AUTOTOTE CORPORATION
$110,000,000 10 7/8% Series B Senior Notes due 2004
FIRST SUPPLEMENTAL INDENTURE
Dated as of August 5, 2000
to
INDENTURE
Dated as of July 28, 1997
----------------------
The Bank of New York, Trustee
FIRST SUPPLEMENTAL INDENTURE, dated as of August 5, 2000, among
Autotote Corporation, a Delaware corporation (the "Company"), Autotote
Enterprises Inc., Marvin H. Sugarman Productions, Inc., Autotote Keno Corp.,
Autotote Systems Inc., Autotote International Inc., Autotote Management Corp.
and Autotote Lottery Corp. (collectively, the "Guarantors") and The Bank of New
York, a New York banking corporation, as Trustee (the "Trustee").
WHEREAS, the Company, the Guarantors and IBJ Schroder Bank & Trust
Company, as trustee, executed an Indenture, dated as of July 28, 1997 (the
"Indenture"), in respect of $110,000,000 aggregate principal amount of 10 7/8%
Senior Notes due 2004;
WHEREAS, the Trustee is the successor to IBJ Schroder Bank & Trust
Company, as trustee, under the Indenture;
WHEREAS, for all purposes of this First Supplemental Indenture,
except as otherwise defined or unless the context otherwise requires, terms used
in capitalized form in this First Supplemental Indenture and defined in the
Indenture have the meanings specified in the Indenture;
WHEREAS, for all purposes of this First Supplemental Indenture, the
terms "Statement," "Tender Offer" and "Requisite Consents" shall have the
meanings ascribed to such terms in the amendments to the Indenture provided for
in Section 1.1 of this First Supplemental Indenture.
WHEREAS, Section 9.02 of the Indenture permits the Company and the
Trustee, with the written consent of the Holders of at least 75% of the
outstanding aggregate principal amount of Securities, to amend or supplement the
Indenture or the Securities as hereinafter provided;
WHEREAS, all conditions and requirements necessary to make this
First Supplemental Indenture a valid, binding and legal instrument in accordance
with its terms have been performed and fulfilled and the execution and delivery
hereof have been in all respects duly authorized.
NOW, THEREFORE, in consideration of the above premises, each party
agrees, for the benefit of the other parties and for the equal and ratable
benefit of the Holders of the Securities, as follows:
ARTICLE I
AMENDMENTS
Section 1.1 Interim Amendments. The Indenture is hereby amended as
follows:
(a) The following definitions are hereby added to Section 1.01 of
the Indenture:
"New Indebtedness" means Indebtedness of the Company and/or its
Restricted Subsidiaries in an aggregate principal amount not to exceed,
without duplication, $200,000,000 (or the economic equivalent of
$200,000,000 if such Indebtedness is in a currency other than United
States Dollars) at any one time outstanding (and any guarantees of (or
other credit support in respect of) such Indebtedness by the Company or
any of its Subsidiaries), provided that (i) an amount not less than the
net proceeds to the Company and its Restricted Subsidiaries of such
Indebtedness is, upon the incurrence of such Indebtedness, placed into an
escrow account (the "Escrow Account") pursuant to an escrow agreement (the
"Escrow Agreement") with an escrow agent (the "Escrow Agent") that is a
commercial bank or trust company which shall have (or, in the case of a
commercial bank or trust company included in a bank holding company
system, the related bank holding company shall have) a combined capital
and surplus of at least $100,000,000 as set forth in its most recent
published annual report of condition and shall be subject to supervision
or examination by federal or state authorities, (ii) the Escrow Agreement
provides, inter alia, that the amounts held in escrow (A) may be invested
in cash and Cash Equivalents, (B) must, in the event that the Tender Offer
is terminated or withdrawn prior to acceptance for payment of Securities,
the tender of which represents the Requisite Consents, be used (within no
later than 45 days after such termination or withdrawal), together with
any other necessary funds to be supplied by the Company and/or its
Subsidiaries, to redeem or repay such Indebtedness at a redemption or
repayment price not in excess of 101% of the principal amount thereof plus
accrued and unpaid interest thereon to the date of redemption or repayment
and (C) so long as any of such Indebtedness is outstanding, may not be
used for any purpose other than the redemption or repayment of such
Indebtedness (as contemplated by the preceding clause (B)) unless and
until an Officers' Certificate has been delivered to the Escrow Agent
stating that Securities, the tender of which represents the Requisite
Consents, have been accepted for payment pursuant to the Tender Offer.
"Requisite Consents" shall have the meaning ascribed to such term in
the Statement.
"Statement" means the Company's Offer to Purchase and Consent
Solicitation Statement dated July 24, 2000 (as it may be supplemented and
amended from time to time).
"Tender Offer" means the Company's offer to purchase for cash, upon
the terms and subject to the conditions set forth in the Statement and in
the accompanying Consent and Letter of Transmittal (as it may be
supplemented and amended form time to time), all of the outstanding
Securities.
(b) Article Four of the Indenture is hereby amended by adding
thereto a new Section 4.20 reading in its entirety as follows:
SECTION 4.20 New Indebtedness.
Anything in this Indenture to the contrary notwithstanding, (i) the
Company and/or its Subsidiaries may incur the New Indebtedness at any time
prior to the termination or withdrawal of the Tender Offer, (ii) neither
the New Indebtedness nor any guarantee thereof need be subordinate to the
Securities or any Guarantee even if the New Indebtedness and/or any
guarantee thereof is subordinated to any other Indebtedness of the Company
or any Guarantor, and (iii) any Liens on the Escrow Account or the
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securities or funds therein securing the New Indebtedness shall be deemed
to be Permitted Liens.
The Company covenants and agrees that, in the event that the Tender
Offer is terminated or withdrawn prior to acceptance for payment of
Securities, the tender of which represents the Requisite Consents, the New
Indebtedness will be redeemed or repaid no later than 45 days after such
termination or withdrawal at a redemption or repayment price not in excess
of 101% of the principal amount thereof plus accrued and unpaid interest
thereon to the date of redemption or repayment.
Section 1.2 Other Amendments. The Indenture is hereby further amended as
follows:
(a) Sections 4.03 through 4.19 of the Indenture and Section 10.17 of the
Indenture are hereby deleted.
(b) Section 5.01 of the Indenture is hereby amended to read in its
entirety as follows:
SECTION 5.01. Merger, Consolidation and Sale of Assets.
(a) The Company will not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person, or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the Company's assets whether as an entirety or
substantially as an entirety to any Person unless: (i) the Person (if
other than the Company or a Restricted Subsidiary of the Company) formed
by such consolidation or into which the Company is merged or the Person
which acquires by sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the Company's assets (the
"Surviving Entity") shall expressly assume, by supplemental indenture (in
form satisfactory to the Trustee), executed and delivered to the Trustee,
the due and punctual payment of the principal of, and premium, if any, and
interest on all of the Securities and the performance of every covenant of
the Securities, this Indenture and the Registration Rights Agreement on
the part of the Company to be performed or observed; and (ii) the Company
or the Surviving Entity shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that such
consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with
the applicable provisions of this Indenture and that all conditions
precedent in this Indenture relating to the execution of such supplemental
indenture have been satisfied.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, lease or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture and the Securities with the same
effect as if such surviving entity had been named as such and the Company
shall be relieved of all of its Obligations and duties under this
Indenture and the Securities.
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Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture)
will not, and the Company will not cause or permit any Guarantor (other
than any Guarantor whose Guarantee is to be released in accordance with
the terms of the Guarantee and this Indenture) to, consolidate with or
merge into any Person other than the Company or any other Guarantor
unless: the entity formed by or surviving any such consolidation or merger
(if other than the Guarantor) or to which such sale, lease, conveyance or
other disposition shall have been made assumes by supplemental indenture
all of the Obligations of the Guarantor on the Guarantee. Any merger or
consolidation of a Guarantor with and into the Company (with the Company
being the surviving entity) or another Guarantor that is a Wholly Owned
Restricted Subsidiary of the Company need not comply with this Section
5.01.
(c) Section 6.01 of the Indenture is hereby amended to read in its
entirety as follows:
SECTION 6.01. Events of Default.
An "Event of Default" means any of the following events:
(a) the failure to pay interest on any Securities when the same
becomes due and payable and the default continues for a period of 30 days;
(b) the failure to pay the principal on any Securities, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Securities
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer);
(c) [Intentionally deleted]
(d) [Intentionally deleted]
(e) [Intentionally deleted]
(f) the Company (i) admits in writing its inability to pay its debts
generally as they become due, (ii) commences a voluntary case or
proceeding under any Bankruptcy Law with respect to itself, (iii) consents
to the entry of a judgment, decree or order for relief against it in an
involuntary case or proceeding under any Bankruptcy Law, (iv) consents to
the appointment of a Custodian of it or for substantially all of its
property, (v) consents to or acquiesces in the institution of a bankruptcy
or an insolvency proceeding against it, (vi) makes a general assignment
for the benefit of its creditors or (vii) takes any partnership or
corporate action, as the case may be, to authorize or effect any of the
foregoing; or
(g) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company in an involuntary case or
proceeding under any Bankruptcy Law, which shall (i) approve as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition in respect of the
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Company, (ii) appoint a Custodian of the Company or for substantially all
of its property or (iii) order the winding-up or liquidation of its
affairs; and such judgment, decree or order shall remain unstayed and in
effect for a period of 60 consecutive days;
(h) any of the Guarantees ceases to be in full force and effect or
any of the Guarantees is declared to be null and void and unenforceable or
any of the Guarantees is found to be invalid by a final judgment or order
that is not appealable or any of the Guarantors denies its liability under
its Guarantee (other than by reason of release of a Guarantor in
accordance with the terms of this Indenture); and
(i) the termination of any Guarantee for any reason not permitted by
this Indenture or the denial of any Person acting on behalf of any
Guarantor of its Obligations under any such Guarantee.
(d) Section 10.04 of the Indenture is hereby amended to read in its
entirety as follows:
SECTION 10.04. Release of a Guarantor.
(a) Upon the sale or disposition of all of the Capital Stock of a
Guarantor by the Company or a Subsidiary of the Company, as the case may
be, or upon the consolidation or merger of a Guarantor with or into any
Person (in each case, other than to the Company or an Affiliate of the
Company), or if any Guarantor is dissolved or liquidated in accordance
with this Indenture, such Guarantor's Guarantee shall be released, and
such Guarantor and each Subsidiary of such Guarantor that is also a
Guarantor shall be deemed released from all Obligations under this Article
Ten without any further action required on the part of the Trustee or any
Holder. Any Guarantor not so released or the entity surviving such
Guarantor, as applicable, shall remain or be liable under its Guarantee as
provided in this Article Ten. Concurrently with the defeasance of the
Securities under Article Eight hereof, the Guarantors shall be released
from all of their obligations under their Guarantees and this Article Ten.
(b) The Trustee shall deliver an appropriate instrument evidencing
the release of a Guarantor upon receipt of a request by the Company or
such Guarantor accompanied by an Officers' Certificate and an Opinion of
Counsel certifying as to the compliance with this Section 10.04; provided
the legal counsel delivering such Opinion of Counsel may rely as to
matters of fact on one or more Officers' Certificates of the Company.
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor
from its Obligations under its Guarantee endorsed on the Securities and
under this Article Ten.
Except as set forth in Articles Four and Five and this Section
10.04, nothing contained in this Indenture or in any of the Securities
shall prevent any consolidation or
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merger of a Guarantor with or into the Company or another Guarantor or
shall prevent any sale or conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the Company or another
Guarantor.
(e) The amendments to the Indenture effected by Section 1.1 of this
First Supplemental Indenture are hereby deleted.
(f) All references in the Indenture to the Sections of the Indenture
deleted pursuant to Section 1.2(a) of this First Supplemental Indenture
are hereby deleted.
(g) The definitions of the following terms are hereby deleted from
Section 1.01 of the Indenture:
Acquired Indebtedness
Affiliate Transaction
Asset Acquisition
Attributable Debt
Consolidated EBITDA
Consolidated Fixed Charge Coverage Ratio
Consolidated Fixed Charges
Consolidated Interest Expense
Consolidated Net Worth
Consolidated Non-cash Charges
MISCELLANEOUS PROVISIONS
Section 2.1. Indenture. Except as amended hereby, the Indenture and
the Securities are in all respects ratified and confirmed and all their terms
shall remain in full force and effect.
Section 2.2. Governing Law. THIS FIRST SUPPLEMENTAL INDENTURE SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
Section 2.3. Successors. All agreements of the Company or a
Guarantor in this First Supplemental Indenture shall bind its successors. All
agreements of the Trustee in this First Supplemental Indenture shall bind its
successors.
Section 2.4. Multiple Counterparts. This First Supplemental
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
Section 2.5. Effectiveness and Operativeness. The provisions of this
First Supplemental Indenture shall become effective, and the amendments provided
for in Section 1.1 of this First Supplemental Indenture shall be operative,
immediately upon the execution and delivery by the Trustee of this First
Supplemental Indenture. However, the amendments
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provided for in Section 1.2 of this First Supplemental Indenture shall only
become operative when Securities, the tender of which pursuant to the Tender
Offer represents the Requisite Consents, are accepted for payment on the
Acceptance Date (as such term is defined in the Statement).
Section 2.6. Trustee's Disclaimer. Except for the second recital
contained herein, the recitals contained herein shall be taken as the statements
of the Company and the Guarantors and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this First Supplemental Indenture.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the date first written
above.
The Company:
AUTOTOTE CORPORATION
By: /s/ Martin E. Schloss
-------------------------------------
Name: Martin E. Schloss
Title: Vice President
The Guarantors:
AUTOTOTE ENTERPRISES INC.
By: /s/ Martin E. Schloss
-------------------------------------
Name: Martin E. Schloss
Title: Vice President
MARVIN H. SUGARMAN PRODUCTIONS, INC.
By: /s/ Martin E. Schloss
-------------------------------------
Name: Martin E. Schloss
Title: Vice President
AUTOTOTE KENO CORP.
By: /s/ Martin E. Schloss
-------------------------------------
Name: Martin E. Schloss
Title: Vice President
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AUTOTOTE SYSTEMS INC.
By: /s/ Martin E. Schloss
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Name: Martin E. Schloss
Title: Vice President
AUTOTOTE INTERNATIONAL INC.
By: /s/ Martin E. Schloss
-------------------------------------
Name: Martin E. Schloss
Title: Vice President
AUTOTOTE MANAGEMENT CORP.
By: /s/ Martin E. Schloss
-------------------------------------
Name: Martin E. Schloss
Title: Vice President
AUTOTOTE LOTTERY CORP.
By: /s/ Martin E. Schloss
-------------------------------------
Name: Martin E. Schloss
Title: Vice President
The Trustee:
THE BANK OF NEW YORK
By: /s/ Julie Salovitch-Miller
-------------------------------------
Name: Julie Salovitch-Miller
Title: Vice President
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