Penn National Gaming, Inc., as Company,
each of the Subsidiary Guarantors named herein
and
State Street Bank and Trust Company,
Trustee
___________________________
FIRST SUPPLEMENTAL INDENTURE
Dated as of May 19, 1999
Supplementing the Indenture Dated as of December 17, 1997
___________________________
$80,000,000
10 5/8% Senior Notes due 2004, Series B
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FIRST SUPPLEMENTAL INDENTURE, dated as of May 19, 1999, between Penn
National Gaming, Inc., a Pennsylvania corporation (the "Company"), each of the
Subsidiary Guarantors that are signatories to this Supplemental Indenture and
State Street Bank and Trust Company, as trustee (the "Trustee").
WHEREAS, the Company and the Trustee executed and delivered that certain
indenture, dated as of December 17, 1997 (the "Indenture"), providing for the
issuance thereunder by the Company, and the authentication and delivery by the
Trustee, of the Company's 10 5/8% Senior Notes due 2004 (the "Notes"). Any
capitalized terms used herein and not otherwise defined shall have the meanings
given thereto in the Indenture.
WHEREAS, Section 9.02 of the Indenture authorizes the Company and the
Trustee, with the consent of the holders of not less than a majority in the
aggregate principal amount of then outstanding Notes excluding Notes held by the
Company and its affiliates (the "Requisite Consent"), to enter into a
supplemental indenture, except for the matters listed in Section 9.02 which
require the consent of each of the Holders effected thereby.
WHEREAS, the Company has solicited all registered holders of record of the
Notes as of the close of business on May 7, 1999 and obtained at least the
Requisite Consent of such holders.
WHEREAS, the Company and the Trustee have determined to amend and
supplement the Indenture in the manner described below, and all acts and
proceedings required by law and by the Indenture necessary to authorize and
constitute this Supplemental Indenture, and the amendments set forth herein, a
valid and binding agreement in accordance with the terms hereof, have been done
and taken.
WHEREAS, the Company has formed Penn National GSFR, Inc., a New Jersey
corporation and wholly-owned Restricted Subsidiary of the Company (AGSFR@);
WHEREAS, following the execution of this Supplemental Indenture, the
Company expects GSFR to have total consolidated assets with a book value in
excess of $500,000;
WHEREAS, consistent with the provisions of Section 4.18 of the Indenture,
GSFR shall herein execute and deliver this Supplemental Indenture for purposes
of becoming a Subsidiary Guarantor under the Indenture;
NOW, THEREFORE, in consideration of the foregoing, the Company covenants
and agrees with the Trustee, for the equal and proportionate benefit of the
respective holders from time to time of the Notes, as follows:
1. Modification or Addition of Certain Definitions in Section 1.01 of the
Indenture. The following definitions are hereby added to Section 1.01 of the
Indenture:
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AContingent Notes@ means the (i) $5,000,000 Contingent Promissory Note,
(ii) $3,000,000 Contingent Promissory Note and (iii) $2,000,000 Contingent
Promissory Note, each (w) dated January 28, 1999, (x) made payable to the order
of International Thoroughbred Breeders, Inc., a Delaware corporation, as agent,
(y) executed and delivered by GS Park Racing, L.P., a New Jersey limited
partnership, and FR Park Racing, L.P., a New Jersey limited partnership, and (z)
as in effect on such date, and any Refinancings thereof of (i), (ii) or (iii)
(provided that such Refinancing does not have any of the results specified in
clause (1) of the definition herein of ARefinancing Indebtedness@).
ADevelopment Costs@ means the costs to the NJ Entities to develop or
further develop NJ Racing or Gaming Locations incurred after May 19, 1999.
A40%-Owned Entity@ means (i) any corporation of which the outstanding
Capital Stock having at least 40% of the votes entitled to be cast in the
election of directors under ordinary circumstances shall at the time be owned,
directly or indirectly, by the Company or a Wholly-Owned Restricted Subsidiary,
or (ii) any other Person of which as least 40% of the voting interest under
ordinary circumstances is at the time, directly or indirectly, owned by the
Company or a Wholly-Owned Restricted Subsidiary.
AGarden State Park Lease@ means the Lease Agreement dated January 28, 1999
between Garden State Race Track, Inc., a New Jersey corporation and GS Park
Racing, L.P., a New Jersey limited partnership, and all amendments and
supplements thereto that do not increase or result in an increase in the rental
or other financial obligations of GS Park Racing, L.P. or any other NJ Entity,
pertaining to the lease by GS Park Racing, L.P. of the premises known as Garden
State Park in Cherry Hill, New Jersey.
ANJ Entities@ means Pennwood Racing, Inc., a Delaware corporation, GS Park
Racing, L.P., a New Jersey limited partnership, FR Park Racing, L.P., a New
Jersey limited partnership, GS Services, L.P., a New Jersey limited partnership,
FR Services, L.P., a New Jersey limited partnership, and each of their
subsidiaries, affiliates, successors and assigns, in each case, if and for so
long as such Person is and remains at least a 40%-Owned Entity.
ANJ Racing and Gaming Activities@ means the purchase, improvement and
operation (including, but not limited to, any expanded operations such as
telephone wagering and off-track wagering) of the NJ Racing or Gaming Locations
by the NJ Entities.
ANJ Racing or Gaming Locations@ means Freehold Raceway in Freehold, New
Jersey and Garden State Park in Cherry Hill, New Jersey and such other locations
within the State of New Jersey owned, leased or operated, now or hereafter, by
the NJ Entities.
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APut Agreement@ means the Subordination, Nondisturbance, Attornment and Put
Option Agreement dated January 28, 1999, between Credit Suisse First Boston
Mortgage Capital LLC, a Delaware limited liability company, and GS Park Racing,
L.P., a New Jersey limited partnership, as in effect on such date.
APut Obligations@ means the obligations of GS Park Racing, L.P., a New
Jersey limited partnership, under Section 5 of the Put Agreement.
2. Amendment of the definition of APermitted Investments@. The definition
of APermitted Investments@ as contained within Section 1.01 of the Indenture is
hereby amended by (i) deleting the word Aand@ and replacing it with a semicolon
before clause (x), (ii) replacing the period at the end of clause (x) with A;
and@ and (iii) adding a new clause (xi) to such term as follows:
(xi) any Investment in the NJ Entities for the NJ Racing and Gaming
Activities at the NJ Racing or Gaming Locations (A) in an aggregate Investment
amount (including the principal amount of Indebtedness guaranteed as provided by
clause (xv) of the definition of Permitted Indebtedness) not to exceed at any
one time outstanding: (1) $8.75 million to fund (or to replenish moneys or
liquidity used to fund) up to one-half of the Put Obligations, (2) $5 million to
fund (or to replenish moneys or liquidity used to fund) up to one-half of
Contingent Note principal payments and (3) $4 million to fund (or to replenish
moneys or liquidity used to fund) Development Costs; provided, however, that the
amounts under the foregoing clauses (1), (2) and (3) shall be reduced on a
dollar for dollar basis by the amount of any guarantee of Put Obligations,
Contingent Notes or Development Costs, respectively, of the Company or any
Restricted Subsidiary on behalf of the NJ Entities that subsequent to May 19,
1999, expires or terminates without the Company or any Restricted Subsidiary
having advanced, paid or contributed to the NJ Entities or guarantee beneficiary
any amounts with respect to such obligations, and (B) consisting of a guarantee
of the obligations of GS Park Racing, L.P. under the Garden State Park Lease.
3. Amendment of the definition of APermitted Indebtedness@. The definition
of APermitted Indebtedness@ as contained within Section 1.01 of the Indenture is
hereby amended by (i) deleting the word Aand@ and replacing it with a semicolon
before clause (xiv), (ii) replacing the period at the end of clause (xiv) with
A; and@ and (iii) adding a new clause (xv) to such term as follows:
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(xv) any Indebtedness (A) of the Company or any Restricted Subsidiary
consisting of the guarantees of Indebtedness of the NJ Entities for the NJ
Racing and Gaming Activities at the NJ Racing or Gaming Locations in an amount
not to exceed at any one time outstanding: (1) $8.75 million or one-half
(whichever is less) of outstanding Put Obligations, (2) $5 million or one-half
(whichever is less) of the outstanding principal balance of the Contingent
Notes, and (3) $4 million of Development Costs; provided, however, that the
amounts under the foregoing clauses (1), (2) and (3) shall be reduced on a
dollar for dollar basis by the amount of any Investment by the Company or any
Restricted Subsidiary in any NJ Entities made (x) under subclause (1), (2) or
(3) (respectively) of clause (xi) of the definition herein of APermitted
Investments@ or (y) under Section 4.10 for purposes described in such subclause
(1), (2) or (3) (respectively), or (B) consisting of a guarantee of the
obligations of GS Park Racing, L.P. under the Garden State Park Lease.
4. Amendment of the definition of APermitted Liens@. The definition of
APermitted Liens@ as contained within Section 1.01 of the Indenture is hereby
amended by (i) deleting the word Aand@ and replacing it with a semicolon before
clause (xv), (ii) replacing the period at the end of clause (xv) with A; and@
and (iii) adding a new clause (xvi) to such term as follows:
(xvi) any Liens on the capital stock of or other ownership interests in the
NJ Entities held by the Company or any Restricted Subsidiary to secure
Indebtedness of the NJ Entities not prohibited hereunder.
5. Amendment to the Obligation to become a Subsidiary Guarantor. Section
4.18 of the Indenture is hereby amended to add a new sentence at the end of this
section as follows:
The provisions of this Section 4.18 shall only apply to a NJ Entity in the
event such NJ Entity becomes a Wholly Owned Restricted Subsidiary.
6. Addition of GSFR as a Subsidiary Guarantor. Pursuant to Section 4.18 of
the Indenture, GSFR hereby agrees to unconditionally guarantee all of the
Company=s obligations under the Notes and the Indenture, as amended, on the
terms set forth in the Indenture.
7. Full Force and Effect. The Indenture, as amended and supplemented by
this First Supplemental Indenture, shall be and remain in full force and effect
as of the date hereof; provided, however, in the event that the Company does not
acquire an ownership interest in the NJ Entities, the amendments set forth in
Sections 1, 2, 3, 4, 5 and 6 of this First Supplemental Indenture shall cease to
have effect and shall be void and this First Supplemental Indenture shall
thereupon have no effect on the Indenture.
8. Governing Law. This First Supplemental Indenture shall be governed by
and construed in accordance with the laws of the State of New York.
9. Duplicate Originals. This First Supplemental Indenture may be executed
in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
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10. Trustee Disclaimer. The Trustee has accepted the amendment of the
Indenture effected by this First Supplemental Indenture and agrees to execute
the trust created by the Indenture as hereby amended, but only upon the terms
and conditions set forth in the Indenture, including the terms and provisions
defining and limiting the liabilities and responsibilities of the Trustee, and
without limiting the generality of the foregoing, the Trustee shall not be
responsible in any manner whatsoever for or with respect to any of the recitals
or statements contained herein, all of which recitals or statements are made
solely by the Company and the Subsidiary Guarantors, or for or with respect to
(a) the validity or sufficiency of this First Supplemental Indenture or any of
the terms or provisions hereto, (b) the proper authorization hereby by the
Company and the Subsidiary Guarantors by corporate action or otherwise, (c) the
due execution hereof by the Company and the Subsidiary Guarantors, (d) the
consequences (direct or indirect and whether deliberate or inadvertent) of any
amendment herein provided for, and the Trustee makes no representation with
respect to any such matters and (e) the validity or sufficiency of the
Solicitation or the consent solicitation materials or procedure in connection
therewith.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the date first written above.
COMPANY:
PENN NATIONAL GAMING, INC.
By: /s/ William J. Bork
Name: William J. Bork
Title: President
SUBSIDIARY GUARANTORS
MOUNTAINVIEW THOUROUGHBRED RACING
ASSOCIATION, as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Chief Financial Officer
PENNSYLVANIA NATIONAL TURF CLUB, INC.,
as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Treasurer
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PENN NATIONAL SPEEDWAY, INC.,
as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Treasurer
PENN NATIONAL HOLDING COMPANY,
as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Treasurer
PENN NATIONAL GAMING OF WEST VIRGINIA,
INC., as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Treasurer
STERLING AVIATION INC., as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Treasurer
POCONO DOWNS, INC., as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Assistant Secretary
NORTHEAST CONCESSIONS, INC.,
as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Assistant Secretary
186
THE DOWNS OFF-TRACK WAGERING, INC.,
as Subsidiary Guarantor
By: /s/ Joseph A. Lashinger
Name: Joseph A. Lashinger
Title: President and Treasurer
THE DOWNS RACING, INC., as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Treasurer
PENN NATIONAL GAMING OF INDIANA,
as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Treasurer
PNGI POCONO, as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Treasurer
PENN NATIONAL GSFR, INC., as Subsidiary Guarantor
By: /s/ Robert S. Ippolito
Name: Robert S. Ippolito
Title: Treasurer
TRUSTEE:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Mark A. Forgetta
Name: Mark A. Forgetta
Title: Vice President
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