Exhibit 4.4
AMENDMENT NO.1 TO FIVE YEAR CREDIT AGREEMENT
This Amendment No. 1 to Five Year Credit Agreement dated as of
August 31, 1999 is entered into with reference to the Five Year Credit
Agreement (the "Credit Agreement") dated as of December 31, 1998, among PARK
PLACE ENTERTAINMENT CORPORATION, the Lenders, Syndication Agent and
Documentation Agents referred to therein, and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Administrative Agent. Capitalized terms used in
this Amendment and not otherwise defined herein are used with the meanings
set forth for those terms in the Credit Agreement.
1. SECTION 1.01. Section 1.01 of the Credit Agreement is hereby
amended to so that the following definitions read in full as follows (adding
those definitions not now appearing therein, and amending now appearing
definitions as set forth below):
"Caesars" means, Xxxxxxx Xxxxx, Inc., a Florida corporation.
"Caesars Acquisition" means the acquisition by the Borrower of
Caesars, Sheraton Tunica, and Starwood's interests in Metropolitan
Entertainment Group, a Canadian partnership, pursuant to the Caesars
Acquisition Agreement.
"Caesars Acquisition Agreement" means the Stock Purchase Agreement
dated as of April 27, 1999 among Starwood, ITT Sheraton Corporation,
Starwood Canada Corp, Caesars, Sheraton Desert Inn Corporation,
Sheraton Tunica and the Borrower.
"Combined Pro Forma Financial Statements" means the combined pro
forma financial statements of the Gaming Segment of Hilton and the
Grand Assets for the twelve month period ended December 31, 1998
heretofore delivered by the Borrower to the Administrative Agent and
each Lender.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period before (i) income taxes, (ii) interest expense,
(iii) depreciation and amortization, (iv) minority interest, (v)
extraordinary losses or gains, (vi) Pre-Opening Expenses, (vii)
transactional expenses associated with the Spin-Off Transaction, and
(viii) nonrecurring non-cash charges, PROVIDED that, in calculating
"Consolidated EBITDA":
(a) for that portion of any period occurring prior to
December 31, 1998, "Consolidated EBITDA" shall be computed on the
basis of the operating results of the Gaming Segment and the Grand
Assets for such periods reflected in the Combined Pro Forma
Financial Statements.
(b) the operating results of each New Project which
commences operations and records not less than one full fiscal
quarter's operations during the relevant period shall be
annualized; and
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(c) Consolidated EBITDA shall be adjusted, on a pro forma
basis, to include the operating results of each resort or casino
property acquired by the Borrower and its Consolidated
Subsidiaries during the relevant period and to exclude the
operating results of each resort or casino property sold or
otherwise disposed of by the Borrower and its Subsidiaries, or
whose operations are discontinued during the relevant period.
"Consolidated Interest Expense" means, for any period, net interest
expense of the Borrower and its Consolidated Subsidiaries for such
period, determined in accordance with generally accepted accounting
principles, PROVIDED that for that portion of any period occurring
prior to December 31, 1998, "Consolidated Interest Expense" shall be
computed on the basis of the net interest expense allocated to the
Borrower and its Consolidated Subsidiaries and shown on the Combined
Pro Forma Financial Statements.
"Consolidated Net Income" means, for any period, the consolidated
net income of the Borrower and its Consolidated Subsidiaries for
such period, provided that for that portion of any period occurring
prior to December 31, 1998, such consolidated net income shall be
the consolidated net income of the Gaming Segment and the Grand
Assets for such periods reflected in the Combined Pro Forma
Financial Statements.
"Other Credit Agreements" means, collectively, the $2,000,000,000
Short Term Credit Agreement and the $1,000,000,000 Short Term Credit
Agreement, each dated as of August 31, 1999 among the Borrower, the
lenders referred to therein, and Bank of America, N.A., as
Administrative Agent, in each case as at any time amended.
"Pre-Opening Expenses" means, with respect to any fiscal period, the
amount of expenses (OTHER THAN Consolidated Interest Expense)
incurred with respect to capital projects which are classified as
"pre-opening expenses" on the applicable financial statements of the
Borrower and its Subsidiaries for such period (or, with respect to
that portion of any period occurring prior to December 31, 1998, the
Combined Pro Forma Financial Statements), prepared in accordance
with generally accepted accounting principles.
"Sheraton Tunica" means Sheraton Tunica Corporation, a Delaware
corporation.
"Starwood" means Starwood Hotels & Resorts Worldwide, Inc., a
Maryland corporation.
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2. SECTION 4.04. Section 4.04 of the Credit Agreement is hereby
amended to read in full as follows:
"4.04 FINANCIAL INFORMATION.
(a) The Combined Pro Forma Financial Statements fairly present in
all material respects, in conformity with generally accepted
accounting principles, the pro forma combined financial position of
the Gaming Segment and the divisions of Grand owning the Grand
Assets as of the dates and for the periods therein stated.
(b) Since December 31, 1998, there has been no material adverse
change in the business, financial position, results of operations or
prospects of the Gaming Segment and the Grand Assets, or in the
operations of the Borrower and its Consolidated Subsidiaries,
considered as a whole."
3. SECTION 4.05. Section 4.05 of the Credit Agreement is hereby
amended to read in full as follows:
"4.05 LITIGATION. Except as disclosed in the Borrower's form 10-K
report for the year ended December 31, 1998 or in its 10-Q reports
dated March 31, and June 30, 1999, there is no action, suit or
proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a reasonable possibility
of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of
operations of the Borrower and its Consolidated Subsidiaries or
which in any manner draws into question the validity or
enforceability of this Agreement or the Notes. Without limiting the
generality of the foregoing, with respect to those litigation
matters described above as reported in the Borrower's aforementioned
form 10-K or 10-Q reports, (a) the disclosure contained therein was
accurate as of the date of thereof, and (b) since such date there
has been no material adverse development."
4. AMENDMENT AND WAIVER OF SECTION 4.07. Section 4.07 of the Credit
Agreement is hereby amended to read in full as follows:
"4.07 TAXES. The United States Federal income tax returns of Hilton
and its Subsidiaries and of Grand and its Subsidiaries have been
filed through the fiscal year ended December 31, 1997. The Borrower
and its Significant Subsidiaries have filed all United States
Federal income tax returns and other material tax returns which are
required to be filed by them and have paid or agreed to settlements
of all taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except for
such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided. The charges, accruals
and reserves on the books of the Borrower and its Significant
Subsidiaries in respect of taxes or other governmental charges are,
in the opinion of the Borrower, adequate."
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The Lenders hereby waive any inaccuracy of the representations of the Borrower
under the former text of Section 4.07. This is a one time waiver only, the
Lenders shall be entitled to rely and insist upon the accuracy of the
representations contained in Section 4.07, as hereby amended.
5. SECTION 4.11. The second sentence of Section 4.11 of the Credit
Agreement is hereby amended to read in full as follows:
"The Borrower has disclosed to the Lenders in writing or by means of
its filings with the Securities and Exchange Commission any and all
facts which materially and adversely affect or may affect (to the
extent the Borrower can now reasonably foresee), the business,
operations or financial position of the Borrower and its
Consolidated Subsidiaries, taken as a whole, or the ability of the
Borrower to perform its obligations under this Agreement."
6. SECTION 5.01. The cross references to Sections 5.01(a) and (b)
contained in Section 5.01(d) of the Credit Agreement are hereby amended to be a
reference to Section 5.01(b) and (c). The cross reference to Section 5.01(a)
contained in Section 5.01(e) of the Credit Agreement is hereby amended to be a
reference to Section 5.01(b).
6A. SECTION 5.06. Clauses (c) and (d) of Section 5.06 of the Credit
Agreement are hereby amended to read in full as follows:
"(c) any Lien on any asset (other than Liens created to
finance or refinance the cost of acquiring the equity interests and
other assets acquired or to be acquired pursuant to the Caesars
Acquisition Agreement) securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring or
constructing such asset (it being understood that, for this purpose,
the acquisition of a Person is also an acquisition of the assets of
such Person); PROVIDED THAT the Lien attaches to such asset
concurrently with or within 180 days after the acquisition thereof,
or such longer period, not to exceed 12 months, due to the
Borrower's inability to retain the requisite governmental approvals
with respect to such acquisition; provided further that, in the case
of real estate, (i) the Lien attaches within 12 months after the
latest of the acquisition thereof, the completion of construction
thereon or the commencement of full operation thereof and (ii) the
Debt so secured does not exceed the sum of (x) the purchase price of
such real estate plus (y) the costs of such construction;
(d) any Lien on any asset of any corporation or other
business entity (including without limitation the Persons acquired
pursuant to the Caesars Acquisition Agreement) existing at the time
such corporation or other business entity is merged or consolidated
with or into the Borrower or a Subsidiary and not created in
contemplation of such event;"
7. SECTION 5.09. Section 5.09 of the Credit Agreement is hereby
amended to read in full as follows:
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"5.09 USE OF PROCEEDS. The proceeds of the Loans made under
this Agreement will be used by the Borrower for general corporate
purposes, including but not limited to (a) on the Effective Date,
the refinancing of obligations under the Hilton Credit Agreement and
transactional and other expenses associated with the Spin-Off
Transaction, and (b), thereafter, for working capital (including
without limitation refinancing of obligations under either of the
Other Credit Agreements), capital expenditures, the back stop of
commercial paper and the acquisition of full-service hotel\casino,
casino and casino\resort properties (including without limitation
the Caesars Acquisition). None of such proceeds will be used,
directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U other than "margin stock" issued
by the Borrower which is retired upon purchase or for any purpose
which violates Section 5.08."
8. AMENDMENT TO LEVERAGE RATIO. Section 5.10 of the Credit Agreement
is hereby amended to read in full as follows:
"5.10 LEVERAGE RATIO. The Leverage Ratio will not, as of the last
day of any fiscal quarter of the Borrower described in the matrix
below, exceed the ratio set forth opposite that fiscal quarter:
FISCAL QUARTERS ENDING MAXIMUM RATIO
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Effective Date through
September 30, 1999 4.75:1.00
December 31, 1999 through and 5.25:1.00
including June 30, 2000
September 30, 2000 and
December 31, 2000 4.75:1.00
Later Fiscal Quarters 4.50:1.00."
9. AMENDMENT TO SCHEDULE 2. The definition of "Level I Status" set
forth in the Credit Agreement is hereby amended to read in full as follows:
"Level I Status" exists at any date if, at such date, either (x) the
Debt Rating assigned by S&P is A- or higher or the Debt Rating
assigned by Xxxxx'x is A3 or higher, or (y) the Applicable Leverage
Ratio is less than 1.50:1."
The definition of "Margin Adjustment" set forth on Schedule 2 to the Credit
Agreement is hereby amended to read in full as follows:
"Margin Adjustment" means, (a) as of any date of determination when
the Applicable Leverage Ratio is in excess of 3.50:1 but equal to or
less than 4.00:1, an incremental
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interest margin of 0.075% per annum to be added to the Euro-Dollar
Margin in determining the rate applicable to Euro-Dollar Loans, (b)
as of any date of determination when the Applicable Leverage Ratio
is in excess of 4.00:1 but equal to or less than 4.75:1, an
incremental interest margin of 0.150% per annum to be added to the
Euro-Dollar Margin in determining the rate applicable to Euro-Dollar
Loans, (c) as of any date of determination when the Applicable
Leverage Ratio is in excess of 4.75:1, an incremental interest
margin of 0.225% per annum to be added to the Euro-Dollar Margin in
determining the rate applicable to Euro-Dollar Loans, and (d) as of
any date of determination when the Applicable Leverage Ratio is less
than 2.00:1, a deduction of 0.075% per annum to be subtracted from
the Euro-Dollar Margin in determining the rate applicable to
Euro-Dollar Loans."
10. CONFIDENTIALITY. The Lenders hereby agree to hold any confidential
information that they may receive from the Borrower or its Subsidiaries pursuant
to this Agreement in confidence, EXCEPT for disclosure: (a) to their respective
Affiliates and to other parties to this Agreement; (b) to legal counsel and
accountants for any such party; (c) to other professional advisors to any such
party, provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this paragraph or has
notified such professional advisors of the confidentiality of such information;
(d) to regulatory officials having jurisdiction over that Lender; (e) to any
Gaming Board; (f) as required by law or legal process (PROVIDED THAT the Lender
shall endeavor, to the extent it may do so under applicable law, to give the
Borrower reasonable prior notice thereof to allow the Borrower to seek a
protective order) or in connection with any legal proceeding to which that
Lender and the Borrower are adverse parties; and (g) to another financial
institution in connection with a dis-position or proposed disposition to that
financial institution of all or part of that Lenders interests hereunder or a
participation interest in its Note, provided that the recipient has accepted
such information subject to a confidentiality agreement substantially similar to
this Section. For purposes of the foregoing, "confidential information" shall
mean any information respecting the Borrower or its Subsidiaries reasonably
considered by them to be confidential, OTHER THAN (i) information previously
filed with any governmental agency and available to the public, (ii) information
previously published in any public medium from a source other than, directly or
indirectly, that Lender, and (iii) information previously disclosed by the
Borrower or its Subsidiaries to any person not associated therewith without a
confidentiality agreement substantially similar to this Section. Nothing in this
Section shall be construed to create or give rise to any fiduciary duty on the
part of any Lender.
11. WITHHOLDING CERTIFICATES. Each Lender who is required pursuant to
the Credit Agreement to deliver an IRS form 4224 or form 1001 to the
Administrative Agent or the Borrower agrees that it shall deliver in lieu
thereof IRS form W-8 ECI or such other successor form as may promulgated by the
Internal Revenue Service from time to time.
12. AMENDED EXHIBITS. The form of the Compliance Certificate and the
form of the Pricing Certificate are hereby amended to be in the forms attached
hereto as Exhibits A and C respectively.
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13. CONDITION PRECEDENT. The effectiveness of this Amendment shall be
conditioned upon the receipt by the Administrative Agent of written consents
hereto executed by the Required Lenders.
14. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
to the Administrative Agent and the Banks that, as of the date of this
Amendment, no Default or Event of Default has occurred and remains continuing.
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15. CONFIRMATION. In all other respects, the terms of the Credit
Agreement and the other Loan Documents are hereby confirmed.
IN WITNESS WHEREOF, Borrower and the Administrative Agent have
executed this Amendment as of the date first written above by their
duly authorized representatives.
PARK PLACE ENTERTAINMENT CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, CFA,
Vice President and Assistant Treasurer
BANK OF AMERICA, N.A. (formerly known as Bank
of America National Trust and Savings Association),
as Administrative Agent on behalf of the Required
Lenders
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, Vice President
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