Allocation of Debt. (1) Debt will be allocated as follows: (a) Debt secured by Retained Business Group Assets, or otherwise specifically associated with the Retained Business, will be assumed or retained by Hilton and/or the appropriate Retained Business Subsidiaries. As of May 31, 1998, such Debt comprises (x) IRB financings of the Atlanta Airport Hilton and the New Orleans Airport Hilton (in the amounts of $50 million and $32 million, respectively), (y) two mortgages on the New Orleans Hilton (in (1) All amounts set forth in this Section 2.08 are approximate and represent gross principal amounts. the amounts of $46 million and $53 million, respectively) and (z) the unsecured credit facility relating to the Hilton Hawaiian Village (in the amount of $480 million). (b) Debt secured by Gaming Group Assets, or otherwise specifically associated with the Gaming Business, will be assumed or retained by Gaming Co. and/or the appropriate Gaming Subsidiaries. As of May 31, 1998, such Debt comprises (i) $13.6 million of secured Debt relating to the Belle of Orleans riverboat, and (ii) $2.9 million of other Debt. (c) Except as provided by Section 2.08(f), Hilton's public bond Debt will be Retained Debt. As of May 31, 1998, such Debt consists of (i) $500 million of unsecured 5% convertible subordinated notes due 2006 (the "SUBORDINATED NOTES"), (ii) $1.4 billion of unsecured senior notes issued in 1997, with various interest rates and maturities ranging from 2002 to 2017 (the "1997 NOTES"), (iii) $267.6 million of unsecured 7.7% notes issued in 1992 and due in 2002 (the "1992 NOTES") and (iv) unsecured medium-term notes, Series A and Series B, due 1998 through 2001 ($135.1 million currently outstanding). (d) Debt under Hilton's credit agreement and related commercial paper program ("CREDIT AGREEMENT DEBT") will be refinanced by new credit facilities obtained by Hilton and Gaming Co., respectively. Except as provided by Section 2.08(g), Hilton will be responsible for refinancing an amount of the Credit Agreement Debt (the "RETAINED CREDIT AGREEMENT DEBT AMOUNT") equal to the amount set forth in Schedule 9 PLUS the amount of option cash-outs attributable to Retained Business Group employees, if any (which Debt shall constitute a part of the Retained Debt). Gaming Co. will be responsible for refinancing the remainder of the Credit Agreement Debt (which Debt shall constitute a part of the Assumed Debt). (e) In the event that the parties cannot fully and finally determine the Retained Credit Agreement Debt Amount as of the Distribution Date, the allocation of Debt as of such date shall be provisional (based on the best data available as of such date) and the parties shall make an appropriate "true up" adjustment as promptly as practicable after all facts necessary for a final determination of the Retained Credit Agreement Debt Amount can be ascertained. (f) Debt allocated to Gaming Co. in the Gaming Co. Intercompany Debt Allocation Agreement will be assumed by Gaming Co. and/or the appropriate Gaming Subsidiaries. The parties acknowledge that this agreement will approximately equalize the Debt between Hilton and Gaming Co. as of December 31, 1998, giving pro forma effect to the Distribution and the Merger assuming they had occurred on December 31, 1998, and will allocate any Debt increases or decreases subsequent to such date in accordance with Section 2.08(g); PROVIDED, HOWEVER, that if the Merger does not occur after the Distribution, the parties hereto shall reallocate the Debt between Hilton and Gaming Co. to approximately equalize it as of December 31, 1998, giving pro forma effect solely to the Distribution assuming it had occurred on December 31, 1998, and allocating any Debt increases or decreases subsequent to such date in accordance with Section 2.08(g). (g) Notwithstanding anything to the contrary herein, (i) any increases (decreases) in Debt incurred (repaid) after December 31, 1998 arising out of operations of the Retained Business (regardless of whether the Distribution has occurred) shall be attributed to Hilton and (ii) any increases (decreases) in Debt incurred (repaid) after December 31, 1998 arising out of operations of the Gaming Business (regardless of whether the Distribution has occurred) shall be attributed to Gaming Co.; and, to the extent such increases (decreases) are not already given effect in the definition of Net Cash and the allocations thereof pursuant to Section 2.07(d), such increases (decreases) shall increase or decrease (as applicable) the Debt allocated to Hilton or GamingCo. (as applicable).
Appears in 2 contracts
Samples: Merger Agreement (Hilton Hotels Corp), Distribution Agreement (Park Place Entertainment Corp)
Allocation of Debt. (1) Debt will be allocated as follows:
(a) Debt secured by Retained Business Group Assets, or otherwise specifically associated with the Retained Business, will be assumed or retained by Hilton and/or the appropriate Retained Business Subsidiaries. As of May 31November 30, 1998, such Debt comprises (xv) IRB financings of the Atlanta Airport Hilton and the New Orleans Airport Hilton (in the amounts of $50 million and $32 million, respectively), (yw) two mortgages on the New Orleans Hilton (in
(1) All amounts set forth in this Section 2.08 are approximate and represent gross principal amounts. the amounts of $46 million and $53 52 million, respectively) and ), (zx) the unsecured credit facility relating to the Hilton Hawaiian Village (in the amount of $480 million), (y) one mortgage on the Pointe Tapatio Hilton (in the amount of $48 million) and (z) $3 million of other Debt.
(b) Debt secured by Gaming Group Assets, or otherwise specifically associated with the Gaming Business, will be assumed or retained by Gaming Co. Park Place and/or the appropriate Gaming Subsidiaries. As of May 31November 30, 1998, such Debt comprises (i) $13.6 11 million of secured Debt relating to the Belle of Orleans riverboat, and (ii) $2.9 3 million of other Debt.
(c) Except as provided by Section 2.08(f2.08(d), Hilton's public bond Debt will be Retained Debt. As of May 31November 30, 1998, such Debt consists of (i) $500 million of unsecured 5% convertible subordinated notes due 2006 (the "SUBORDINATED NOTES"), (ii) $1.4 billion of of
(1) All amounts set forth in this Section 2.08 are approximate and represent gross principal amounts. unsecured senior notes issued in 1997, with various interest rates and maturities ranging from 2002 to 2017 (the "1997 NOTES"), (iii) $267.6 million of unsecured 7.7% notes issued in 1992 and due in 2002 (the "1992 NOTES") and (iv) unsecured medium-term notes, Series A and Series B, due 1998 through 2001 ($135.1 77.6 million currently outstanding).
(d) Debt allocated to Park Place in the Debt Assumption Agreement will be assumed by Park Place.
(e) Debt under Hilton's credit agreement and related commercial paper program ("CREDIT AGREEMENT DEBT") will be refinanced refinanced, in part, by a new credit facilities facility obtained by Hilton and Gaming Co., respectivelyPark Place. Except as provided by Section 2.08(g), Hilton will be responsible for refinancing retain an amount of the Credit Agreement Debt (the "RETAINED CREDIT AGREEMENT DEBT AMOUNT") equal to the amount set forth in Schedule 9 PLUS the amount of option cash-outs attributable to Retained Business Group employees, if any (which Debt shall constitute a part of the Retained Debt). Gaming Co. Park Place will be responsible for refinancing refinance the remainder of the Credit Agreement Debt (which Debt shall constitute a part of the Assumed Debt). The parties acknowledge that this Section 2.08(e) is intended to equalize the Debt (excluding any Debt -- or reductions thereof -- associated with the items referred to in Sections 2.08(e)(i) through (e)(viii) below (the "SPECIAL ALLOCATIONS")) between Hilton and Park Place as of December 31, 1998, giving pro forma effect to the Distribution and the Merger assuming they had occurred on December 31, 1998. Once equalized, the Debt of each company will then be adjusted according to the Special Allocations. Any Debt increases or decreases subsequent to December 31, 1998 will be allocated in accordance with Section 2.08(g). If the Merger does not occur after the Distribution, the parties hereto shall reallocate the Debt (excluding any Debt -- or reductions thereof -- associated with the Special Allocations) between Hilton and Park Place to equalize it as of December 31, 1998, giving pro forma effect solely to the Distribution assuming it had occurred on December 31, 1998. Once re-equalized, the Debt of each company will then be adjusted according to the Special Allocations. Any Debt increases or decreases subsequent to such date will be allocated in accordance with Section 2.08(g). The parties intend that all Special Allocations of cash shall be used to reduce the total Debt allocated to the subject company.
(ei) Debt equal to $83,274,300, representing the purchase price paid by Hilton and/or the relevant Retained Business Subsidiary in connection with the purchase of the Sheraton Xxxxxx Xxxxx, Debt equal to $2,000,000, representing the deposits paid by Hilton and/or the relevant Retained Business Subsidiary in connection with the contemplated purchase of the Radisson Plaza Hotel at Xxxx Center in Alexandria, Virginia ($1,500,000) and the Back Bay Hilton in Boston, Massachusetts ($500,000) and Debt equal to $25 million, representing the Lodging Corporate Cash shall be allocated to Hilton;
(ii) Debt equal to $620,000, representing the purchase price paid by Park Place and/or the relevant Gaming Subsidiary in connection with the purchase of 101 Xxxxxxx in Northfield, New Jersey, Debt equal to $206,597, representing the expenditures incurred by Park Place and/or the relevant Gaming Subsidiary in 1998 in connection with the construction of the pedestrian bridge between Caesars Palace and the Flamingo Hilton-Las Vegas, Debt equal to $1,000,000, representing the deposit paid by Park Place and/or the relevant Gaming Subsidiary in connection with the contemplated purchase of the Gulfstream IV, Debt equal to $9,630,000, representing the expenses paid by Hilton in connection with the offering and sale of Park Place's $400 million 77/8% Senior Subordinated Notes due 2005 (the "SENIOR SUBORDINATED NOTE OFFERING") and Debt equal to $25 million, representing the Gaming Corporate Cash shall be allocated to Park Place;
(iii) cash equal to $22,892,054 representing 100% of the cash value assigned to the Flamingo Casino - Kansas City shall be allocated to Park Place;
(iv) subject to the true-up provision set forth in Section 2.08(f) below, cash equal to (A) 50% of the following total (1) the book balances of Unrestricted Cash of Company (as defined in the Merger Agreement), less (2) cash unavailable for general corporate purposes (e.g., cash pledged to secure assets), (3) cash reserved for the payment of trade payables, less (4) cash generated from the sale of the assets pursuant to the Asset Purchase Agreement dated October 15, 1998 by and between BL Development Corp. and the Robinsonville Commerce Utility District, plus (5) cash in an amount equal to Trade accounts receivable, and (B) 50% of the excess (if any) of any insurance proceeds received by Company or its affiliates relating to all damage claims arising from Hurricane Georges in excess of any related property damage expenditures, shall be allocated to Hilton;
(v) cash equal to $9,010,954, representing 50% of the Tax benefit expected to be realized by (1) the consolidated group of which Park Place is the common parent in 1999 resulting from the payment of tender and defeasance premiums and related expenses in connection with the tender offer for the First Mortgage Notes (as defined in the Merger Agreement) and (2) the consolidated group of which Park Place is the common parent in 1999 resulting from the payment of defeasance premiums and related expenses in connection with the defeasance of the Senior Notes (as defined in the Merger Agreement), shall be allocated to Hilton;
(vi) cash equal to $1,094,089, representing a portion of the present value (assuming a discount rate of 12%) of the Tax benefits expected to be realized by Park Place in the years 1999 through and including 2003 resulting from the payment of fees and expenses in connection with the Five Year Credit Agreement dated as of the date 18 hereof by and between, among others, Park Place and Bank of America National Trust and Savings Association, as Administrative Agent ("BOA") and the Short Term Credit Agreement dated as of December 31, 1998 by and between, among others, Park Place and BOA (collectively, the "PARK PLACE CREDIT FACILITY"), shall be allocated to Hilton;
(vii) Debt equal to $3,907,828, representing a portion of the fees and expenses paid by Park Place in connection with the Park Place Credit Facility that are included in the calculation of the Total Debt of Company (as defined in the Merger Agreement) shall be allocated to Hilton; and
(viii) cash equal to $1,250,000, representing 50% of the credit relating to the Xxxxxxx Xxxxx, shall be allocated to Hilton.
(f) In the event that the parties cannot fully and finally determine the Retained Credit Agreement allocation of Debt Amount as set forth in this Section 2.08 as of the Distribution Date, the allocation of Debt as of such date shall be provisional (based on the best data available as of such date) and the parties shall make an appropriate "true up" adjustment as promptly as practicable (but in no event later than February 19, 1999) after all facts necessary for a final determination of the Retained Credit Agreement Debt Amount can be ascertained.
(f) Debt allocated to Gaming Co. in the Gaming Co. Intercompany Debt Allocation Agreement will be assumed by Gaming Co. and/or the appropriate Gaming Subsidiaries. The parties acknowledge that this agreement will approximately equalize the Debt between Hilton and Gaming Co. as of December 31, 1998, giving pro forma effect to the Distribution and the Merger assuming they had occurred on December 31, 1998, and will allocate any Debt increases or decreases subsequent to such date in accordance with Section 2.08(g); PROVIDED, HOWEVER, that if the Merger does not occur after the Distribution, the parties hereto shall reallocate the Debt between Hilton and Gaming Co. to approximately equalize it as of December 31, 1998, giving pro forma effect solely to the Distribution assuming it had occurred on December 31, 1998, and allocating any Debt increases or decreases subsequent to such date in accordance with Section 2.08(g).
(g) Notwithstanding anything to the contrary herein, (i) any increases (decreases) in Debt incurred (repaid) after December 31, 1998 arising out of operations of the Retained Business (regardless of whether the Distribution has occurred) shall be attributed to Hilton and (ii) any increases (decreases) in Debt incurred (repaid) after December 31, 1998 arising out of operations of the Gaming Business (regardless of whether the Distribution has occurred) shall be attributed to Gaming Co.Park Place; and, to the extent such increases (decreases) are not already given effect in the definition of Net Cash and the allocations thereof pursuant to Section 2.07(d), such increases (decreases) shall increase or decrease (as applicable) the Debt allocated to Hilton or GamingCo. Park Place (as applicable).
Appears in 2 contracts
Samples: Distribution Agreement (Hilton Hotels Corp), Distribution Agreement (Park Place Entertainment Corp)
