Company's
wholly-owned subsidiaries with and into Grand all substantially on the terms
described in the Offering Memorandum and in the documentation for the
Transactions as currently in effect on December 14, 1998 (without regard to
any material amendment, supplement or waiver thereto that is (A) entered into
after December 14, 1998 and (B) not contemplated in the Offering Memorandum).
"Moody's" means Moody's Investors Service, Inc. or any successor
rating agency.
"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.
"Offering Memorandum" means the final Offering Memorandum, dated
December 14, 1998, relating to the sale of the Initial Securities.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President, the Chief Executive Officer, the Chief Financial
Officer or a Vice President (regardless of Vice Presidential designation),
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company and in form and substance reasonably satisfactory
to, and delivered to, the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or the Trustee, unless an Opinion of Independent
Counsel is required pursuant to the terms of this Indenture, and who shall be
acceptable to the Trustee, and which opinion shall be in form and substance
reasonably satisfactory to the Trustee.
"Opinion of Independent Counsel" means a written opinion of
counsel, who may be regular outside counsel for the Company, but which is
issued by a Person who is not an employee or consultant (other than
non-employee legal counsel) of the Company and who shall be reasonably
acceptable to the Trustee, and which opinion shall be in form and substance
reasonably satisfactory to the Trustee.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited with
the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; PROVIDED that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor reasonably satisfactory to
the Trustee has been made;
(c) Securities, except to the extent provided in Sections 4.02 and
4.03, with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article IV; and
(d) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have been
presented to the Trustee and the Company proof reasonably satisfactory to
each of them that such Securities are held by a bona fide purchaser in whose
hands the Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that 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, Securities
owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows
to be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the reasonable satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Pari Passu Debt" means any Debt of the Company which ranks PARI
PASSU in right of payment to the Securities.
"Paying Agent" means any Person (including the Company) authorized
by the Company to pay the principal of, premium, if any, or interest on, any
Securities on behalf of the Company.
"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.
"Permitted Lien" means:
(a) Liens existing as of the date of the original issuance of the
Initial Securities;
(b) Liens existing (i) on property at the time of acquisition
thereof by the Company or a Restricted Subsidiary (whether such property is
acquired through a merger, a consolidation or otherwise), or (ii) on property
or securing Debt of, or 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 of 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
Improvement;
(f) Liens in favor of the Company or another Restricted Subsidiary;
(g) Liens to secure Debt on which interest payments are exempt
from Federal income tax under Section 103 of the Code;
(h) Liens on the partnership or other Capital Stock of the Company
or any Restricted Subsidiary in any Joint Venture or any Restricted
Subsidiary which owns Capital Stock 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 any Debt
secured thereby, including premium, if any, provided that the aggregate
principal amount does not exceed (x) the greater of (A) the principal amount
secured thereby at the time of such extension, renewal or replacement, or, as
the case may be, repayment or extinguishment and (B) 80% of the fair market
value (in the opinion of the Board of Directors) of the properties subject to
such extension, renewal or replacement plus (y) any reasonable fees and
expenses associated with such extension, renewal or replacement, and
PROVIDED, FURTHER, 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 payments of workers' compensation or insurance
premiums, or related 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.
"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.
"Predecessor Security" of any particular Security means every
previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.08 in exchange for a
mutilated Security or in lieu of a lost, destroyed or stolen Security shall
be deemed to evidence the same debt as the mutilated, lost, destroyed or
stolen Security.
"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.
"QIB" means a "Qualified Institutional Buyer" under Rule 144A under
the Securities Act.
"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 Securities or is redeemable at the option
of the holder thereof at any time prior to any such Stated Maturity of the
Securities, or is convertible into or exchangeable for debt securities at any
time prior to any such Stated Maturity of the Securities.
"Redemption Date" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the date fixed for
such redemption by or pursuant to this Indenture, other than the Special
Redemption Date.
"Redemption Price" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the price at which
it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 21, 1998, among the Company and the Initial
Purchasers, as such agreement may be amended, modified or supplemented from
time to time in accordance with the terms thereof.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the June 1 or December 1 (whether or not a Business Day)
next preceding such Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee means
any officer or employee assigned to the Corporate Trust Office or any agent
of the Trustee appointed hereunder, including any vice president, assistant
vice president, secretary, assistant secretary, or any other officer or
assistant officer of the Trustee or any agent of the Trustee appointed
hereunder to whom any
corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Security" means Securities that are required to bear
the Private Placement Legend.
"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
(i) which owns, or is a lessee pursuant to a capital lease of, any Principal
Property or (ii) in which the investment of the Company and all of its
Subsidiaries exceeds 5% of Consolidated Net Tangible Assets as of the date of
such determination other than, in the case of either clause (i) or (ii), (A)
each Subsidiary whose business primarily consists of finance, banking,
credit, leasing, insurance, financial services or other similar operations,
or any combination thereof, and (B) 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.
"Rule 144A" means Rule 144A under the Securities Act, as amended
from time to time.
"Rule 144A Global Securities" means one or more permanent Global
Securities in registered form representing the aggregate principal amount of
Initial Securities sold in reliance on Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Rating Group, a division of McGraw
Hill, Inc. or any successor rating agency.
"Securities" means, collectively, the Initial Securities and, when
and if issued as provided in the Registration Rights Agreement, the Exchange
Securities.
"Securities Act" means the Securities Act of 1933, as amended, or
any successor statute.
"Security Agreement" means the Security Agreement dated as of
December 21, 1998 by and among the Company, the Trustee and the Securities
Intermediary, as such agreement may be amended, modified or supplemented from
time to time in accordance with the terms thereof.
"Securities Intermediary" means First Union National Bank, as
securities intermediary.
"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 Securities or to other Debt which ranks equally with,
or is subordinated to, the Securities; 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.
"Series A Securities" means the Initial Securities.
"Series B Securities" means the Exchange Securities.
"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.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.09.
"Special Redemption Date" means the 30th calendar day after the
Issue Date.
"Stated Maturity" means, when used with respect to any Debt or any
installment of interest thereon, the dates specified in such Debt as the
fixed date on which the principal of such Debt or such installment of
interest, as the case may be, is due and payable.
"Subordinated Debt" means any Debt of the Company (whether
outstanding on the date of the Indenture or thereafter incurred) which is
subordinate or junior in right of payment to the Securities.
"Subsidiary" means any corporation of which at least a majority of the
outstanding Capital 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.
"Successor Security" of any particular Security means every
Security issued after, and evidencing all or a portion of the same debt as
that evidenced by, such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.08 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"Transactions" means the Hilton Distribution, the Grand
Distribution and the Merger.
"Treasury Securities" means any investment in obligations issued or
guaranteed by the United States government or any agency thereof.
"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 Securities, provided that if the
average life of the Securities is not equal to the constant maturity of the
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
Securities 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.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, or any successor statute.
"wholly-owned," with respect to any Subsidiary , means any
Subsidiary of a Person of which at least 99% of the outstanding Capital Stock
is owned by the 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.
Section 1.02 OTHER DEFINITIONS.
TERM DEFINED IN SECTION
"Act" 1.05
"Agent Members" 3.06
"covenant defeasance" 4.03
"Defaulted Interest" 3.09
"defeasance" 4.02
"Defeased Securities" 4.01
"Payment Blockage Notice" 13.03
"Payment Blockage Period" 13.03
"Private Placement Legend" 2.02
"Representative" 13.09
"Restricted Period" 2.01
"Sale and Leaseback Transaction" 10.08
"Securities" Recitals
"Security Register" 3.05
"Security Registrar" 3.05
"Special Redemption" 11.09
"Special Payment Date" 3.09
"Special Redemption Account" 11.09
"Surviving Entity" 8.01
"U.S. Government Obligations" 4.04
Section 1.03 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company and any other obligor
on the Securities (if applicable) shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture (including any covenant compliance which constitutes a condition
precedent) relating to the proposed action have been complied with, and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the
case of any such application or request as to which the furnishing of such
certificates or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or Opinion of Counsel with respect to compliance with
a condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
individual or firm signing such opinion has read and understands such
covenant or condition and the definitions herein relating thereto;
(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 each such individual or such
firm, he or it has made such examination or investigation as is necessary to
enable him or it 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, in the opinion of each such individual
or such firm, such condition or covenant has been complied with.
Section 1.04 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate of an officer of the Company or other obligor on
the Securities may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous. Any such
certificate or opinion may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer
or officers of the Company or other obligor on the Securities stating that
the information with respect to such factual matters is in the possession of
the Company or other obligor on the Securities, unless such officer or
counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous. Opinions of Counsel required to be delivered to the Trustee may
have qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company
or government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that
various financial covenants have been complied with.
Any certificate or opinion of an officer of the Company or other
obligor on the Securities may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of, or representations by, an
accountant or firm of accountants in the employ of the Company, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the accounting
matters upon which his certificate or opinion may be based are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with the Trustee shall contain a statement that such firm is
independent with respect to the Company.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.05 ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and conclusive in favor
of the Trustee and the Company, if made in the manner provided in this
Section 1.05.
(b) The ownership of Securities shall be proved by the Security
Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act by the Holder of any Security shall bind every future
Holder of the same Security or the Holder of every Security issued upon the
transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything
done, suffered or omitted to be done by the Trustee, any Paying Agent or the
Company or any other obligor of the Securities in reliance thereon, whether
or not notation of such action is made upon such Security.
(d) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, by or pursuant to a Board Resolution, fix in advance a
record date for the determination of such Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. Notwithstanding
Trust Indenture Act Section 316(c), any such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a date
not more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than the date such first solicitation is
completed.
If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close
of business on such record date shall be deemed to be Holders for purposes of
determining whether Holders of the requisite proportion of Securities then
Outstanding have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for this
purpose the Securities then Outstanding shall be computed as of such record
date; PROVIDED that no such request, demand, authorization, direction,
notice, consent, waiver or other Act by the Holders on such record date shall
be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after such record date.
(f) For purposes of this Indenture, any action by the Holders which may
be taken in writing may be taken by electronic means or as otherwise
reasonably acceptable to the Trustee.
Section 1.06 NOTICES, ETC., TO THE TRUSTEE AND THE COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any other obligor on
the Securities shall be sufficient for every purpose (except as provided in
Section 5.01(c)) hereunder if in writing and mailed, first-class postage
prepaid, or delivered by recognized overnight courier, to or with the Trustee
at its Corporate Trust Office, Attention: Corporate Trust Administration, or
at any other address previously furnished in writing to the Holders or the
Company or any other obligor on the Securities by the Trustee, in any event,
with a copy to the Trustee at 230 South Tryon Street, 9th Floor, Charlotte,
North Carolina 28288-1179, Attention: Corporate Trust Administration; or
(b) the Company by the Trustee or any Holder shall be sufficient for
every purpose (except as provided in Section 5.01(c)) hereunder if in writing
and mailed, first-class postage prepaid, or delivered by recognized overnight
courier, to the Company at 3930 Howard Hughes Parkway, Las Vegas, Nevada
89109, Attention: Chief Financial Officer or at any other address previously
furnished in writing to the Trustee by the Company.
Section 1.07 NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, or delivered
by recognized overnight courier, to each Holder affected by such event, at
its address as it appears in the Security Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of
such notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by
the Person entitled to receive such notice, either before or after the event,
and such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause, it shall be impracticable to mail notice of any event as
required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to
be a sufficient giving of such notice.
Section 1.08 CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required
or deemed to be included in this Indenture by any of the provisions of the
Trust Indenture Act, the provision or requirement of the Trust Indenture Act
shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
to be excluded, as the case may be.
Section 1.09 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.10 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall bind
their respective successors and assigns, whether so expressed or not.
Section 1.11 SEPARABILITY CLAUSE.
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 1.12 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 1.13 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEE
AND STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company or any successor Person or any of the Company's
Affiliates under the Securities, the Indenture, the Security Agreement or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration issuance of the Securities. The waiver may not be effective to
waive liabilities under the Federal securities laws.
Section 1.14 GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
Section 1.15 LEGAL HOLIDAYS; PAYMENT OF SECURITIES.
In any case where any Interest Payment Date, Special Redemption Date or
Redemption Date, Maturity or Stated Maturity of any Security shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or
of the Securities) payment of interest or principal or premium, if any, need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on such Interest Payment Date,
Special Redemption Date or Redemption Date, or at the Maturity or Stated
Maturity and no interest shall accrue with respect to such payment for the
period from and after such Interest Payment Date, Special Redemption Date or
Redemption Date, Maturity or Stated Maturity, as the case may be, to the next
succeeding Business Day.
Section 1.16 INDEPENDENCE OF COVENANTS.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not
permitted by any such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.
Section 1.17 SCHEDULES AND EXHIBITS.
All schedules and exhibits attached hereto are by this reference made a
part hereof with the same effect as if herein set forth in full.
Section 1.18 COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which shall be deemed an original; but all such counterparts shall together
constitute but one and the same instrument.
Section 1.19 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders of Securities may communicate pursuant to TIA Section 312(b)
with other Holders of Securities with respect to their rights under this
Indenture or the Securities. The Company, the Trustee, the Paying Agent and
any other Person shall have the protection of TIA Section 312(c).
Section 1.20 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 1.21 QUALIFICATION OF INDENTURE.
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall
pay all costs and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith, including, but not limited to,
costs and expenses of qualification of this Indenture and the Securities and
printing this Indenture and the Securities. The Trustee shall be entitled to
receive from the Company any such Officers' Certificates, Opinions of Counsel
or other documentation as it may reasonably request in connection with any
such qualification of this Indenture under the TIA.
Section 1.22 REGISTRATION RIGHTS.
Certain Holders of Securities may be entitled to certain registration
rights with respect to such Securities pursuant to, and subject to the terms
of, the Registration Rights Agreement.
ARTICLE II
SECURITY FORMS
Section 2.01 FORMS GENERALLY.
The Securities and the Trustee's certificate of authentication thereon
shall be in substantially the forms set forth in this Article II, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted hereby and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange, any
organizational document or governing instrument or applicable law or as may,
consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities. Any portion
of the text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
Initial Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more Rule 144A Global Securities,
substantially in the form set forth in Section 2.02, deposited upon issuance
with the Trustee, as custodian for the Depositary, registered in the name of
the Depositary, or its nominee, in each case for credit to an account of a
direct or indirect participant of the Depositary, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Rule 144A Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Exchange Securities exchanged for Initial Securities shall be issued
initially in the form of one or more Exchange Global Securities,
substantially in the form set forth in Section 2.02, deposited upon issuance
with the Trustee, as custodian for the Depositary, registered in the name of
the Depositary or its nominee, in each case for credit to an account of a
direct or indirect participant of the Depositary, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Exchange Global Securities may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Section 2.02 FORM OF FACE OF SECURITY.
(a) The form of the face of any Initial Securities authenticated and
delivered hereunder shall be substantially as follows:
Unless and until (i) an Initial Security is sold under an effective
registration statement under the Securities Act or (ii) an Initial Security
is exchanged for an Exchange Security in connection with an effective
registration statement under the Securities Act, in each case pursuant to the
Registration Rights Agreement, then such Initial Security shall bear the
legend set forth below (the "Private Placement Legend") on the face thereof:
THE SERIES A SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5
OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SERIES A SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SERIES A SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THIS SERIES A SECURITY EVIDENCED HEREBY AGREES FOR
THE BENEFIT OF THE COMPANY THAT (A) SUCH SERIES A SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SERIES A SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
In addition, unless and until an Initial Security is issued in a form
other than global form, such Initial Security shall bear the legend set
forth below (the "Global Legend") on the face thereof:
THIS SERIES A SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 3.06
AND 3.07 OF THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
PARK PLACE ENTERTAINMENT CORPORATION
------------------------
7 7/8% SERIES A SENIOR SUBORDINATED NOTE DUE 2005
CUSIP NO. 700690AA8
No. __________ $_______________________
Park Place Entertainment Corporation, a Delaware corporation (herein
called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to
pay to _____________ or registered assigns, the principal sum of ___________
United States dollars on December 15, 2005, at the office or agency of the
Company referred to below, and to pay interest thereon from December 21,
1998, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semiannually on June 15 and December 15 in
each year, commencing June 15, 1999 at the rate of 7 7/8% per annum, subject
to adjustments as described in the second following paragraph, in United
States dollars, until the principal hereof is paid or duly provided for.
Interest shall be computed on the basis of a 360-day year comprised of twelve
30-day months.
If all the Transactions have not been consummated on or before the
Special Redemption Date, the Company shall, on the Special Redemption Date,
redeem and retire all of the Securities for a price equal to 100% of their
principal amount plus accrued and unpaid interest thereon through the Special
Redemption Date.
Until the earlier to occur of the Hilton Distribution or the Special
Redemption Date, the Securities will be secured by the Special Redemption
Account as set forth in the Indenture. The Securities will not be
subordinated prior to the consummation of the Hilton Distribution.
The Holder of this Series A Security is entitled to the benefits of the
Registration Rights Agreement. Under the Registration Rights Agreement, subject
to the terms and conditions thereof, the Company is obligated to consummate the
Exchange Offer pursuant to which the Holder of this Series A
Security shall have the right to exchange this Series A Security for a like
principal amount of the Series B Securities as provided therein. The Series
A Securities and the Series B Securities are together referred to as the
"Securities." The Series A Securities rank PARI PASSU in right of payment
with the Series B Securities.
In the event that (a) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to the 30th calendar day following the
date of original issue of the Series A Securities, (b) the Exchange Offer
Registration Statement has not been declared effective on or prior to the
120th calendar day following the date of original issue of the Series A
Securities or (c) the Exchange Offer is not consummated or, if the Company is
prohibited from doing an Exchange Offer, a Shelf Registration Statement is
not declared effective, in either case, on or prior to the 150th calendar day
following the date of original issue of the Series A Securities (each such
event referred to in clauses (a) through (c) above, a "Registration
Default"), the interest rate borne by the Series A Securities shall be
increased by an absolute amount of 0.25% per annum upon the occurrence of any
Registration Default, which rate (as increased as aforesaid) will increase by
an additional absolute amount of 0.25% each 90-day period that such
additional interest continues to accrue under any such circumstance;
provided, that the maximum aggregate increase in the interest rate will in no
event exceed an absolute amount of one percent (1%) per annum. Following the
cure of all Registration Defaults, the accrual of additional interest will
cease and the interest rate will revert to the original rate PROVIDED,
HOWEVER, that, if after any such reduction in interest rate, a different
event specified in clause (a), (b) or (c) above occurs, the interest rate
shall again be increased pursuant to the foregoing provisions.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or any Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the June 1 or December 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any
such interest not so punctually paid, or duly provided for, and interest on
such defaulted interest at the interest rate borne by the Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such
Regular Record Date, and may either be paid to the Person in whose name this
Security (or any Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by this Indenture not
inconsistent with the requirements of such exchange, all as more fully
provided in this Indenture.
Payment of the principal of, premium, if any, and interest on, the
Securities, and exchange or transfer of the Securities, will be made at the
office or agency of the Company in The City of New York maintained for that
purpose (which initially will be a corporate trust office of the Trustee
located at 40 Broad Street, Suite 550, Fifth Floor, New York, New York 1004,
or at such other office or agency as may be maintained for such purpose, in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that payment of interest may be made at the option of the Company by
check mailed to the address of the Person entitled thereto as such address
shall appear on the Security Register.
Reference is hereby made to the further provisions of this Series A
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating
agent appointed as provided in the Indenture by manual signature of an
authorized signer, this Series A Security shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
PARK PLACE ENTERTAINMENT CORPORATION
By:
Name:
Title:
Attest:
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 7 7/8% Series A Senior Subordinated Notes due 2005
referred to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By:
------------------------------------
Authorized Signer
Dated:
---------------
(b) The form of the face of any Exchange Securities authenticated and
delivered hereunder shall be substantially as follows:
Unless and until an Exchange Security is issued in a form other than
global form, such Exchange Security shall bear the Global Legend set forth
below on the face thereof:
THIS SERIES B SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 3.06
AND 3.07 OF THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
PARK PLACE ENTERTAINMENT CORPORATION
----------------------
7 7/8% SERIES B SENIOR SUBORDINATED NOTE DUE 2005
CUSIP NO. 700690AB6
No. __________ $_______________________
Park Place Entertainment Corporation, a Delaware corporation (herein
called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to
pay to _____________ or registered assigns, the principal sum of ___________
United States dollars on December 15, 2005, at the office or agency of the
Company referred to below, and to pay interest thereon from December 21,
1998, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semiannually on June 15 and December 15 in
each year, commencing June 15, 1999 at the rate of 7 7/8% per annum, subject
to adjustments as described in the second following paragraph, in United
States dollars, until the principal hereof is paid or duly provided for.
Interest shall be computed on the basis of a 360-day year comprised of twelve
30-day months.
If all the Transactions have not been consummated on or before the
Special Redemption Date, the Company shall, on the Special Redemption Date,
redeem and retire all of the Securities for a price equal to 100% of their
principal amount plus accrued and unpaid interest thereon through the Special
Redemption Date.
Until the earlier to occur of the Hilton Distribution or the Special
Redemption Date, the Securities will be secured by the Special Redemption
Account as set forth in the Indenture. The Securities will not be
subordinated prior to the consummation of the Hilton Distribution.
This Series B Security was issued pursuant to the Exchange Offer
pursuant to which the Series A Securities were exchanged for a like principal
amount of the Series B Securities. The Series B Securities rank PARI PASSU
in right of payment with the Series A Securities. The Series A Securities
and the Series B Securities are together referred to as the "Securities."
For any period in which the Series A Security exchanged for this Series
B Security was outstanding, in the event that (a) the Exchange Offer
Registration Statement is not filed with the Commission on or prior to the
30th calendar day following the date of original issue of the Series A
Securities, (b) the Exchange Offer Registration Statement has not been
declared effective on or prior to the 120th calendar day following the date
of original issue of the Series A Securities or (c) the Exchange Offer is not
consummated or, if the Company is prohibited from doing an Exchange Offer, a
Shelf Registration Statement is not declared effective, in either case, on or
prior to the 150th calendar day following the date of original issue of the
Series A Securities (each such event referred to in clauses (a) through (c)
above, a "Registration Default"), the interest rate borne by the Series A
Securities shall be increased by an absolute amount of 0.25% per annum upon
the occurrence of any Registration Default, which rate (as
increased as aforesaid) will increase by an additional absolute amount of
0.25% each 90-day period that such additional interest continues to accrue
under any such circumstance; provided, that the maximum aggregate increase in
the interest rate will in no event exceed an absolute amount of one percent
(1%) per annum. Following the cure of all Registration Defaults the accrual
of additional interest will cease and the interest rate will revert to the
original rate; PROVIDED that, to the extent interest at such increased
interest rate has been paid or duly provided for with respect to the Series A
Securities, interest at such increased interest rate, if any, on the Series B
Securities shall accrue from the most recent Interest Payment Date to which
such interest on the Series A Security has been paid or duly provided for;
PROVIDED, HOWEVER, that, if after any such reduction in interest rate, a
different event specified in clause (a), (b) or (c) above occurs, the
interest rate shall again be increased pursuant to the foregoing provisions.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or any Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the June 1 or December 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any
such interest not so punctually paid, or duly provided for, and interest on
such defaulted interest at the interest rate borne by the Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such
Regular Record Date, and may either be paid to the Person in whose name this
Security (or any Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by this Indenture not
inconsistent with the requirements of such exchange, all as more fully
provided in this Indenture.
Payment of the principal of, premium, if any, and interest on, the
Securities, and exchange or transfer of the Securities, will be made at the
office or agency of the Company in The City of New York maintained for that
purpose (which initially will be a corporate trust office of the Trustee
located at 40 Broad Street, Suite 550, Fifth Floor, New York, New York 1004),
or at such other office or agency as may be maintained for such purpose, in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that payment of interest may be made at the option of the Company by
check mailed to the address of the Person entitled thereto as such address
shall appear on the Security Register.
Reference is hereby made to the further provisions of this Series B
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating
agent appointed as provided in the Indenture by manual signature of an
authorized signer, this Series B Security shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
PARK PLACE ENTERTAINMENT CORPORATION
By:
Name:
Title:
Attest:
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 7 7/8% Series B Senior Subordinated Notes due 2005
referred to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By:
--------------------------------
Authorized Signer
Dated:
-------------
Section 2.03 FORM OF REVERSE OF SECURITIES.
(a) The form of the reverse of the Initial Securities shall be
substantially as follows:
PARK PLACE ENTERTAINMENT CORPORATION
7 7/8% Series A Senior Subordinated Notes due 2005
This Series A Security is one of a duly authorized issue of securities
of the Company designated as its 7 7/8% Series A Senior Subordinated Notes
due 2005 (herein called the "Series A Securities"), limited (except as
otherwise provided in the Indenture referred to below) in aggregate principal
amount to $400,000,000, issued under and subject to the terms of an indenture
(herein called the "Indenture") dated as of December 21, 1998, between the
Company and First Union National Bank, as trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a) the
entire Debt on the Securities and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Securities are subject to redemption at any time, at the option of
the Company, in whole but not in part, on not less than 30 nor more than 60
days' prior notice, in amounts of $1,000 or an integral multiple thereof, at
a Redemption Price equal to 100% of the principal amount thereof plus the
Make-Whole Premium, together with accrued and unpaid interest thereon, if
any, to the Redemption Date (subject to the rights of Holders of record on
relevant record dates to receive interest due on an Interest Payment Date).
In the case of any redemption or repurchase of Securities in accordance
with the Indenture, interest installments whose Stated Maturity is on or
prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular
Record Date or Special Record Date referred to on the face hereof.
Securities (or portions thereof) for whose redemption and payment provision
is made in accordance with the Indenture shall cease to bear interest from
and after the Redemption Date.
Each Holder, by accepting a Security, 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 the beneficial owner of Securities 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, the Company shall have the right, at its
option to (a) require such Person to dispose of its 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 (b) redeem such Securities at a redemption price equal
to the lesser of (i) such Person's cost or (ii) 100% of the principal amount
of the Securities plus accrued and unpaid interest thereon, if any, to the
earlier of the Redemption Date or the date of the finding of unsuitablility
which may be less than 30 days following the notice of redemption if so
requested or prescribed by the applicable gaming authority.
In the event of redemption or repurchase of the Securities in accordance
with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof
upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain
amendments which require the consent of all the Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders under the Indenture and the
Securities at any time by the Company and the Trustee with the consent of the
Holders of at least a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of at least a majority in aggregate principal amount
of the Securities (100% of the Holders in certain circumstances) at the time
Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and the
Securities and certain past Defaults under the Indenture and the Securities
and their consequences. Any such consent or waiver by or on behalf of the
Holder of a Security shall be conclusive and binding upon such Holder and
upon all future Holders of such Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon such Security.
No reference herein to the Indenture and no provision of the Securities
or of the Indenture shall alter or impair the obligation of the Company or
any other obligor on the Securities (in the event such other obligor is
obligated to make payments in respect of the Securities), which is absolute
and unconditional, to pay the principal of, premium, if any, and interest on,
the Securities at the times, place, and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set
forth, the transfer of a Security is registrable in the Security Register,
upon surrender of such Security for registration of transfer at the office or
agency of the Company in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or its attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
Certificated securities shall be transferred to all beneficial holders
in exchange for their beneficial interests in the Rule 144A Global Securities
if (x) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security and a successor Depositary is
not appointed by the Company within 90 days or (y) there shall have occurred
and be continuing an Event of Default and the Security Registrar has received
a request from the Depositary. Upon any such issuance, the Trustee is
required to register such certificated Securities in the name of, and cause
the same to be delivered to, such Person or Persons (or the nominee of any
thereof). All such certificated Series A Securities would be required to
include the Private Placement Legend.
Securities in certificated form are issuable only in registered form
without coupons in a minimum amount of $100,000 and in denominations of
$1,000 and any integral multiple thereof that is above the minimum amount of
$100,000. As provided in the Indenture and subject to certain limitations
therein set forth, the Securities are exchangeable for a like aggregate
principal amount of Securities of a differing authorized denomination, as
requested by the Holder surrendering the same.
At any time when the Company is not subject to Sections 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Series A
Security, the Company will promptly furnish or cause to be furnished such
information as is specified pursuant to Rule 144A(d)(4) under the Securities
Act (or any successor provision thereto) to such Holder or to a prospective
purchaser of such Series A Security who such Holder informs the Company is
reasonably believed to be a "Qualified Institutional Buyer" within the
meaning of Rule 144A under the Securities Act, as the case may be, in order
to permit compliance by such Holder with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner hereof for
all purposes, whether or not such Security is overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.
All terms used in this Series A Security which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
The Transferee Certificate, in the form of Appendix I hereto, will be
attached to the Initial Security.
Unless and until (i) an Initial Security is sold under an effective
registration statement under the Securities Act or (ii) an Initial Security
is exchanged for an Exchange Security in connection with an effective
registration statement under the Securities Act, in each case pursuant to the
Registration Rights Agreement, then the Restricted Security Certificate, in
the form of Exhibit A hereto, will be attached to the Initial Security.
After such Initial Security is sold under an effective registration statement
under the Securities Act or exchanged for an Exchange Security, then the
Unrestricted Security Certificate, in the form of Exhibit B hereto, will be
attached to the Exchange Security.
(b) The form of the reverse of the Exchange Securities shall be
substantially as follows:
PARK PLACE ENTERTAINMENT CORPORATION
7 7/8% Series B Senior Subordinated Notes due 2005
This Series B Security is one of a duly authorized issue of securities
of the Company designated as its 7 7/8% Series B Senior Subordinated Notes
due 2005 (herein called the "Series B Securities"), limited (except as
otherwise provided in the Indenture referred to below) in aggregate principal
amount to $400,000,000, issued under and subject to the terms of an indenture
(herein called the "Indenture") dated as of December 21, 1998, between the
Company and First Union National Bank, as trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a) the
entire Debt on the Securities and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Securities are subject to redemption at any time, at the option of
the Company, in whole or but not in part, on not less than 30 nor more than
60 days' prior notice, in amounts of $1,000 or an integral multiple thereof,
at a Redemption Price equal to 100% of the principal amount thereof plus the
Make-Whole Premium, together with accrued and unpaid interest thereon, if
any, to the Redemption Date (subject to the rights of Holders of record on
relevant record dates to receive interest due on an Interest Payment Date).
In the case of any redemption or repurchase of Securities in accordance
with the Indenture, interest installments whose Stated Maturity is on or
prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular
Record Date or Special Record Date referred to on the face hereof.
Securities (or portions thereof) for whose redemption and payment provision
is made in accordance with the Indenture shall cease to bear interest from
and after the Redemption Date.
Each Holder, by accepting a Security, 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 the beneficial owner of Securities 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, the Company shall have the right, at its option to (a) require
such Person to dispose of its 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 (b)
redeem such Securities at a redemption price equal to the lesser of (i) such
Person's cost or (ii) 100% of the principal amount of the Securities plus
accrued and unpaid interest thereon, 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.
In the event of redemption or repurchase of the Securities in accordance
with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof
upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner
and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain
amendments which require the consent of all the Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders under the Indenture and the
Securities at any time by the Company and the Trustee with the consent of the
Holders of at least a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of at least a majority in aggregate principal amount
of the Securities (100% of the Holders in certain circumstances) at the time
Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and the
Securities and certain past Defaults under the Indenture and the Securities
and their consequences. Any such consent or waiver by or on behalf of the
Holder of a Security shall be conclusive and binding upon such Holder and
upon all future Holders of such Security and of any Security issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof
whether or not notation of such consent or waiver is made upon such Security.
No reference herein to the Indenture and no provision of the Securities
or of the Indenture shall alter or impair the obligation of the Company or
any other obligor on the Securities (in the event such other obligor is
obligated to make payments in respect of the Securities), which is absolute
and unconditional, to pay the principal of, premium, if any, and interest on,
the Securities at the times, place, and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of a Security is registrable in the Security
Register, upon surrender of such Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or its attorney duly authorized in writing, and thereupon
one or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
Certificated securities shall be transferred to all beneficial holders in
exchange for their beneficial interests in the Global Securities if (x) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Exchange Global Security and a successor Depositary is not
appointed by the Company within 90 days or (y) there shall have occurred and be
continuing an Event of Default and the Security Registrar has received a request
from the Depositary. Upon any such issuance, the Trustee is required to
register such certificated Securities in the name of, and cause the same to be
delivered to, such Person or Persons (or the nominee of any thereof).
Securities in certificated form are issuable only in registered form
without coupons in a minimum amount of $100,000 and in denominations of
$1,000 and any integral multiple thereof that is above the minimum amount of
$100,000. As provided in the Indenture and subject to certain limitations
therein set forth, the Securities are exchangeable for a like aggregate
principal amount of Securities of a differing authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner hereof for
all purposes, whether or not such Security is overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK,, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.
All terms used in this Series B Security which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
The Unrestricted Security Certificate, in the form of Exhibit B hereto,
and the Transferee Certificate, in the form of Appendix II hereto, will be
attached to the Exchange Security.
ARTICLE III
THE SECURITIES
Section 3.01 TITLE AND TERMS.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to $400,000,000 in principal
amount of Securities, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Section 3.03, 3.04, 3.05, 3.06, 3.07, 3.08, 9.06 or
11.08.
The Initial Securities shall be known and designated as the "7 7/8%
Series A Senior Subordinated Securities due 2005" of the Company. The
Exchange Securities shall be known and designated as the "7 7/8% Series B
Senior Subordinated Securities due 2005" of the Company. The Stated Maturity
of the Securities shall be December 15, 2005, and the Securities shall each
bear interest at the rate of 7 7/8% per annum, as such interest rate may be
adjusted as set forth in the Securities and the Registration Rights
Agreement, from December 21, 1998 or from the most recent Interest Payment
Date to which interest has been paid, as applicable, payable semiannually on
June 15 and December 15 in each year, commencing June 15, 1999, until the
principal thereof is paid or duly provided for. Interest on any overdue
principal, interest (to the extent lawful) or premium, if any, shall be
payable on demand.
The principal of, premium, if any, and interest on, the Securities shall
be payable and the Securities shall be exchangeable and transferable at an
office or agency of the Company in The City of New York maintained for such
purposes (which initially will be a corporate trust office of the trustee
located at 40 Broad Street, Suite 550, Fifth Floor, New York, New York 1004);
PROVIDED, HOWEVER, that payment of interest may be made at the option of the
Company by check mailed to addresses of the Persons entitled thereto as shown
on the Security Register.
For all purposes hereunder, the Initial Securities and the Exchange
Securities will be treated as one class and are together referred to as the
"Securities." The Initial Securities rank PARI PASSU in right of payment
with the Exchange Securities.
The Securities shall be redeemable as provided in Article XI and in the
Securities.
At the election of the Company, the entire Debt on the Securities or
certain of the Company's obligations and covenants and certain Events of
Default thereunder may be defeased as provided in Article IV.
Section 3.02 DENOMINATIONS.
The Securities shall be issuable only in fully registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 3.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by one of its
Chairman of the Board, its President, its Chief Executive Officer, its Chief
Financial Officer or one of its Vice Presidents attested by its Secretary or
one of its Assistant Secretaries. The signatures of any of these officers on
the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did
not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee (with or without Guarantees endorsed thereon) for authentication,
together with a Company Order for the authentication and delivery of such
Securities; and the Trustee in accordance with such Company Order shall
authenticate and make available for delivery such Securities as provided in
this Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security endorsed thereon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of an
authorized officer, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.
In case the Company, pursuant to Article VIII, shall, in a single
transaction or through a series of related transactions, be consolidated or
merged with or into any other Person or shall sell, assign, convey or transfer
its properties and assets substantially in their entirety to any Person, and the
successor Person resulting from such consolidation or surviving such merger, or
into which the Company shall have been merged, or the successor Person which
shall have participated in the sale, assignment, conveyance or transfer, as
aforesaid, shall have executed an indenture supplemental hereto with the Trustee
pursuant to Article VIII, any of the Securities authenticated or delivered prior
to such consolidation, merger, sale, assignment, conveyance or transfer may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon request of the successor Person, shall
authenticate and deliver Securities as specified in such request for the purpose
of such exchange. If Securities shall at any time be authenticated and
delivered in any new name of a successor Person pursuant to this Section 3.03 in
exchange or substitution for or upon registration of transfer of any Securities,
such successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Securities at the time Outstanding for
Securities authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities on behalf of the Trustee. Unless limited
by the terms of such appointment, 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 any Security Registrar or Paying
Agent to deal with the Company and its Affiliates.
If an officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates such Security such Security
shall be valid nevertheless.
Section 3.04 TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation
of definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the
office or agency of the Company designated for such purpose pursuant to
Section 10.02, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Securities, the Company shall execute and the
Trustee (in accordance with a Company Order for the authentication of such
Securities) shall authenticate and make available for delivery in exchange
therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities.
Section 3.05 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause the Trustee to keep, so long as it is the Security
Registrar, at the Corporate Trust Office of the Trustee, or such other office as
the Trustee may designate, a register (the register maintained in such office or
in any other office or agency designated pursuant to Section 10.02 being herein
sometimes referred to as the "Security Register") in which, subject to such
reasonable regulations as the Security Registrar may prescribe, the
Company shall provide for the registration of Securities and of transfers of
Securities. Such transfers of Securities must be in a minimum amount of
$100,000. The Trustee shall initially be the "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided. The Company may change the Security Registrar or appoint one or
more co-Security Registrars without notice.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 10.02, the
Company shall execute, and the Trustee shall (in accordance with a Company
Order for the authentication of such Securities) authenticate and make
available for delivery, in the name of the designated transferee or
transferees, one or more new Securities of the same series of any authorized
denomination or denominations, of a like aggregate principal amount.
Furthermore, any Holder of the Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained
by the Holder of such Global Security (or its agent), and that ownership of a
beneficial interest in a Security shall be required to be reflected in a book
entry. Transfers of beneficial interests must be in a minimum amount of
$100,000.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like
aggregate principal amount, upon surrender of the Securities to be exchanged
at such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall (in accordance
with a Company Order for the authentication of such Securities) authenticate
and make available for delivery, Securities of the same series which the
Holder making the exchange is entitled to receive; PROVIDED that no exchange
of Initial Securities for Exchange Securities shall occur until an Exchange
Offer Registration Statement shall have been declared effective by the
Commission and the Initial Securities exchanged for the Exchange Securities
have been canceled.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
Debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer, or
for exchange, repurchase or redemption, shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made to a Holder for any registration of
transfer, exchange or redemption of Securities, except for any tax or other
governmental charge that may be imposed in connection therewith, other than
exchanges pursuant to Sections 3.03, 3.04, 3.05, 9.06 or 11.08 not involving
any transfer.
The Company shall not be required (a) to issue, register the transfer of
or exchange any Security during a period beginning at the opening of business
15 days before the mailing of a notice of redemption of the Securities
selected for redemption under Section 11.04 and ending at the close of
business on the day of such mailing or (b) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of Securities being redeemed in part.
Every Security shall be subject to the restrictions on transfer provided
in the legend required to be set forth on the face of each Security pursuant
to Section 2.02, and the restrictions set forth in this Section 3.05, and the
Holder of each Security, by such Holder's acceptance thereof (or interest
therein), agrees to be bound by such restrictions on transfer.
Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Global Security, whether pursuant to this Section
3.05, Section 3.04, 3.08, 9.06 or 11.08 or otherwise, shall also be a Global
Security and bear the legend specified in Section 2.02.
Section 3.06 BOOK ENTRY PROVISIONS FOR GLOBAL SECURITIES.
(a) Each Global Security initially shall (i) be registered in the name
of the Depositary for such Global Security or the nominee of such Depositary,
(ii) be deposited with, or on behalf of, the Depositary or with the Trustee
as custodian for such Depositary and (iii) bear legends as set forth in
Section 2.02.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held
on their behalf by the Depositary, or the Trustee as its custodian, or under
such Global Security, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
shall impair, as between the Depositary and its Agent Members, the operation
of customary practices governing the exercise of the rights of a holder of
any Security.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the
name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) the Company notifies the Trustee in writing that
such Depositary (A) has notified the Company that it is unwilling or unable
to continue as Depositary for such Global Security or (B) has ceased to be a
clearing agency registered as such under the Exchange Act, and in either case
the Company fails to appoint a successor Depositary within 90 days, (ii) the
Company, at its option, executes and delivers to the Trustee a Company Order
stating that it elects to cause the issuance of the Securities in
certificated form and that all Global Securities shall be exchanged in whole
for Securities that are not Global Securities (in which case such exchange
shall be effected by the Trustee) or (iii) there shall have occurred and be
continuing an Event of Default or any event which after notice or lapse of
time or both would be an Event of Default with respect to such Global
Security.
(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation as provided in this Article III. If any Global Security is to
be exchanged for other Securities or canceled in part, or if another Security
is to be exchanged in whole or in part for a beneficial interest in any
Global Security, then either (i) such Global Security shall be so surrendered
for exchange or cancellation as provided in this Article III or (ii) the
principal amount thereof shall be reduced or increased by an amount equal to
the portion thereof to be so exchanged or canceled, or equal to the principal
amount of such other Security to be so exchanged for a beneficial interest
therein, as the case may be, by means of an appropriate adjustment made on
the records of the Trustee, as Security Registrar, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depositary or
its authorized representative to make a corresponding adjustment to its
records. Upon any such surrender or adjustment of a Global Security, the
Trustee shall, subject to this Section 3.06(c) and as otherwise provided in
this Article III, authenticate and deliver any Securities issuable in
exchange for such Global Security (or any portion thereof) to or upon the
order of, and registered in such names as may be directed by, the Depositary
or its authorized representative. Upon the request of the Trustee in
connection with the occurrence of any of the events specified in the
preceding paragraph, the Company shall promptly make available to the Trustee
a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction
or request of the Depositary or its authorized representative which is given
or made pursuant to this Article III if such order, direction or request is
given or made in accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article III or otherwise, shall be
authenticated
and delivered in the form of, and shall be, a Global Security, unless such
Security is registered in the name of a Person other than the Depositary for
such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
the Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable
Procedures. Accordingly, any such owner's beneficial interest in a Global
Security will be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members.
Section 3.07 SPECIAL TRANSFER AND EXCHANGE PROVISIONS.
(a) CERTAIN TRANSFERS AND EXCHANGES. Transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds
specified in this Section 3.07 shall be made only in accordance with this
Section 3.07.
(i) EXCHANGES BETWEEN GLOBAL SECURITY AND NON-GLOBAL SECURITY.
A beneficial interest in a Global Security may be exchanged for a Security
that is not a Global Security as provided in Section 3.06(b).
(b) PRIVATE PLACEMENT LEGENDS. Rule 144A Securities and their
Successor Securities shall bear a Private Placement Legend, subject to the
following:
(i) subject to the following clauses of this Section 3.07(b), a
Security or any portion thereof which is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Private Placement Legend borne by such Global Security while represented
thereby;
(ii) subject to the following clauses of this Section 3.07(b), a
new Security which is not a Global Security and is issued in exchange for
another Security (including a Global Security) or any portion thereof, upon
transfer or otherwise, shall bear the Private Placement Legend borne by such
other Security;
(iii) Exchange Securities, and all other Securities sold or
otherwise disposed of pursuant to an effective registration statement under
the Securities Act, together with their respective Successor Securities,
shall not bear a Private Placement Legend;
(iv) at any time after the Securities may be freely transferred
without registration under the Securities Act or without being subject to
transfer restrictions pursuant to the Securities Act, a new Security which
does not bear a Private Placement Legend may be issued in exchange for or in
lieu of a Security
(other than a Global Security) or any portion thereof which bears such a
legend if the Trustee has received an Unrestricted Securities Certificate
substantially in the form of Exhibit C hereto, satisfactory to the Trustee
and duly executed by the Holder of such legended Security or his attorney
duly authorized in writing, and after such date and receipt of such
certificate, the Trustee shall authenticate and deliver such a new Security
in exchange for or in lieu of such other Security as provided in this Article
III;
(v) a new Security which does not bear a Private Placement
Legend may be issued in exchange for or in lieu of a Security (other than a
Global Security) or any portion thereof which bears such a legend if, in the
Company's judgment, placing such a legend upon such new Security is not
necessary to ensure compliance with the registration requirements of the
Securities Act, and the Trustee, at the direction of the Company, shall
authenticate and deliver such a new Security as provided in this Article III;
and
(vi) notwithstanding the foregoing provisions of this Section
3.07(b), a Successor Security of a Security that does not bear a particular
form of Private Placement Legend shall not bear such form of legend unless
the Company has reasonable cause to believe that such Successor Security is a
"restricted security" within the meaning of Rule 144, in which case the
Trustee, at the direction of the Company, shall authenticate and deliver a
new Security bearing a Private Placement Legend in exchange for such
Successor Security as provided in this Article III.
By its acceptance of any Security bearing the Private Placement Legend,
each Holder of such a Security acknowledges the restrictions on transfer of
such Security set forth in this Indenture and in the Private Placement Legend
and agrees that it will transfer such Security only as provided in this
Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 3.06 or this
Section 3.07. The Company shall have the right to inspect and make copies of
all such letters, notices or other written communications at any reasonable
time upon the giving of reasonable written notice to the Security Registrar.
Section 3.08 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If (i) any mutilated Security is surrendered to the Trustee, or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, and the Trustee, such security or indemnity, in each case, as may be
required by them to save each 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 a Company Request the Trustee
shall authenticate and make available for delivery, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a replacement Security of like tenor and principal amount, 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 replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section, the
Company may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charges that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith.
Every replacement Security 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 benefits of this Indenture equally and
proportionately with any and all other Securities 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 3.09 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on the Stated Maturity of such interest shall be paid to
the Person in whose name the Security (or any Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest payment.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on the Stated Maturity of such interest, and
interest on such defaulted interest at the then applicable interest rate
borne by the Securities, to the extent lawful (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest"), shall
forthwith cease to be payable to the Holder on the Regular Record Date; and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities (or any relevant Predecessor Securities)
are registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the
date (not less than 30 days after such notice) of the proposed payment (the
"Special Payment Date"), and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the Special Payment
Date, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Subsection provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the Special Payment Date and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company in writing of such Special Record
Date. In the name and at the expense of the Company, the Trustee shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each
Holder at its address as it appears in the Security Register, not less than
10 days prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date and Special Payment Date
therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities are registered on such Special Record
Date and shall no longer be payable pursuant to the following Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may
be required by this Indenture not inconsistent with the requirements of such
exchange, if, after written notice given by the Company to the Trustee of the
proposed payment pursuant to this Subsection, such payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.09, each
Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 3.10 CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and the Company, or the Trustee on behalf of the Company,
shall use CUSIP numbers in notices of redemption or exchange as a convenience to
Holders; PROVIDED, HOWEVER, that any such notice shall 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 redemption or exchange and
that reliance may be placed only on the other identification numbers printed on
the Securities; and PROVIDED FURTHER, HOWEVER, that failure to
use CUSIP numbers in any notice of redemption or exchange shall not affect
the validity or sufficiency of such notice.
Section 3.11 PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of, premium, if
any, and (subject to Section 3.09) interest on, such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 3.12 CANCELLATION.
All Securities surrendered for payment, purchase, redemption,
registration of transfer or exchange shall be delivered to the Trustee and,
if not already canceled, shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or
in exchange for any Securities canceled as provided in this Section 3.12,
except as expressly permitted by this Indenture. All canceled Securities
held by the Trustee shall be returned to the Company. The Trustee shall
provide the Company a list of all Securities that have been canceled from
time to time as requested by the Company.
Section 3.13 COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
ARTICLE IV
DEFEASANCE AND COVENANT DEFEASANCE
Section 4.01 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at its option by Board Resolution, at any time after the
Special Redemption Date, with respect to the Securities, elect to have either
Section 4.02 or Section 4.03 be applied to all of the Outstanding Securities
(the "Defeased Securities"), upon compliance with the conditions set forth below
in
this Article Four.
Section 4.02 DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 4.01 of the option applicable
to this Section 4.02, the Company and any other obligor upon the Securities,
if any, shall be deemed to have been discharged from its obligations with
respect to the Defeased Securities on the date the conditions set forth in
Section 4.04 below are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company and any other obligor upon
the Securities shall be deemed to have paid and discharged the entire Debt
represented by the Defeased Securities, which shall thereafter be deemed to
be "Outstanding" only for the purposes of Section 4.05 and the other Sections
of this Indenture referred to in (a) and (b) below, and to have satisfied all
its other obligations under such Securities and this Indenture insofar as
such Securities are concerned (and the Trustee, at the expense of the Company
and upon Company Request, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of Defeased
Securities to receive, solely from the trust fund described in Section 4.04
and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on, such Securities, when such
payments are due, (b) the Company's obligations with respect to such Defeased
Securities under Sections 3.04, 3.05, 3.08, 10.02 and 10.03, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder, including,
without limitation, the Trustee's rights under Section 6.07, and (d) this
Article IV. Subject to compliance with this Article IV, the Company may
exercise its option under this Section 4.02 notwithstanding the prior
exercise of its option under Section 4.03 with respect to the Securities.
Section 4.03 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 4.01 of the option applicable to
this Section 4.03, the Company shall be released from its obligations under any
covenant or provision contained or referred to in Sections 10.05 through 10.11,
inclusive, and Article VIII hereof, with respect to the Defeased Securities on
and after the date the conditions set forth in Section 4.04 below are satisfied
(hereinafter, "covenant defeasance"), and the Defeased Securities shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Defeased Securities, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein or
in any other
document and such omission to comply shall not constitute a Default or an
Event of Default under Section 5.01(c) but, except as specified above, the
remainder of this Indenture and such Defeased Securities shall be unaffected
thereby.
Section 4.04 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section
4.02 or Section 4.03 to the Defeased Securities:
(a) The Company shall irrevocably have deposited or caused to be
deposited 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) cash in United
States dollars, (ii) U.S. Government Obligations, or (iii) a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants or a nationally
recognized investment banking firm expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee to pay and discharge, the principal of, premium, if
any, and interest (which shall include Additional Interest, if any) on, the
Defeased Securities, on the stated date for payment thereof or on the
applicable redemption date, as the case may be, of such principal, premium,
if any, or interest (which shall include Additional Interest, if any) on such
Defeased Securities if at or prior to electing to exercise either its option
applicable to Section 4.02 or its option applicable to Section 4.03, the
Company has delivered to the Trustee an irrevocable notice of such
defeasance, including the date that such defeasance is to occur. For this
purpose, "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the timely 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 timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the option
of the issuer thereof, and shall also include a depositary receipt issued by
a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian
with respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depositary 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 depositary receipt
from any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depositary receipt;
(b) In the case of an election under Section 4.02, the Company shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date hereof, 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 Independent Counsel in the United States shall
confirm that, the Holders of the Outstanding Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of such
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
defeasance had not occurred;
(c) In the case of an election under Section 4.03, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States reasonably acceptable to such Trustee to the effect that the Holders
of the Outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant 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 covenant defeasance had
not occurred;
(d) No Default or Event of Default (other than a Default or Event of
Default under this Indenture resulting from the borrowing of funds to be
applied to such deposit) shall have occurred and be continuing on the date of
such deposit, and with respect to an election under Section 4.02 insofar as
Section 5.01(e) or (f) is concerned, at any time during the period ending on
the 91st day after the date of deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such period);
(e) Such defeasance or covenant defeasance shall not result in a breach
or violation of, or constitute a Default under, this Indenture or any other
material agreement or instrument to which the Company or any Restricted
Subsidiary is a party or by which it is bound;
(f) 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 over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others;
Opinions of Counsel or Opinions of Independent Counsel required to be
delivered under this Section shall be in form and substance reasonably
satisfactory to the Trustee and may have qualifications customary for
opinions of the type required and counsel delivering such opinions may rely
on certificates of the Company or government or other officials customary for
opinions of the type required, which certificates shall be limited as to
matters of fact, including that various financial covenants have been
complied with.
Section 4.05 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 10.03, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 4.04 in respect of
the Defeased Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (excluding the Company
or any of its Affiliates acting as Paying Agent), as the Trustee may
determine, to the Holders of such Securities of all sums due and to become
due thereon in respect of principal, premium, if any, and interest, but such
money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 4.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
imposed, assessed or for the account of the Holders of the Defeased
Securities.
Anything in this Article IV to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request
any United States dollars or U.S. Government Obligations held by it as
provided in Section 4.04 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect defeasance or covenant
defeasance.
Section 4.06 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 4.02 or
4.03, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated, with present and prospective
effect, as though no deposit had occurred pursuant to Section 4.02 or 4.03,
as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such United States dollars or U.S. Government
Obligations in accordance with Section 4.02 or 4.03, as the case may be;
PROVIDED, HOWEVER, that if the Company makes any payment to the Trustee or
Paying Agent of principal of, premium, if any, or interest on any Security
following the reinstatement of its obligations, the Trustee or Paying Agent
shall promptly pay any such amount to the Holders of the Securities and the
Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the United States dollars and U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE V
REMEDIES
Section 5.01 EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) a default in the payment of any interest on any Security when it
becomes due and payable, and such default shall continue for a period of 30
days;
(b) a default in the payment of the principal of (or premium, if any,
on) any Security at its Maturity (upon acceleration, optional or mandatory
redemption or otherwise);
(c) a default in the performance, or breach, of any covenant or
warranty of the Company in the Indenture which default continues uncured for
a period of 60 days after written notice has been given, by certified mail,
(i) to the Company by the Trustee or (ii) to the Company and the Trustee by
the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities;
(d) an 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 aggregate
principal amount of the Outstanding Securities;
(e) the entry by a court of competent jurisdiction of (i) a decree or
order for relief in respect of the Company or any Significant Subsidiary in
an involuntary case or proceeding under any applicable Bankruptcy Law or (ii)
a decree or order adjudging the Company or any Significant Subsidiary
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant Subsidiary
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or any Subsidiary or of any substantial part of
their respective properties, or ordering the winding up or liquidation of
their respective affairs, and any such decree or order for relief shall
continue to be in effect, or any such other decree or order shall be unstayed
and in effect, for a period of 60 consecutive days; or
(f) (i) the Company or any Significant Subsidiary commences a voluntary
case or proceeding under any applicable Bankruptcy Law or any other case or
proceeding to be adjudicated bankrupt or insolvent, (ii) the Company or any
Significant Subsidiary consents to the entry of a decree or order for relief
in respect of the Company or such Significant Subsidiary in an involuntary
case or proceeding under any applicable Bankruptcy Law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, (iii) the
Company or any Significant Subsidiary files a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law,
(iv) the Company or any Significant Subsidiary (A) consents to the filing of
such petition or the appointment of, or taking possession by, a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official of
the Company or such Significant Subsidiary or of any substantial part of
their respective properties, (B) makes an assignment for the benefit of
creditors or (C) admits in writing its inability to pay its debts generally
as they become due or (v) the Company or any Significant Subsidiary takes any
corporate action in furtherance of any such actions in this paragraph (i); or
(g) a failure to comply with the provisions of the Security Agreement,
including, without limitation, a default in the payment, if required pursuant
to Section 11.09, on the Special Redemption Date, of the principal amount of
all of the Securities and all accrued and unpaid interest thereon through the
Special Redemption Date.
Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Sections 5.01(e) and (f) with respect to the Company) shall occur and be
continuing with respect to this Indenture, the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Securities then
Outstanding may, and the Trustee at the request of such Holders shall,
declare all unpaid principal of, premium, if any, and accrued interest on all
Securities to be due and payable, by a notice in writing to the Company (and
to the Trustee if given by the Holders of the Securities) and upon any such
declaration, such principal, premium, if any, and interest shall become due
and payable immediately. If an Event of Default specified in clause (e) or
(f) of Section 5.01 occurs with respect to the Company and is continuing,
then all the Securities shall IPSO FACTO become and be due and payable
immediately in an amount equal to the principal amount of the Securities,
together with accrued and unpaid interest thereon, if any, to the date the
Securities become due and payable, without any declaration or other act on
the part of the Trustee or any Holder. Thereupon, the Trustee may, at its
discretion, proceed to protect and enforce the rights of the Holders of the
Securities by appropriate judicial proceedings.
After a declaration of acceleration with respect to the Securities, but
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 aggregate principal amount of the Securities Outstanding, 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 sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Outstanding Securities,
(iii) the principal of and premium, if any, on any Outstanding
Securities which have become due otherwise than by such declaration of
acceleration and interest thereon at a rate borne by the Securities, and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities; and
(b) all Events of Default, other than the non-payment of principal of
the Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13. No such
rescission shall affect any subsequent Default or impair any right consequent
thereon.
Section 5.03 COLLECTION OF DEBT 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 the principal of or premium, if
any, on any Security at the Stated Maturity thereof,
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 premium, if any, and interest, with interest upon
the overdue principal and premium, if any, and, to the extent that payment of
such interest shall be legally enforceable, upon overdue installments of
interest, at the rate borne by the 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 within 3 Business Days of 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 and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture by such appropriate private or judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
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 therein, or to enforce any other proper remedy, subject however to
Section 5.12. No recovery of any such judgment upon any property of the
Company shall affect or impair any rights, powers or remedies of the Trustee
or the Holders.
Section 5.04 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
premium, if any, 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 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 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 6.07.
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 5.05 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 and 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 5.06 APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article or otherwise
on behalf of the Holders or the Trustee pursuant to this Article or through
any proceeding or any arrangement or restructuring in anticipation or in lieu
of any proceeding contemplated by this Article shall be applied, subject to
applicable law, 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, premium, if any, 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 6.07;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities for principal, premium, if any, and interest, 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, premium, if any, and interest; and
THIRD: The balance, if any, to the Person or Persons entitled thereto,
including the Company, provided that all sums due and owing to the Holders
and the Trustee have been paid in full as required by this Indenture.
Section 5.07 LIMITATION ON SUITS.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the
Securities, 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;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities 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 an indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 15 days after its receipt of such notice, request
and offer (and if requested, provision) 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 15-day period by the Holders of a majority in
principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security to affect, disturb or prejudice the rights
of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture or any Security, except in the manner provided in this Indenture
and for the equal and ratable benefit of all the Holders.
Section 5.08 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right based on the terms stated herein, which is
absolute and unconditional, to receive payment of the principal of, premium, if
any, and (subject to Section 3.09) interest on such Security on the respective
Stated Maturities expressed in such Security (or, in the case of redemption or
repurchase, on the Redemption Date or the repurchase 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 5.09 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 the Company, any
other obligor on the Securities, the Trustee and the Holders shall, subject
to any determination in such proceeding, 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 5.10 RIGHTS AND REMEDIES CUMULATIVE.
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 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security 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 5.12 CONTROL BY HOLDERS.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities shall have the right to direct the time, method
and place of conducting any proceeding for exercising any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee,
PROVIDED that
(a) such direction shall not be in conflict with any rule of law or with
this Indenture (including, without limitation, Section 5.07), expose the Trustee
to personal liability, or be unduly prejudicial to Holders not joining therein;
and
(b) subject to the provisions of Section 315 of the Trust Indenture
Act, the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.
Section 5.13 WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities may on behalf of the Holders of all Outstanding
Securities waive any past Default hereunder and its consequences, except a
Default
(a) in the payment of the principal of, premium, if any, or interest on
any Security; or
(b) in respect of a covenant or a provision hereof which under this
Indenture cannot be modified or amended without the consent of the Holder of
each Security Outstanding affected by such modification or amendment.
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 5.14 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 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, or to any suit instituted by any Holder for
the enforcement of the payment of the principal of, premium, if any, or
interest on, any Security on or after the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on or after the
Redemption Date).
Section 5.15 WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which
would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Securities contemplated
herein or in the Securities or which may affect the covenants or the
performance of this Indenture; and each of the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not 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 had been
enacted.
Section 5.16 REMEDIES SUBJECT TO APPLICABLE LAW.
All rights, remedies and powers provided by this Article V may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Indenture are intended to be subject to all applicable mandatory provisions
of law which may be controlling in the premises, including applicable gaming
laws, and to be limited to the extent necessary so that they will not render
this Indenture invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
ARTICLE VI
THE TRUSTEE
Section 6.01 DUTIES OF TRUSTEE.
Subject to the provisions of Trust Indenture Act Sections 315(a) through
315(d):
(a) if a Default or an Event of Default has occurred and is continuing,
and subject to compliance with applicable gaming laws, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in its exercise thereof as a prudent person
would exercise or use under the circumstances in the conduct of his own
affairs;
(b) except during the continuance of a Default or an Event of Default:
(i) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or obligations
shall be implied in this Indenture that are adverse to the Trustee; and
(ii) in the absence of bad faith or willful misconduct on its part,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and opinions
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 Subsection (c) does not limit the effect of Subsection
(b) of this Section 6.01;
(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; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith, in accordance with a direction of
the Holders of a majority in principal amount of Outstanding Securities
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power confirmed
upon the Trustee under this Indenture;
(d) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it;
(e) whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
Subsections (a), (b), (c) and (d) and (f) of this Section 6.01;
(f) the Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree with the Company. Assets held
in trust by the Trustee need not be segregated from other assets except to
the extent required by law; and
(g) the Trustee shall cooperate with any gaming authority (including,
but not limited to, the New Jersey Casino Control Commission, the New Jersey
Division of Gaming Enforcement and the Mississippi Gaming Commission) of any
jurisdiction in which the Company or any of its subsidiaries conducts or
proposes to conduct gaming and shall produce any document or information as
any of them may request.
(h) The Trustee shall in no event be required to expend its own funds
in the exercise of any of the remedies set forth in this Section 6.01.
Section 6.02 NOTICE OF DEFAULTS.
Within 30 days after a Responsible Officer of the Trustee receives
notice of the occurrence of any Default, the Trustee shall transmit by mail
to all Holders and any other Persons entitled to receive reports pursuant to
Section 313(c) of the Trust Indenture Act, as their names and addresses
appear in the Security Register, notice of such Default hereunder known to
the Trustee, unless such Default shall have been cured or waived; PROVIDED,
HOWEVER, that, except in the case of a Default in the payment of the
principal of, premium, if any, or interest on any Security, the Trustee shall
be protected in withholding such notice if and so long as a trust committee
of Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders.
Section 6.03 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.01 hereof and Trust Indenture Act
Sections 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon receipt by it of any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of Debt or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) the Trustee may consult with counsel of its selection and any
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 in accordance
with such advice or Opinion of Counsel;
(d) 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 pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity satisfactory to the Trustee
against the costs, expenses and liabilities which might be incurred therein
or,
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of
the negligence, bad faith or willful misconduct of the Trustee;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, appraisal, bond, debenture, note, coupon, security or other paper
or document unless requested in writing to do so by the Holders of not less
than a majority in aggregate principal amount of the Securities then
Outstanding; PROVIDED that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses
of every such investigation so requested by the Holders of not less than 25%
in aggregate principal amount of the Securities Outstanding shall be paid by
the Company or, if paid by the Trustee or any predecessor Trustee, shall be
repaid by the Company upon demand; PROVIDED, FURTHER, the Trustee in its
discretion may make such further inquiry or investigation into such facts or
matters as it may deem fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 6.04 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITIONS OF
SECURITIES OR APPLICATION OF PROCEEDS THEREOF.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Securities, except that the Trustee represents that
it is duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made
by it in any Statement of Eligibility and Qualification on Form T-1 supplied
to the Company are true and accurate subject to the qualifications set forth
therein. The Trustee shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.
Section 6.05 TRUSTEE AND AGENTS MAY HOLD SECURITIES; COLLECTIONS; ETC.
The Trustee, any Paying Agent, Security Registrar or any other agent of
the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with the Company
and receive, collect, hold and retain collections from the Company with the
same rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
Section 6.06 MONEY HELD IN TRUST.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Except for funds or securities
deposited with the Trustee pursuant to Article IV, the Trustee shall be
required to invest all moneys received by the Trustee, until used or applied
as herein provided, in Cash Equivalents in accordance with the directions of
the Company.
Section 6.07 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as the parties
shall agree in writing from time to time for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) and the Company
covenants and agrees to pay or reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by or on behalf of the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
agents) except any such expense, disbursement or advance as may arise from
its negligence, bad faith or willful misconduct. The Company also covenants
and agrees to indemnify the Trustee and each predecessor Trustee for, and to
hold it harmless against, any claim, loss, liability, tax, assessment or
other governmental charge (other than taxes applicable to the Trustee's
compensation hereunder) or expense incurred without negligence, bad faith or
willful misconduct on its part, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder and
its duties hereunder, including enforcement of this Section 6.07 and also
including any liability which the Trustee may incur as a result of failure to
withhold, pay or report any tax, assessment or other governmental charge, and
the costs and expenses of defending itself against or investigating any claim
or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The obligations of the Company under this
Section 6.07 to compensate and indemnify the Trustee and each predecessor
Trustee and to pay or reimburse the Trustee and each predecessor Trustee for
reasonable expenses, disbursements and advances shall constitute an
additional obligation
hereunder and shall survive the satisfaction and discharge of this Indenture
and the resignation or removal of the Trustee and each predecessor Trustee.
After the date of the Hilton Distribution, to secure the Company's
payment obligations in this Section 6.07, the Trustee shall have a perfected
lien prior to the Securities on all assets held or collected by the Trustee,
in its capacity as Trustee, except assets held in trust to pay principal and
premium, if any, of or interest on particular Securities.
Section 6.08 CONFLICTING INTERESTS.
The Trustee shall comply with the provisions of Section 3.09(b) of the
Trust Indenture Act.
Section 6.09 TRUSTEE ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be eligible
to act as trustee under Trust Indenture Act Section 3.09(a) and which shall
have a combined capital and surplus of at least $250,000,000, to the extent
there is an institution eligible and willing to serve. If the Trustee does
not have a Corporate Trust Office in The City of New York, the Trustee may
appoint an agent in The City of New York reasonably acceptable to the Company
to conduct any activities which the Trustee may be required under this
Indenture to conduct in The City of New York. If such Trustee publishes
reports of condition at least annually, pursuant to law or to the
requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section
6.09, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.09, the Trustee
shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
Section 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE.
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor trustee under Section 6.11.
(b) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign by giving written notice thereof to the Company. Upon
receiving such notice or resignation, the Company shall promptly appoint a
successor trustee by written instrument executed by authority of the Board of
Directors of the Company, a copy of which shall be delivered to the resigning
Trustee and a copy to the successor trustee. If an instrument of acceptance
by a successor
trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may, or any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper,
appoint and prescribe a successor trustee.
(c) The Trustee may be removed at any time for any cause or for no
cause by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, delivered to the Trustee and
to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of
Trust Indenture Act Section 3.09(b) after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security for at
least six months,
(ii) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Security for at least six
months, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, the Holder of any Security who has
been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor
trustee and shall comply with the applicable requirements of Section 6.11.
If, within 60 days after such resignation, removal or incapability, or the
occurrence of such vacancy, the Company has not appointed a successor
Trustee, a successor trustee shall be appointed by the Act of the Holders of
a majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring
Trustee. Such successor trustee so appointed shall forthwith upon its
acceptance of such appointment become the successor trustee and supersede the
successor trustee appointed by the Company. If no successor trustee shall
have been so appointed by the Company or the Holders of the Securities and
accepted appointment in the manner hereinafter provided, the Trustee or the
Holder of any Security who has been a bona fide Holder for at least six
months may, subject to Section 5.14, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities as their names and addresses appear in the Security Register.
Each notice shall include the name of the successor trustee and the address
of its Corporate Trust Office or agent hereunder.
Section 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee as if originally named as
Trustee hereunder; but, nevertheless, on the written request of the Company
or the successor trustee, upon payment of its charges pursuant to Section
6.07 then unpaid, such retiring Trustee shall pay over to the successor
trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations. Upon request of any such successor trustee,
the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers.
No successor trustee with respect to the Securities shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under
the provisions of Trust Indenture Act Section 3.09(a) and this Article VI and
shall have a combined capital and surplus of at least $250,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 6.10.
Upon acceptance of appointment by any successor trustee as provided in this
Section 6.11, the Company shall give notice thereof to the Holders of the
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the appointment, then the notice called for
by the preceding sentence may be combined with the notice called for by
Section 6.10. If the Company fails to give such notice within 10 days after
acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be given at the expense of the Company.
Section 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee (including the trust created by this Indenture) shall
be the successor of the Trustee hereunder, PROVIDED that such corporation
shall be eligible under Trust Indenture Act Section 310(a) and this Article
VI and shall have a combined capital and surplus of at least $250,000,000 and
have a Corporate Trust Office or an agent selected in accordance with Section
6.09, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder
or in the name of the successor trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities
or in this Indenture provided that the certificate of the Trustee shall have;
PROVIDED that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
Section 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company (or
other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor). A Trustee who has resigned
or been removed shall be subject to Trust Indenture Act Section 311(a) to the
extent indicated therein.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 7.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 15 days after each Regular Record Date,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request, a
list of similar form and content to that in subsection (a) hereof as of a
date not more than 15 days prior to the time such list is furnished;
PROVIDED, HOWEVER, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
Section 7.02 DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Holders may communicate pursuant to Trust Indenture Act Section 312(b)
with other Holders with respect to their rights under this Indenture or the
Securities, and the Trustee shall comply with Trust Indenture Act Section
312(b). The Company, the Trustee, the Security Registrar and any other
Person shall have the protection of Trust Indenture Act Section 312(c).
Further, every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee or any agent of either of them shall be held accountable by reason of
the disclosure of any information as to the names and addresses of the
Holders in accordance with Trust Indenture Act Section 312, regardless of the
source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a
request made under Trust Indenture Act Section 312.
Section 7.03 REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with the first
May 15 after the issuance of Securities, the Trustee, if so required under
the Trust Indenture Act, shall transmit by mail to all Holders, in the manner
and to the extent provided in Trust Indenture Act Section 313(c), a brief
report dated as of such May 15 in accordance with and with respect to the
matters required by Trust Indenture Act Section 313(a). The Trustee shall
also transmit by mail to all Holders, in the manner and to the extent
provided in Trust Indenture Act Section 313(c), a brief report in accordance
with and with respect to the matters required by Trust Indenture Act Section
313(b)(2).
(b) A copy of each report transmitted to Holders pursuant to this
Section 7.03 shall, at the time of such transmission, be mailed to the
Company and filed with each stock exchange, if any, upon which the Securities
are listed and also with the Commission. The Company will notify the Trustee
promptly if the Securities are listed on any stock exchange.
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OF ASSETS
Section 8.01 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
(a) Prior to the Special Redemption Date, the Company shall not, in a
single transaction or through a series of related transactions, except in
accordance with the Transactions, (i) consolidate with or merge with or into
any other Person; or (ii) sell, assign, convey or transfer its properties and
assets substantially in their entirety (computed on a Consolidated basis) to
any Person.
(b) Following the Special Redemption Date, the Company may not, in a
single transaction or through a series of related transactions, (i)
consolidate with or merge with or into any other Person; or (ii) sell,
assign, convey or transfer its properties and assets substantially in their
entirety (computed on a Consolidated basis) to any Person, unless:
(i) either (A) the Company is the surviving entity; or (B) the
Person formed by or surviving such consolidation or merger (if other than the
Company) or to which such sale, assignment, conveyance or transfer shall have
been made (the "Surviving Entity") is an entity organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(ii) the Surviving Entity assumes all the obligations of the
Company under the Securities and this Indenture; and
(iii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
(c) The foregoing shall not apply to a sale, assignment, conveyance,
transfer, or other disposition of properties or assets solely between or
among the Company and any of its wholly-owned Subsidiaries.
Section 8.02 SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, conveyance or
transfer of the properties and assets of the Company substantially in their
entirety in accordance with Section 8.01, the Surviving Entity shall succeed to,
and be substituted for, and may exercise every right and power of the Company
under this Indenture and/or in the Securities, as the case may be, with the
same effect as if such successor had been named as the Company herein and in
the Securities, and the Company shall be discharged from all obligations and
covenants hereof and in the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 SUPPLEMENTAL INDENTURES AND AGREEMENTS WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company and any other obligor
under the Securities when authorized by a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto or agreements in form and substance satisfactory to the
Trustee, for any of the following purposes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Securities in addition to or in place
of certificated Securities;
(c) to evidence the succession of another Person to the Company or any
other obligor upon the Securities, and the assumption by any such successor
or obligor of the covenants of the Company herein and in the Securities in
accordance with Article VIII;
(d) to add to the covenants of the Company or any other obligor upon
the Securities for the benefit of the Holders, or to surrender any right or
power conferred upon the Company or any other obligor upon the Securities, as
applicable, herein or in the Securities or to make any change that does not
adversely affect the legal rights of Holders under the Security Agreement;
(e) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 9.05 or otherwise; or
(f) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder.
Section 9.02 SUPPLEMENTAL INDENTURES AND AGREEMENTS WITH CONSENT OF
HOLDERS.
Except as permitted by Section 9.01, with the consent of the Holders of
at
least a majority in aggregate principal amount of the Outstanding Securities,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by Board Resolutions, and the Trustee may (i) enter into an
indenture or indentures supplemental hereto or agreements in form and
substance satisfactory to the Trustee, for the purpose of adding any
provisions to or amending, modifying or changing in any manner or eliminating
any of the provisions of this Indenture or the Securities (including but not
limited to, for the purpose of modifying in any manner the rights of the
Holders under this Indenture or the Securities) or (ii) waive compliance with
any provision in this Indenture or the Securities (other than waivers of past
Defaults covered by Section 5.13 and waivers of covenants which are covered
by Section 10.12); PROVIDED, HOWEVER, that no such supplemental indenture or
agreement shall, without the consent of the Holder of each Outstanding
Security affected thereby:
(a) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture or agreement, or the consent of whose Holders is
required for any waiver or compliance with certain provisions of this
Indenture;
(b) change the Stated Maturity of the principal of, or any installment
of interest on, or extend the time for payment of interest on any Security,
or change to an earlier date any Redemption Date of, or waive a default in
the payment of the principal or interest on, any such Security or otherwise
alter the provisions with respect to the redemption of the Securities in a
manner adverse to Holders, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
change the coin or currency in which the principal of any Security or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date); and
(c) modify any of the provisions of this Section 9.02 or Sections 5.13,
10.01 or 10.12.
Upon the written request of the Company accompanied by a copy of Board
Resolutions authorizing the execution of any such supplemental indenture or
agreement and upon the filing with the Trustee of evidence of the consent of
Holders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture.
It shall not be necessary for any Act of Holders under this Section 9.02
to approve the particular form of any proposed supplemental indenture or
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES OR AGREEMENTS.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article IX or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Trust
Indenture Act Sections 315(a) through 315(d) and Section 6.02 hereof) shall
be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate stating that the execution of such supplemental indenture,
agreement or instrument is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture, agreement or instrument which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article IX shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
Section 9.07 NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 9.02, the
Company shall give notice thereof to the Holders of each Outstanding Security
affected, in the manner provided for in Section 1.06, setting forth in
general terms the substance of such supplemental indenture. Any failure of
the Company to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such supplemental indenture.
ARTICLE X
COVENANTS
Section 10.01 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall duly and punctually pay the principal of, premium, if
any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture. Payments in respect of the Securities
represented by a Global Security (including principal, premium, if any,
interest and Additional Interest will be made by wire transfer of immediately
available funds to the accounts specified by the Global Security Holder.
With respect to Securities that are not Global Securities, the Company will
make all payments of principal, premium, if any, interest and Additional
Interest, if any, by wire transfer of immediately available funds to the
accounts specified by Holders thereof or, if no such account is specified, by
mailing a check to each such Holder's registered address.
Section 10.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency where Securities may be
presented or surrendered for payment. The Company also will maintain in The
City of New York an office or agency where Securities may be surrendered for
registration of transfer, redemption or exchange and where notices and
demands to or upon the Company in respect of the Securities and this
Indenture may be served. The office of the Trustee, at its Corporate Trust
Office initially located at 40 Broad Street, Suite 550, Fifth Floor, New
York, New York 10004, will be such office or agency of the Company, unless
the Company shall designate and maintain some other office or agency for one
or more of such purposes. The Company will give prompt written notice to the
Trustee of the location and any change in the location of any such offices or
agencies. If at any time the Company shall fail to maintain any such
required offices or agencies or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the office of the Trustee and the Company hereby appoints
the Trustee such agent as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may from time to time designate one or more other offices or
agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to
time rescind such designation. The Company will give prompt written notice
to the Trustee of any such designation or rescission and any change in the
location of any such office or agency.
The Trustee shall initially act as Paying Agent for the Securities.
Section 10.03 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company or any of its Affiliates shall at any time act as Paying
Agent, it will, on or before each due date of the principal of, premium, if
any, or interest on any of the Securities, segregate and hold in trust for
the benefit of the Holders entitled thereto a sum sufficient to pay the
principal, premium, if any, or interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure so to act.
If the Company or any of its Affiliates is not acting as Paying Agent,
the Company will, on or before each due date of the principal of, premium, if
any, or interest on any of the Securities, deposit with a Paying Agent a sum
in same day funds sufficient to pay the principal, premium, if any, or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent
will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on the Securities in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal,
premium, if any, or interest on the Securities;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities
of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Security and remaining unclaimed for two years after
such principal and premium, if any, or interest has become due and payable
shall promptly be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee
or such Paying Agent, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), and mail to each such
Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification, publication and mailing, any unclaimed balance of such money
then remaining will promptly be repaid to the Company.
Section 10.04 CORPORATE EXISTENCE.
Subject to Article VIII, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Restricted Subsidiary; PROVIDED, HOWEVER, that the Company
shall not be required to preserve any such right or franchise or the
corporate existence of any such Restricted Subsidiary if the Board of
Directors of the Company shall determine that the preservation thereof is no
longer necessary or desirable in the conduct of the business of the Company
and its Restricted Subsidiaries as a whole; and PROVIDED, FURTHER, HOWEVER,
that the foregoing shall not prohibit a sale, transfer or conveyance of a
Restricted Subsidiary or any of its assets in compliance with the terms of
this Indenture.
Section 10.05 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged, on or
before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
of its Subsidiaries shown to be due on any return of the Company or any of its
Subsidiaries or otherwise assessed or upon the income, profits or property of
the Company or any of its Subsidiaries if failure to pay or discharge the same
could reasonably be expected to have a material adverse effect on the ability of
the Company to perform its obligations hereunder and (b) all lawful claims for
labor, materials and supplies, which, if unpaid, would by law become a Lien
upon the property of the Company or any of its Subsidiaries, except for any
Lien permitted to be incurred under Section 10.07, if failure to pay or
discharge the same could reasonably be expected to have a material adverse
effect on the ability of the Company to perform its obligations hereunder;
PROVIDED, HOWEVER, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings properly instituted and diligently conducted and in
respect of which appropriate reserves (in the good faith judgment of
management of the Company) are being maintained in accordance with GAAP.
Section 10.06 MAINTENANCE OF INSURANCE.
The Company shall at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed
by the Company in good faith to be financially sound and responsible, against
loss or damage to the extent that property of similar character is usually so
insured by corporations similarly situated and owning like properties in the
same general geographic areas in which the Company and its Subsidiaries
operate, except where the failure to do so could not reasonably be expected
to have a material adverse effect on the condition (financial or otherwise),
earnings, business affairs or prospects of the Company and its Subsidiaries,
taken as a whole.
Section 10.07 LIMITATION ON LIENS.
(a) The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create, assume or suffer to exist any Lien of any
kind upon the proceeds of the Special Redemption Account except pursuant to
the Security Agreement for the benefit of the Holders of the Securities.
Neither the Company nor any Restricted Subsidiary will, directly or
indirectly, create, assume or suffer to exist any Lien of any kind (i) upon
any Principal Property, (ii) upon any shares of Capital Stock of any
Restricted Subsidiary owned by the Company or any Restricted Subsidiary or
(iii) securing Debt of any Restricted Subsidiary, without equally and ratably
securing the Securities with (or prior to) the Debt secured by such Lien, for
so long as such Debt shall be so secured, PROVIDED, HOWEVER, that the Company
and any Restricted Subsidiary may, directly or indirectly, create, assume or
suffer to exist Permitted Liens.
(b) Notwithstanding the foregoing, the Company or any Restricted
Subsidiary may create, assume or suffer to exist Liens not otherwise
permitted as described above, provided that at the time of such incurrence,
assumption or sufferance, after giving effect to such Lien, the sum of
outstanding Debt secured by such Liens (not including Permitted Liens) plus
all Attributable Debt in respect of Sale and Lease-Back Transactions entered
into (not including Sale and Lease-Back Transactions expressly permitted
under Section 10.08(a) below),
measured, in each case, at the time the Lien is incurred, does not exceed 15%
of Consolidated Net Tangible Assets.
Section 10.08 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.
(a) 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 any 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 (a "Sale and Lease-Back Transaction"), unless either: (i) the
Company or such Restricted Subsidiary would be entitled, pursuant to the
provisions described in clauses (a) through (o) of the definition of
"Permitted Liens" to create, assume or suffer to exist a Lien on the property
to be leased without equally and ratably securing the Securities, or (ii) an
amount equal to (A) the greater of the net cash proceeds of such sale or the
fair market value of such property (in the opinion of the Board of Directors)
less (B) the fair market value (in the opinion of the 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 Securities or Pari Passu Debt.
(b) Notwithstanding the foregoing, the Company or any Restricted
Subsidiary may enter into Sale and Lease-Back Transactions not otherwise
permitted as described above, provided that at the time of entering into such
Sale and Lease-Back Transaction, after giving effect to such Sale and
Lease-Back Transaction, the sum of outstanding Debt secured by such Liens
(not including Permitted Liens) plus all Attributable Debt in respect of Sale
and Lease-Back Transactions entered into (not including Sale and Lease-Back
Transactions permitted under Section 10.08(a)), measured, in each case, at
the time any such Sale and Lease-Back Transaction is entered into, does not
exceed 15% of Consolidated Net Tangible Assets.
Section 10.09 RULE 144A INFORMATION REQUIREMENTS.
So long as any of the Initial Securities remain outstanding, the Company
shall furnish, within a reasonable amount of time, to the Holders or
beneficial owners of Initial Securities and to prospective purchasers of the
Initial Securities the information required by Rule 144A(d)(4) under the
Securities Act, upon their written request, until such time as the Company
has either exchanged the Initial Securities for the Exchange Securities or
until such time as the Holders thereof have disposed of such Initial
Securities pursuant to an effective shelf registration
statement under the Securities Act. The Company shall also furnish such
information during the pendency of any suspension of effectiveness of the
shelf registration statement.
Section 10.10 STATEMENT BY OFFICERS AS TO DEFAULT.
(a) The Company will deliver to the Trustee, on or before a date not
more than 120 days after the end of each fiscal year of the Company ending
after the date hereof, a written statement signed by two executive officers
of the Company, one of whom shall be the principal executive officer,
principal financial officer or principal accounting officer of the Company,
as to compliance herewith, including whether or not, after a review of the
activities of the Company during such year and of the Company's performance
under this Indenture, to the best knowledge, based on such review, of the
signers thereof, the Company has fulfilled all of their respective
obligations and are in compliance with all conditions and covenants under
this Indenture throughout such year and, if there has been a Default
specifying each Default and the nature and status thereof and any actions
being taken by the Company with respect thereto.
(b) When any Default or Event of Default has occurred and is
continuing, the Company shall deliver notice to the Trustee promptly upon
becoming aware of any Default or Event of Default, by registered or certified
mail or facsimile transmission followed by an originally executed copy of an
Officers' Certificate specifying such Default or Event of Default, the status
thereof and what actions the Company is taking or proposes to take with
respect thereto.
Section 10.11 REPORTS BY COMPANY.
The Company shall:
(a) file with the Trustee, within 15 days after the Company is required
to file the same with the Commission, 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 Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall (i) deliver to the Trustee
annual audited financial statements of the Company and its Subsidiaries,
prepared on a Consolidated basis in conformity with GAAP, within 120 days
after the end of each fiscal year of the Company, and (ii) file with the
Trustee and, to the extent permitted by law, the Commission, in accordance
with the rules and regulations prescribed from time to time by the
Commission, such of the 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;
(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as are
required from time to time by such rules and regulations (including such
information, documents and reports referred to in Trust Indenture Act Section
314(a)); and
(c) within the time period allowed for filings with the Trustee,
transmit by mail to all Holders in the manner and to the extent provided in
Trust Indenture Act Section 313(c), such summaries of any information,
documents and reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section as are required by rules and
regulations prescribed from time to time by the Commission.
Section 10.12 WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 10.06 through 10.11, if, before
or after the time for such compliance, the Holders of not less than a
majority in aggregate principal amount of the Securities at the time
Outstanding shall, by Act (which for purposes of this Section 10.12 includes
transmissions across the internet) of such Holders, waive such compliance in
such instance with such covenant or provision, but no such waiver shall
extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any
such covenant or condition shall remain in full force and effect.
ARTICLE XI
REDEMPTION AND MANDATORY DISPOSITION OF SECURITIES
Section 11.01 RIGHTS OF REDEMPTION.
(a) The Securities are subject to redemption at any time, at the option
of the Company, in whole but not in part, at a Redemption Price equal to 100%
of the principal amount thereof plus the Make-Whole Premium, together with
accrued and unpaid interest thereon, if any, to the Redemption Date (subject
to the right of Holders of record on relevant Regular Record Dates and
Special Record Dates to receive interest due on relevant Interest Payment
Dates and Special Payment Dates).
Section 11.02 APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article XI.
Section 11.03 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant to Section
11.01 shall be evidenced by a Company Order and an Officers' Certificate. In
case of any redemption at the election of the Company, the Company shall, not
less than 45 nor more than 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice period shall be satisfactory to the
Trustee), notify the Trustee in writing of such Redemption Date and of the
principal amount of Securities to be redeemed.
Section 11.04 SECURITIES TO BE REDEEMED IN PART.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part in
accordance with Section 11.10, to the portion of the principal amount of such
Security which has been or is to be redeemed.
Section 11.05 NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at its address
appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed in
accordance with Section 11.10, the identification of the particular
Securities to be redeemed;
(d) in the case of a Security to be redeemed in part in accordance with
Section 11.10, the principal amount of such Security to be redeemed and that
after the Redemption Date upon surrender of such Security, new Security or
Securities in the aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security or portion thereof to be redeemed, and
that (unless the Company shall default in payment of the Redemption Price)
interest thereon shall cease to accrue on and after said date;
(g) the names and addresses of the Paying Agent and the offices or
agencies referred to in Section 10.02 where such Securities are to be
surrendered for payment of the Redemption Price;
(h) the CUSIP number, if any, relating to such Securities; and
(i) the procedures that a Holder must follow to surrender the
Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company. If the Company
elects to give notice of redemption, it shall provide the Trustee with a
certificate stating that such notice has been given in compliance with the
requirements of this Section 11.05.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been given, whether or not the Holder receives such notice.
In any case, failure to give such notice by mail or any defect in the notice
to the Holder of any Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any
other Security.
Section 11.06 DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company or any of its Affiliates
is acting as Paying Agent, segregate and hold in trust as provided in Section
10.03) an amount of money in same day funds sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment
Date or Special Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date. The Paying Agent
shall promptly mail or deliver to Holders of Securities so redeemed payment
in an amount equal to the Redemption Price of the Securities purchased from
each such Holder. All money, if any, earned on funds held in trust by the
Trustee or any Paying Agent shall be remitted to the Company. For purposes
of this Section 11.06, the Company shall choose a Paying Agent which shall
not be the Company.
Section 11.07 SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Holders will be
required to surrender the Securities to be redeemed to the Paying Agent at
the address specified in the notice of redemption at least one Business Day
prior to the Redemption Date. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price together with accrued interest to the
Redemption Date; PROVIDED, HOWEVER, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such on the relevant Regular Record Dates and Special Record Dates
according to the terms and the provisions of Section 3.09.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by such
Security.
Section 11.08 SECURITIES REDEEMED OR PURCHASED IN PART.
Any Security which is to be redeemed or purchased only in part in
accordance with Section 11.10 shall be surrendered to the Paying Agent at the
office or agency maintained for such purpose pursuant to Section 10.02 (with,
if the Company, the Security Registrar or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to
the Company, the Security Registrar or the Trustee, as the case may be, duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal of the Security so surrendered that is
not redeemed or purchased.
Section 11.09 SPECIAL REDEMPTION.
If all the Transactions have not been consummated on or before the
Special Redemption Date, the Company shall, on the Special Redemption Date,
redeem and retire (the "Special Redemption") all of the Securities for a
price equal to 100% of their principal amount plus accrued and unpaid
interest thereon through the Special Redemption Date, as follows:
(a) Upon issuance of the Initial Securities, the Company shall deliver
the net proceeds from the sale of the Initial Securities to the Securities
Intermediary. The Securities Intermediary shall use such net proceeds to
purchase Cash Equivalents, as directed by the Company. The Company shall
simultaneously deliver to the Securities Intermediary additional cash for the
purchase of additional Cash Equivalents in an amount sufficient, together
with the Cash Equivalents purchased with the net proceeds of the offering of
the Initial Securities, for the full payment of the principal amount of all
of the Securities, all interest that shall accrue thereon until and through
the Special Redemption Date and the Securities Intermediary's customary fees.
The Securities Intermediary shall deposit all Cash Equivalents so purchased
into a securities account (the "Special Redemption Account") maintained at
the Securities Intermediary.
(b) If the Hilton Distribution has not been consummated on or before
the Special Redemption Date, the Securities Intermediary shall immediately
liquidate the Cash Equivalents in the Special Redemption Account and the
Trustee shall use the proceeds therefrom and any additional funds to redeem
and retire all of the Securities, for a price equal to 100% of their
principal amount plus accrued and unpaid interest thereon through the Special
Redemption Date, and to pay the Securities Intermediary's and the Trustee's
customary fees with such proceeds. Any remaining proceeds after such
redemption and retirement of the Securities and payment of the Securities
Intermediary's and the Trustee's fees shall be delivered promptly to the
Company.
(c) If the Hilton Distribution has been consummated on or before the
Special Redemption Date and the Trustee has released its security interest in
the Special Redemption Account in accordance with Section 12.01, but all of
the Transactions have not been consummated on or prior to the Special
Redemption Date, the Company shall, on the Special Redemption Date, deposit
sufficient cash with the Trustee for the payment in full of the principal
amount of all of the Securities and all interest that shall have accrued
thereon through the Special Redemption Date. The Trustee shall immediately
use such cash to redeem and retire all of the Securities for a price equal to
100% of their principal amount plus accrued and unpaid interest thereon
through the Special Redemption Date. If the Company does not deposit such
cash with the Trustee on the Special Redemption Date, the Securities shall
bear interest at the rate of 7 7/8% per annum plus Additional Interest, if
any, from the Special Redemption Date to the date that the Company redeems
and retires all of the Securities for a price equal to 100% of their
principal amount plus accrued and unpaid interest thereon through the date of
redemption.
(d) The Company's obligations under this Section 11.09 shall be
covenants of the Company.
Section 11.10 MANDATORY DISPOSITION PURSUANT TO GAMING LAWS.
Each Holder, by accepting a Security, 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 the beneficial owner of Securities 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, the Company
shall have the right, at its option:
(a) to require such Person to dispose of its 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
(b) to redeem such Securities at a Redemption Price equal to the lesser
of (i) such Person's cost or (ii) 100% of the principal amount thereof, plus
accrued and unpaid interest thereon, 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.
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 Holder or beneficial owner may incur in connection with its
application for a license, qualification or a finding or suitability.
Section 11.11 REDEMPTION PROCEDURES.
Other than as specifically provided in Sections 11.09 and 11.10, any
redemption pursuant to Sections 11.09 or 11.10 shall be made pursuant to the
provisions of Section 11.01 through 11.08 hereof, unless the context
otherwise requires.
ARTICLE XII
SECURITY
Section 12.01 SECURITY.
(a) Under the Security Agreement, the Trustee shall have a security
interest in the Special Redemption Account to secure the Company's obligations
under the Indenture, including the Company's obligation to redeem and retire all
of the Securities, as set forth in Section 11.09, if all the Transactions have
not been consummated on or before the Special Redemption Date. The Security
Agreement further provides that upon consummation of the Hilton Distribution,
the Trustee shall release its security interest in the Special Redemption
Account, and the Securities Intermediary shall liquidate the Cash Equivalents in
the Special Redemption Account and deliver the proceeds therefrom to the
Company (less an amount necessary to pay the Securities Intermediary's and
the Trustee's customary fees). The Company intends to use those net proceeds
to pay down Hilton Debt. Thereafter, the Securities shall be unsecured
obligations of the Company.
(b) Each Holder, by its acceptance of a Security, consents and agrees
to the terms of the Security Agreement (including, without limitation, the
provisions described in the preceding paragraphs) as the same may be in
effect or may be amended from time to time in accordance with its terms, and
authorizes and directs the Trustee to enter into the Security Agreement and
to perform its obligations and exercise its rights thereunder in accordance
therewith. The Company will do or cause to be done all such acts and things
as may be necessary or proper to assure and confirm to the Trustee the
security interest in the Pledged Collateral (as defined in the Security
Agreement) contemplated hereby and by the Security Agreement, as from time to
time constituted, so as to render the same available for the security and
benefit of this Indenture and of the Securities secured hereby, according to
the intent and purposes herein expressed. The Company shall take, or shall
cause to be taken, any and all actions reasonably required (and any action
reasonably requested by the Trustee) to create and maintain, as security for
the obligation of the Company to make the Special Redemption and to secure
all of the Company's other obligations under this Indenture and the
Securities, a valid and enforceable first priority lien in and on all the
Pledged Collateral, in favor of the Trustee, superior to and prior to the
rights of third Persons and subject to no other Liens. The Trustee shall not
be liable for the validity, sufficiency or priority of the funds or Pledged
Collateral held under the Security Agreement or for the maintenance of the
perfection of any funds or securities held therein.
(c) To the extent applicable, the Company shall comply with TIA Section
314(d).
(d) The Trustee, in its sole discretion and without the consent of the
Holders, may, and at the request of the Holders of at least 25% in aggregate
principal amount of Securities then outstanding and upon receipt of indemnity
satisfactory to it shall, on behalf of the Holders, take all actions it deems
necessary or appropriate in order to (i) enforce any of the terms of the
Security Agreement and (ii) collect and receive any and all amounts payable
in respect of the obligations of the Company thereunder. The Trustee shall
have power to institute and to maintain such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders in the Pledged Collateral (including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement
of, or compliance with, such enactment, rule or order would impair the
security interest hereunder or be prejudicial to the interests of the Holders
or of the Trustee).
ARTICLE XIII
SUBORDINATION
Section 13.01 SECURITIES SUBORDINATE TO SENIOR DEBT.
Until the earlier to occur of the Hilton Distribution or the Special
Redemption Date, the Securities will be secured by the Special Redemption
Account as set forth in Article XII. The Securities will not be subordinate
prior to the consummation of the Hilton Distribution.
The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, for the benefit of the
holders, from time to time, of Senior Debt that, after the consummation of
the Hilton Distribution, to the extent and in the manner hereinafter set
forth in this Article, the Debt represented by the Securities and the payment
of the principal of (and premium, if any) and interest on each and all of the
Securities are hereby expressly made subordinate and subject in right of
payment as provided in this Article to the prior payment in full in cash or
cash equivalents of all Senior Debt; provided, however, that the Securities,
the Debt represented thereby and the payment of the principal of (and
premium, if any) and interest on the Securities 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.
Section 13.02 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
marshalling 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 VIII), then and in any event:
(a) after the consummation of the Hilton Distribution, 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 Securities will be entitled to receive any payment or
distribution of any kind or
character (other than any payment made pursuant to Article IV 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 Securities; and
(b) after the consummation of the Hilton Distribution, 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 IV
from monies or U.S. Government Obligations previously deposited with the
Trustee), by set-off or otherwise, to which the Holders of the Securities or
the Trustee would be entitled but for the provisions of this 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 VIII shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Section 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 VIII.
Section 13.03 SUSPENSION OF PAYMENT WHEN DESIGNATED SENIOR DEBT IN
DEFAULT.
(a) Unless Section 13.02 shall be applicable, after the consummation of
the Hilton Distribution, 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 IV 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 Securities or on account of the purchase, redemption
or other acquisition of Securities 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 Securities,
including any missed payments.
(b) Unless Section 13.02 shall be applicable, after the consummation of
the Hilton Distribution, 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 IV 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 Securities or on account of the purchase, redemption or other
acquisition of Securities 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 Securities, 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
Section 13.02, any payments or distribution shall be made to the Trustee
which is prohibited by the foregoing provisions of this Section and the
provisions of Section 13.02, 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 Designated Senior Debt.
Section 13.04 PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities 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 marshalling of
assets and
liabilities of the Company referred to in Section 13.02 or under the
conditions described in Section 13.03, from making payments at any time of
principal of, and premium, if any, or interest on the Securities.
Section 13.05 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT.
After the consummation of the Hilton Distribution, subject to the
payment in full of all Senior Debt, the Holders of the Securities 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 Securities 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
Securities or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to
the holders of Senior Debt by Holders of the Securities 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 Securities, 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 Article are intended solely for the
purpose of determining the relative rights of the Holders of Securities, on
the one hand, and the holders of Senior Debt, on the other hand.
Section 13.06 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article 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
Article or elsewhere in this Indenture or in the Securities 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 Securities 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 this Indenture, subject to the rights, if
any, under this Article of the holders of Senior Debt.
Section 13.07 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security 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 Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
Section 13.08 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 this 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 Article 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 Debt; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
Section 13.09 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 Article XIII, 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 Article
13.
The Company must promptly notify holders of Senior Debt if payment of
the Securities is accelerated because of an Event of Default.
Section 13.10 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 Securities. Notwithstanding the
provisions of this Article or any other provision of this 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 Securities, 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 Security), 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 Senior
Debt to participate in any payment or distribution pursuant to this Article,
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 Article 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.
Section 13.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to Sections 315(a) through 315(d) of the
Trust Indenture Act, and the Holders of the Securities 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 Securities, 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 Article;
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 Article.
Section 13.12 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 Article 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 this Indenture shall deprive the Trustee of any of its
rights as such holder.
Section 13.13 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 Article 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 Article in addition to or in place of the
Trustee; provided, however, that Section 13.12 shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
Section 13.14 NO SUSPENSION OF REMEDIES.
If the Company fails to make any payments on the Securities when due or
within any applicable grace period, whether or not on account of the
subordination provisions referred to in this Article 13, such failure would
constitute an Event of Default under this Indenture and would enable the
Holders of the Securities to accelerate the maturity thereof pursuant to
Article V. Nothing contained in this Article shall limit the right of the
Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to Article V or to pursue any rights or
remedies hereunder or under applicable law, except as provided in Article V.
Section 13.15 TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments from
cash or the proceeds of U.S. Government Securities held in trust under
Article IV hereof by the Trustee (or other qualifying trustee) and which were
deposited in
accordance with the terms of Article IV hereof and not in violation of
Section 13.03 hereof for the payment of principal of (and premium, if any)
and interest on the Securities shall not be subordinated to the prior payment
of any Senior Debt or subject to the restrictions set forth in this Article
XIII, 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.
Section 13.16 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 wilful misconduct,
pay over or distribute to Holders of Securities 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 Article 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
Article and no implied covenants or obligations with respect to holders of
Senior Debt shall be read into this Indenture against the Trustee.
ARTICLE XIV
SATISFACTION AND DISCHARGE
Section 14.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall be discharged and shall cease to be of further
effect (except as to surviving rights of registration of transfer or exchange
of Securities as expressly provided for herein) as to all Outstanding
Securities hereunder, and the Trustee, upon Company Request and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all the Securities theretofore authenticated and delivered
(other than (A) lost, stolen or destroyed Securities which have been replaced
or paid as provided in Section 3.08 or (B) all Securities whose payment has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust as
provided in Section 10.03) have been delivered to the Trustee for
cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee
for cancellation (A) have become due and payable, (B) will become due and
payable at their Stated Maturity within one year or (C) are to be called for
redemption within one year under arrangements reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company; and the Company has irrevocably deposited
or caused to be deposited with the Trustee as trust funds in trust an amount
in United States dollars sufficient to pay and discharge the entire Debt on
the Securities not theretofore delivered to the Trustee for cancellation,
including the principal of, premium, if any, and accrued interest on, such
Securities at such Maturity, Stated Maturity or Redemption Date;
(iii) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(iv) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, in form and substance
reasonably satisfactory to the Trustee, each stating that (A) all conditions
precedent herein relating to the satisfaction and discharge hereof have been
complied with and (B) such satisfaction and discharge will not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Subsidiary
is a party or by which the Company or any Subsidiary is bound.
Notwithstanding the satisfaction and discharge hereof, the obligations
of the Company to the Trustee under Section 6.06 and, if United States
dollars shall have been deposited with the Trustee pursuant to subclause (2)
of subsection (a) of this Section 12.01, the obligations of the Trustee under
Section 12.02 and the last paragraph of Section 10.03 shall survive.
Section 14.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.03, all
United States dollars deposited with the Trustee pursuant to Section 12.01
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 of, premium, if any, and interest on, the Securities for whose
payment such United States dollars have been deposited with the Trustee.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
PARK PLACE ENTERTAINMENT CORPORATION
By: /s/ Scott A. LaPorta
Name: Scott A. LaPorta
Title Executive Vice President and Chief
Financial Officer
FIRST UNION NATIONAL BANK, as Trustee
By: /s/ Donna Flanagan
Name: Donna Flanagan
Title: Vice President
EXHIBIT A
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 3.07(a)(i) of the Indenture)
First Union National Bank
40 Broad Street, Suite 550, Fifth Floor
New York, New York 1004
Re: 7 7/8% Senior Subordinated Notes due 2005 of Park Place Entertainment
Corporation (the "Securities")
Reference is made to the Indenture, dated as of December 21, 1998
(the "Indenture"), among Park Place Entertainment Corporation (the "Company")
First Union National Bank, as Trustee. Terms used herein and defined in the
Indenture or in Rule 144A or Rule 144 under the U.S. Securities Act of 1933
(the "Securities Act") are used herein as so defined.
This certificate relates to US$_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s). 700690AA8
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial
owner of the Specified Securities or (ii) it is acting on behalf of all the
beneficial owners of the Specified Securities and is duly authorized by them
to do so. Such beneficial owner or owners are referred to herein collectively
as the "Owner". The Specified Securities are represented by a Global
Security and are held through the Depositary or an Agent Member in the name
of the Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be
transferred to a person (the "Transferee") who will take delivery in the form
of a Restricted Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an
effective registration statement under the Securities Act, it is being
effected in accordance with Rule 144A or Rule 144 under the Securities Act
and all applicable securities laws of the states of the United States and
other jurisdictions. Accordingly, the Owner hereby further certifies as
follows:
(a) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(i) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A, acquiring
for its own account or for the account of a qualified institutional buyer; and
(ii) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner may be
relying on Rule 144A in connection with the transfer; and
(b) Rule 144 Transfers. If the transfer is being effected pursuant to
Rule 144:
(i) the transfer is occurring after a holding period of at least
one year (computed in accordance with paragraph (d) of Rule 144) has elapsed
since the Specified Securities were last acquired from the Company or from an
affiliate of the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and notice requirements
of Rule 144; or
(ii) the transfer is occurring after a holding period of at least
two years has elapsed since the Specified Securities were last acquired from
the Company or from an affiliate of the Company, whichever is later, and the
Owner is not, and during the preceding three months has not been, an
affiliate of the Company.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchasers.
Dated: ________________
(Print the name of the Undersigned, as such term
is defined in the second paragraph of this
certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation, partnership
or fiduciary, the title of the person signing on
behalf of the Undersigned must be stated.)
EXHIBIT B
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to Section 3.07(b))
First Union National Bank
40 Broad Street, Suite 550, Fifth Floor
New York, New York 1004
Re: 7 7/8% Senior Subordinated Notes due 2005 of Park Place Entertainment
Corporation (the "Securities")
Reference is made to the Indenture, dated as of December 21, 1998,
among Park Place Entertainment Corporation (the "Company") and First Union
National Bank, as Trustee. Terms used herein and defined in the Indenture or
in Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are
used herein as so defined.
This certificate relates to US$_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
CUSIP No(s).
-----------------------------
CERTIFICATE No(s).
-----------------------
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial
owner of the Specified Securities or (ii) it is acting on behalf of all the
beneficial owners of the Specified Securities and is duly authorized by them
to do so. Such beneficial owner or owners are referred to herein collectively
as the "Owner". If the Specified Securities are represented by a Global
Security, they are held through the Depositary or an Agent Member in the name
of the Undersigned, as or on behalf of the Owner. If the Specified
Securities are not represented by a Global Security, they are registered in
the name of the Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged
for Securities bearing no Private Placement Legend pursuant to Section
3.07(b) of the Indenture. In connection with such exchange, the Owner hereby
certifies that the exchange is occurring after a holding period of at least
two years (computed in accordance with paragraph (d) of Rule 144) has elapsed
since the Specified Securities were last acquired from the Company or from an
affiliate of the Company, whichever is later, and the Owner is not, and
during the
preceding three months has not been, an affiliate of the Company. The Owner
also acknowledges that any future transfers of the Specified Securities must
comply with all applicable securities laws of the states of the United States
and other jurisdictions.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Initial Purchasers.
Dated:____________________
(Print the name of the Undersigned, as such term
is defined in the second paragraph of this
certificate.)
By:
Name:
Title:
(If the Undersigned is a corporation, partnership
or fiduciary, the title of the person signing on
behalf of the Undersigned must be stated.)
APPENDIX I
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- - ---------------------------
- - -----------------------------------------------------------------------------
- - -----------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
- - --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- - -------------------------------------------------------------------------------
attorney to transfer such Security on the books of the Company with full power
of substitution in the premises.
THE FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATES
FOR 7 7/8% SERIES A SENIOR SUBORDINATED NOTES DUE 2005
In connection with any transfer of this Security occurring prior to
the date which is the earlier of the date of an effective Registration Statement
or May 28, 1999, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
/ / (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act of 1933,
as amended, provided by Rule 144A thereunder.
or
/ / (b) this Security is being transferred other than in accordance
with (a) above and documents are being furnished which comply with
the conditions of transfer set forth in this Security and the
Indenture.
If none of the foregoing boxes is checked, the Trustee or other Security
Registrar shall not be obligated to register this Security in the name of any
Person other than the Holder hereof unless and until the conditions to any
such transfer of registration set forth herein and in Section 3.07 of the
Indenture shall have been satisfied.
Date:
------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
Signature Guarantee:
------------------------------
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
--------------------------------------------------------------
NOTICE: To be executed by an authorized signatory
APPENDIX II
FORM OF TRANSFEREE CERTIFICATE
I or we assign and transfer this Security to:
Please insert social security or other identifying number of assignee
Print or type name, address and zip code of assignee and irrevocably
appoint________________________________________________________________ as
Agent, to transfer this Security on the books of the Company. The Agent may
substitute another to act for him.
Dated Signed
--------------------- --------------------------------------
(Sign exactly as name appears on the other side of this Security)
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17 Ad-15]