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AUTOTOTE CORPORATION
as Issuer
each of the entities named herein
as Guarantors
and
THE BANK OF NEW YORK
as Trustee
INDENTURE
Dated as of August 14, 2000
$150,000,000
12 1/2% Senior Subordinated Notes due 2010, Series A
and
12 1/2% Senior Subordinated Notes due 2010, Series B
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310 (a)(1).......................................... 7.10
(a)(2).......................................... 7.10
(a)(3).......................................... N.A.
(a)(4).......................................... N.A.
(a)(5).......................................... 7.08; 7.10
(b)............................................. 7.08; 7.10; 14.02
(c)............................................. N.A.
311 (a)............................................. 7.11
(b)............................................. 7.11
(c)............................................. N.A.
312 (a)............................................. 2.05
(b)............................................. 14.03
(c)............................................. 14.03
313 (a)............................................. 7.06
(b)(1).......................................... N.A.
(b)(2).......................................... 7.06
(c)............................................. 7.06; 14.02
(d)............................................. 7.06
314 (a)............................................. 4.08; 4.10; 14.02
(b)............................................. N.A.
(c)(1).......................................... 7.02; 14.04
(c)(2).......................................... 7.02; 14.04
(c)(3).......................................... N.A.
(d)............................................. N.A.
(e)............................................. 14.05
(f)............................................. N.A.
315 (a)............................................. 7.01(b)
(b)............................................. 7.05; 14.02
(c)............................................. 7.01(a)
(d)............................................. 7.01(c)
(e)............................................. 6.11
316 (a)(last sentence).............................. 2.09
(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.04
(a)(2).......................................... N.A.
(b)............................................. 6.07
(c)............................................. 9.04
317 (a)(1).......................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.04
318 (a)............................................. 14.01
(c)............................................. 14.01
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions................................................ 1
SECTION 1.02. Incorporation by Reference of TIA.......................... 27
SECTION 1.03. Rules of Construction...................................... 28
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating............................................ 28
SECTION 2.02. Execution and Authentication............................... 29
SECTION 2.03. Registrar and Paying Agent................................. 30
SECTION 2.04. Paying Agent To Hold Assets in Trust....................... 31
SECTION 2.05. Securityholder Lists....................................... 31
SECTION 2.06. Transfer and Exchange...................................... 31
SECTION 2.07. Replacement Securities..................................... 36
SECTION 2.08. Outstanding Securities..................................... 36
SECTION 2.09. Treasury Securities........................................ 37
SECTION 2.10. Temporary Securities....................................... 37
SECTION 2.11. Cancellation............................................... 37
SECTION 2.12. Defaulted Interest......................................... 37
SECTION 2.13. CUSIP Number............................................... 38
SECTION 2.14. Deposit of Moneys.......................................... 38
SECTION 2.15. Liquidated Damages Under Registration Agreement............ 38
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee......................................... 39
SECTION 3.02. Selection of Securities To Be Redeemed..................... 39
SECTION 3.03. Notice of Optional Redemption.............................. 39
SECTION 3.04. Effect of Notice of Redemption............................. 40
SECTION 3.05. Deposit of Redemption Price................................ 41
SECTION 3.06. Securities Redeemed in Part................................ 41
SECTION 3.07. Special Mandatory Redemption............................... 41
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities...................................... 42
SECTION 4.02. Maintenance of Office or Agency............................ 43
SECTION 4.03. Limitation on Restricted Payments.......................... 43
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness........ 46
SECTION 4.05. Corporate Existence........................................ 47
SECTION 4.06. Payment of Taxes and Other Claims.......................... 47
SECTION 4.07. Maintenance of Properties and Insurance.................... 47
SECTION 4.08. Compliance Certificate; Notice of Default.................. 48
SECTION 4.09. Compliance with Laws....................................... 48
SECTION 4.10. Commission Reports......................................... 49
SECTION 4.11. Waiver of Stay, Extension or Usury Laws.................... 49
SECTION 4.12. Limitations on Transactions with Affiliates................ 50
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.................................. 51
SECTION 4.14. Limitation on Liens........................................ 53
SECTION 4.15. Change of Control.......................................... 53
SECTION 4.16. Limitation on Asset Sales.................................. 55
SECTION 4.17. Limitation on Preferred Stock of Restricted Subsidiaries... 58
SECTION 4.18. Limitation on Sale and Leaseback Transactions.............. 59
SECTION 4.19. Limitation of Guarantees by Restricted Subsidiaries........ 59
SECTION 4.20. Escrow of Proceeds of Securities on Issue Date............. 60
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets................... 50
SECTION 5.02. Successor Corporation Substituted.......................... 62
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.......................................... 63
SECTION 6.02. Acceleration............................................... 64
SECTION 6.03. Other Remedies............................................. 65
SECTION 6.04. Waiver of Past Defaults.................................... 65
SECTION 6.05. Control by Majority........................................ 66
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SECTION 6.06. Limitation on Suits........................................ 66
SECTION 6.07. Rights of Holders To Receive Payment....................... 66
SECTION 6.08. Collection Suit by Trustee................................. 67
SECTION 6.09. Trustee May File Proofs of Claim........................... 67
SECTION 6.10. Priorities................................................. 67
SECTION 6.11. Undertaking for Costs...................................... 68
SECTION 6.12. Restoration of Rights and Remedies......................... 68
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.......................................... 68
SECTION 7.02. Rights of Trustee.......................................... 70
SECTION 7.03. Individual Rights of Trustee............................... 71
SECTION 7.04. Trustee's Disclaimer....................................... 71
SECTION 7.05. Notice of Default.......................................... 71
SECTION 7.06. Reports by Trustee to Holders.............................. 72
SECTION 7.07. Compensation and Indemnity................................. 72
SECTION 7.08. Replacement of Trustee..................................... 73
SECTION 7.09. Successor Trustee by Merger, Etc........................... 74
SECTION 7.10. Eligibility; Disqualification.............................. 74
SECTION 7.11. Preferential Collection of Claims Against Company.......... 74
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations................... 75
SECTION 8.02. Legal Defeasance and Covenant Defeasance................... 75
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance...... 76
SECTION 8.04. Application of Trust Money................................. 78
SECTION 8.05. Repayment to the Company................................... 78
SECTION 8.06. Reinstatement.............................................. 79
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders................................. 79
SECTION 9.02. With Consent of Holders.................................... 80
SECTION 9.03. Compliance with TIA........................................ 81
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SECTION 9.04. Revocation and Effect of Consents.......................... 81
SECTION 9.05. Notation on or Exchange of Securities...................... 82
SECTION 9.06. Trustee To Sign Amendments, Etc............................ 82
ARTICLE TEN
SUBORDINATION OF SECURITIES
SECTION 10.01. Securities Subordinated to Senior Debt..................... 82
SECTION 10.02. No Payment on Securities in Certain Circumstances.......... 83
SECTION 10.03. Payment Over of Proceeds upon Dissolution, etc............. 84
SECTION 10.04. Subrogation................................................ 85
SECTION 10.05. Obligations of Company Unconditional....................... 85
SECTION 10.06. Notice to Trustee.......................................... 86
SECTION 10.07. Reliance on Judicial Order or Certificate of
Liquidating Agent....................................... 86
SECTION 10.08. Trustee's Relation to Senior Debt.......................... 87
SECTION 10.09. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Debt................... 87
SECTION 10.10. Securityholders Authorize Trustee to Effectuate
Subordination of Securities............................. 87
SECTION 10.11. This Article Not to Prevent Events of Default.............. 88
SECTION 10.12. Trustee's Compensation Not Prejudiced...................... 88
SECTION 10.13. No Waiver of Subordination Provisions...................... 88
SECTION 10.14. Subordination Provisions Not Applicable to Collateral Held
in Trust for Securityholders; Payments May Be Paid
Prior to Dissolution.................................... 88
SECTION 10.15. Acceleration of Securities................................. 89
ARTICLE ELEVEN
GUARANTEE OF SECURITIES
SECTION 11.01. Unconditional Guarantee.................................... 89
SECTION 11.02. Limitations on Guarantees.................................. 90
SECTION 11.03. Execution and Delivery of Guarantee........................ 90
SECTION 11.04. Release of a Guarantor..................................... 91
SECTION 11.05. Waiver of Subrogation...................................... 92
SECTION 11.06. Obligations Continuing..................................... 92
SECTION 11.07. Obligations Reinstated..................................... 92
SECTION 11.08. Waiver..................................................... 93
SECTION 11.09. No Obligation To Take Action Against the Company........... 93
SECTION 11.10. Default and Enforcement.................................... 93
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SECTION 11.11. Amendment, Etc............................................... 93
SECTION 11.12. Acknowledgment............................................... 93
SECTION 11.13. Costs and Expenses........................................... 93
SECTION 11.14. No Waiver; Cumulative Remedies............................... 94
SECTION 11.15. Successors and Assigns....................................... 94
SECTION 11.16. Contribution................................................. 94
SECTION 11.17. Future Guarantors............................................ 94
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior
Debt..................................................... 95
SECTION 12.02. No Payment on Guarantee in Certain Circumstances............. 95
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc............... 96
SECTION 12.04. Subrogation.................................................. 97
SECTION 12.05. Obligations of Guarantor Unconditional....................... 98
SECTION 12.06. Notice to Trustee............................................ 98
SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating
Agent..................................................... 99
SECTION 12.08. Trustee's Relation to Guarantor Senior Debt.................. 99
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions of
the Guarantors or Holders of Guarantor Senior Debt........ 100
SECTION 12.10. Securityholders Authorize Trustee to Effectuate
Subordination of Guarantees............................... 100
SECTION 12.11. This Article Not to Prevent Events of Default................ 100
SECTION 12.12. Trustee's Compensation Not Prejudiced........................ 100
SECTION 12.13. No Waiver of Guarantee Subordination Provisions.............. 101
SECTION 12.14. Payments May Be Paid Prior to Dissolution.................... 101
ARTICLE THIRTEEN
SECURITY
SECTION 13.01. Security..................................................... 101
ARTICLE FOURTEEN
MISCELLANEOUS
SECTION 14.01. TIA Controls................................................. 102
SECTION 14.02. Notices...................................................... 102
SECTION 14.03. Communications by Holders with Other Holders................. 104
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SECTION 14.04. Certificate and Opinion as to Conditions Precedent............104
SECTION 14.05. Statements Required in Certificate or Opinion.................104
SECTION 14.06. Rules by Trustee, Paying Agent, Registrar.....................105
SECTION 14.07. Legal Holidays................................................105
SECTION 14.08. Governing Law.................................................105
SECTION 14.09. No Adverse Interpretation of Other Agreements.................105
SECTION 14.10. No Recourse Against Others....................................105
SECTION 14.11. Successors....................................................105
SECTION 14.12. Duplicate Originals...........................................106
SECTION 14.13. Severability..................................................106
SIGNATURES...................................................................107
Exhibit A - Form of Series A Security.....................................A-1
Exhibit B - Form of Series B Security.....................................B-1
Exhibit C - Form of Legend for Global Securities..........................C-1
Exhibit D - Form of Certificate to Be Delivered in Connection with
Transfers to Institutional Accredited Investors................D-1
Exhibit E - Form of Certification for Transfer or Exchange of Restricted
Global Security to Regulation S Global Security................E-1
Exhibit F - Form of Certification for Transfer or Exchange of Regulation
S Global Security to Restricted Global Security................F-1
Exhibit G-1 - Form of Certification for Transfer or Exchange of Non-global
Restricted Security to Restricted Global Security............G-1-1
Exhibit G-2 - Form of Certification for Transfer or Exchange of Non-global
Restricted Security to Regulation S Global Security..........G-2-1
Exhibit H - Form of Guarantee............................................. H-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
the Indenture.
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INDENTURE, dated as of August 14, 2000, among Autotote Corporation,
a Delaware corporation (the "Company"), Autotote Management Corporation,
Autotote Systems, Inc., Autotote International, Inc., Autotote Enterprises,
Inc., Autotote Keno Corporation, Autotote Lottery Corporation, ACRA Acquisition
Corp., Xxxxxx X. Xxxxxxxx Productions, Inc., Autotote Gaming, Inc. and Autotote
Dominicana Inc. (each a "Guarantor") and The Bank of New York, a New York
banking corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 12 1/2%
Senior Subordinated Notes due 2010 (the "Series A Securities") and Series B 12
1/2% Senior Subordinated Notes due 2010 (the "Series B Securities," and together
with the Series A Securities, the "Securities") and, to provide therefor, the
Company and the Guarantors have duly authorized the execution and delivery of
this Indenture. All things necessary to make the Securities, when duly issued
and executed by the Company, and authenticated and delivered hereunder, the
valid Obligations (as defined below) of the Company and the Guarantors, and to
make this Indenture a valid and binding agreement of the Company and the
Guarantors, have been done.
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Securities.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Restricted Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its Subsidiaries or is assumed in connection with the
acquisition of assets from such Person and not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"Acquisition Closing Date" means the date upon which the
consummation of the Scientific Games Acquisition occurs.
"Additional Capital Stock" means (1) the Olivetti Preferred Stock
issued on or about the Acquisition Closing Date and (2) any other Qualified
Capital Stock (including Olivetti Preferred Stock) having terms not materially
less favorable to the Company than the Olivetti Preferred Stock as determined by
the Board of Directors of the Company in good faith.
An "Affiliate" of a Person means a Person who directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, such Person; pro-
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vided, however, that with respect to the Company the term Affiliate shall not
include the Company or any Subsidiary of the Company so long as no Affiliate of
the Company has any direct or indirect interest therein, except through the
Company or its Subsidiaries. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Affiliate Transaction" has the meaning set forth in Section 4.12.
"Agent" means the Registrar or any Paying Agent.
"Agent Member" means any member of, or participant in, the
Depository.
"Applicable Procedures" means the rules and procedures of the
Depository, Euroclear and Clearstream, in each case to the extent applicable and
as in effect from time to time.
"Asset Acquisition" means
(a) an Investment by the Company or any Restricted Subsidiary of the
Company in any other Person pursuant to which such Person shall become a
Restricted Subsidiary of the Company or any Restricted Subsidiary of the
Company, or shall be merged with or into the Company or any Restricted
Subsidiary of the Company, or
(b) the acquisition by the Company or any Restricted Subsidiary of
the Company of the assets of any Person which constitute all or
substantially all of the assets of such Person, any division or line of
business of such Person or any other properties or assets of such Person
other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries, including any Sale and Leaseback Transaction that
does not give rise to a Capitalized Lease Obligation, to any Person other than
the Company or a Restricted Subsidiary of the Company of
(a) any Capital Stock of any Restricted Subsidiary of the Company;
or
(b) any other property or assets, other than cash or Cash
Equivalents, of the Company or any Restricted Subsidiary of the Company
other than in the ordinary course of business;
provided, however, that Asset Sales shall not include
(1) a transaction or series of related transactions for which the
Company or its Restricted Subsidiaries receive aggregate consideration,
exclusive of indemnities, of less than $1 million,
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(2) the sale of accounts receivable,
(3) the sale, lease, conveyance, disposition or other transfer of
assets in the ordinary course of business,
(4) the sale, lease, conveyance, disposition or other transfer of
all or substantially all of the assets of the Company and its Restricted
Subsidiaries or any Guarantor as permitted under Section 5.01,
(5) sales, transfers or other dispositions of assets resulting from
the creation, incurrence or assumption of (but not any foreclosure with
respect to) any Lien not prohibited by Section 4.14,
(6) sales, transfers or other dispositions of assets in a
transaction constituting a Permitted Investment or a Restricted Payment
permitted by Section 4.03, and
(7) the grant of licenses to third parties in respect of
intellectual property in the ordinary course of business of the Company or
any of its Restricted Subsidiaries.
"Attributable Debt" in respect of a sale and leaseback transaction
consummated subsequent to the Issue Date means, at the time of determination,
the present value, discounted at the rate of interest implicit in such
transaction, determined in accordance with GAAP, of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction, including any period for which such lease has
been extended or may, at the option of the lessor, be extended.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Book-Entry Security" means a Security represented by a Global
Security and registered in the name of the nominee of the Depository.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in The City of New York are required or
authorized by law or other governmental action to be closed.
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"Capital Stock" means (1) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents,
however designated, of corporate stock, including each class of common stock and
preferred stock of such Person and (2) with respect to any Person that is not a
corporation, any and all partnership or other equity interests of such other
Person.
"Capitalized Lease Obligations" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency
thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's;
(3) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances (or, with
respect to foreign banks, similar instruments) maturing within one year
from the date of acquisition thereof issued by any bank organized under
the laws of the United States of America or any state thereof or the
District of Columbia or any U.S. branch of a foreign bank having at the
date of acquisition thereof combined capital and surplus of not less than
$250 million;
(5) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (1) above
entered into with any bank meeting the qualifications specified in clause
(4) above; and
(6) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (1) through
(5) above.
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"Certificated Securities" means physical, certificated Securities in
registered form.
"Change of Control" means the occurrence of one or more of the
following events:
(1) any sale, lease, exchange or other transfer, in one transaction
or a series of related transactions, of all or substantially all of the
assets of the Company to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a "Group") (whether or not
otherwise in compliance with the provisions of this Indenture), other than
a Permitted Holder or Holders;
(2) the approval by the holders of Capital Stock of the Company of
any plan or proposal for the liquidation or dissolution of the Company
(whether or not otherwise in compliance with the provisions of this
Indenture);
(3) any Person or Group, other than a Permitted Holder or Holders,
shall become the owner, directly or indirectly, beneficially, of shares
representing more than 50% of the aggregate voting power represented by
the issued and outstanding Capital Stock of the Company entitled under
ordinary circumstances to elect a majority of the directors of the
Company; or
(4) the replacement of a majority of the Board of Directors of the
Company over a two-year period from the directors who constituted the
Board of Directors at the beginning of such period, and such replacement
shall not have been approved by a vote of at least a majority of the Board
of Directors then still in office who either were members of the Board of
Directors at the beginning of such period or whose election as a member of
the Board of Directors was previously so approved.
"Change of Control Offer" has the meaning set forth in Section 4.15.
"Change of Control Payment Date" has the meaning set forth in
Section 4.15.
"Clearstream" means Clearstream Banking, Societe Anonyme, Luxembourg
(or any successor securities clearing agency).
"Collateral" has the meaning set forth in Section 13.01.
"Commission" or "SEC" means the Securities and Exchange Commission,
or any successor agency thereto with respect to the regulation or registration
of securities.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a
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Vice President or its Treasurer, and by an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of
(1) Consolidated Net Income,
(2) to the extent Consolidated Net Income has been reduced thereby,
all losses (x) from Asset Sales or abandonments or reserves relating
thereto, all items classified as extraordinary losses and all income taxes
of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable
to extraordinary gains or losses) and (y) resulting from plant closure
costs arising out of the closure of Scientific Games' printing facility in
Gilroy, California,
(3) Consolidated Interest Expense and
(4) Consolidated Non-cash Charges.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to
(1) the incurrence or repayment of any Indebtedness of such Person
or any of its Restricted Subsidiaries (and the application of the proceeds
thereof) giving rise to the need to make such calculation and any
incurrence or repayment or retirement of other Indebtedness (and the
application of the proceeds thereof) at any time subsequent to the last
day of the Four Quarter Period and on or prior to the Transaction Date
(other than the incurrence or repayment of Indebtedness in the ordinary
course of business for working capital purposes pursuant to working
capital facilities), as if such incurrence or repayment, as the case may
be (and the application of the proceeds thereof), occurred on the first
day of the Four Quarter Period and
(2) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as
a result of the Asset Acquisition) incurring, assuming or otherwise being
liable for Acquired Indebtedness and also including any Consolidated
EBITDA (including any pro forma expense and cost reductions calculated on
a basis consistent with Regulation S-X under the Securities Act)
attributable to the assets which are the subject of the Asset Acquisition
or Asset Sale during the Four Quarter Period) occurring during the Four
Quarter Period or at any time subsequent to the
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last day of the Four Quarter Period and on or prior to the Transaction
Date, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any such Indebtedness or Acquired
Indebtedness) occurred on the first day of the Four Quarter Period.
If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio",
(1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date;
(2) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction
Date will be deemed to have been in effect during the Four Quarter Period;
and
(3) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered
by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the
operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of
(1) Consolidated Interest Expense, plus
(2) the product of
(x) the amount of all dividend payments on any series of
Preferred Stock of such Person (other than dividends paid in
Qualified Capital Stock) paid, accrued or scheduled to be paid or
accrued during such period times
(y) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective
consolidated Federal, state and local tax rate of such Person
expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of, without duplication,
-8-
(1) the aggregate of all cash and non-cash interest expense with
respect to all outstanding Indebtedness of such Person and its Restricted
Subsidiaries, including the net costs associated with Interest Swap
Obligations, capitalized interest, and imputed interest with respect to
Attributable Debt (but excluding (a) the write-off of deferred financing
costs associated with the Transactions and (b) the amortization of
deferred financing charges associated with the issuance of the Securities
and the New Credit Agreement or other Indebtedness outstanding on the
Issue Date or refinanced in connection with the Transactions), for such
period determined on a consolidated basis in conformity with GAAP; and
(2) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, however, that there shall be excluded therefrom
(a) after tax gains but not losses from Asset Sales (without regard
to the $1 million threshold in clause (1) of the definition of Asset
Sales) or abandonments or reserves relating thereto,
(b) items classified as extraordinary gains but not losses, and the
related tax effects according to GAAP,
(c) the net income (or loss) of any Person acquired in a pooling of
interests transaction accrued prior to the date it becomes a Subsidiary of
such first Person or is merged or consolidated with it or any Subsidiary,
(d) the net income of any Restricted Subsidiary to the extent that
the declaration of dividends or similar distributions by that Subsidiary
of that income is restricted by contract, operation of law or otherwise,
(e) the net loss of any Person, other than a Restricted Subsidiary
of the Company,
(f) the net income of any Person, other than a Restricted Subsidiary, in
which such Person has an interest, except to the extent of cash dividends or
distributions paid to such Person or a Restricted Subsidiary of such Person,
(g) gains from retirement of debt, and
(h) amounts attributable to dividends paid in respect of Qualified
Capital Stock to the extent such dividends are paid in shares of Qualified
Capital Stock.
-9-
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP less (to the extent otherwise included in accordance with
GAAP) amounts attributable to Disqualified Capital Stock.
"Consolidated Non-cash Charges" means, with respect to any Person
for any period, the aggregate depreciation, amortization and other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP (excluding any such
charges constituting an extraordinary item or loss or any such charge which
requires an accrual of or a reserve for cash charges for any future period).
"Corporate Trust Office" means the principal office of the Trustee
where it conducts its corporate trust administrative functions, which office is
currently located at 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Administration, or such other address as the Trustee
may designate from time to time by notice to the Holders and the Company.
"Covenant Defeasance" has the meaning set forth in Section 8.02.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Deadline Date" means September 30, 2000.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company ("DTC") or
another Person designated as Depository by the Company, which must be a clearing
agency registered under the Exchange Act.
"Designated Guarantor Senior Debt" means, with respect to any
Guarantor, (1) any Indebtedness outstanding under the New Credit Agreement to
the extent guaranteed by such Guarantor and (2) any other Guarantor Senior Debt
permitted under this Indenture the principal amount of which is $25 million or
more and that has been designated by the Company or such Guarantor as Designated
Guarantor Senior Debt in the instrument creating such Indebtedness.
"Designated Non-cash Consideration" means the fair market value of
non-cash consideration received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Non-cash Consideration pursuant to an Officers' Certificate exe-
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cuted by the principal executive officer and the principal financial officer of
the Company or such Restricted Subsidiary.
"Designated Senior Debt" means (1) any Indebtedness outstanding
under the New Credit Agreement and (2) any other Senior Debt permitted under
this Indenture the principal amount of which is $25 million or more and that has
been designated by the Company as Designated Senior Debt in the instrument
creating such Indebtedness.
"Disqualified Capital Stock" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event (other than an event
which would constitute a Change of Control), matures (excluding any maturity as
the result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof (except, in each case, upon the
occurrence of a Change of Control), in whole or in part, on or prior to the
final maturity date of the Securities.
"Equity Offering" means any private or public offering of Qualified
Capital Stock of the Company.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Agreement" means the Escrow and Pledge Agreement dated as of
the Issue Date among the Company, the Trustee and the Securities Intermediary,
as the same may be amended from time to time in accordance with the provisions
of Article Nine of this Indenture.
"Escrow Account" means the escrow account created pursuant to the
Escrow Agreement.
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Existing Notes" means the Company's 10 7/8% Series B Senior Notes
due 2004.
"fair market value" or "fair value" means, with respect to any asset
or property, the price which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
whom is under pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution
delivered to the Trustee.
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"Final Maturity Date" means August 15, 2010.
"GAAP" is defined to mean generally accepted accounting principles
in the United States of America as in effect as of the Issue Date, including,
without limitation, those set forth in the opinions and pronouncements of the
Accounting Principles 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 approved by
a significant segment of the accounting profession.
"Global Security" means a security evidencing all or a portion of
the Securities issued to the Depository or its nominee in accordance with
Section 2.01 and bearing the legend set forth in Exhibit C.
"Guarantee" has the meaning set forth in Section 11.01.
"Guarantor" means (i) each of Autotote Management Corporation,
Autotote Systems, Inc., Autotote International, Inc., Autotote Enterprises,
Inc., Autotote Keno Corporation, Autotote Lottery Corporation, ACRA Acquisition
Corp., Xxxxxx X. Xxxxxxxx Productions, Inc., Autotote Gaming, Inc. and Autotote
Dominicana Inc., (ii) upon consummation of the Scientific Games Acquisition,
each of Scientific Games Holdings Corp., Scientific Games Finance Corporation,
Scientific Games (Greece), Inc., Scientific Games Acquisition Inc., SciGames
France Inc., Scientific Games Inc. and Scientific Games Royalty Corporation and
(iii) each of the Company's Restricted Subsidiaries organized in the United
States that in the future executes a supplemental indenture in which such
Restricted Subsidiary agrees to be bound by the terms of this Indenture as a
Guarantor; provided that any Person constituting a Guarantor as described above
shall cease to constitute a Guarantor when its respective Guarantee is released
in accordance with the terms of this Indenture.
"Guarantor Senior Debt" means the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on any Indebtedness of any Guarantor of the Securities, whether outstanding on
the Issue Date or thereafter created, incurred or assumed, unless, in the case
of any particular Indebtedness, the instrument creating or evidencing the same
or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Guarantee of the
Securities. Without limiting the generality of the foregoing, "Guarantor Senior
Debt" shall also include the principal of, premium, if any, interest (including
any interest accruing subsequent to the filing of a petition of bankruptcy at
the rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on, and all other
amounts owing in respect of, all monetary obligations (including guarantees
thereof) of every nature of any Guarantor of the Securities under the New Credit
Agreement, including, without limitation, obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities. "Guarantor Senior Debt" shall not include
(1) Indebtedness evidenced by a Guarantee of the Securities;
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(2) any Indebtedness of such Guarantor of the Securities owing to
the Company or to a Subsidiary of the Company;
(3) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Company or any Subsidiary of the Company or
Affiliate of the Company (including, without limitation, amounts owed for
compensation);
(4) trade payables and other current liabilities arising in the
ordinary course of business in connection with obtaining goods, materials
or services;
(5) Indebtedness represented by Disqualified Stock;
(6) any liability for federal, state, local or other taxes owed or
owing by such Guarantor of the Securities;
(7) that portion of any Indebtedness incurred in violation of this
Indenture;
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of such Guarantor of the
Securities; and
(9) any Indebtedness which, when incurred and without respect to any
other election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is
without recourse to such Guarantor of the Securities.
"Holder" means the Person in whose name a Security is registered on
the Registrar's books.
"incur" means, with respect to any Indebtedness, to, directly or
indirectly, create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise with respect to, or otherwise become responsible for
payment of such Indebtedness.
"Indebtedness" means with respect to any Person, without
duplication,
(1) the principal amount of all obligations of such Person for
borrowed money,
(2) the principal amount of all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments,
(3) all Capitalized Lease Obligations of such Person,
(4) all obligations of such Person to pay the deferred purchase
price of property, all conditional sale obligations and all obligations
under any title retention agreement (but excluding accounts payable and
other current liabilities arising in the ordinary course of business),
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(5) all obligations of such Person for the reimbursement of any
obligor on any letter of credit or banker's acceptance,
(6) guarantees and other contingent obligations of such Person in
respect of Indebtedness referred to in clauses (1) through (5) above and
clause (8) below,
(7) all Indebtedness of any other Person of the type referred to in
clauses (1) through (6) above which are secured by any Lien on any
property or asset of such Person, the amount of such obligation being
deemed to be the lesser of the fair market value at such date of any asset
subject to any Lien securing the Indebtedness of others and the amount of
the Indebtedness secured,
(8) all obligations under currency agreements relating to currency
swap agreements and interest swap agreements of such Person, and
(9) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock
being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any.
For purposes hereof, (1) the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock, and (2) accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Capital Stock in the form of additional shares of the same class of Disqualified
Capital Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Capital Stock for purposes of Section 4.04. The amount
of Indebtedness of any Person at any date shall be the amount of all
unconditional obligations described above, as such amount would be reflected on
a balance sheet prepared in accordance with GAAP, and the maximum liability at
such date of such Person for any contingent obligations described above.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Security through a participant of DTC, Euroclear or
Clearstream.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Purchasers" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation and Xxxxxx Brothers Inc.
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"Interest Payment Date" means the stated due date of an installment
of interest on the Securities.
"Interest Swap Obligations" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit by
the Company and its Subsidiaries on commercially reasonable terms. For the
purposes of Section 4.03,
(1) "Investment" shall include and be valued at the fair market
value of the net assets of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary and
(2) the amount of any Investment shall be the original cost of such
Investment plus the cost of all additional Investments by the Company or
any of its Restricted Subsidiaries, without any adjustments for increases
or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment, reduced by the payment of dividends or
distributions (including tax sharing payments) in connection with such
Investment or any other amounts received in respect of such Investment.
If the Company or any Restricted Subsidiary sells or otherwise
disposes of any Capital Stock of any Restricted Subsidiary such that, after
giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary, the Company shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the fair market value of the
Capital Stock of such Subsidiary not sold or disposed.
"Issue Date" means the original date of issuance of the Securities.
"Joint Venture" means any Person (other than a Subsidiary of the
Company) engaged in a Related Business with respect to which at least 35% of
such Person's outstanding Capital Stock is owned directly or indirectly by the
Company.
"Legal Defeasance" has the meaning set forth in Section 8.02.
-15-
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Liquidated Damages" means the liquidated damages required to be
paid by the Company under certain circumstances as set forth in Section 5 of the
Registration Rights Agreement.
"Mandatory Redemption" has the meaning set forth in Section 3.07.
"Mandatory Redemption Date" means the earliest of (a) November 1,
2000, if the funds in the Escrow Account have not been released to the Company
in accordance with the requirements of Section 3(a) of the Escrow Agreement by
11:59 p.m. New York time on the Deadline Date, (b) the 45th day following the
termination of the Merger Agreement for any reason or (c) the 45th day following
the termination or withdrawal of the Tender Offer prior to acceptance for
payment of the Existing Notes, the tender of which represents the Requisite
Consents (as defined in the Statement).
"Mandatory Redemption Event" has the meaning set forth in Section
3.07.
"Mandatory Redemption Notice" has the meaning set forth in Section
3.07.
"Mandatory Redemption Price" means 101% of the principal amount of
the Securities.
"Merger Agreement" has the meaning set forth in the definition of
"Transactions."
"Moody's" means Xxxxx'x Investor Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of
(a) all out-of-pocket expenses and fees relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking
fees and sales commissions),
(b) taxes paid or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or deductions and
any tax sharing arrangements,
(c) the amounts of
(x) any repayments of debt secured, directly or indirectly, by
Liens on the assets which are the subject of such Asset Sale and
(y) any repayments of debt associated with such assets which
is due by reason of such Asset Sale (i.e., such disposition is
permitted by the terms of the instruments evidencing or applicable
to such debt, or by the terms of a consent granted there-
-16-
under, on the condition the proceeds (or portion thereof) of such
disposition be applied to such debt), and other fees, expenses and
other expenditures, in each case, reasonably incurred as a
consequence of such repayment of debt (whether or not such fees,
expenses or expenditures are then due and payable or made, as the
case may be);
(d) any portion of cash proceeds which the Company determines in
good faith should be reserved for post-closing adjustments, it being
understood and agreed that on the day that all such post-closing
adjustments have been determined, the amount (if any) by which the
reserved amount in respect of such Asset Sale exceeds the actual
post-closing adjustments payable by the Company or any of its Restricted
Subsidiaries shall constitute Net Cash Proceeds on such date;
(e) all amounts deemed appropriate by the Company (as evidenced by a
signed certificate of the Chief Financial Officer of the Company delivered
to the Trustee) to be provided as a reserve, in accordance with GAAP
("GAAP Reserves"), against any liabilities associated with such assets
which are the subject of such Asset Sale;
(f) all foreign, federal, state and local taxes payable (including
taxes reasonably estimated to the payable) in connection with or as a
result of such Asset Sale; and
(g) with respect to Asset Sales by Restricted Subsidiaries of the
Company, the portion of such cash payments attributable to Persons holding
a minority interest in such Restricted Subsidiary.
Notwithstanding the foregoing, Net Cash Proceeds shall not include
proceeds received in a foreign jurisdiction from an Asset Sale of an asset
located outside the United States to the extent
(1) such proceeds cannot under applicable law be transferred to the
United States or
(2) such transfer would result (in the good faith determination of
the Board of Directors of the Company set forth in a Board Resolution) in
a foreign tax liability that would be materially greater than if such
Asset Sale occurred in the United States;
provided that if, as, and to the extent that any of such proceeds may lawfully
be in the case of clause (1) or are in the case of clause (2) transferred to the
United States, such proceeds shall be deemed to be cash payments that are
subject to the terms of this definition of Net Cash Proceeds.
"Net Proceeds Offer" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Amount" has the meaning set forth in Section
4.16.
"Net Proceeds Offer Payment Date" has the meaning set forth in
Section 4.16.
"Net Proceeds Offer Trigger Date" has the meaning set forth in
Section 4.16.
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"New Credit Agreement" means the Credit Agreement to be dated on or
about the Acquisition Closing Date between the Company and the lenders thereto
including all related notes, collateral documents and guarantees in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, increasing the total commitment under,
refinancing, replacing or otherwise restructuring (including adding Subsidiaries
of the Company as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.
"Obligations" means, with respect to any Indebtedness, all
principal, interest, premiums, penalties, fees, indemnities, expenses (including
legal fees and expenses), reimbursement obligations and other liabilities
payable to the holder of such Indebtedness under the documentation governing
such Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Controller, the
Treasurer, the Secretary or any Assistant Vice President or Assistant Secretary
of such Person.
"Officers' Certificate" means a certificate signed by two Officers
of the Company.
"Olivetti Letter Agreement" means the Letter Agreement, dated as of
May 18, 2000, between Olivetti S.p.A. and the Company.
"Olivetti Preferred Stock" means up to $115.5 million aggregate
liquidation preference of the Company's Series A Convertible Preferred Stock or
any other Qualified Capital Stock issued pursuant to or in satisfaction of (1)
the commitments under the Olivetti Letter Agreement and the Letter Agreement,
dated as of May 18, 2000, between Tote Holdings, L.P. and the Company, and (2)
fees and expenses payable to Ramius Capital Group, LLC in connection with the
issuance of Olivetti Preferred Stock contemplated by the agreements set forth in
the foregoing clause (1).
"Opinion of Counsel" means a written opinion from legal counsel
which opinion is reasonably acceptable to the Trustee and which counsel may be
counsel to or an employee of the Company or counsel to the Trustee.
"Pari Passu Indebtedness" means any Indebtedness of the Company or a
Guarantor of the Securities ranking pari passu with the Securities or a
Guarantee of the Securities, as the case may be, that the obligor thereon is
required to offer to repurchase or repay on a permanent basis in connection with
an Asset Sale.
"Paying Agent" has the meaning set forth in Section 2.03.
"Permitted Holders" means Olivetti S.p.A. and its Affiliates.
-18-
"Permitted Indebtedness" means, without duplication,
(1) the Securities and the Guarantees thereof,
(2) Indebtedness incurred pursuant to the New Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $345
million reduced by any required permanent repayments (which are
accompanied by a corresponding permanent commitment reduction) thereunder
(excluding any such required permanent repayment and corresponding
permanent commitment reduction to the extent refinanced at the time of
payment under a replaced New Credit Agreement) and less the amount of any
prepayment made with the proceeds of an Asset Sale in accordance with
Section 4.16,
(3) other Indebtedness of the Company and its Subsidiaries
outstanding on the Acquisition Closing Date,
(4) Interest Swap Obligations of the Company or any of its
Subsidiaries covering Indebtedness of the Company or any of its
Subsidiaries; provided, however, that any Indebtedness to which any such
Interest Swap Obligations correspond is otherwise permitted to be incurred
under this Indenture; provided, further, that such Interest Swap
Obligations are entered into, in the judgment of the Company, to protect
the Company or any of its Subsidiaries from fluctuation in interest rates
on their respective outstanding Indebtedness,
(5) Indebtedness under Currency Agreements,
(6) intercompany Indebtedness owed by the Company to any Wholly
Owned Restricted Subsidiary of the Company or by any Restricted Subsidiary
of the Company to the Company or any Wholly Owned Restricted Subsidiary of
the Company for so long as such Indebtedness is held by the Company or a
Wholly Owned Restricted Subsidiary of the Company in each case subject to
no Lien held by a Person other than the Company or a Wholly Owned
Restricted Subsidiary of the Company; provided, however, that if as of any
date any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company owns or holds any such Indebtedness or holds a
Lien in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness by the
issuer of such Indebtedness under this clause (6),
(7) Acquired Indebtedness to the extent the Company could have
incurred such Indebtedness in accordance with Section 4.04 on the date
such Indebtedness became Acquired Indebtedness,
(8) (A) guarantees by Restricted Subsidiaries pursuant to Section
4.19 or guarantees by Restricted Subsidiaries of Indebtedness of other
Restricted Subsidiaries to the extent that such Indebtedness is otherwise
permitted under this Indenture and (B) guarantees by the Company of its
Wholly Owned Restricted Subsidiaries' Indebtedness; provided that such
Indebtedness is permitted to be incurred under this Indenture,
-19-
(9) Indebtedness incurred by the Company or any Restricted
Subsidiary in connection with the purchase or improvement of property
(real or Personal) or equipment or other capital expenditures in the
ordinary course of business, in aggregate not to exceed $15 million in any
fiscal year of the Company,
(10) Indebtedness of the Company or any Restricted Subsidiary
evidenced by Capitalized Lease Obligations not to exceed $15 million
principal amount at any one time outstanding,
(11) guarantees, letters of credit and indemnity agreements relating
to performance and surety bonds incurred in the ordinary course of
business,
(12) any refinancing, modification, replacement, renewal,
restatement, refunding, deferral, extension, substitution, supplement,
reissuance or resale of existing or future Indebtedness incurred in
accordance with Section 4.04 (other than pursuant to clause (2), (6), (9),
(10), (11), (13), (14) or (15) of this definition), including any
additional Indebtedness incurred to pay premiums required by the
instruments governing such existing or future Indebtedness as in effect at
the time of issuance thereof ("Required Premiums") and fees in connection
therewith; provided, however, that any such event shall not (1) result in
an increase in the aggregate principal amount of Permitted Indebtedness
(except to the extent such increase is a result of a simultaneous
incurrence of additional Indebtedness (A) to pay Required Premiums and
related fees or (B) otherwise permitted to be incurred under this
Indenture) of the Company and its Subsidiaries and (2) create Indebtedness
with a Weighted Average Life to Maturity at the time such Indebtedness is
incurred that is less than the Weighted Average Life to Maturity at such
time of the Indebtedness being refinanced, modified, replaced, renewed,
restated, refunded, deferred, extended, substituted, supplemented,
reissued or resold,
(13) additional Indebtedness of the Company or any Restricted
Subsidiary in an aggregate principal amount not to exceed $20 million at
any one time outstanding (which amount may, but need not, be incurred in
whole or in part under the New Credit Agreement),
(14) Indebtedness of the Company or any Restricted Subsidiary in
respect of the contingent deferred purchase price of any acquired property
(including Capital Stock) not to exceed $15 million in aggregate principal
amount at any one time outstanding,
(15) the guarantee of Indebtedness of Joint Ventures to the extent
permitted by clause (12) of the definition of Permitted Investments, and
(16) after the Acquisition Closing Date, Indebtedness of a
Restricted Subsidiary, not to exceed $20 million in aggregate principal
amount incurred to finance the costs associated with construction of a
printing facility in the United Kingdom, the acquisition of assets related
to such facility, and fees and expenses relating to such financing;
provided that the Company applies, or causes a Restricted Subsidiary to
apply, an amount equal to the net cash proceeds from the Indebtedness
incurred under this clause (16) to the permanent reduction of Indebted-
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ness (including, in the case of any Indebtedness outstanding under a
revolving credit facility, the permanent reduction of amounts that may be
reborrowed thereunder by an equivalent amount).
"Permitted Investments" means
(1) Investments by the Company or any Restricted Subsidiary of the
Company in, or for the benefit of, any Restricted Subsidiary of the
Company (whether existing on the Issue Date or created thereafter and
including Investments in any Person, if after giving effect to such
Investment, such Person would be a Restricted Subsidiary of the Company or
such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company)
and Investments in, or for the benefit of, the Company by any Restricted
Subsidiary of the Company;
(2) cash and Cash Equivalents;
(3) Investments existing on the Issue Date;
(4) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or customers or
in settlement of or other resolution of claims or disputes, and in each
case, extensions, modifications and remands thereof;
(5) so long as no Default or Event of Default has occurred and is
continuing, loans and advances in the ordinary course of business by the
Company and its Restricted Subsidiaries to their respective employees not
to exceed $2.5 million at any one time outstanding;
(6) so long as no Default or Event of Default has occurred and is
continuing, additional Investments in a Person or Persons principally
engaged in a Related Business not to exceed $30 million at any one time
outstanding;
(7) Investments received by the Company or its Restricted
Subsidiaries as consideration for asset sales, including Asset Sales;
provided, however, in the case of an Asset Sale, such Asset Sale is
effected in compliance with Section 4.16;
(8) Currency Agreements and Interest Swap Obligations entered into
in the ordinary course of the Company's or its Restricted Subsidiaries'
business and otherwise in compliance with this Indenture;
(9) guarantees by the Company or any of its Restricted Subsidiaries
of Indebtedness or other obligations otherwise permitted to be incurred by
the Company or any of its Restricted Subsidiaries under this Indenture;
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(10) so long as no Default or Event of Default has occurred and is
continuing, Investments in Joint Ventures not to exceed $10 million at any
one time outstanding;
(11) any Investments received in exchange for the issuance of
Qualified Capital Stock of the Company or any warrants, rights or options
to purchase or acquire shares of any such Qualified Capital Stock;
(12) so long as no Default or Event of Default has occurred and is
continuing, the guarantee by the Company of Indebtedness of Joint Ventures
not to exceed $10 million in aggregate principal amount at any one time
outstanding; and
(13) so long as no Default or Event of Default has occurred and is
continuing, loans to Xxxxxxx X. Xxxxxx required to be made by the Company
pursuant to the Consulting Agreement made as of May 18, 2000 between the
Company and Xxxxxxx X. Xxxxxx.
"Permitted Junior Securities" means
(1) Qualified Capital Stock of the Company or any Guarantor; or
(2) debt securities that are subordinated to (a) all Senior Debt or
Guarantor Senior Debt and (b) any debt securities issued in exchange for
Senior Debt or Guarantor Senior Debt to substantially the same extent as,
or to a greater extent than, the Securities and the Guarantees of the
Securities are subordinated to Senior Debt and Guarantor Senior Debt,
respectively, under this Indenture.
"Permitted Liens" means
(1) Liens securing Indebtedness consisting of Capitalized Lease
Obligations;
(2) Liens securing any Senior Debt or Guarantor Senior Debt,
including liens securing the New Credit Agreement;
(3) Liens on property existing at the time of acquisition thereof by
the Company or a Restricted Subsidiary; provided that such Liens were in
existence prior to the contemplation of such acquisition;
(4) Liens at any time outstanding with respect to assets of the
Company and its Restricted Subsidiaries, the fair market value of which at
the time the Lien was imposed does not exceed $1 million;
(5) Liens securing Indebtedness incurred pursuant to clauses (9),
(11), (13) or (14) of the definition of Permitted Indebtedness;
(6) Liens securing Indebtedness incurred pursuant to clause (16) of
the definition of Permitted Indebtedness; and
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(7) Liens created to replace Liens described in clause (3) or (6)
above to the extent that such Liens do not extend beyond the originally
encumbered property (other than improvements thereto or thereon,
attachments and other modifications reasonably required to maintain such
property) and are not otherwise materially less favorable to the Company
and its Restricted Subsidiaries than the Liens being replaced, as
determined by the Board of Directors of the Company in good faith.
"Person" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof.
"Physical Securities" has the meaning set forth in Section 2.01.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Securities) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article II of Regulation S-X under the Securities Act.
"Pro Rata Share" has the meaning set forth in Section 4.16.
"Productive Assets" means assets of a kind used or usable in the
business of the Company and its Restricted Subsidiaries as conducted on the date
of the relevant Asset Sale or in a Related Business (including Capital Stock in
any such business or Related Business and licenses or similar rights to
operate); provided, however, that accounts receivable acquired as part of an
acquisition of assets of a kind used or usable in such business shall be deemed
to be Productive Assets.
"Purchase Agreement" means the purchase agreement dated as of August
3, 2000 by and among the Company, the Guarantors and the Initial Purchasers.
"Qualified Capital Stock" means any stock that is not Disqualified
Capital Stock.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Record Date" means the applicable Record Date (whether or not a
Business Day) specified in the Securities.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
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"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.
"Registered Exchange Offer" means the offer to exchange the Series B
Securities for all of the outstanding Series A Securities in accordance with the
Registration Rights Agreement.
"Registrar" has the meaning set forth in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the Issue Date among the Company, the Guarantors and the
Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" has the meaning set forth in Section
2.01.
"Related Business" means the businesses of the Company and its
Restricted Subsidiaries as conducted on the Issue Date and similar,
complementary or related businesses or reasonable extensions, developments or
expansions thereof.
"Responsible Officer" means, when used with respect to the Trustee,
any officer in the Corporate Trust Administration department at the Corporate
Trust Office of the Trustee including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer, assistant
trust officer, or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" has the meaning set forth in Section 4.03.
"Restricted Period" means 40 days after the later of commencement of
the offering of the Securities and the Issue Date.
"Restricted Global Security" has the meaning set forth in Section
2.01.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided that the Trustee shall be entitled to request
and conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
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"S&P" means Standard & Poor's, A division of the XxXxxx-Xxxx
Companies, and its successors.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such Property;
provided, however, that a Sale and Leaseback Transaction shall not include a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration (exclusive of
indemnities) of less than $1,000,000 (a "De Minimis Transaction") so long as the
aggregate consideration (exclusive of indemnities) received by the Company or
its Restricted Subsidiaries from all De Minimis Transactions does not exceed an
aggregate of $10,000,000.
"Scientific Games" means Scientific Games Holdings Corp.
"Scientific Games Acquisition" has the meaning set forth in the
definition of "Transactions."
"Securities Act" means the Securities Act of 1933, as amended, or
any successor statute or statutes thereto.
"Securities Intermediary" means The Bank of New York, or any
successor securities intermediary under the Escrow Agreement.
"Securityholder" or "Holder" means the Person in whose name a
Security is registered on the Registrar's books.
"Senior Debt" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Securities. Without limiting the
generality of the foregoing, "Senior Debt" shall also include the principal of,
premium, if any, interest (including any interest accruing subsequent to the
filing of a petition of bankruptcy at the rate provided for in the documentation
with respect thereto, whether or not such interest is an allowed claim under
applicable law) on, and all other amounts owing in respect of, all monetary
obligations (including guarantees thereof) of every nature of the Company under
the New Credit Agreement, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities. "Senior Debt" shall not include
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(1) Indebtedness evidenced by the Securities;
(2) any Indebtedness of the Company to a Subsidiary of the Company;
(3) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Company or any Subsidiary of the Company or
Affiliate of the Company (including, without limitation, amounts owed for
compensation);
(4) trade payables and other current liabilities arising in the
ordinary course of business in connection with obtaining goods, materials
or services;
(5) Indebtedness represented by Disqualified Stock;
(6) any liability for federal, state, local or other taxes owed or
owing by the Company;
(7) that portion of any Indebtedness incurred in violation of this
Indenture;
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of the Company; and
(9) any Indebtedness which, when incurred and without respect to any
other election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is
without recourse to the Company.
"Significant Subsidiary" shall have the meaning set forth in Rule
1.02(w) of Regulation S-X under the Securities Act.
"Statement" has the meaning set forth in the definition of "Tender
Offer."
"Subsidiary," with respect to any Person, means (i) any corporation
of which the outstanding Capital Stock having at least a majority 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 such Person, or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Surviving Entity" has the meaning set forth in Section 5.01.
"Tender Offer" means the Company's offer to purchase for cash, upon
the terms and subject to the conditions set forth in 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, the "Statement") and in the related
Consent and Letter of Transmittal (as it may be supplemented and amended from
time to time), all of the outstanding Existing Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is
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qualified under the TIA, and thereafter as in effect on the date on which this
Indenture is qualified under the TIA, or as the TIA may otherwise be amended
from time to time.
"Transactions" means (1) the acquisition of Scientific Games
pursuant to the Agreement and Plan of Merger, dated as of May 18, 2000 (as the
same may hereafter be amended, the "Merger Agreement"), by and among the Company
Corporation, ATX Enterprises Inc. and Scientific Games Holdings Corp. (the
"Scientific Games Acquisition"), (2) the execution and delivery of the New
Credit Agreement and the anticipated borrowing of approximately $280 million
thereunder in connection with the consummation of the Scientific Games
Acquisition, (3) the issuance of Olivetti Preferred Stock for aggregate net cash
proceeds of approximately $110 million, (4) the issuance of Olivetti Preferred
Stock to Affiliates of Ramius Capital Group, LLC in satisfaction of up to $5.5
million of fees and expenses payable in connection with the issuance and sale of
the Olivetti Preferred Stock, and (5) the application of approximately $213
million to the repayment of existing Indebtedness of the Company and Scientific
Games.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Subsidiary" of any Person means
(1) any Subsidiary of such Person that at the time of determination
shall be or continue to be designated an Unrestricted Subsidiary by the
Board of Directors of such Person in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; provided, however, that
(x) the Company certifies to the Trustee that such designation
complies with Section 4.03 and
(y) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness pursuant to which the lender has
recourse to any of the assets of the Company or any of its Restricted
Subsidiaries except to the extent permitted by Section 4.03 and Section
4.04.
The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary only if
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(x) immediately after giving effect to such designation, the Company
is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.04 and
(y) immediately before and immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations of and
obligations guaranteed by the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing
(a) the then outstanding aggregate principal amount of such
Indebtedness into
(b) the sum of the total of the products obtained by multiplying
(1) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal,
including payment at final maturity, in respect thereof, by
(2) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of
such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any
Restricted Subsidiary of such Person of which all the outstanding voting
securities (other than directors' qualifying shares) are owned by such Person or
any Wholly Owned Restricted Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
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"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
and, in each case, not otherwise defined herein have the meanings assigned to
them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words in the
plural include the singular;
(4) provisions apply to successive events and transactions; and
(5) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Series A Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A hereto.
The Series B Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of Exhibit B hereto. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Securities and
any notation, legend or endorsement on them. Each Security shall be dated the
date of its authentication and shall show the date of its issuance. Each
Security shall have an executed Guarantee from each of the Guarantors endorsed
thereon substantially in the form of Exhibit H hereto.
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The terms and provisions contained in the Securities, annexed hereto
as Exhibits A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company, the Guarantors and
the Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
Securities offered and sold in their initial distribution to
Qualified Institutional Buyers in reliance on Rule 144A or in offshore
transactions in reliance on Regulation S shall be initially issued in the form
of Global Securities in fully registered form without interest coupons,
substantially in the form of Exhibit A, with such applicable legends as are
provided for in Exhibit A and Exhibit C.
Securities offered and sold in their initial distribution to
Qualified Institutional Buyers in reliance on Rule 144A shall be issued in the
form of one or more Global Securities (collectively, and together with their
successor securities, the "Restricted Global Security") which shall be
registered in the name of the Depository or its nominee and deposited with the
Trustee, as custodian for the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided, for credit by the
Depository to the respective accounts of beneficial owners of the Securities
represented thereby (or such other accounts as they may direct). The aggregate
principal amount of the Restricted Global Security may be increased or decreased
from time to time by adjustments made on the records of the Trustee, as
custodian for the Depository, in connection with a corresponding decrease or
increase in the aggregate principal amount of the Regulation S Global Security,
as hereinafter provided in Section 2.06.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall initially be in the form of one or more temporary registered,
global book-entry Global Securities (collectively, and together with their
successor securities, the "Regulation S Global Security") which shall be
registered in the name of the Depository or its nominee and deposited with the
Trustee, as custodian for the Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided, for credit by the
Depository to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct), provided that
upon such deposit all such Securities shall be credited to or through accounts
maintained at the Depository by or on behalf of Euroclear or Clearstream. The
aggregate principal amount of the Regulation S Global Security may be increased
or decreased from time to time by adjustments made on the records of the
Trustee, as custodian for the Depository, as hereinafter provided. As used
herein, the term "Restricted Period" means the period of 40 days commencing on
the day after the later of (a) the offering date and (b) the date of this
Indenture; provided that promptly after the occurrence of the date described in
clause (a), the Company shall give written notice thereof to the Trustee,
identifying therein the day on which the Restricted Period expires.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature.
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If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Series A Securities for original
issue on the Issue Date in the aggregate principal amount not to exceed
$150,000,000, and (ii) Series B Securities from time to time only in exchange
for a like principal amount of Series A Securities, in each case upon a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of Securities to be authenticated, the
series of Securities and the date on which the Securities are to be
authenticated. The aggregate principal amount of Securities outstanding at any
time may not exceed $150,000,000, except as provided in Section 2.07. Upon
receipt of a written order of the Company in the form of an Officers'
Certificate, the Trustee shall authenticate Securities in substitution for
Securities originally issued to reflect any name change of the Company. The
Trustee may appoint an authenticating agent reasonably acceptable to the Company
to authenticate Securities. Unless otherwise provided in the 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 an
Agent to deal with the Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company, upon notice to the Trustee, may have one or
more additional Paying Agents reasonably acceptable to the Trustee. The term
"Paying Agent" includes any additional Paying Agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent, or
fails to give the foregoing notice, the Trustee shall act as such.
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The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of demands and notices in connection with the
Securities, until such time as the Trustee has resigned or a successor has been
appointed. The Paying Agent or Registrar may resign upon 45 days notice to the
Company.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities (whether such assets have been
distributed to it by the Company or any other obligor on the Securities), and
shall notify the Trustee of any Default by the Company (or any other obligor on
the Securities) in making any such payment. If the Company or an Affiliate of
the Company acts as Paying Agent, it shall segregate the money and hold it in a
separate trust. The Company at any time may require a Paying Agent to distribute
all assets held by it to the Trustee and account for any assets disbursed and
the Trustee may at any time during the continuance of any payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent shall have no further liability
for such assets.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and otherwise comply with TIA ss. 312(a). If the Trustee is not the
Registrar, the Company shall furnish or cause the Registrar to furnish to the
Trustee by each Record Date and at such other times as the Trustee may
reasonably request in writing a list as of such date and in such form as the
Trustee may reasonably require of the names and addresses of Holders, which list
(subject to Section 7.01 hereof) may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
(a) An entire Global Security may be exchanged for Certificated
Securities if (i) the Company delivers to the Trustee notice from DTC that (x)
it is unwilling or unable to continue as Depositary for the Global Securities
and the Company thereupon fails to appoint a successor Depositary within 90 days
or (y) that DTC has ceased to be a clearing agency registered under the Exchange
Act, (ii) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of Certificated Securities or (iii) there shall
have occurred and be continuing a Default or an Event of Default with respect to
the Securities. In addition, beneficial interests in a Global Security may,
subject to the restrictions on the transferability of the Securities set forth
herein and upon delivery of a certificate in the form of Exhibit D, be exchanged
for Certificated Securities upon request but only upon at least 20 days' prior
written notice given to the Trustee by or on behalf of the Depository (in
accordance with the Depository's customary procedures) and will bear the
applicable legends set forth in Exhibit A. The
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Company shall duly execute and deliver to the Trustee upon request Certificated
Securities for such purpose.
(b) If any Global Security is to be exchanged for other Securities
or cancelled in whole, it shall be surrendered by or on behalf of the Depository
or its nominee to the Trustee, as Registrar, for exchange or cancellation as
provided in this Article Two. If any Global Security is to be exchanged for
other Securities or cancelled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, such
Global Security shall be so surrendered for exchange or cancellation as provided
in this Article Two or, if the Trustee is acting as custodian for the Depository
or its nominee (or is party to a similar arrangement) with respect to such
Global Security, the principal amount thereof shall be reduced or increased by
an amount equal to the portion thereof to be so exchanged or cancelled, or the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, in each case by means of an appropriate
adjustment made on the records of the Trustee, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depository or its
authorized representatives to make a corresponding adjustment to its records
(including by crediting or debiting any Agent Member's account as necessary to
reflect any transfer or exchange of a beneficial interest). Upon any such
surrender or adjustment of a Global Security, the Company shall execute and the
Trustee shall, subject to this Article Two, 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 Depository 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 or in paragraph (n) below, 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 conclusively
rely upon any order, direction or request of the Depository or its authorized
representative which is given or made pursuant to this Article Two if such
order, direction or request is given or made in accordance with the Applicable
Procedures.
(c) Subject to the provisions in the legends required by this
Indenture, the registered Holder may grant proxies and otherwise authorize any
Person, including Agent Members and Persons who may hold interests in Agent
Members, to take any action that such Holder is entitled to take under this
Indenture.
(d) Neither Agent Members nor any other Person on whose behalf Agent
Members may act shall have any rights under this Indenture with respect to any
Global Security held on their behalf by the Depository or under the Global
Security, and the Depository 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. 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 Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security. With respect to any Global Security deposited with the Trustee as
custodian for the Depository for credit to their respective accounts (or to such
other accounts as they may direct) at Euroclear or Clearstream, the provisions
of the "Operating Procedures of the Euroclear System" and the "Terms and
Con-
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ditions Governing Use of Euroclear," and the "Management Regulations" and
"Instructions to Participants" of Clearstream, respectively, shall be applicable
to such Global Security.
(e) Upon presentation for transfer or exchange of any Security at
the office of the Trustee, as Registrar, located in The City of New York,
accompanied by a written instrument of transfer or exchange in the form approved
by the Company (it being understood that, until notice to the contrary is given
to holders of Securities, the Company shall be deemed to have approved the form
of instrument of transfer or exchange, if any, printed on any Security),
executed by the registered Holder, in person or by such Holder's attorney
thereunto duly authorized in writing, and upon compliance with this Section
2.06, such Security shall be transferred upon the Register, and a new Security
shall be authenticated and issued in the name of the transferee. Notwithstanding
any provision to the contrary herein or in the Securities, transfers of a Global
Security, in whole or in part, and transfers of interests therein of the kind
described in this Section 2.06, shall only be made in accordance with this
Section 2.06. Transfers and exchanges subject to this Section 2.06 shall also be
subject to the other provisions of this Indenture that are not inconsistent with
this Section 2.06.
(f) General. A Global Security may be transferred, in whole and not
in part, only to another nominee of DTC or to a successor of DTC, or its nominee
in certain limited circumstances as described below, and no such transfer to any
such other Person may be registered; provided, however, that this paragraph (f)
shall not prohibit any transfer of a Security that is issued in exchange for a
Global Security but is not itself a Global Security. No transfer of a Security
to any Person shall be effective under this Indenture or the Securities unless
and until such Security has been registered in the name of such Person. Nothing
in this paragraph (f) shall prohibit or render ineffective any transfer of a
beneficial interest in a Global Security effected in accordance with the other
provisions of this Section 2.06.
(g) Restricted Global Security to Regulation S Global Security. If
the holder of a beneficial interest in the Restricted Global Security wishes at
any time to transfer such interest to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Regulation S Global
Security, such transfer may be effected, subject to the Applicable Procedures,
only in accordance with this paragraph (g). Upon receipt by the Trustee, as
Registrar, of (A) written instructions given by or on behalf of the Depository
in accordance with the Applicable Procedures directing the Trustee to credit or
cause to be credited to a specified Agent Member's account a beneficial interest
in the Regulation S Global Security in a specified principal amount and to cause
to be debited from another specified Agent Member's account a beneficial
interest in the Restricted Global Security in an equal principal amount and (B)
a certificate in substantially the form set forth in Exhibit E signed by or on
behalf of the holder of such beneficial interest in the Restricted Global
Security, the Trustee, as Registrar, shall reduce the principal amount of a
Restricted Global Security and increase the principal amount of the Regulation S
Global Security by such specified principal amount.
(h) Regulation S Global Security to Restricted Global Security. If
the holder of a beneficial interest in the Regulation S Global Security at any
time wishes after the expiration of the Restricted Period to transfer such
interest to a Person who wishes to take delivery thereof in the form of a
beneficial interest in the Restricted Global Security, such transfer may be
effected, subject to the Appli-
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cable Procedures, only in accordance with this paragraph (h). Upon receipt by
the Trustee, as Registrar, of (A) written instructions given by or on behalf of
the Depository in accordance with the Applicable Procedures directing the
Trustee to credit or cause to be credited to a specified Agent Member's account
a beneficial interest in the Restricted Global Security in a specified principal
amount and to cause to be debited from another specified Agent Member's account
a beneficial interest in the Regulation S Global Security in an equal principal
amount and (B) a certificate in substantially the form set forth in Exhibit F
signed by or on behalf of the holder of such beneficial interest in the
Regulation S Global Security, the Trustee, as Registrar, shall reduce the
principal amount of such Regulation S Global Security and increase the principal
amount of the Restricted Global Security by such specified principal amount.
(i) Non-Global Restricted Security to Global Security. If the Holder
of a Restricted Security (other than a Global Security) wishes at any time to
transfer all or any portion of such Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in the Restricted Global
Security or the Regulation S Global Security, such transfer may be effected,
subject to the Applicable Procedures, only in accordance with this paragraph
(i). Upon receipt by the Trustee, as Registrar, of (A) such Restricted Security
and written instructions given by or on behalf of such Holder directing the
Trustee to credit or cause to be credited to a specified Agent Member's account
a beneficial interest in the Restricted Global Security or the Regulation S
Global Security, as the case may be, in a specified principal amount equal to
the principal amount of the Restricted Security (or portion thereof) to be so
transferred, and (B) an appropriately completed certificate substantially in the
form set forth in Exhibit G-1 hereto, if the specified account is to be credited
with a beneficial interest in the Restricted Global Security, or Exhibit G-2
hereto, if the specified account is to be credited with a beneficial interest in
the Regulation S Global Security, signed by or on behalf of such Holder, then
the Trustee, as Registrar, shall, subject to paragraph (j) below, cancel such
Restricted Security (and issue a new Restricted Security in respect of any
untransferred portion thereof) as provided in this Section 2.06 and increase the
principal amount of the Restricted Global Security or Regulation S Global
Security, as the case may be, by the specified principal amount.
(j) Other Exchanges. Securities that are not Global Securities may
be exchanged (on transfer or otherwise) for Securities that are not Global
Securities or for beneficial interests in a Global Security (if any is then
outstanding) only in accordance with such procedures, which shall be
substantially consistent with the provisions of paragraphs (f) through (i) above
(including the certification requirements intended to insure that transfers of
beneficial interests in a Global Security comply with Rule 144A under the
Securities Act, Rule 144 under the Securities Act or Regulation S, as the case
may be) and any Applicable Procedures, as may be from time to time adopted by
the Company and the Trustee. The Trustee shall be entitled to request in writing
and receive, from time to time, instructions as to such procedures adopted or
approved by the Company.
(k) When Certificated Securities are presented to the Registrar with
a request to register the transfer of such Certificated Securities or to
exchange such Certificated Securities for an equal principal amount of
Certificated Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transaction are met; provided, however, that the Securities surrendered for
transfer or exchange shall be duly endorsed or ac-
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companied by a written instrument of transfer in form satisfactory to the
Company and the Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Certificated
Securities at the Registrar's written request. No service charge shall be made
for any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchanges or transfers pursuant to
Sections 2.10, 3.06, 4.15, 4.16 or 9.05). The Registrar shall not be required to
register the transfer of or exchange of any Security (i) during a period between
(a) the date the Trustee receives notice of a redemption from the Company and
the date the Securities to be redeemed are selected by the Trustee or (b) a
record date and the next succeeding Interest Payment Date or (ii) selected for
redemption in whole or in part pursuant to Article Three hereof, except the
unredeemed portion of any Security being redeemed in part. The Company is not
required to transfer or exchange: (i) any Security selected for redemption or
tendered, or (ii) any Security during the period between (a) the date of mailing
by the Company of a notice of a redemption and the date the Securities to be
redeemed are selected by the Trustee or (b) a record date and the next
succeeding Interest Payment Date.
(l) If a Series A Security is a Restricted Security and a
Certificated Security, then as provided in this Indenture and subject to the
limitations herein set forth, the Holder, provided it is a Qualified
Institutional Buyer, may exchange such Security for a Book-Entry Security by
instructing the Trustee (by completing the transferee certificate in the form of
Exhibit G-1 or G-2 hereto, as applicable) to arrange for such Series A Security
to be represented by a beneficial interest in a Global Security in accordance
with the customary procedures of the Depository.
(m) Upon any exchange provided for in Section 2.06(a), the Company
shall execute and the Trustee shall authenticate and deliver to the Person
specified by the Depository a new Certificated Security registered in such names
and in such authorized denominations as the Depository, pursuant to the
instructions of the beneficial owner of the Securities requesting the exchange,
shall instruct the Trustee. Thereupon, the beneficial ownership of such Global
Security shown on the records maintained by the Depository or its nominee shall
be reduced by the amounts so exchanged and an appropriate endorsement shall be
made by or on behalf of the Trustee on the Global Security. Any such exchange
shall be effected through the Depository in accordance with the procedures of
the Depository therefor.
(n) Notwithstanding the foregoing, no Global Security shall be
registered for transfer or exchange, or authenticated and delivered in the name
of a Person other than the Depository for such Global Security or its nominee
until (i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security or if at any time the Depository
ceases to be a clearing agency registered under the Exchange Act, and a
successor depository is not appointed by the Company within 30 days, (ii) the
Company executes and delivers to the Trustee a Company Order that all such
Global Securities shall be exchangeable or (iii) there shall have occurred and
be continuing an Event of Default. Upon the occurrence in respect of any Global
Security representing the Series A Securities of any one or more of the
conditions specified in clause (i), (ii) or (iii) of the preceding sentence,
such Global Security may be registered for transfer or exchange for Series A
Securities registered in the
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names of, authenticated and delivered to, such Persons as the Trustee or the
Depository, as the case may be, shall direct.
(o) Except as provided above, any Security authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
any Global Security shall also be a Global Security and bear the legend
specified in Exhibit C.
(p) Neither the Trustee, the Registrar, any Paying Agent, the
Company nor any Guarantor shall have any responsibility or liability for the
accuracy of the books and records of, or for any actions or omissions of, the
Depository, Euroclear, Clearstream or any Agent Member.
(q) Notwithstanding anything contained herein to the contrary,
neither the Trustee nor the Registrar shall be responsible for ascertaining
whether any transfer complies with the registration provisions of or exemptions
from the Securities Act, applicable state securities laws, ERISA, the Internal
Revenue Code of 1986 or the Investment Company Act of 1940; provided, however,
that if a certificate is specifically required by the express terms of this
Section 2.06 to be delivered to a Trustee by a purchaser or transferee of a
Security, the Trustee shall be under a duty to receive and examine the same to
determine whether it conforms on its face to the requirements of this Indenture
and shall promptly notify the party delivering the same if such certificate does
not conform.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's and Company's requirements are met. If
required by the Trustee or the Company, such Holder shall provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Guarantors, the Trustee and any Agent from
any loss which any of them may suffer if a Security is replaced. The Company may
charge such Holder for its reasonable out-of-pocket expenses in replacing a
Security, including reasonable fees and expenses of counsel. Every replacement
Security shall constitute an additional obligation of the Company and every
replacement Guarantee shall constitute an additional obligation of the
Guarantors.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
Subject to Section 2.09, a Security does not cease to be outstanding because the
Company or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
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If on a Redemption Date or the Final Maturity Date the Paying Agent
holds U.S. Legal Tender sufficient to pay all of the principal and interest due
on the Securities payable on that date, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by the Company or any of its Affiliates shall be disregarded, except that,
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities that the
Trustee has received notice are so owned shall be disregarded.
The Trustee may require an Officers' Certificate listing Securities
owned by the Company or its Affiliates.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel and dispose of all Securities surrendered for
transfer, exchange, payment or cancellation, in accordance with its customary
practices. Subject to Section 2.07, the Company may not issue new Securities to
replace Securities that it has paid or delivered to the Trustee for
cancellation. If the Company shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company will pay interest on overdue principal from time to time
on demand at the rate of interest then borne by the Securities. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Securities. Interest will be computed on
the basis of a
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360-day year comprised of twelve 30-day months and, in the case of a partial
month, the actual number of days elapsed.
If the Company defaults in a payment of interest on the Securities,
it shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Company for the payment of defaulted interest.
At least 15 days before the subsequent special record date, the Company shall
mail to each Holder, with a copy to the Trustee (or cause the Trustee to mail) a
notice that states the subsequent special record date, the payment date and the
amount of defaulted interest, and interest payable on such defaulted interest,
if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(a) shall be paid
to Holders as of the regular Record Date for the Interest Payment Date for which
interest has not been paid.
Notwithstanding the foregoing, the Company may make payment of
defaulted interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the securities may be listed.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided, however, that no
representation is hereby deemed to be made as to the correctness or accuracy of
the CUSIP numbers printed in the notice or on the Securities, and that reliance
may be placed only on the other identification numbers printed on the
Securities. The Company shall promptly notify the Trustee of any change in the
CUSIP number.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment Date
and the Final Maturity Date, the Company shall have deposited with the Paying
Agent in immediately available funds U.S. Legal Tender sufficient to make cash
payments, if any, due on such Interest Payment Date or Final Maturity Date, as
the case may be, in a timely manner which permits the Paying Agent to remit
payment to the Holders on such Interest Payment Date or Final Maturity Date, as
the case may be.
SECTION 2.15. Liquidated Damages Under Registration Agreement.
Under certain circumstances, the Company shall be obligated to pay
Liquidated Damages to the Holders, all as set forth in Section 5 of the
Registration Rights Agreement. The terms thereof are hereby incorporated herein
by reference. References in this Indenture to payments of interest shall be
deemed to include payments of Liquidated Damages.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Paragraph 5 or Paragraph 6 of the Securities, it shall
notify the Trustee in writing of the Redemption Date, the Redemption Price and
the principal amount of Securities to be redeemed. The Company shall give notice
of redemption to the Paying Agent and Trustee at least 45 days but not more than
60 days before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee), together with an Officers' Certificate stating
that such redemption will comply with the conditions contained herein. Any such
notice may be cancelled at any time prior to notice of such redemption being
mailed to any Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed.
In the event that less than all of the Securities are to be redeemed
at any time pursuant to the optional redemption provisions of Paragraph 5 or
Paragraph 6 of the Securities, selection of such Securities for redemption will
be made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Securities are listed or, if
the Securities are not then listed on a national securities exchange, on a pro
rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate and in such manner as complies with applicable law; provided,
however, that no Securities of a principal amount of $1,000 or less shall be
redeemed in part; and provided, further, that if a redemption is made with the
proceeds of an Equity Offering pursuant to Paragraph 6 of the Securities,
selection of the Securities or portions thereof for redemption shall be made by
the Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of the Depository), unless such method is
otherwise prohibited.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 or less may be redeemed only in
whole. The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
SECTION 3.03. Notice of Optional Redemption.
In the case of an optional redemption pursuant to the provisions of
Paragraph 5 or Paragraph 6 of the Securities, at least 30 days but not more than
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first class mail, postage prepaid, to each Holder whose Securities are to be
redeemed at its registered address. At the Company's request, the Trustee shall
give
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the notice of redemption in the Company's name and at the Company's expense.
Each notice for redemption shall identify the Securities to be redeemed
(including the CUSIP number(s), if any) and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption; and
(8) the paragraph of the Securities pursuant to which the Securities
are to be redeemed.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
or Section 3.07, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price plus accrued interest, if any. Upon
surrender to the Trustee or Paying Agent, such Securities called for redemption
shall be paid at the Redemption Price (which shall include accrued interest
thereon to the Redemption Date), but installments of interest, the maturity of
which is on or prior to the Redemption Date, shall be payable to Holders of
record at the close of business on the relevant Record Dates.
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SECTION 3.05. Deposit of Redemption Price.
On or before 10:00 a.m. New York Time on the Redemption Date, the
Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Securities to be
redeemed on that date (other than Securities or portions thereof called for
redemption on that date which have been delivered by the Company to the Trustee
for cancellation). The Paying Agent or Trustee shall promptly return to the
Company any U.S. Legal Tender so deposited which is not required for that
purpose.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment when due of such Redemption Price plus
accrued interest, if any, interest on the Securities to be redeemed will cease
to accrue on and after the applicable Redemption Date, whether or not such
Securities are presented for payment.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender and cancellation of a Security that is to be redeemed
in part only, the Trustee shall authenticate for the Holder a new Security or
Securities in a principal amount equal to the unredeemed portion of the Security
surrendered.
SECTION 3.07. Special Mandatory Redemption.
In the event that (x) the funds in the Escrow Account have not been
released to the Company (or its designee) in accordance with the requirements of
Section 3(a) of the Escrow Agreement by 11:59 p.m. New York Time on the Deadline
Date, (y) the Merger Agreement has been terminated on or before the Deadline
Date or (z) the Tender Offer is terminated or withdrawn prior to acceptance for
payment of Existing Notes, the tender of which represents the Requisite Consents
(each of the events referred to in the preceding clauses (x), (y) and (z) being
herein sometimes referred to as a "Mandatory Redemption Event"):
(i) The Company shall notify the Trustee and the Securities
Intermediary in writing on the next succeeding Business Day after a
Mandatory Redemption Event that the Company will redeem the Securities on
a specified Redemption Date no later than the Mandatory Redemption Date at
the Mandatory Redemption Price plus accrued and unpaid interest to the
Redemption Date (the "Mandatory Redemption").
(ii) Within two Business Days after a Mandatory Redemption Event,
the Company shall mail a notice (the "Mandatory Redemption Notice") by
first class mail, postage prepaid, to each Holder at its registered
address. The Mandatory Redemption Notice shall be mailed at least 10 days
(or 30 days if legally required by DTC) but not more than 45 days before
the Redemption Date. At the Company's request, the Trustee shall give the
Mandatory Redemption Notice in the Company's name and at the Company's
expense. The Mandatory Redemption Notice shall identify the Securities to
be redeemed (including the CUSIP number(s), if any) and shall state:
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(1) the Redemption Date;
(2) the Mandatory Redemption Price and the amount of accrued
interest to be paid;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price plus accrued
interest, if any;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to
accrue on and after the Redemption Date, and the only remaining
right of the Holders of such Securities is to receive payment of the
Redemption Price upon surrender to the Paying Agent of the
Securities redeemed; and
(6) the Securities are to be redeemed pursuant to this Section
3.07.
(iii) On or before 10:00 a.m. New York Time on the Redemption Date
for a Mandatory Redemption, the Company shall deposit with the Paying
Agent an amount of funds such that on the Redemption Date the Paying Agent
shall have sufficient immediately available funds (including funds made
available under the Escrow Agreement) to pay the Mandatory Redemption
Price plus accrued and unpaid interest to the Redemption Date for all
outstanding Securities. The Paying Agent or Trustee shall promptly return
to the Company any amount so deposited which is not required for that
purpose.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company will pay the principal of and interest on the Securities
in the manner provided in the Securities and in this Indenture. An installment
of principal of or interest on the Securities shall be considered paid on the
date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds on that date U.S. Legal Tender designated for
and sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders pursuant to the terms of this Indenture. Interest
including defaulted interest and Liquidated Damages, if any, will be computed on
the basis of a 360-day year comprised of twelve 30-day months and in the case of
a partial month, the actual number of days elapsed.
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Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal, premium or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 14.02.
The Company hereby initially designates the office of the Trustee at 000 Xxxxxxx
Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000 as its office or agency in the
Borough of Manhattan, The City of New York where presentations and surrenders
may be made and notices or demands may be served on the Company.
SECTION 4.03. Limitation on Restricted Payments.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly,
(a) declare or pay any dividend or make any distribution (other than
dividends or distributions payable in Qualified Capital Stock of the
Company or in warrants, rights or options (other than debt securities or
Disqualified Capital Stock) to acquire Qualified Capital Stock of the
Company) on or in respect of shares of the Company's Capital Stock to
holders of such Capital Stock,
(b) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any warrants, rights or options (other
than debt securities or Disqualified Capital Stock) to purchase or acquire
shares of any class of such Capital Stock, other than the exchange of such
Capital Stock, warrants, rights or options for Qualified Capital Stock
and/or for warrants, rights or options (other than debt securities or
Disqualified Capital Stock) to acquire Qualified Capital Stock, or
(c) make any Restricted Investment (other than Permitted
Investments)
(each of the foregoing actions set forth in clauses (a), (b) and (c)
being referred to as a "Restricted Payment"), if at the time of such Restricted
Payment or immediately after giving effect thereto,
(1) a Default or an Event of Default shall have occurred and be
continuing,
(2) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.04, or
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(3) the aggregate amount of Restricted Payments made subsequent to
the Issue Date (without duplication and excluding Restricted Payments
permitted by clauses (2)(a), (4) and (5) of the following paragraph) shall
exceed the sum of
(x) 50% of the cumulative Consolidated Net Income, or if
cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss, of the Company earned subsequent to November 1, 2000 and
on or prior to the last day of the most recent fiscal quarter for
which financial statements are available and have been delivered to
the Trustee as provided under Section 4.10, treating such period as
a single accounting period, plus
(y) 100% of the aggregate net cash proceeds in excess of $35
million received by the Company from any Person (other than a
Subsidiary of the Company) from the issuance and sale subsequent to
the Acquisition Closing Date and on or prior to the date the
Restricted Payment occurs of Qualified Capital Stock, or in respect
of warrants, rights or options (other than debt securities or
Disqualified Capital Stock) to acquire Qualified Capital Stock,
including Qualified Capital Stock issued upon the conversion of
convertible Indebtedness; provided that for the purposes of this
clause (y), the retirement and cancellation of the Company's 5.5%
Convertible Subordinated Debentures due 2001 in exchange for the
issuance of Additional Capital Stock shall be deemed to constitute
net cash proceeds from the issuance and sale of Qualified Capital
Stock to the extent of the aggregate principal amount of the
Company's 5.5% Convertible Subordinated Debentures due 2001 so
retired and canceled, plus
(z) with respect to Restricted Investments made after the
Issue Date, the net reduction of such Restricted Investments as a
result of (without duplication with respect to any item below as
among such items or any item listed in clause (3) of the next
paragraph)
(a) any disposition of any such Restricted Investments
sold or otherwise liquidated or repaid, to the extent of the
net cash proceeds received by the Company or a Restricted
Subsidiary,
(b) cash dividends or repayments of loans or advances in
cash to the Company or any Restricted Subsidiary or, to the
extent that a guarantee issued by the Company or a Restricted
Subsidiary constitutes a Restricted Investment, the release of
such guarantee, or
(c) a Person becoming a Restricted Subsidiary, to the
extent of the Company's portion (proportionate to the
Company's equity interest in such Person) of the fair market
value of the net assets of such Person;
provided, that in no event shall the net reduction in Restricted Investments
attributable to any particular Restricted Investment exceed the amount of such
Restricted Investment on the date originally made;
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provided, further, that any net reduction in Restricted Investments pursuant to
this clause (z) shall only be included in the calculation required by clause (3)
above to the extent that such net reduction in Restricted Investments is not
included in the Company's Consolidated Net Income.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph shall not prohibit
(1) the payment of any dividend or distribution or the redemption of
any securities within 60 days after the date of declaration of such
dividend or distribution or the giving of formal notice by the Company of
such redemption, if the dividend or distribution would have been permitted
on the date of declaration or the redemption would have been permitted on
the date of the giving of the formal notice thereof;
(2) so long as no Default or Event of Default shall have occurred
and be continuing, the acquisition of any shares of Capital Stock of the
Company or the making of a Restricted Investment, either
(a) in exchange for shares of Qualified Capital Stock and/or
warrants, rights or options (other than debt securities or
Disqualified Capital Stock) to acquire Qualified Capital Stock, or
(b) through the application of the net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary
of the Company) of shares of Qualified Capital Stock and/or
warrants, rights or options (other than debt securities or
Disqualified Capital Stock) to acquire Qualified Capital Stock;
(3) so long as no Default or Event of Default shall have occurred
and be continuing, any other Restricted Payment by the Company; provided,
however, that the aggregate amount of cash expended by the Company
pursuant to this clause (3) does not exceed $5 million plus, to the extent
that any Restricted Payment made pursuant to this clause (3) is in the
form of a Restricted Investment, the net reduction of such Restricted
Investments as a result of (without duplication with respect to any item
below as among such items or any item listed in clause (3)(z) of the
previous paragraph)
(a) any disposition of any such Restricted Investments sold or
otherwise liquidated or repaid, to the extent of the net cash
proceeds received by the Company or a Restricted Subsidiary,
(b) cash dividends or repayments of loans or advances in cash
to the Company or any Restricted Subsidiary or, to the extent that a
guarantee issued by the Company or a Restricted Subsidiary
constitutes a Restricted Investment, the release of such guarantee,
or
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(c) a Person becoming a Restricted Subsidiary, to the extent
of the Company's portion (proportionate to the Company's equity
interest in such Person) of the fair market value of the net assets
of such Person;
provided, that in no event shall the net reduction in Restricted
Investments attributable to any particular Restricted Investment exceed
the amount of such Restricted Investment on the date originally made;
provided, further, that any net reduction in Restricted Investments
pursuant to this clause (3) shall only be included in the calculation
required by this clause (3) to the extent that such net reduction in
Restricted Investments is not included in the Company's Consolidated Net
Income;
(4) the repurchase of any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any such
Capital Stock deemed to occur upon the exercise of stock options to
acquire Qualified Capital Stock or other similar arrangements to acquire
Qualified Capital Stock if such repurchased Capital Stock or warrants,
rights or options to acquire shares of any such Capital Stock represent a
portion of the exercise price thereof; and
(5) the acquisition of Restricted Investments of Scientific Games
outstanding on the Acquisition Closing Date upon consummation of the
Scientific Games Acquisition in connection therewith.
In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (3) of the immediately
preceding paragraph, amounts expended (to the extent such expenditure is in the
form of cash) pursuant to clauses (1), (2)(b) and (3) of this paragraph shall be
included in such calculation.
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, incur any Indebtedness, other than Permitted Indebtedness;
provided, however, that if no Default or Event of Default shall have occurred
and be continuing at the time or as a consequence of the incurrence of any such
Indebtedness, the Company or any Guarantor may incur Indebtedness if on the date
of the incurrence of such Indebtedness, after giving effect to the incurrence
thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is equal to
or greater than 2.0 to 1.0 prior to August 15, 2002 and 2.25 to 1.0 thereafter.
Neither the Company nor any Guarantor will, directly or indirectly,
in any event incur any Indebtedness which, by its terms or by the terms of any
agreement governing such Indebtedness, is both subordinated pursuant to its
terms in right of payment to any other Indebtedness of the Company or such
Guarantor, as the case may be, and senior in right of payment to the Securities
or any such Guarantor's Guarantee, as the case may be.
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SECTION 4.05. Corporate Existence.
Except as otherwise permitted by Article Five, the Company shall do
or cause to be done, at its own cost and expense, all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each of the Subsidiaries in
accordance with the respective organizational documents of the Company or the
Subsidiary, as the case may be, and the rights (charter and statutory) and
material franchises of the Company and each of the Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right or
franchise, or the corporate existence of any Subsidiary, if the Board of
Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and each of the
Subsidiaries, taken as a whole.
SECTION 4.06. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any of the Subsidiaries or
upon the income, profits or property of it or any of the Subsidiaries and (b)
all lawful claims for labor, materials and supplies which, in each case, if
unpaid, might by law become a material liability or Lien upon the property of it
or any of the Subsidiaries; 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 the amount, applicability or validity of which is
being contested in good faith by appropriate proceedings and for which adequate
provision has been made or for which adequate reserves, to the extent required
under GAAP, have been taken or where the failure to effect such payment or
discharge is not adverse in any material respect to the Holders.
SECTION 4.07. Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by or
leased by it or any of its Subsidiaries used or useful to the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept in
normal condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals and
replacements thereof, all as in its judgment may be reasonably necessary, so
that the business carried on in connection therewith may be properly conducted
at all times; provided, however, that nothing in this Section 4.07 shall prevent
the Company or any of the Subsidiaries from discontinuing the use, operation or
maintenance of any of such properties, or disposing of any of them, if such
properties are, in the reasonable and good faith judgment of the Board of
Directors of the Company or such Subsidiary, as the case may be, no longer
reasonably necessary in the conduct of their respective businesses or such
disposition is otherwise permitted by this Indenture.
(b) The Company shall provide or cause to be provided, for itself
and each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith judgment
of the Board of Directors of the Company, are adequate and appropriate for the
conduct of the business of the Company and such Subsidiaries in a prudent
manner, with reputable insurers or with the government of the United States of
America or an agency or instrumen-
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tality thereof, in such amounts, with such deductibles and by such methods as
shall be customary, in the good faith judgment of the Board of Directors of the
Company, for companies similarly situated in the industry.
SECTION 4.08. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each of the Company's fiscal years, an Officers' Certificate (signed
by the principal executive officer, principal financial officer and principal
accounting officer) stating that a review of its activities and the activities
of its Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing officers with a view to determining whether it has
kept, observed, performed and fulfilled its Obligations under this Indenture and
further stating, as to each such officer signing such certificate, that to the
best of his knowledge the Company during such preceding fiscal year has kept,
observed, performed and fulfilled each and every such Obligation and no Default
or Event of Default has occurred during such year and at the date of such
certificate there is no Default or Event of Default that has occurred and is
continuing or, if such signers do know of such Default or Event of Default, the
certificate shall describe the Default or Event of Default and its status in
reasonable detail. The Officers' Certificate shall also notify the Trustee
should the Company elect to change the manner in which it fixes its fiscal year
end.
(b) The annual financial statements delivered to the Trustee
pursuant to Section 4.10 shall be accompanied by a written report of the
Company's independent accountants that in conducting their audit of the
financial statements which are a part of such annual report or such annual
financial statements nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four, Five or
Six insofar as they relate to accounting matters or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Securities are outstanding, if any Default
or Event of Default has occurred and is continuing, the Company shall promptly
deliver to the Trustee by registered or certified mail or by telegram, telex or
facsimile transmission an Officers' Certificate specifying such event, notice or
other action within 30 Business Days of its becoming aware of such occurrence.
SECTION 4.09. Compliance with Laws.
The Company will comply, and will cause each of the Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States, all states and municipalities thereof, and of
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
for such noncompliances as are being contested in good faith and by appropriate
proceedings and except for such noncompliances as would not in the aggregate
have a material adverse effect on the financial condition or results of
operations of the Company and its Subsidiaries taken as a whole.
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SECTION 4.10. Commission Reports.
(a) The Company promptly will deliver to the Trustee, but in any
event no later than 15 days after it files with the Commission, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding that the
Company may not be required to remain subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company will file with the
Commission all information, documents and reports required to be filed with the
Commission to the extent permitted, and provide the Trustee and the Holders with
such annual reports and such information, documents and other reports specified
in Sections 13 and 15(d) of the Exchange Act. The Company shall also comply with
the other provisions of TIA ss. 314(a).
(b) Regardless of whether the Company is required to furnish such
reports to its stockholders pursuant to the Exchange Act, the Company (at its
own expense) shall cause its consolidated financial statements, comparable to
those which would have been required to appear in annual or quarterly reports,
to be delivered to the Trustee and the Holders.
(c) For so long as any of the Securities remain outstanding, the
Company will make available to any prospective purchaser of the Securities or
beneficial owner of the Securities in connection with any sale thereof the
information required by Rule 144A(d)(4) under the Securities Act during any
period when the Company is not subject to Section 13 or 15(d) under the Exchange
Act.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.11. 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, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of and/or interest on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture, and (to the
extent that it may lawfully do so) the Company 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.
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SECTION 4.12. Limitations on Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions with any of its Affiliates (an
"Affiliate Transaction"), other than
(x) Affiliate Transactions permitted under the next paragraph and
(y) Affiliate Transactions on terms that are no less favorable to
the Company or such Restricted Subsidiary than those that might reasonably
have been obtained in a comparable transaction at such time on an
arm's-length basis from a Person that is not an Affiliate;
provided, however, that for a transaction or series of related transactions with
an aggregate value of $2 million or more
(1) such determination shall be made in good faith by a majority of
the disinterested members of the Board of the Directors of the Company or
(2) the Board of Directors of the Company shall have received an
opinion from an independent nationally recognized investment banking firm
selected by the Company, that such transaction or series of related
transactions is on terms which are fair, from a financial point of view,
to the Company or such Restricted Subsidiary;
and provided, further, that for a transaction or series of related transactions
with an aggregate value of $10 million or more,
(1) such determination shall be made in good faith by a majority of
the disinterested members of the Board of Directors of the Company and
(2) the Board of Directors of the Company shall have received an
opinion from an independent nationally recognized investment banking firm
selected by the Company, that such transaction or series of related
transactions is on terms which are fair, from a financial point of view,
to the Company or such Restricted Subsidiary.
The foregoing restrictions shall not apply to
(1) reasonable fees and compensation paid to, and indemnity provided
on behalf of, officers, directors, employees or consultants of the Company
or any Subsidiary as determined in good faith by the Company's Board of
Directors or senior management;
(2) transactions between or among the Company and any of its
Restricted Subsidiaries so long as no portion of the minority interest in
such Restricted Subsidiary is owned by an Affiliate of the Company (other
than a Wholly Owned Subsidiary of the Company or directors or officers of
such Subsidiary that hold stock of such Subsidiary to the extent that
local law re-
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quires a resident of such jurisdiction to own stock of such company) or
between or among such Restricted Subsidiaries; provided such transactions
are not otherwise prohibited by this Indenture;
(3) any agreement as in effect as of the Issue Date or any amendment
thereto or any transaction contemplated thereby (including pursuant to any
amendment thereto) or in any replacement agreement thereto so long as any
such amendment or replacement agreement is not more disadvantageous to the
Holders in any material respect than the original agreement as in effect
on the Issue Date;
(4) Permitted Investments and Restricted Payments permitted by this
Indenture;
(5) commercially reasonable transactions between the Company or a
Restricted Subsidiary and any Joint Venture in the ordinary course of
business that have been determined by the Board of Directors of the
Company to comply with clause (y) of the first paragraph above; and
(6) any agreement of Scientific Games or its Subsidiaries as in
effect on the Acquisition Closing Date or any amendment thereto or any
transaction contemplated thereby (including pursuant to any amendment
thereto) or in any replacement agreement thereto so long as any such
amendment or replacement agreement is not more disadvantageous to the
Holders in any material respect than the original agreement as in effect
on the Acquisition Closing Date.
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to
(a) pay dividends or make any other distributions on or in respect
of its Capital Stock;
(b) make loans or advances to or pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary of the
Company; or
(c) transfer any of its property or assets to the Company or any
other Restricted Subsidiary of the Company,
except for such encumbrances or restrictions existing under or by
reason of:
(1) applicable law and agreements with governmental authorities with
respect to assets located in their jurisdiction,
(2) the Securities, this Indenture or any Guarantee,
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(3) (A) customary provisions restricting (1) the subletting or
assignment of any lease or (2) the transfer of copyrighted or patented
materials, (B) provisions in agreements that restrict the assignment of
such agreements or rights thereunder or (C) provisions of a customary
nature contained in the terms of Capital Stock restricting the payment of
dividends and the making of distributions on Capital Stock,
(4) any agreement or instrument governing Acquired Indebtedness,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than (a) the Person or the
properties or assets of the Person so acquired (including the Capital
Stock of such Person), or (b) any Restricted Subsidiary having no assets
other than (i) the Person or the properties or assets of the Person so
acquired (including the Capital Stock of such Person) and (ii) other
assets having a fair market value not in excess of $50,000, and, in each
case, the monetary proceeds thereof,
(5) any agreement or instrument governing Senior Debt or Guarantor
Senior Debt, including the New Credit Agreement,
(6) any agreement or instrument governing Indebtedness incurred
pursuant to clause (9), (13) or (16) of the definition of Permitted
Indebtedness,
(7) restrictions on the transfer of assets subject to any Lien
permitted under this Indenture,
(8) restrictions imposed by any agreement to sell assets not in
violation of this Indenture to any Person pending the closing of such
sale,
(9) customary rights of first refusal with respect to the Company's
and its Restricted Subsidiaries' interests in their respective Restricted
Subsidiaries and joint ventures,
(10) Indebtedness of a Person that was a Restricted Subsidiary at
the time of incurrence and the incurrence of which Indebtedness is
permitted by Section 4.04; provided that such encumbrances and
restrictions apply only to such Restricted Subsidiary and its assets; and
provided, further, that the Board of Directors of the Company has
determined in good faith, at the time of creation of each such encumbrance
or restriction, that such encumbrances and restrictions would not singly
or in the aggregate have a materially adverse effect on the Holders of the
Securities,
(11) the subordination of any Indebtedness owed by the Company or
any of its Restricted Subsidiaries to the Company or any other Restricted
Subsidiary to any other Indebtedness of the Company or any of its
Restricted Subsidiaries; provided (A) such other Indebtedness is permitted
under this Indenture and (B) the Board of Directors of the Company has
determined in good faith, at the time of creation of each such encumbrance
or restriction, that such encumbrances and restrictions would not singly
or in the aggregate have a materially adverse effect on the Holders of the
Securities, or
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(12) an agreement effecting a refinancing, replacement or
substitution of Indebtedness issued, assumed or incurred pursuant to an
agreement referred to in clauses (2), (4) and (5) above or any other
agreement evidencing Indebtedness permitted under this Indenture;
provided, however, that the provisions relating to such encumbrance or
restriction contained in any such refinancing, replacement or substitution
agreement or any such other agreement are not less favorable to the
Company in any material respect as determined by the Board of Directors of
the Company than the provisions of the Indebtedness being refinanced.
SECTION 4.14. Limitation on Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien securing Indebtedness (other than Permitted Liens) upon any
property or asset now owned or hereafter acquired by them, or any income or
profits therefrom, or assign or convey any right to receive income therefrom;
provided, however, that in addition to creating Permitted Liens on their
properties or assets, the Company and any of its Restricted Subsidiaries may
create any Lien securing Indebtedness upon any of their properties and assets
(including, but not limited to, any Capital Stock of its Subsidiaries) if the
Securities are equally and ratably secured.
SECTION 4.15. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will
have the right to require that the Company repurchase all or a portion of such
Holder's Securities, at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase.
(b) Prior to the mailing of the notice described in paragraph (c)
below, but in any event within 30 days following any Change of Control, the
Company covenants to
(1) repay in full and terminate all commitments under Indebtedness
under the New Credit Agreement and all other Senior Debt, the terms of
which require repayment upon a Change of Control or offer to repay in
full, and terminate all commitments under all Indebtedness under the New
Credit Agreement and all other such Senior Debt and to repay the
Indebtedness owed to each lender which has accepted such offer, or
(2) obtain the requisite consents under the New Credit Agreement and
all such other Senior Debt to permit the purchase of the Securities as
provided below.
The Company shall first comply with the covenant in the immediately preceding
sentence before it shall be required to repurchase Securities pursuant to the
provisions described below. The Company's failure to comply with this Section
4.15 shall constitute an Event of Default described in clause (c) and not in
clause (b) of Section 6.01.
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(c) Within 30 days following the date upon which a Change of Control
occurred, the Company shall send, by first class mail, a notice to each Holder,
with a copy to the Trustee, which notice shall govern the terms of the Change of
Control offer to purchase (the "Change of Control Offer"). The notice to the
Holders shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Change of Control Offer. Such
notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Securities tendered and not withdrawn will be
accepted for payment;
(2) the purchase price (including the amount of accrued interest)
and the purchase date, which shall be no earlier than 30 days nor later
than 45 days from the date such notice is mailed, other than as may be
required by law (the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor,
any Security accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to a
Change of Control Offer will be required to surrender the Security, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Security completed, to the Paying Agent at the address specified in
the notice prior to 5:00 p.m. New York City time on the third Business Day
prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than 5:00 p.m. New York time on the
second Business Day prior to the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Securities the Holder delivered
for purchase and a statement that such Holder is withdrawing his election
to have such Security purchased;
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Securities or portions thereof tendered (in integral
multiples of $1,000) pursuant to the Change of Control Offer, (ii) deposit with
the Paying Agent U.S. Legal Tender sufficient to pay the purchase price plus
accrued interest, if any, of all Securities so tendered and (iii) deliver to the
Trustee Securities so accepted together with an Officers' Certificate stating
the Securities or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to the Holders of Securities so accepted payment in an
amount equal to the purchase price plus accrued and unpaid interest, if any,
thereon to
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the Change of Control Payment Date and the Trustee shall promptly authenticate
and mail to such Holders new Securities equal in principal amount to any
unpurchased portion of the Securities surrendered. Any Securities not so
accepted shall be promptly mailed by the Company to the Holder thereof. For
purposes of this Section 4.15, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Securities pursuant to a
Change of Control Offer promptly shall be returned by the Trustee to the
Company.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Change of Control Offer. To the extent
the provisions of any securities laws or regulations conflict with the
provisions under this Section 4.15, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.15 by virtue thereof.
SECTION 4.16. Limitation on Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless
(1) the Company or the applicable Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets sold or otherwise disposed
of, as determined in good faith by the Company's Board of Directors,
(2) at least 75% of the consideration received by the Company or
such Restricted Subsidiary exclusive of indemnities, as the case may be,
from such Asset Sale shall be cash or Cash Equivalents and is received at
the time of such disposition; provided that the amount of (a) any
liabilities of the Company or any such Restricted Subsidiary, as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet,
that are assumed by the transferee of any such assets, (b) any notes or
other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are converted by the Company or such
Restricted Subsidiary into cash or Cash Equivalents within 60 days of the
time of such disposition, to the extent of the cash or Cash Equivalents
received and (c) any Designated Non-cash Consideration received by the
Company or any of its Restricted Subsidiaries in such Asset Sale having an
aggregate fair market value, taken together with all other Designated
Non-cash Consideration received pursuant to this clause (c), not to exceed
$5 million, with the fair market value of each item of Designated Non-cash
Consideration being measured at the time received and without giving
effect to subsequent changes in value, shall be deemed to be cash for the
purposes of this clause (2) and
(3) upon the consummation of an Asset Sale, the Company shall apply
directly or through a Restricted Subsidiary, or cause such Restricted
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale
within 360 days of receipt thereof either (A) to repay Sen-
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ior Debt (and in the case of any Indebtedness outstanding under a
revolving credit facility, to permanently reduce the amounts that may be
reborrowed thereunder by an equivalent amount), with the Net Cash Proceeds
received in respect thereof, (B) to reinvest in Productive Assets, or (C)
a combination of prepayment, reduction and investment permitted by the
foregoing clauses (3)(A) and (3)(B);
provided that the 75% limitation referred to above shall not apply to any sale,
transfer or other disposition of assets in which the cash portion of the
consideration received therefor is equal to or greater than what the after-tax
net proceeds would have been had such transaction complied with the
aforementioned 75% limitation. On the 361st day after an Asset Sale or such
earlier date, if any, as the Board of Directors of the Company or of such
Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to
such Asset Sale as set forth in clauses (3)(A), (3)(B) and (3)(C) of the
preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate
amount of Net Cash Proceeds which have not been so applied on or before such Net
Proceeds Offer Trigger Date as permitted in clauses (3)(A), (3)(B) and (3)(C) of
the preceding sentence (each, a "Net Proceeds Offer Amount") shall be applied by
the Company to make an offer to repurchase (the "Net Proceeds Offer") on a date
(the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days
following the applicable Net Proceeds Offer Trigger Date, from all Holders on a
pro rata basis that amount of Securities equal to the Net Proceeds Offer Amount
multiplied by a fraction, the numerator of which is the aggregate principal
amount of Securities then outstanding and the denominator of which is the sum of
the aggregate principal amount of Securities and Pari Passu Indebtedness then
outstanding (the "Pro Rata Share"), at a price equal to 100% of the principal
amount of the Securities to be repurchased, plus accrued interest to the date of
repurchase.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is
less than $10 million, the application of the Net Cash Proceeds constituting
such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until
such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date
relating to such initial Net Proceeds Offer Amount from all Asset Sales by the
Company and its Restricted Subsidiaries aggregates at least $10 million, at
which time the Company shall apply all Net Cash Proceeds constituting all Net
Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer,
the first date the aggregate of all such deferred Net Proceeds Offer Amounts is
equal to $10 million or more being deemed to be a Net Proceeds Offer Trigger
Date. To the extent that the aggregate purchase price of Securities tendered
pursuant to any Net Proceeds Offer is less than the Pro Rata Share, the Company
or any Guarantor may use such amount for general corporate purposes. Upon
completion of any Net Proceeds Offer, the Net Proceeds Offer Amount shall be
reset to zero.
Notwithstanding the first two paragraphs of this Section 4.16, the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such paragraphs to the extent
(1) at least 75% of the consideration for such Asset Sale
constitutes Productive Assets
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and
(2) such Asset Sale is for fair market value, as determined in good
faith by the Company's Board of Directors; provided that the fair market
value of any consideration not constituting Productive Assets received by
the Company or any of its Restricted Subsidiaries in connection with any
Asset Sale permitted to be consummated under this paragraph shall
constitute Net Cash Proceeds subject to the provisions of the first two
paragraphs of this Section 4.16.
In the event of the transfer of substantially all, but not all, of
the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and its Restricted Subsidiaries not so transferred for purposes of
this Section 4.16, and shall comply with the provisions of this Section 4.16
with respect to such deemed sale as if it were an Asset Sale. In addition, the
fair market value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this Section 4.16.
Notice of a Net Proceeds Offer shall be mailed, by first-class mail,
by the Company to Holders of Securities at their last registered address not
less than 30 days nor more than 60 days before the Net Proceeds Offer Payment
Date, with a copy to the Trustee. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to the
Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to this
Section 4.16, that all Securities tendered will be accepted for payment;
provided, however, that if the aggregate principal amount of Securities
tendered in a Net Proceeds Offer plus accrued interest at the expiration
of such offer exceeds the aggregate amount of the Net Proceeds Offer, the
Company shall select the Securities to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000 or multiples thereof shall be
purchased) and that the Net Proceeds Offer shall remain open for a period
of 20 Business Days or such longer period as may be required by law;
(2) the purchase price (including the amount of accrued interest)
and the Net Proceeds Offer Payment Date (which shall be not less than 30
nor more than 45 days following the applicable Net Proceeds Offer Trigger
Date and which shall be at least five Business Days after the Trustee
receives notice thereof from the Company);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor,
any Security accepted for payment pursuant to the Net Proceeds Offer shall
cease to accrue interest after the Net Proceeds Offer Payment Date;
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(5) that Holders electing to have a Security purchased pursuant to a
Net Proceeds Offer will be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Business Day prior to the Net
Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Net Proceeds Offer Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Securities such Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Securities purchased;
and
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; provided, however, that each
Security purchased and each new Security issued shall be in an original
principal amount of $1,000 or integral multiples thereof.
On or before the Net Proceeds Offer Payment Date, the Company shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Net Proceeds Offer which are to be purchased in accordance with item (1) above,
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price plus accrued interest, if any, of all Securities to be purchased
and (iii) deliver to the Trustee Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof being purchased
by the Company. The Paying Agent shall promptly mail to the Holders of
Securities so accepted payment in an amount equal to the purchase price plus
accrued interest, if any. For purposes of this Section 4.16, the Trustee shall
act as the Paying Agent.
Any amounts remaining after the purchase of Securities pursuant to a
Net Proceeds Offer promptly shall be returned by the Trustee to the Company.
If an offer is made to repurchase the Securities pursuant to a Net
Proceeds Offer, the Company will and will cause its Restricted Subsidiaries to
comply with all tender offer rules under state and federal securities laws,
including, but not limited to, Section 14(e) under the Exchange Act and Rule
14e-1 thereunder, to the extent applicable to such offer. To the extent that the
provisions of any securities laws or regulations conflict with this Section
4.16, the Company shall comply with the applicable securities laws and
obligations and shall not be deemed to have breached its obligations hereunder
by virtue thereof.
SECTION 4.17. Limitation on Preferred Stock of Restricted Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries that
are not Guarantors of the Securities to issue any Preferred Stock (other than to
the Company or to a Wholly Owned Restricted Subsidiary of the Company) or permit
any Person (other than the Company or a Wholly Owned Restricted Subsidiary of
the Company) to own any Preferred Stock of any Restricted Subsidiary of the
Company that is not a Guarantor of the Securities.
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SECTION 4.18. Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any Restricted Subsidiary
to, enter into any Sale and Leaseback Transaction; provided that the Company and
any Guarantor may enter into a Sale and Leaseback Transaction if
(1) the Company or such Guarantor could have
(a) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such Sale and Leaseback Transaction
pursuant to Section 4.04 and
(b) incurred a Lien to secure such Indebtedness pursuant to
Section 4.14,
(2) the gross cash proceeds of such Sale and Leaseback Transaction
are at least equal to the fair market value, as determined in good faith
by the Board of Directors and set forth in an Officers' Certificate
delivered to the Trustee, of the property that is the subject of such Sale
and Leaseback Transaction and
(3) the transfer of assets in such Sale and Leaseback Transaction is
permitted by, and the Company or the applicable Guarantor applies the
proceeds of such transaction with, Section 4.16.
SECTION 4.19. Limitation of Guarantees by Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary that is not a
Guarantor, directly or indirectly, by way of the pledge of any intercompany note
or otherwise, to assume, guarantee or in any other manner become liable with
respect to any Indebtedness of the Company, other than
(A) Indebtedness incurred in reliance on clauses (12) (to the extent
the Indebtedness being refinanced, modified, replaced, renewed, restated,
refunded, deferred, extended, substituted, supplemented, reissued or
resold was permitted to be guaranteed by Restricted Subsidiaries) and (13)
of the definition of Permitted Indebtedness or under Currency Agreements
in reliance on clause (5) of the definition of Permitted Indebtedness, or
(B) Interest Swap Obligations incurred in reliance on clause (4) of
the definition of Permitted Indebtedness,
unless, in any such case
(a) such Restricted Subsidiary has executed and delivered or
executes and delivers a supplemental indenture to this Indenture,
providing a guarantee of payment of the Securities by such Restricted
Subsidiary in the form required by this Indenture and
(b) if such assumption, guarantee or other liability of such
Restricted Subsidiary is provided in respect of Indebtedness that is
expressly subordinated to the Securities, the guaran-
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tee or other instrument provided by such Restricted Subsidiary in respect
of such subordinate Indebtedness shall be similarly subordinated to the
Guarantee of the Securities.
Any Guarantee of the Securities by a Restricted Subsidiary shall
provide by its terms that it shall be automatically and unconditionally released
and discharged, without any further action required on the part of the Trustee
or any Holder, upon:
(1) the unconditional release of such Restricted Subsidiary from its
liability in respect of the Indebtedness in connection with which such
Guarantee of the Securities was executed and delivered pursuant to the
preceding paragraph; or
(2) any sale or other disposition (by merger or otherwise) to any
Person which is not a Restricted Subsidiary of the Company, of all of the
Company's Capital Stock in, or all or substantially all of the assets of,
such Restricted Subsidiary; provided, however, that
(a) such sale or disposition of such Capital Stock or assets
is otherwise in compliance with the terms of this Indenture and
(b) such assumption, guarantee or other liability of such
Restricted Subsidiary has been released by the holders of the other
Indebtedness so guaranteed.
SECTION 4.20. Escrow of Proceeds of Securities on Issue Date.
On the Issue Date the Company will enter into the Escrow Agreement
and deposit (or cause to be deposited) into the Escrow Account $150,000,000 in
cash and will provide to the Trustee a Letter of Credit (as such term is defined
in the Escrow Agreement) in the face amount of $2,029,650. On or before the
first day of each month that the funds in the Escrow Account have not been
released to the Company in accordance with the requirements of Section 3(a) of
the Escrow Agreement, the Company will (a) deposit cash into the Escrow Account,
or (b) cause a Letter of Credit to be issued or cause the face amount of an
existing Letter of Credit then held by the Trustee to be increased, in either
case, in the amount and according to the procedures set forth in Section
2(b)(ii) of the Escrow Agreement. The Trustee is authorized and directed to
execute and deliver the Escrow Agreement and to perform its duties and
obligations thereunder.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.
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 (or
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cause or permit any Restricted Subsidiary of the Company to sell, assign,
transfer, lease, convey or otherwise dispose of) all or substantially all of the
Company's assets (determined on a consolidated basis for the Company and its
Restricted Subsidiaries) whether as an entirety or substantially as an entirety
to any Person unless:
(1) either (A) the Company or a Restricted Subsidiary of the Company
shall be the surviving or continuing corporation or (B) 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 determined
on a consolidated basis for the Company and its Restricted Subsidiaries
(the "Surviving Entity") (x) shall be a corporation organized and validly
existing under the laws of the United States or any State thereof or the
District of Columbia and (y) shall expressly assume, by supplemental
indenture, in form reasonably 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;
(2) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(B)(y) above, including giving effect
to any Indebtedness and Acquired Indebtedness incurred or anticipated to
be incurred in connection with or in respect of such transaction, the
Company or such Surviving Entity, as the case may be, (1) shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth
of the Company immediately prior to such transaction and (2) shall be able
to incur at least $1.00 of additional Indebtedness, other than Permitted
Indebtedness, pursuant to Section 4.04;
(3) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (1)(B)(y) above,
including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction, no Default or
Event of Default shall have occurred and be continuing; and
(4) 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
shall 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.
For purposes of the foregoing, the transfer, by lease, assignment,
sale or otherwise, in a single transaction or series of transactions, of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company, other than to a Wholly Owned Subsidiary that is a
Guarantor, the Capital Stock of which constitutes all or substantially all of
the properties and assets of the
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Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
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.
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 to, consolidate with
or merge with or into any Person other than the Company or any other Guarantor
unless:
(1) 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 is a corporation
organized and existing under the laws of the United States or any State
thereof or the District of Columbia;
(2) such entity assumes by supplemental indenture all of the
obligations of the Guarantor on the Guarantee;
(3) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; and
(4) immediately after giving effect to such transaction and the use
of any net proceeds therefrom on a pro forma basis, the Company could
satisfy the provisions of clause (2) of the first paragraph of this
Section 5.01.
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.
SECTION 5.02. Successor Corporation Substituted.
Upon any such consolidation, merger, conveyance, lease or transfer
of all or substantially all of the assets of the Company in accordance with
Section 5.01, in which the Company is not the surviving Person, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made will 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 successor had
been named as the Company therein. When a successor corpo-
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ration assumes all of the Obligations of the Company hereunder and under the
Securities and agrees to be bound hereby and thereby, the predecessor shall be
released from such Obligations.
ARTICLE SIX
DEFAULT AND REMEDIES
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) a default in the observance or performance of any other covenant
or agreement contained in this Indenture, which default continues for a
period of 45 days after the Company receives written notice specifying the
default, and demanding that such default be remedied, from the Trustee or
the Holders of at least 25% of the outstanding principal amount of the
Securities;
(d) the failure to pay at final maturity, giving effect to any
extensions thereof, the principal amount of any Indebtedness of the
Company or any Restricted Subsidiary of the Company that is a Significant
Subsidiary, other than intercompany Indebtedness, and such failure
continues for a period of 20 days or more, or the acceleration of the
final stated maturity of any such Indebtedness, which acceleration is not
rescinded, annulled or otherwise cured within 20 days of receipt by the
Company or such Restricted Subsidiary of notice of any such acceleration,
if, in either case, the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at final maturity or which has been
accelerated, in each case with respect to which the 20-day period
described above has passed, aggregates $10 million or more at any time;
(e) one or more judgments in an aggregate amount in excess of $10
million shall have been rendered against the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary and such
judgments remain undischarged, unpaid or unstayed for a period of 60 days
after such judgment or judgments become final and non-appealable;
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(f) the Company or any of its Significant Restricted Subsidiaries
(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;
(g) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any of its Significant
Subsidiaries 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
Company or any of its Significant Subsidiaries, (ii) appoint a Custodian
of the Company or any of its Significant Subsidiaries or for substantially
all of any of their 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 held in a judicial processing 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;
(i) following the consummation of the Scientific Games Acquisition
and the Transactions to be consummated concurrently therewith, the Company
fails to issue Additional Capital Stock for net cash proceeds of at least
$35 million on or before August 15, 2001; provided that for the purposes
of this clause (i), the retirement and cancellation of the Company's 5.5%
Convertible Subordinated Debentures due 2001 in exchange for the issuance
of Additional Capital Stock shall be deemed to constitute net cash
proceeds from the issuance and sale of Additional Capital Stock to the
extent of the aggregate principal amount of the Company's 5.5% Convertible
Subordinated Debentures due 2001 so retired and canceled; or
(j) the failure to (i) deposit cash into the Escrow Account or (ii)
cause a Letter of Credit (as such term is defined in the Escrow Agreement)
to be issued or cause the face amount of an existing Letter of Credit then
held by the Trustee to be increased, in either case in the amount and at
the time required pursuant to the terms of Section 2(b)(ii) of the Escrow
Agreement, and the default continues for a period of 10 days.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
Section 6.01(f) or (g)) shall occur and be continuing, the Trustee or the
Holders of at least 25% in principal amount of
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outstanding Securities may declare the principal of and accrued and unpaid
interest on all the Securities to be due and payable by notice in writing to the
Company and the Trustee specifying the respective Event of Default and that it
is a "notice of acceleration", and the same shall become immediately due and
payable. If an Event of Default specified in Section 6.01(f) or (g) occurs and
is continuing, then all unpaid principal of and premium, if any, and accrued and
unpaid interest on all of the outstanding Securities shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
principal amount of the Securities may rescind and cancel such declaration and
its consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its reasonable expenses, disbursements and advances
and (v) in the event of the cure or waiver of an Event of Default of the type
described in clause (f) or (g) of Section 6.01, the Trustee shall have received
an Officers' Certificate and an Opinion of Counsel that such Event of Default
has been cured or waived. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities, this Indenture or the
Guarantees.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of not less
than a majority in principal amount of the outstanding Securities by written
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Security as specified in clauses (a) and (b) of Section 6.01. When a Default or
Event of Default is waived, it is cured and ceases.
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SECTION 6.05. Control by Majority.
The Holders of not less than a majority in principal amount of the
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. Subject to Section 7.01, however, the Trustee may refuse
to follow any direction that conflicts with any law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may, in the sole judgment of the Trustee, give rise to
or subject the Trustee to personal liability; provided that the Trustee may take
any other action deemed proper by the Trustee.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against any loss or expense caused by
taking such action or following such direction.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holder or Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity or
security satisfactory to the Trustee in its sole judgment, against any
loss, liability or expense;
(4) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer described in clause (3) above;
and
(5) during such 30-day period the Holder or Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee a
written direction which, in the opinion of the Trustee, is inconsistent
with the request.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the written consent of the Holder.
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SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in clause (a) or (b) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount of principal
and accrued interest and fees remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per annum
borne by the Securities and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the actual, documented and
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and 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 the
Securityholders allowed in any judicial proceedings relating to the Company, the
Subsidiaries, their creditors or their property and shall be entitled and
empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any Custodian in
any such judicial proceedings is hereby authorized by each Securityholder 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 Securityholders, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Securityholder 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 Securityholder
in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their reasonable collection
costs;
Third: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Fourth: to the Company.
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The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
Each party to this Indenture agrees and each Holder of any Security
by its acceptance thereof shall be deemed to have agreed that, 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 or omitted by it as Trustee, a court in
its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit instituted by the Company, any suit instituted by the
Trustee, any suit instituted by a Holder pursuant to Section 6.07, or any suit
instituted by a Holder or Holders of more than 10% in principal amount of the
outstanding Securities.
SECTION 6.12. 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 Holders, then and in every such case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee and
the Holders shall 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.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is
continuing, 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 their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are expressly and
specifically set forth in this Indenture or the TIA and no covenants,
duties or obligations whatsoever shall be implied under this Indenture
that are adverse to the Trustee.
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(2) In the absence of bad faith 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 and such
other documents delivered to it pursuant to Section 14.04 hereof 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) Notwithstanding anything to the contrary herein contained, 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:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) 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.
(3) 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
received by it pursuant to Section 6.02, 6.04 or 6.05.
(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 to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall reasonably believe that repayment of such funds is not assured to it
or it does not receive an indemnity that is, in its sole discretion, adequate
against such risk, liability, loss, fee or expense which might be incurred by it
in compliance with such request or direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets of the Trustee except to the extent required by law.
(g) In the absence of bad faith, negligence or willful misconduct on
the part of the Trustee, the Trustee shall not be accountable for the use of any
of the Securities delivered hereunder or the proceeds thereof.
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SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely conclusively on any document believed by it
to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and an Opinion of Counsel, which shall conform to
the provisions of Sections 14.04 and 14.05. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent (other
than an agent who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel of its selection and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee in its sole
judgment against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) The Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has received written
notice thereof or unless written notice of any event which is in fact such
a default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate (including any
Officers' Certificate), statement, instrument, opinion (including any
Opinion of Counsel), notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney.
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(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and to each agent, custodian and other
Person employed to act hereunder.
(j) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to
this Indenture, which Officers' Certificate may be signed by any Person
authorized to sign an Officers' Certificate, including any Person
specified as so authorized in any such certificate previously delivered
and not superseded.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, its
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities (other than
the certificate of authentication of the Trustee), it shall not be accountable
for the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in this Indenture or any document
issued in connection with the sale of Securities or any statement in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and the
Trustee receives actual notice of such event, the Trustee shall mail to each
Securityholder, as their names and addresses appear on the Securityholder list
described in Section 2.05, notice of the uncured Default or Event of Default
within 90 days after the Trustee receives such notice. Except in the case of a
Default or an Event of Default in payment of principal of, or interest on, any
Security, including the failure to make payment on (i) the Change of Control
Payment Date pursuant to a Change of Control Offer or (ii) the Net Proceeds
Offer Payment Date pursuant to a Net Proceeds Offer, the Trustee shall not be
deemed to have actual knowledge or actual notice of a Default or an Event of
Default unless a Responsible Officer of the Trustee has received written notice
of such Default or Event of Default. The Trustee may withhold the notice if and
so long as the board of directors, the executive committee, or a trust committee
of directors and/or Responsible Officers, of the Trustee in good faith
determines that withholding the notice is in the interest of the
Securityholders. As used herein, the term "actual knowledge" means the actual
fact or statement of knowing, without any duty to make any investigation with
regard thereto.
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SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after August 15 of each year, beginning with August
15, 2001, the Trustee shall, to the extent that any of the events described in
TIA ss. 313(a) occurred within the previous twelve months, but not otherwise,
mail to each Securityholder a brief report dated as of such May 15 that complies
with TIA ss. 313(a). The Trustee also shall comply with TIA xx.xx. 313(b),
313(c) and 313(d).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the Commission and each securities
exchange, if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become listed
on any securities exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder (which shall be agreed to from time to
time in writing by the Company and the Trustee). The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon written request for all
reasonable and documented disbursements, expenses and advances (including
reasonable and documented fees and expenses of counsel) incurred or made by it
in addition to the compensation for its services, except any such disbursements,
expenses and advances as may be attributable to the Trustee's negligence or
willful misconduct. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents, accountants, experts and
counsel.
The Company shall indemnify the Trustee or any predecessor Trustee
and its agents, employees, officers, stockholders and directors for, and hold
them harmless against, any loss, liability or expense, including taxes (other
than taxes based upon, measured or determined by the income of the Trustee),
incurred by them except for such actions to the extent caused by any negligence,
bad faith or willful misconduct on their part, arising out of or in connection
with the acceptance or administration of this trust including the reasonable
costs and expenses of defending themselves against or investigating any claim or
liability in connection with the exercise or performance of any of the Trustee's
rights, powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee or any of its agents,
employees, officers, stockholders and directors for which it may seek indemnity.
At the Trustee's reasonable discretion, the Company shall defend the claim and
the Trustee shall cooperate and may participate in the defense; provided that
any settlement of a claim shall be approved in writing by the Trustee.
Alternatively, the Trustee may at its option have separate counsel of its own
choosing and the Company shall pay the reasonable fees and expenses of such
counsel; provided, however, that the Company will not be required to pay such
fees and expenses if it assumes the Trustee's defense and there is no conflict
of interest between the Company and the Trustee and its agents, employees,
officers, stockholders and directors subject to the claim in connection with
such defense as reasonably determined by the Trustee. The Company need not pay
for any settlement made
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without its written consent. The Company need not reimburse any expense or
indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment Obligations in this Section 7.07,
the Trustee shall have a lien prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee.
When the Trustee incurs expenses or renders services after an Event
of Default specified in clause (f) or (g) of Section 6.01 occurs, the expenses
and the compensation for the services shall be paid to the extent allowable
under any Bankruptcy Law. The Company's Obligations under this Section 7.07 and
any claim arising hereunder shall survive the resignation or removal of any
Trustee, the discharge of the Company's Obligations pursuant to Article Eight
and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days in advance. The Holders of a majority in principal
amount of the outstanding Securities may remove the Trustee by so notifying the
Company and the Trustee in writing and may appoint a successor trustee. A
resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only with the successor Trustee's acceptance of
appointment as provided in this Section 7.08. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify in writing each
Holder of such event and shall promptly appoint a successor Trustee. Within one
year after the successor Trustee takes office, the Holders of a majority in
principal amount of the Securities may appoint a successor Trustee to replace
the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties
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of the Trustee under this Indenture. A successor Trustee shall mail notice of
its succession to each Securityholder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction at the expense of the Company for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's Obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided, however, that
such corporation shall be otherwise qualified and eligible under this Article
Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA xx.xx. 310(a)(1), 310(a)(2), if applicable, and 310(a)(5).
The Trustee shall be a commercial bank with trust powers or a trust company,
which shall have (or, in the case of a financial institution, commercial bank
with trust powers or a trust company included in a bank holding company system,
the related bank holding company shall have) a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report of
condition, and subject to supervision or examination by federal or state
authorities, so long as any of the Securities are outstanding. The Trustee shall
comply with TIA ss. 310(b); provided, however, that there shall be excluded from
the operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Company are outstanding, if the requirements for such exclusion set forth in
TIA ss. 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein. The
provisions of TIA ss. 311 shall apply to the Company, and any other obligor of
the Securities.
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ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of the Company's Obligations.
The Company may terminate all of its obligations under this
Indenture (except as provided below) when
(i) all outstanding Securities theretofore authenticated have been
delivered to the Trustee for cancellation and the Company has paid or
caused to be paid all sums payable under this Indenture by the Company or
(ii) the Company has called for redemption pursuant to this
Indenture all of the Securities under the arrangements and by depositing
the amounts described in Section 8.03(a), the conditions in clauses (i)
and (ii) of the proviso to Section 8.03(a) have been satisfied and the
certificate and opinion described in Section 8.03(g) have been delivered.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (ii) above need not be delivered if all Securities not theretofore
delivered to the Trustee for cancellation (i) have become due and payable, (ii)
will become due and payable on the maturity date within one year or (iii) are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
Notwithstanding the first paragraph of this Section 8.01, the
Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 8.05
and 8.06 shall survive until the Securities are no longer outstanding pursuant
to the last paragraph of Section 2.08. After the Securities are no longer
outstanding, the Company's obligations in Sections 7.07, 8.05 and 8.06 shall
survive.
After such delivery or irrevocable deposit, the Trustee shall
acknowledge in writing the discharge of the Company's and Guarantors'
obligations under the Securities and this Indenture except for those surviving
obligations specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of the Board
of Directors of the Company, at any time, elect to have either paragraph (b) or
(c) below be applied to all outstanding Securities upon compliance with the
conditions set forth in Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.03, be
deemed to have been discharged from its obligations with respect to all
outstanding Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal
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Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.04 and the other Sections of this Indenture
referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Securities and this Indenture (and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging the same), and Holders of the Securities and any amounts deposited
under Section 8.03 shall cease to be subject to any other obligations, except
for the following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Section 8.04, 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, (ii) the
Company's obligations with respect to such Securities under Sections 2.05, 2.06,
2.07, 2.08 and 4.02, (iii) the rights, obligations and immunities of the Trustee
under this Indenture and (iv) this Article Eight. Subject to compliance with
this Section 8.02, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03, be released from its
Obligations under the covenants contained in Sections 4.03, 4.04 and 4.12
through 4.19 and Article Five with respect to the outstanding Securities on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Securities shall thereafter be deemed 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 (it being understood that such Securities shall not be deemed
outstanding for accounting purposes) and Holders of the Securities and any
amounts deposited under Section 8.03 shall cease to be subject to any other
obligations. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding 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 covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant 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 6.01(c), but, except as specified above, the remainder of this Indenture
and such Securities shall be unaffected thereby. In addition, upon the Company's
exercise under paragraph (a) hereof of the option applicable to this paragraph
(c), subject to the satisfaction of the conditions set forth in Section 8.03,
Sections 6.01(c), 6.01(d), 6.01(e), 6.01(h) and 6.01(i) shall not constitute
Events of Default.
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02(b) or 8.02(c) to the outstanding Securities:
(a) the Company irrevocably deposits, or causes to be deposited,
with the Trustee, in trust for the benefit of the Holders pursuant to an
irrevocable trust and security agreement in
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form and substance reasonably satisfactory to the Trustee (i) U.S. Legal
Tender, (ii) U.S. Government Obligations or (iii) a combination thereof,
in an amount sufficient after payment of all Federal, state or local taxes
or other charges or assessments in respect thereof payable by the Trustee,
which through the payment of interest and principal will provide, not
later than one day before the due date of payment in respect of the
Securities, U.S. Legal Tender in an amount which, in the opinion of a
nationally recognized firm of independent certified public accountants
expressed in a written certification thereof (in form and substance
reasonably satisfactory to the Trustee) delivered to the Trustee, is
sufficient to pay the principal of, premium, if any, and interest on the
Securities then outstanding on the dates on which any such payments are
due and payable in accordance with the terms of this Indenture and of the
Securities; provided, however, that (i) the trustee of the irrevocable
trust shall have been irrevocably instructed to pay such money or the
proceeds of such U.S. Government Obligations to the Trustee; and (ii) the
Trustee shall have been irrevocably instructed to apply such U.S. Legal
Tender or the proceeds of such U.S. Government Obligations to the payment
of said principal and interest with respect to the Securities;
(b) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel from independent counsel
reasonably satisfactory to the Trustee or a tax ruling from the Internal
Revenue Service to the effect that the Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of such deposit
and Legal Defeasance and will be subject to Federal income tax in the same
amounts and in the same manner and at the same times as would have been
the case if such deposit and Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for Federal income tax purposes as a result
of such deposit and Covenant Defeasance and will be subject to Federal
income tax at the same amounts and in the same manner and at the same
times as would have been the case if such deposit and Covenant Defeasance
had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default with respect to the Indenture resulting from the incurrence of
Indebtedness all or a portion of which will be used to defease the
Securities concurrently with such incurrence);
(e) such Legal 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 is a party
or by which the Company is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, such
money or the proceeds of such U.S. Government Obligations will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; and
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(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and substance
reasonably satisfactory to the Trustee, each stating that all conditions
precedent relating to the satisfaction and discharge of this Indenture
have been complied with or waived.
Notwithstanding the foregoing, the Opinion of Counsel required by
clauses (b), (c) and (f) above need not be delivered if all Securities not
theretofore delivered to the Trustee for cancellation (i) have become due and
payable, (ii) will become due and payable on the maturity date within one year
or (iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
SECTION 8.04. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to this Article Eight,
and shall apply the deposited U.S. Legal Tender and the U.S. Legal Tender from
U.S. Government Obligations in accordance with this Indenture to the payment of
principal of and interest on the Securities. The Trustee shall be under no
obligation to invest said U.S. Legal Tender or U.S. Government Obligations
except as it may agree with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.03 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.03 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 that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.05. Repayment to the Company.
Subject to Section 8.01, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for one year; provided that the
Trustee or such Paying Agent, before being required to make any payment, may at
the expense of the Company cause to be published once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein which shall be at least 30 days from the date of such publication or
mailing any unclaimed balance of such money then remaining will be repaid to the
Company. After payment to the Company, Holders
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entitled to such money must look to the Company for payment as general creditors
unless an applicable law abandoned property designates another Person.
SECTION 8.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Article Eight by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's Obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Article Eight until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with Article Eight; provided that if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
Obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the U.S. Legal Tender or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company and the Trustee, together, may amend or supplement this
Indenture, the Securities or the Escrow Agreement without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency so long as such
change does not, in the opinion of the Trustee, adversely affect the
rights of any Holders in any material respect;
(2) to evidence the succession in accordance with Article Five
hereof of another Person to the Company and the assumption by any such
successor of the covenants of the Company herein, in the Escrow Agreement
and in the Securities;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(4) to make any other change that does not, in the opinion of the
Trustee, adversely affect in any material respect the rights of any
Securityholders hereunder;
(5) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
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(6) to make any change that would provide any additional benefit or
rights to the Securityholders or that does not adversely affect the rights
of any Securityholder in any material respect; or
(7) to provide for issuance of the Series B Securities, which will
have terms substantially identical in all material respects to the Series
A Securities (except that the transfer restrictions contained in the
Series A Securities will be modified or eliminated, as appropriate), and
which will be treated together with any outstanding Series A Securities as
a single issue of securities;
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Trustee, together, with
the written consent of the Holder or Holders of at least a majority in aggregate
principal amount unless a greater principal amount is specified herein of the
outstanding Securities, may amend or supplement this Indenture, the Securities
or the Escrow Agreement, without notice to any other Securityholders. Subject to
Section 6.07, the Holder or Holders of a majority in aggregate principal amount
unless a greater principal amount is specified herein of the outstanding
Securities may waive compliance by the Company with any provision of this
Indenture or the Securities without notice to any other Securityholder. Without
the consent of each Securityholder affected, however, no amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any
Securities;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Securities, or change the date on which any
Securities may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor;
(4) make any Securities payable in money other than that stated in
the Securities;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Security on or after the due date thereof or to bring suit to enforce
such payment, or permitting Holders of a majority in principal amount of
the Securities to waive Defaults or Events of Default (other than Defaults
or Events of Default with respect to the payment of principal of or
interest on the Securities);
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(6) modify or change any provision of this Indenture or the related
definitions that adversely affects the ranking of the Securities or the
Guarantees; or
(7) make any change to Section 3.07 or 4.20 hereof or Section 3(b)
of the Escrow Agreement which would adversely affect the rights of any
Holders.
In addition, following the occurrence of a Change of Control or an
Asset Sale (if the Company is obligated to make and consummate a Net Proceeds
Offer as a result of such Asset Sale), as the case may be, without the consent
of Holders of at least 75% of the outstanding aggregate principal amount of
Securities, an amendment, supplement or waiver may not make any change to the
Company's obligations to make and consummate the required Change of Control
Offer or Net Proceeds Offer, as the case may be, or modify any of the provisions
or definitions with respect thereto.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall or shall cause the Trustee to mail to the
Holders affected thereby a notice briefly describing the amendment, supplement
or waiver. 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 amendment, supplement, waiver or supplemental indenture.
SECTION 9.03. Compliance with TIA.
From the date on which this Indenture is qualified under the TIA,
every amendment, waiver or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders af-
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ter such record date. No such consent shall be valid or effective for more than
90 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Company may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture and constitutes the legal, valid and binding obligations of the
Company enforceable in accordance with its terms (subject to customary
exceptions).
ARTICLE TEN
SUBORDINATION OF SECURITIES
SECTION 10.01. Securities Subordinated to Senior Debt.
The Company covenants and agrees, and the Trustee and each Holder of
the Securities by his acceptance thereof likewise covenant and agree, that all
Securities shall be issued subject to the provisions of this Article Ten; and
each person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that all payments of the
principal of and interest and Liquidated Damages, if any, on the Securities by
the Company shall, to the extent and in the manner set forth in this Article
Ten, be subordinated and junior in right of payment to the prior payment in full
in cash of all amounts payable under Senior Debt, whether outstanding on the
Issue Date or thereafter incurred.
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SECTION 10.02. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment by or on behalf of the Company of
principal of or interest or Liquidated Damages, if any, on the Securities,
whether pursuant to the terms of the Securities, upon acceleration, pursuant to
an Asset Sale Offer or Change of Control Offer or otherwise, shall be made to
the Holders of Securities (except that Holders of Securities may receive and
retain (I) payments made from the defeasance trust described under Article Eight
and (II) payments made from the Escrow Account or from the proceeds of any
drawing under any letter of credit pursuant to the Escrow Agreement) if (i) a
default in the payment of the principal of or premium, if any, or interest on
Designated Senior Debt occurs and is continuing beyond any applicable period of
grace or (ii) any other default occurs and is continuing with respect to
Designated Senior Debt that permits holders of the Designated Senior Debt as to
which such default relates to accelerate its maturity and the Trustee receives a
written notice of such other default (a "Payment Blockage Notice") from the
Company or the holders of any Designated Senior Debt (with a copy to the
Company) until all Obligations with respect to such Designated Senior Debt are
paid in full; payments on the Securities shall be resumed (x) in the case of a
payment default, upon the date on which such default is cured or waived and (y)
in case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received by the Trustee (such period being
referred to herein as the "Payment Blockage Period"), unless the maturity of any
Designated Senior Debt has been accelerated (and written notice of such
acceleration has been received by the Trustee).
Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Payment Blockage Period extend beyond 179 days
from the date the Payment Blockage Notice in respect thereof was given and (y)
not more than one Payment Blockage Period may be commenced with respect to the
Securities during any period of 360 consecutive days. No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage Notice
to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice (it being understood that any subsequent action, or any breach of any
covenant for a period commencing after the date of receipt by the Trustee of
such Payment Blockage Notice, that, in either case, would give rise to such a
default pursuant to any provisions under which a default previously existed or
was continuing shall constitute a new default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 10.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Designated Senior Debt or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Designated Senior Debt may have been
issued, as their respective interests may appear, but only to the extent that,
upon notice from the Trustee to the holders of Designated Senior Debt that such
prohibited payment has been made, the holders of the Designated Senior Debt (or
their representative or representatives or a trustee) notify the Trustee in
writing of the amounts then due and owing on the Designated Senior Debt, if any,
and only the amounts specified in such notice to the Trustee shall be paid to
the holders of Designated Senior Debt.
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SECTION 10.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities, upon
any dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other similar proceedings, an assignment for the benefit of creditors or any
marshaling of the Company's assets, the holders of Senior Debt shall be entitled
to receive payment in full in cash of all Obligations due in respect of such
Senior Debt (including interest after the commencement of any proceeding at the
rate specified in the applicable Senior Debt) before the Holders of the
Securities or the Trustee on behalf of such Holders shall be entitled to receive
any payment by the Company of the principal of or interest or Liquidated
Damages, if any, on the Securities, or any payment by the Company to acquire any
of the Securities for cash, property or securities, or any distribution with
respect to the Securities of any cash, property or securities (except that the
Holders may receive and retain (I) Permitted Junior Securities, (II) payments
made from the defeasance trust described under Article Eight and (III) payments
made from the Escrow Account or from the proceeds of any drawing under any
letter of credit pursuant to the Escrow Agreement). Before any payment (other
than Permitted Junior Securities or by virtue of the defeasance trust or a
Mandatory Redemption described above) may be made by, or on behalf of, the
Company of the principal of or interest or Liquidated Damages, if any, on the
Securities upon any such dissolution or winding-up or liquidation or
reorganization, any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Securities or the Trustee on their behalf would be
entitled, but for the subordination provisions of this Indenture, shall be made
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, directly to the
holders of the Senior Debt (pro rata to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their representatives
or to the trustee or trustees or agent or agents under any agreement or
indenture pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, to the extent necessary to pay all such
Senior Debt in full in cash after giving effect to any prior or concurrent
payment, distribution or provision therefor to or for the holders of such Senior
Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Holder of Securities at a
time when such payment or distribution is prohibited by Section 10.03(a) and
before all obligations in respect of Senior Debt are paid in full in cash, or
payment provided for, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt (pro rata to such holders on the basis of the respective amounts of
Senior Debt held by such holders) or their respective representatives, or to the
trustee or trustees or agent or agents under any indenture pursuant to which any
of such Senior Debt may have been issued, as their respective interests may
appear, for application to the payment of Senior Debt remaining unpaid until all
such Senior Debt has been paid in full in cash after giving effect to any prior
or concurrent payment, distribution or provision therefor to or for the holders
of such Senior Debt.
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The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 10.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 10.04. Subrogation.
Upon the payment in full in cash of all Senior Debt, or provision
for payment, the Holders of the Securities shall be subrogated to the rights of
the holders of Senior Debt to receive payments or distributions of cash,
property or securities of the Company made on such Senior Debt until the
principal of and interest and Liquidated Damages, if any, on the Securities
shall be paid in full in cash; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Securities or the Trustee on
their behalf would be entitled except for the provisions of this Article Ten,
and no payment over pursuant to the provisions of this Article Ten to the
holders of Senior Debt by Holders of the Securities or the Trustee on their
behalf shall, as between the Company, its creditors other than holders of Senior
Debt, and the Holders of the Securities, be deemed to be a payment by the
Company to or on account of the Senior Debt. It is understood that the
provisions of this Article Ten are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of the Senior Debt, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Ten shall have been applied, pursuant to the provisions of this Article
Ten, to the payment of all amounts payable under Senior Debt, then and in such
case, the Holders of the Securities shall be entitled to receive from the
holders of such Senior Debt any payments or distributions received by such
holders of Senior Debt in excess of the amount required to make payment in full,
or provision for payment, of such Senior Debt.
SECTION 10.05. Obligations of Company Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company and
the Holders of the Securities, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders of the Securities the principal of and
interest and Liquidated Damages, if any, on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders of the Securities and
creditors of the Company other than the holders of the Senior Debt, nor shall
anything herein or therein prevent the Holder of any Security or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article Ten of the holders of the Senior Debt in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
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Without limiting the generality of the foregoing, nothing contained
in this Article Ten shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Article Six or to pursue any rights
or remedies hereunder; provided, however, that all Senior Debt then due and
payable shall first be paid in full before the Holders of the Securities or the
Trustee are entitled to receive any direct or indirect payment from the Company
of principal of or interest or Liquidated Damages, if any, on the Securities.
SECTION 10.06. Notice to Trustee.
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 pursuant to the provisions of this
Article Ten. The Trustee shall not be charged with knowledge of the existence of
any event of default with respect to any Senior Debt or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing at its Corporate Trust Office
to that effect signed by an Officer of the Company, or by a holder of Senior
Debt or trustee or agent therefor; and prior to the receipt of any such written
notice, the Trustee shall, subject to Article Seven, be entitled to assume that
no such facts exist; provided that if the Trustee shall not have received the
notice provided for in this Section 10.06 at least two Business Days prior to
the date upon which by the terms of this Indenture any moneys shall become
payable for any purpose (including, without limitation, the payment of the
principal of or interest or Liquidated Damages, if any, on any Security), then,
regardless of anything herein to the contrary, the Trustee shall have full power
and authority to receive any moneys from the Company and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior date.
Nothing contained in this Section 10.06 shall limit the right of the holders of
Senior Debt to recover payments as contemplated by Section 10.03. The Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Debt (or a trustee
on behalf of, or other representative of, such holder) to establish that such
notice has been given by a holder of such Senior Debt or a trustee or
representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
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 Ten, 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 Ten, 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 10.07. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets or securities referred to
in this Article Ten, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by
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any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the Holders of the Securities for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness 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 Ten.
SECTION 10.08. Trustee's Relation to Senior Debt.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Ten with respect to any Senior Debt which may at any
time be held by it in its individual or any other capacity to the same extent as
any other holder of Senior Debt, and nothing in this Indenture shall deprive the
Trustee or any Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt (except as provided in Section
10.03(b)). The Trustee shall not be liable to any such holders if the Trustee
shall in good faith mistakenly 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 Ten or
otherwise.
SECTION 10.09. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to
enforce subordination as provided herein 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
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
The provisions of this Article Ten are intended to be for the benefit of, and
shall be enforceable directly by, the holders of Senior Debt.
SECTION 10.10. Securityholders Authorize Trustee to Effectuate
Subordination of Securities.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on its or his behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article Ten, and appoints the Trustee its or his
attorney-in-fact for such purposes, including, in the event of any dissolution,
winding-up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the busi-
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ness and assets of the Company, the filing of a claim for the unpaid balance of
its or his Securities in the form required in those proceedings.
SECTION 10.11. This Article Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium or
interest or Liquidated Damages, if any, on the Securities by reason of any
provision of this Article Ten shall not be construed as preventing the
occurrence of an Event of Default specified in clause (a) or (b) of Section
6.01.
SECTION 10.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Ten shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 10.13. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 10.09, 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 of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article Ten or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (a) 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 or secured; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt; (c) release any
Person liable in any manner for the collection of Senior Debt; and (d) exercise
or refrain from exercising any rights against the Company and any other Person.
SECTION 10.14. Subordination Provisions Not Applicable to
Collateral Held in Trust for Securityholders;
Payments May Be Paid Prior to Dissolution.
All (i) money and United States Government Obligations deposited in
trust with the Trustee pursuant to and in accordance with Article Eight, (ii)
funds and securities held in the Escrow Account and (iii) funds that are the
proceeds of any drawing under any letter of credit pursuant to the Escrow
Agreement shall be for the sole benefit of the Holders and shall not be subject
to this Article Ten.
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Section
10.02, from making payments of principal of and interest and Liquidated Damages,
if any, on the Securities, or from depositing with the Trustee any moneys for
such payments or from effecting a termination of the Company's and the
Guarantors' obligations under the Securities and this Indenture as provided in
Article Eight, or (ii) the application by the Trustee of any moneys deposited
with it for the purpose of making such payments of principal of
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and interest and Liquidated Damages, if any, on the Securities, to the Holders
entitled thereto unless at least two Business Days prior to the date upon which
such payment becomes due and payable, the Trustee shall have received the
written notice provided for in Section 10.02(b) or in Section 10.06. The Company
shall give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of the Company.
SECTION 10.15. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of the Senior Debt of the
acceleration.
ARTICLE ELEVEN
GUARANTEE OF SECURITIES
SECTION 11.01. Unconditional Guarantee.
Each of the Guarantors hereby, jointly and severally and
unconditionally guarantees, on a senior subordinated basis (such guarantee to be
referred to herein as a "Guarantee") to each Holder of a Security authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns
that: (a) the principal of, premium, if any, and interest on the Securities (and
any Liquidated Damages payable thereon) shall be promptly paid in full when due
(subject to any applicable grace periods) whether at maturity, upon redemption
at the option of Holders pursuant to the provisions of the Securities relating
thereto, by acceleration or otherwise, and interest on the overdue principal and
(to the extent permitted by law) interest, if any, on the Securities and all
other Obligations of the Company to the Holders or the Trustee hereunder or
thereunder (including amounts due the Trustee under Section 7.07 hereof) and all
other Obligations shall be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Securities or any of such other Obligations, the same
shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to any applicable grace period,
whether at maturity, by acceleration or otherwise subject, however, in the case
of (i) and (ii) to the limitations set forth in Section 11.04. Failing payment
when due of any amount so guaranteed, or failing performance of any other
obligation of the Company to the Holders under this Indenture or under the
Securities, for whatever reason, each Guarantor shall be obligated to pay, or to
perform or cause the performance of, the same immediately. An Event of Default
under this Indenture or the Securities shall constitute an event of default
under this Guarantee, and shall entitle the Holders of Securities to accelerate
the Obligations of the Guarantors hereunder in the same manner and to the same
extent as the Obligations of the Company.
Each of the Guarantors hereby agrees that its Obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
re-
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spect to any provisions hereof or thereof, any release of any other Guarantor,
the recovery of any judgment against the Company, any action to enforce the
same, whether or not a Guarantee is affixed to any particular Security, or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each of the Guarantors hereby waives the
benefit of diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that its Guarantee shall not be discharged except by
complete performance of the Obligations contained in the Securities, this
Indenture and this Guarantee. This Guarantee is a guarantee of payment and not
of collection. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or to any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or such Guarantor, any amount paid by the Company or such Guarantor to the
Trustee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further agrees
that, as between it, on the one hand, and the Holders of Securities and the
Trustee, on the other hand, (a) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in Article Six for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Obligations guaranteed hereby, and (b) in
the event of any acceleration of such Obligations as provided in Article Six
hereof, such Obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantors for the purpose of this Guarantee.
No stockholder, officer, director, employee or incorporator, past,
present or future, or any Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in an
amount pro rata, based on the net assets of each Guarantor, determined in
accordance with GAAP.
SECTION 11.02. Limitations on Guarantees.
The Obligations of each Guarantor under its Guarantee are limited to
the maximum amount which, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under its Guarantee or pursuant to its
contribution Obligations under this Indenture, will result in the Obligations of
such Guarantor under the Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under any laws of the United States, any state or territory
of the United States or the District of Columbia.
SECTION 11.03. Execution and Delivery of Guarantee.
To evidence the Guarantee set forth in Section 11.01, each Guarantor
hereby agrees that a notation of such Guarantee, substantially in the form of
Exhibit H herein, shall be endorsed on each Security authenticated and delivered
by the Trustee. Such Guarantee shall be executed on behalf of each Guarantor by
either manual or facsimile signature of two Officers of each Guarantor, who, in
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each case, shall have been duly authorized to so execute by all requisite
corporate action. The validity and enforceability of any Guarantee shall not be
affected by the fact that it is not affixed to any particular Security.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 11.01 shall remain in full force and effect (unless released in
accordance with Section 11.04) notwithstanding any failure to endorse on each
Security a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or
a Guarantee no longer holds that office at the time the Trustee authenticates
the Security on which such Guarantee is endorsed or at any time thereafter, such
Guarantor's Guarantee of such Security shall be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Indenture on behalf of each Guarantor.
SECTION 11.04. Release of a Guarantor.
(a) Upon the sale or disposition of all of the Capital Stock of a
Guarantor by the Company, as the case may be, in compliance with Section 4.16,
or upon the consolidation or merger of a Guarantor with or into any Person in
compliance with Article Five (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 Indenture and
the Securities 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 Eleven. Concurrently with the defeasance of the
Securities under Article Eight hereof, the Guarantors shall be released from all
of their obligations under their Guarantees, this Indenture and the Securities.
In addition, a Guarantor's Guarantee will also be released and such Guarantor
will also be released from all Obligations under this Indenture and the
Securities if such Guarantor (1) is released from any and all guarantees of
Indebtedness of the Company and (2) has no other outstanding Indebtedness other
than Indebtedness which could be incurred by a Restricted Subsidiary that is not
a Guarantor of the Securities on the date of the proposed release of such
Guarantor's Guarantee.
(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, upon request, an Opinion
of Counsel certifying as to the compliance with this Section 11.04; 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 Eleven.
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Except as set forth in Articles Four and Five and this Section
11.04, nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or 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.
SECTION 11.05. Waiver of Subrogation.
Until this Indenture is discharged and all of the Securities are
discharged and paid in full, each Guarantor hereby irrevocably waives and agrees
not to exercise any claim or other rights which it may now or hereafter acquire
against the Company that arise from the existence, payment, performance or
enforcement of the Company's Obligations under the Securities or this Indenture
and such Guarantor's Obligations under this Guarantee and this Indenture, in any
such instance including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, and any right to
participate in any claim or remedy of the Holders against the Company, whether
or not such claim, remedy or right arises in equity, or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Issuer, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such claim or other
rights. If any amount shall be paid to any Guarantor in violation of the
preceding sentence and any amounts owing to the Trustee or the Holders of
Securities under the Securities, this Indenture, or any other document or
instrument delivered under or in connection with such agreements or instruments,
shall not have been paid in full, such amount shall have been deemed to have
been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Trustee or the Holders and shall forthwith be paid to the
Trustee for the benefit of itself or such Holders to be credited and applied to
the Obligations in favor of the Trustee or the Holders, as the case may be,
whether matured or unmatured, in accordance with the terms of this Indenture.
Each Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by this Indenture and that the
waiver set forth in this Section 11.05 is knowingly made in contemplation of
such benefits.
SECTION 11.06. Obligations Continuing.
Subject to Section 11.04, the Obligations of each Guarantor
hereunder shall be continuing and shall remain in full force and effect until
all the Obligations have been paid and satisfied in full.
SECTION 11.07. Obligations Reinstated.
Subject to Section 11.04, the Obligations of each Guarantor
hereunder shall continue to be effective or shall be reinstated, as the case may
be, if at any time any payment which would otherwise have reduced the
Obligations of any Guarantor hereunder (whether such payment shall have been
made by or on behalf of the Company or by or on behalf of a Guarantor) is
rescinded or reclaimed from any of the Holders upon the insolvency, bankruptcy,
liquidation or reorganization of the Company or any Guarantor or otherwise, all
as though such payment had not been made. If demand for, or acceleration of the
time for, payment by the Company is stayed upon the insolvency, bankruptcy,
liquidation
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or reorganization of the Company, all such Indebtedness otherwise subject to
demand for payment or acceleration shall nonetheless be payable by each
Guarantor as provided herein.
SECTION 11.08. Waiver.
Without in any way limiting the provisions of Section 11.01, each
Guarantor hereby waives notice or proof of reliance by the Holders upon the
Obligations of any Guarantor hereunder, and diligence, presentment, demand for
payment on the Company, protest or notice of dishonor of any of the Obligations.
SECTION 11.09. No Obligation To Take Action Against the Company.
Neither the Trustee nor any other Person shall have any obligation
to enforce or exhaust any rights or remedies or to take any other steps under
any security for the Obligations or against the Company or any other Person or
any property of the Company or any other Person before the Trustee is entitled
to demand payment and performance by any or all Guarantors of their liabilities
and Obligations under their Guarantees or under this Indenture.
SECTION 11.10. Default and Enforcement.
If any Guarantor fails to pay in accordance with Section 11.01, the
Trustee may proceed in its name as trustee hereunder in the enforcement of the
Guarantee of any such Guarantor and such Guarantor's Obligations thereunder and
hereunder by any remedy provided by law, whether by legal proceedings or
otherwise, and to recover from such Guarantor the Obligations under their
Guarantees or under this Indenture.
SECTION 11.11. Amendment, Etc.
No amendment, modification or waiver of any provision of this
Indenture relating to any Guarantor or consent to any departure by any Guarantor
or any other Person from any such provision will in any event be effective
unless it is signed by such Guarantor and the Trustee, other than a release
pursuant to Section 11.04.
SECTION 11.12. Acknowledgment.
Each Guarantor hereby acknowledges communication of the terms of
this Indenture and the Securities and consents to and approves of the same.
SECTION 11.13. Costs and Expenses.
Each Guarantor shall pay on demand by the Trustee any and all
reasonable costs, fees and expenses (including, without limitation, reasonable
legal fees and disbursements) incurred by the Trustee, its agents, advisors and
counsel or any of the Holders in enforcing any of their rights under any
Guarantee.
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SECTION 11.14. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of
the Trustee or the Holders, any right, remedy, power or privilege hereunder or
under this Indenture or the Securities, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder or under this Indenture or the Securities preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges in the Guarantee and
under this Indenture, the Securities and any other document or instrument
between a Guarantor and/or the Company and the Trustee are cumulative and not
exclusive of any rights, remedies, powers and privilege provided by law.
SECTION 11.15. Successors and Assigns.
Each Guarantee shall be binding upon and inure to the benefit of
each Guarantor and the Trustee and the other Holders and their respective
successors and permitted assigns, except that no Guarantor may assign any of its
Obligations hereunder or thereunder.
SECTION 11.16. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to contribution from all
other Guarantors in a pro rata amount based on the net assets (determined in
accordance with GAAP) of each Guarantor (including the Funding Guarantor) for
all payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company's Obligations with respect to the Securities or any
other Guarantor's Obligations with respect to its Guarantee.
SECTION 11.17. Future Guarantors.
The Company shall cause (i) each of Scientific Games Holdings Corp.,
Scientific Games Finance Corporation, Scientific Games (Greece), Inc.,
Scientific Games Acquisition Inc., SciGames France Inc., Scientific Games Inc.
and Scientific Games Royalty Corporation on the Acquisition Closing Date and
(ii) each of the Company's Restricted Subsidiaries to the extent required by
Section 4.19, in each case, to execute and deliver a Supplemental Indenture and
thereby become a Guarantor bound by the Guarantee of the Securities in the form
set forth in Article Eleven hereof (without such Guarantor being required to
execute and deliver its Guarantee endorsed on the securities); provided that no
Subsidiary organized outside the United States of America and no Unrestricted
Subsidiary shall be required to become a Guarantor.
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ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor
Senior Debt.
Each Guarantor covenants and agrees, and the Trustee and each Holder
of the Securities by its or his acceptance thereof likewise covenant and agree,
that all Guarantees shall be issued subject to the provisions of this Article
Twelve; and each person holding any Guarantee, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees that all
payments of the principal of and premium, if any, interest and Liquidated
Damages, if any, on the Securities pursuant to the Guarantee made by or on
behalf of such Guarantor shall, to the extent and in the manner set forth in
this Article Twelve, be subordinated and junior in right of payment to the prior
payment in full in cash of all amounts payable under Guarantor Senior Debt of
such Guarantor.
SECTION 12.02. No Payment on Guarantee in Certain Circumstances.
(a) No direct or indirect payment by or on behalf of any Guarantor
of principal of or premium, if any, or interest or Liquidated Damages, if any,
on the Securities, whether pursuant to the terms of the Securities or the
Guarantees, upon acceleration, pursuant to an Asset Sale Offer or Change of
Control Offer or otherwise, shall be made to the Holders of Securities (except
that holders of Securities may receive and retain (I) payments made from the
defeasance trust described under Article Eight and (II) payments made from the
Escrow Account or from the proceeds of any drawing under any letter of credit
pursuant to the Escrow Agreement) if (i) a default in the payment of the
principal of or premium, if any, or interest on Designated Guarantor Senior Debt
occurs and is continuing beyond any applicable period of grace or (ii) any other
default occurs and is continuing with respect to Designated Guarantor Senior
Debt that permits holders of the Designated Guarantor Senior Debt as to which
such default relates to accelerate its maturity and the Trustee receives a
written notice of such other default (a "Guarantor Payment Blockage Notice")
from the Company or a Guarantor or the holders of any Designated Guarantor
Senior Debt (with a copy to the Company) until all Obligations with respect to
such Designated Guarantor Senior Debt are paid in full; payments on the
Securities shall be resumed (x) in the case of a payment default, upon the date
on which such default is cured or waived and (y) in case of a nonpayment
default, the earlier of the date on which such nonpayment default is cured or
waived or 179 days after the date on which the applicable Guarantor Payment
Blockage Notice is received by the Trustee (such period being referred to herein
as the "Guarantor Payment Blockage Period"), unless the maturity of any
Designated Guarantor Senior Debt has been accelerated (and written notice of
such acceleration has been received by the Trustee).
Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Guarantor Payment Blockage Period extend
beyond 179 days from the date the Guarantor Payment Blockage Notice in respect
thereof was given and (y) not more than one Guarantor Payment Blockage Period
may be commenced with respect to the Securities during any period of 360
consecutive
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days. No nonpayment default that existed or was continuing on the date of
delivery of any Guarantor Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Guarantor Payment Blockage Notice (it being
understood that any subsequent action, or any breach of any covenant for a
period commencing after the date of receipt by the Trustee of such Guarantor
Payment Blockage Notice, that, in either case, would give rise to such a default
pursuant to any provisions under which a default previously existed or was
continuing shall constitute a new default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 12.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of such Designated Guarantor
Senior Debt or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Designated Guarantor Senior
Debt may have been issued, as their respective interests may appear, but only to
the extent that, upon notice from the Trustee to the holders of such Designated
Guarantor Senior Debt that such prohibited payment has been made, the holders of
such Designated Guarantor Senior Debt (or their representative or
representatives or a trustee) notify the Trustee in writing of the amounts then
due and owing on such Designated Guarantor Senior Debt, if any, and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
such Designated Guarantor Senior Debt.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of any
Guarantor of any kind or character, whether in cash, property or securities,
upon any dissolution or winding-up or liquidation or reorganization of such
Guarantor, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other similar proceedings, the holders of Guarantor Senior Debt
of such Guarantor shall be entitled to receive payment in full in cash of all
Obligations due in respect of such Guarantor Senior Debt before the Holders of
the Securities or the Trustee on behalf of such Holders shall be entitled to
receive any payment by such Guarantor of the principal of or premium, if any,
and interest or Liquidated Damages, if any, on the Securities pursuant to its
Guarantee, or any payment to acquire any of the Securities for cash, property or
securities, or any distribution with respect to the Securities of any cash,
property or securities (except that Holders may receive and retain (I) Permitted
Junior Securities, (II) payments made from the defeasance trust described under
Article Eight and (III) payments made from the Escrow Account or from letters of
credit issued to the Trustee to support the Company's potential obligation to
make a Mandatory Redemption or otherwise pursuant to the Escrow Agreement).
Before any payment (other than Permitted Junior Securities or by virtue of the
defeasance trust or a Mandatory Redemption described above) may be made by, or
on behalf of, any Guarantor of the principal of or premium, if any, and interest
or Liquidated Damages, if any, on the Securities upon any such dissolution or
winding-up or liquidation or reorganization, any payment or distribution of
assets or securities of such Guarantor of any kind or character, whether in
cash, property or securities, to which the Holders of the Securities or the
Trustee on their behalf would be entitled, but for the subordination provisions
of this Indenture, shall be made by such Guarantor or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of the Guarantor Senior Debt of such
Guarantor (pro rata to such holders on the basis of the respective amounts of
such Guarantor Senior Debt held by such holders) or their representatives or to
the trustee
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or trustees or agent or agents under any agreement or indenture pursuant to
which any such Guarantor Senior Debt may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Guarantor Senior
Debt in full in cash after giving effect to any prior or concurrent payment,
distribution or provision therefor to or for the holders of such Guarantor
Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of a Guarantor of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Holder of Securities at a
time when such payment or distribution is prohibited by Section 12.03(a) and
before all Obligations in respect of the Guarantor Senior Debt of such Guarantor
are paid in full in cash, or payment provided for, such payment or distribution
shall be received and held in trust for the benefit of, and shall be paid over
or delivered to, the holders of such Guarantor Senior Debt (pro rata to such
holders on the basis of the respective amounts of Guarantor Senior Debt held by
such holders) or their respective representatives, or to the trustee or trustees
or agent or agents under any indenture pursuant to which any of such Guarantor
Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of the Guarantor Senior Debt remaining unpaid until
all Guarantor Senior Debt has been paid in full in cash after giving effect to
any prior or concurrent payment, distribution or provision therefor to or for
the holders of any Guarantor Senior Debt; provided that the Trustee shall be
entitled to receive from the holders of Guarantor Senior Debt written notice of
the amounts owing on the Guarantor Senior Debt.
The consolidation of a Guarantor with, or the merger of a Guarantor
with or into, another corporation or the liquidation or dissolution of a
Guarantor following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 12.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 12.04. Subrogation.
Upon the payment in full in cash of all Guarantor Senior Debt of a
Guarantor, or provision for payment, the Holders of the Securities shall be
subrogated to the rights of the holders of Guarantor Senior Debt to receive
payments or distributions of cash, property or securities of such Guarantor made
on Guarantor Senior Debt of such Guarantor until the principal of and premium,
if any, and interest and Liquidated Damages, if any, on the Securities shall be
paid in full in cash; and, for the purposes of such subrogation, no payments or
distributions to the holders of Guarantor Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee on their behalf
would be entitled except for the provisions of this Article Twelve, and no
payment over pursuant to the provisions of this Article Twelve to the holders of
the Guarantor Senior Debt by Holders of the Securities or the Trustee on their
behalf shall, as between such Guarantor, its creditors other than holders of
such Guarantor Senior Debt of such Guarantor, and the Holders of the Securities,
be deemed to be a payment by such Guarantor to or on account of the Guarantor
Senior Debt of such Guarantor. It is understood that the provisions of this
Article Twelve are and are intended solely for the purpose of defin-
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ing the relative rights of the Holders of the Securities, on the one hand, and
the holders of Guarantor Senior Debt, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Twelve shall have been applied, pursuant to the provisions of this
Article Twelve, to the payment of all amounts payable under Guarantor Senior
Debt, then and in such case, the Holders of the Securities shall be entitled to
receive from the holders of such Guarantor Senior Debt any payments or
distributions received by such holders of Guarantor Senior Debt in excess of the
amount required to make payment in full, or provision for payment, of such
Guarantor Senior Debt.
SECTION 12.05. Obligations of Guarantor Unconditional.
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Securities or the Guarantees is intended to or shall impair,
as between any Guarantor and the Holders of the Securities, the obligation of
such Guarantor, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of and premium, if any, or interest and Liquidated
Damages, if any, on the Securities as and when the same shall become due and
payable in accordance with the terms of its Guarantee, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Guarantors other than the holders of Guarantor Senior Debt, nor shall
anything herein or therein prevent the Holder of any Security or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article Twelve of the holders of Guarantor Senior Debt in respect of cash,
property or securities of the Guarantors received upon the exercise of any such
remedy.
Without limiting the generality of the foregoing, nothing contained
in this Article Twelve shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Guarantor Senior Debt of any
Guarantor then due and payable shall first be paid in full before the Holders of
the Securities or the Trustee are entitled to receive any direct or indirect
payment from such Guarantor of principal of or premium, if any, or interest or
Liquidated Damages, if any, on the Securities pursuant to such Guarantor's
Guarantee.
SECTION 12.06. Notice to Trustee.
The Company and the Guarantors shall give prompt written notice to
the Trustee of any fact known to the Company or the Guarantors which would
prohibit the making of any payment to or by the Trustee in respect of the
Guarantees pursuant to the provisions of this Article Twelve. The Trustee shall
not be charged with knowledge of the existence of any event of default with
respect to any Guarantor Senior Debt or of any other facts which would prohibit
the making of any payment to or by the Trustee unless and until the Trustee
shall have received notice in writing at its Corporate Trust Office to that
effect signed by an Officer of the Company or a Guarantor, or by a holder of
Guarantor Senior Debt or trustee or agent therefor; and prior to the receipt of
any such written notice, the Trustee
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shall, subject to Article Seven, be entitled to assume that no such facts exist;
provided that if the Trustee shall not have received the notice provided for in
this Section 12.06 at least two Business Days prior to the date upon which by
the terms of this Indenture any moneys shall become payable for any purpose
(including, without limitation, the payment of the principal of or premium, if
any, or interest or Liquidated Damages, if any, on any Security), then,
regardless of anything herein to the contrary, the Trustee shall have full power
and authority to receive any moneys from the Guarantors and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior date.
Nothing contained in this Section 12.06 shall limit the right of the holders of
Guarantor Senior Debt to recover payments as contemplated by Section 12.03. The
Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself or itself to be a holder of any Guarantor Senior
Debt (or a trustee on behalf of, or other representative of, such holder) to
establish that such notice has been given by a holder of Guarantor Senior Debt
or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt to participate in any payment or distribution pursuant to
this Article Twelve, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Guarantor 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 Twelve, 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 12.07. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets or securities of any
Guarantor referred to in this Article Twelve, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of Guarantor Senior Debt and other
Indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Twelve.
SECTION 12.08. Trustee's Relation to Guarantor Senior Debt.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Twelve with respect to any Guarantor Senior Debt which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Guarantor Senior Debt, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
-100-
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Twelve, and no implied covenants
or obligations with respect to the holders of Guarantor Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Guarantor Senior Debt (except as
provided in Section 12.03(b)). The Trustee shall not be liable to any such
holders if the Trustee shall in good faith mistakenly 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 Guarantor Senior Debt shall be entitled by
virtue of this Article Twelve or otherwise.
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions
of the Guarantors or Holders of Guarantor Senior Debt.
No right of any present or future holders of any Guarantor Senior
Debt to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Guarantor
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by any Guarantor with the terms of this Indenture, regardless of
any knowledge thereof which any such holder may have or otherwise be charged
with. The provisions of this Article Twelve are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Guarantor Senior Debt.
SECTION 12.10. Securityholders Authorize Trustee to Effectuate
Subordination of Guarantees.
Each Holder of Securities by its or his acceptance of such
Securities authorizes and expressly directs the Trustee on its or his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Twelve, and appoints the Trustee its or
his attorney-in-fact for such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of any Guarantor (whether
in bankruptcy, insolvency, receivership, reorganization or similar proceedings
or upon an assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of such Guarantor, the filing of a claim
for the unpaid balance of its or his Securities in the form required in those
proceedings.
SECTION 12.11. This Article Not to Prevent Events of Default.
The failure to make a payment on account of principal of or premium,
if any, or interest or Liquidated Damages, if any, on the Securities by reason
of any provision of this Article Twelve shall not be construed as preventing the
occurrence of an Event of Default specified in clauses (a) or (b) of Section
6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Twelve shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
-101-
SECTION 12.13. No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 12.09, the
holders of Guarantor Senior Debt may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article Twelve or the
obligations hereunder of the Holders of the Securities to the holders of
Guarantor Senior Debt, do any one or more of the following: (a) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Guarantor Senior Debt or any instrument evidencing the same or any
agreement under which Guarantor Senior Debt is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Guarantor Senior Debt; (c) release any Person liable in any
manner for the collection of Guarantor Senior Debt; and (d) exercise or refrain
from exercising any rights against the Guarantor and any other Person.
SECTION 12.14. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Twelve or elsewhere in this
Indenture shall prevent (i) the Guarantors, except under the conditions
described in Section 12.02, from making payments of principal of and premium, if
any, and interest and Liquidated Damages, if any, on the Securities, or from
depositing with the Trustee any moneys for such payments or from effecting a
termination of the Guarantors' obligations under the Securities, the Guarantees
and this Indenture, as provided in Article Eight, or (ii) the application by the
Trustee of any moneys deposited with it for the purpose of making such payments
of principal of and premium, if any, and interest and Liquidated Damages, if
any, on the Securities, to the Holders entitled thereto unless at least two
Business Days prior to the date upon which such payment becomes due and payable,
the Trustee shall have received the written notice provided for in Section
12.02(b) or in Section 12.06. The Company shall give prompt written notice to
the Trustee of any dissolution, winding-up, liquidation or reorganization of any
Guarantor.
ARTICLE THIRTEEN
SECURITY
SECTION 13.01. Security.
(a) The Company will, pursuant to the Escrow Agreement, grant a
first priority security interest in the Collateral (as such term is defined in
the Escrow Agreement) to the Trustee for its benefit and the benefit of the
Holders, in order to secure all monetary obligations of the Company under the
Securities and any other monetary obligation, now or hereafter arising, of every
kind and nature, owed by the Company under the Indenture to the Holders or to
the Trustee for the benefit of the Holders. The Company shall comply with its
obligations under the Escrow Agreement.
-102-
(b) Each Holder, by its acceptance of a Security, consents and
agrees to the terms of the Escrow Agreement (including, without limitation, the
provisions providing for foreclosure and release of the Collateral) 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 Escrow Agreement
and to perform its obligations and exercise its rights thereunder in accordance
therewith.
(c) The release of any Collateral pursuant to the Escrow Agreement
shall not be deemed to impair the security under this Indenture in contravention
of the provisions hereof.
(d) The Trustee, in its sole discretion and without the consent of
the Holders, may take all actions it deems necessary or appropriate in order to
(i) enforce any of the terms of the Escrow Agreement and (ii) collect and
receive any and all amounts payable in respect of the monetary 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
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 under the Escrow Agreement or be prejudicial
to the interest of the Holders or of the Trustee).
ARTICLE FOURTEEN
MISCELLANEOUS
SECTION 14.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control. If any provision of this Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.
SECTION 14.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier, by reputable overnight delivery service, or registered mail,
postage prepaid, return receipt requested, addressed as follows:
-103-
if to the Company or any Guarantor:
Autotote Corporation
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Facsimile: (000) 000-0000
Each of the Company, the Guarantors and the Trustee by written
notice to each other may designate additional or different addresses for notices
to such Person. Any notice or communication to the Company and the Guarantors
shall be deemed to have been given or made as of the date so delivered if
personally delivered; when answered back, if telexed; when receipt is
acknowledged, if telecopied; one (1) business day after mailing by reputable
overnight courier; and five (5) calendar days after mailing if sent by
registered mail, postage prepaid (except that, notwithstanding the foregoing, a
notice of change of address shall not be deemed to have been given until
actually received by the addressee). Notice to the Trustee shall be deemed given
when actually received by the Trustee.
Any notice or communication mailed to a Securityholder shall be
mailed to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
-104-
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 14.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA ss. 312(c).
SECTION 14.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee
at the request of the Trustee:
(1) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee, stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 14.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.08(a), shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition and the definitions relating thereto;
(2) 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;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
-105-
SECTION 14.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 14.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York, or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 14.08. Governing Law.
THIS INDENTURE, THE SECURITIES AND THE GUARANTEES WILL 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 CONFLICTS OF LAW. Each of the parties hereto agrees to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Indenture or the Securities or
the Guarantees.
SECTION 14.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 14.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of the Company or any Guarantor shall not have any liability for any Obligations
of the Company or any Guarantor under the Securities, the Guarantees or this
Indenture or for any claim based on, in respect of or by reason of such
Obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Securities.
SECTION 14.11. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successor.
-106-
SECTION 14.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
SECTION 14.13. Severability.
In case any one or more of the provisions in this Indenture, in the
Securities or in the Guarantees shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
SIGNATURE PAGES TO FOLLOW
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
THE COMPANY:
AUTOTOTE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
GUARANTORS:
AUTOTOTE MANAGEMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
AUTOTOTE SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
AUTOTOTE INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
AUTOTOTE ENTERPRISES INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
AUTOTOTE KENO CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
AUTOTOTE LOTTERY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
ACRA ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
XXXXXX X. XXXXXXXX PRODUCTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
AUTOTOTE GAMING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
AUTOTOTE DOMINICANA INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
THE TRUSTEE:
THE BANK OF NEW YORK, as Trustee
By: /s/ Xxxxx Xxxxxxxxx-Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxx-Xxxxxx
Title: Vice President
EXHIBIT A
[FORM OF SERIES A SECURITY]
[LEGEND FOR RESTRICTED SECURITY]
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER: (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED
THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN
"IAI"), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO AUTOTOTE CORPORATION OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF
REGULATION S UNDER THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM
OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT
OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO AUTOTOTE CORPORATION THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO AUTOTOTE CORPORATION) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHICH THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING.
A-1
[LEGEND FOR REGULATION S GLOBAL SECURITY]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S UNDER THE SECURITIES ACT)
UNLESS REGISTERED UNDER THE SECURITIES ACT OR EXCEPT PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
THIS NOTE MAY NOT BE OFFERED OR SOLD TO A U.S. PERSON OR FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD (AS
DEFINED IN THE INDENTURE), AND NO TRANSFER OR EXCHANGE OF THIS NOTE MAY BE MADE
FOR AN INTEREST IN THE RESTRICTED GLOBAL SECURITY UNTIL AFTER THE LATER OF THE
DATE OF EXPIRATION OF THE RESTRICTED PERIOD AND THE DATE ON WHICH THE PROPER
REQUIRED CERTIFICATION RELATING TO SUCH INTEREST HAS BEEN PROVIDED IN ACCORDANCE
WITH THE TERMS OF THE INDENTURE, TO THE EFFECT THAT THE BENEFICIAL OWNER OR
OWNERS OF SUCH INTEREST ARE NOT U.S. PERSONS.
A-2
AUTOTOTE CORPORATION
12 1/2% Senior Subordinated Note
due 2010, Series A
CUSIP No.:
No. [ ] $[ ]
AUTOTOTE CORPORATION, a Delaware corporation (the "Company", which
term includes any successor corporation), for value received promises to pay to
[ ] or registered assigns, the principal sum of $[ ] Dollars, on August 15,
2010.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
A-3
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
AUTOTOTE CORPORATION
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
This is one of the 12 1/2% Senior Subordinated Notes due 2010,
Series A, described in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK
as Trustee
By:
------------------------------------
Authorized Signatory
A-4
(REVERSE OF SECURITY)
AUTOTOTE CORPORATION
12 1/2% Senior Subordinated Note
due 2010, Series A
1. Interest.
AUTOTOTE CORPORATION, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semi-annually on February
15 and August 15 of each year (each an "Interest Payment Date"), commencing
February 15, 2001. Interest on the Securities will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from
August 14, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months or in the case of a partial month, the actual number of
days elapsed.
The Company shall pay interest at the rate of interest then borne by
the Securities on overdue installments of principal and on overdue installments
of interest to the extent lawful as provided in the Indenture.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee") will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holders. The Company or any of its Subsidiaries may act as
Registrar or Paying Agent.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
August 14, 2000 (the "Indenture"), by and among the Company, the Guarantors
named therein and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on
A-5
the date on which the Indenture is qualified under the TIA and as it may be
amended from time to time. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and Holders of Securities are referred
to the Indenture and the TIA for a statement of them. The Securities are general
obligations of the Company limited in aggregate principal amount to
$150,000,000.
5. Optional Redemption.
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after August 15, 2005, upon not
less than 30 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on August 15 of the year set forth below,
plus, in each case, accrued and unpaid interest to the date of redemption:
Year Percentage
---- ----------
2005................................................. 106.250%
2006................................................. 104.167%
2007................................................. 102.083%
2008 and thereafter.................................. 100.000%
6. Optional Redemption upon Equity Offering.
At any time, or from time to time, on or prior to August 15, 2003,
the Company may, at its option, use the net cash proceeds of one or more Equity
Offerings (as defined below) to redeem up to 35% of the original principal
amount of the Securities at a redemption price equal to 112.5% of the principal
amount thereof, plus accrued and unpaid interest to the date of redemption;
provided, however, that at least 65% of the original principal amount of the
Securities remains outstanding immediately after any such redemption. In order
to effect the foregoing redemption with the proceeds of any Equity Offering, the
Company shall make such redemption not more than 120 days after the consummation
of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means any
private or public offering of Qualified Capital Stock of the Company.
7. Notice of Optional Redemption.
Notice of redemption will be sent, by first class mail, postage
prepaid, at least 30 days but not more than 60 days before the Redemption Date
to each Holder of Securities to be redeemed at such Holder's registered address.
Securities in denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Securities called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
interest, if any, the Securities called for redemption will cease to bear
interest from and after such Redemption Date and the only right of the Holders
of such Securities will be to receive payment of the Redemption Price plus
accrued and unpaid interest, if any to the Redemption Date.
A-6
8. Offers to Purchase.
Sections 4.15 and 4.16 of the Indenture provide that, and upon the
occurrence of a Change of Control (as defined in the Indenture) and after
certain Asset Sales (as defined in the Indenture), and subject to further
limitations contained therein, the Company will make an offer to purchase
certain amounts of the Securities in accordance with the procedures set forth in
the Indenture.
9. Special Mandatory Redemption.
Section 3.07 of the Indenture provides that if a Mandatory
Redemption Event (as defined in the Indenture) occurs, the Company will redeem
all of the Securities at 101% of the principal amount of the Securities plus
accrued and unpaid interest to the date of redemption in accordance with the
procedures set forth in Section 3.07.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption, except the unredeemed portion of any Security
being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for one year, the Trustee and the Paying Agent will repay the funds to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its Obligations under the
Indenture and the Securities except for certain provisions thereof, and may be
discharged from Obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of
A-7
the Securities then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture and the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not adversely affect
the rights of any Holder of a Security in any material respect.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Subsidiaries to incur additional
Indebtedness, create certain liens, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates and merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company. The limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such covenants.
16. Subordination.
The Indebtedness evidenced by the Securities is, to the extent and
in the manner provided in the Indenture, subordinated in right of payment to the
prior payment in full in cash of all Senior Debt, and this Security is issued
subject to such provisions. Each Holder of this Security, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes and directs
the Trustee, on behalf of such Holder, to take such action as may be necessary
or appropriate to effectuate the subordination as provided in the Indenture and
(c) appoints the Trustee attorney-in-fact of such Holder for such purpose.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare the principal of and accrued interest on all the
Securities to be due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Securities may not enforce the Indenture
or the Securities except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture or the Securities unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
18. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
A-8
19. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such Obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security by its manual
signature.
21. Guarantees.
This Security will be entitled to the benefits of certain
Guarantees, if any, made for the benefit of the Holders. Reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and Obligations thereunder of the Guarantors, the Trustee and the
Holders.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a CUSIP number to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
24. Registration Rights.
Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will be obligated upon the occurrence of certain events to consummate
an exchange offer pursuant to which the Holder of this Security shall have the
right to exchange this Series A Security for the Company's 12 1/2% Senior
Subordinated Notes due 2010, Series B, which will have been registered under the
Securities Act, in like principal amount and having terms identical in all
material respects as the Series A Securities. The Holders shall be entitled to
receive certain additional interest payments in the event such exchange offer is
not consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement.
A-9
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture and the Registration Rights
Agreement. Requests may be made to: Autotote Corporation, 000 Xxxxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Chief Financial Officer.
25. Governing Laws.
This Security and the 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. Each of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Security.
A-10
ASSIGNMENT FORM
I or we assign and transfer this Security to:
_______________________________________________________________
_______________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _____________________________________,
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 Guarantee:__________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 |_| Section 4.16 |_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount: $_____________
Date: _________________ Your Signature: ________________________________
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
A-12
EXHIBIT B
[FORM OF SERIES B SECURITY]
AUTOTOTE CORPORATION
12 1/2% Senior Subordinated Note
due 2010, Series B
CUSIP No.:
No. [ ] $[ ]
AUTOTOTE CORPORATION, a Delaware corporation (the "Company", which
term includes any successor corporation), for value received promises to pay to
[ ] or registered assigns, the principal sum of $[ ] Dollars, on August 15,
2010.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
B-1
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
AUTOTOTE CORPORATION
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
This is one of the 12 1/2% Senior Subordinated Notes due 2010,
Series B, described in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------------
Authorized Signatory
B-2
(REVERSE OF SECURITY)
AUTOTOTE CORPORATION
12 1/2% Senior Subordinated Note
due 2010, Series B
1. Interest.
AUTOTOTE CORPORATION, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semi-annually on February
15 and August 15 of each year (each an "Interest Payment Date"), commencing
February 15, 2001. Interest on the Securities will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from
August 14, 2000. Interest will be computed on the basis of a 360-day year of
twelve 30-day months or in the case of a partial month, the actual number of
days elapsed.
The Company shall pay interest at the rate of interest then borne by
the Securities on overdue installments of principal and on overdue installments
of interest and on overdue installments of interest to the extent lawful as
provided in the Indenture.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee") will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holders. The Company or any of its Subsidiaries may, act
as Registrar or Paying Agent.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
August 14, 2000 (the "Indenture"), by and among the Company, the Guarantors
named therein and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on
B-3
the date on which the Indenture is qualified under the TIA and as it may be
amended from time to time. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and Holders of Securities are referred
to the Indenture and the TIA for a statement of them. The Securities are general
Obligations of the Company limited in aggregate principal amount to
$150,000,000.
5. Optional Redemption.
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after August 15, 2005, upon not
less than 30 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on August 15 of the year set forth below,
plus, in each case, accrued and unpaid interest to the date of redemption:
Year Percentage
---- ----------
2005................................................. 106.250%
2006................................................. 104.167%
2007................................................. 102.083%
2008 and thereafter.................................. 100.000%
6. Optional Redemption upon Equity Offering.
At any time, or from time to time, on or prior to August 15, 2003,
the Company may, at its option, use the net cash proceeds of one or more Equity
Offerings (as defined below) to redeem up to 35% of the original principal
amount of the Securities at a redemption price equal to 112.5% of the principal
amount thereof, plus accrued and unpaid interest to the date of redemption;
provided, however, that at least 65% of the original principal amount of the
Securities remains outstanding immediately after any such redemption. In order
to effect the foregoing redemption with the proceeds of any Equity Offering, the
Company shall make such redemption not more than 120 days after the consummation
of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means any
private or public offering of Qualified Capital Stock of the Company.
7. Notice of Optional Redemption.
Notice of redemption will be sent, by first class mail, postage
prepaid, at least 30 days but not more than 60 days before the Redemption Date
to each Holder of Securities to be redeemed at such Holder's registered address.
Securities in denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Securities called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
interest, if any, the Securities called for redemption will cease to bear
interest from and after such Redemption Date and the only right of the Holders
of such Securities will be to receive payment of the Redemption Price plus
accrued and unpaid interest, if any to the Redemption date.
B-4
8. Offers to Purchase.
Sections 4.15 and 4.16 of the Indenture provide that, and upon the
occurrence of a Change of Control (as defined in the Indenture) and after
certain Asset Sales (as defined in the Indenture), subject to further
limitations contained therein, the Company will make an offer to purchase
certain amounts of the Securities in accordance with the procedures set forth in
the Indenture.
9. Special Mandatory Redemption.
Section 3.07 of the Indenture provides that if a Mandatory
Redemption Event (as defined in the Indenture) occurs, the Company will redeem
all of the Securities at 101% of the principal amount of the Securities plus
accrued and unpaid interest to the date of redemption in accordance with the
procedures set forth in Section 3.07.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption, except the unredeemed portion of any Security
being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for one year, the Trustee and the Paying Agent will repay the funds to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from their Obligations under the
Indenture and the Securities except for certain provisions thereof, and may be
discharged from their Obligations to comply with certain covenants contained in
the Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount
B-5
of the Securities then outstanding, and any existing Default or Event of Default
or compliance with any provision may be waived with the consent of the Holders
of a majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture and the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not adversely affect
the rights of any Holder of a Security in any material respect.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Subsidiaries to incur additional
Indebtedness, create certain liens, pay dividends or make certain other
restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates and merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company. The limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such covenants.
16. Subordination.
The Indebtedness evidenced by the Securities is, to the extent and
in the manner provided in the Indenture, subordinated in right of payment to the
prior payment in full in cash of all Senior Debt, and this Security is issued
subject to such provisions. Each Holder of this Security, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes and directs
the Trustee, on behalf of such Holder, to take such action as may be necessary
or appropriate to effectuate the subordination as provided in the Indenture and
(c) appoints the Trustee attorney-in-fact of such Holder for such purpose.
17. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare the principal of and accrued interest on all the
Securities to be due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Securities may not enforce the Indenture
or the Securities except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture or the Securities unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
18. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
B-6
19. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such Obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
20. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security by its manual
signature.
21. Guarantees.
This Security will be entitled to the benefits of certain
Guarantees, if any, made for the benefit of the Holders. Reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and Obligations thereunder of the Guarantors, the Trustee and the
Holders.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a CUSIP number to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture.
24. Governing Law.
This Security and the 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. Each of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Security.
B-7
ASSIGNMENT FORM
I or we assign and transfer this Security to:
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint ________________________________________________________
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 Guarantee:____________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
B-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 |_| Section 4.16 |_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount: $_____________
Date: _______________________ Your Signature: ________________________________
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
B-9
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
AUTOTOTE CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE,
OR PAYMENT, AND ANY 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.
C-1
EXHIBIT D
Form of Certificate To Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
_______________, ____
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: Autotote Corporation (the "Company") Indenture (the "Indenture")
relating to 12 1/2% Senior Subordinated Notes due 2010
Ladies and Gentlemen:
In connection with our proposed purchase of 12 1/2% Senior
Subordinated Notes due 2010 (the "Securities") of Autotote Corporation (the
"Company"), we confirm that:
1. We have received such information as we deem necessary in order
to make our investment decision.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
and the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended
(the "Securities Act").
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and, unless so registered, may
not be offered, sold or otherwise transferred within the United States or
to, or for the account or benefit of, U.S. persons except as permitted in
the following sentence. We agree, on our own behalf and on behalf of any
investor account for which we are acting as hereinafter stated, that if we
should sell any Securities, we will do so only (A) to the Company or any
subsidiary thereof, (B) inside the United States in accordance with Rule
144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501 of
Regulation D under the Securities Act that is acquiring the Securities for
its own account or for the account of such an institutional "accredited
investor", for investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities
Act, (D) pursuant to offers and sales that occur outside the United States
within the meaning of Regulation S under the Securities Act, (E) in
accordance with another exemption from the registration requirements of
the Secu-
D-1
rities Act, or (F) pursuant to an effective registration statement under
the Securities Act, subject in each of the foregoing cases to any
requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their
control and to compliance with any applicable state securities laws. If
any resale or other transfer of the Securities is proposed to be made
pursuant to clause (F) above, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Trustee
under the Indenture pursuant to which the Securities were issued (the
"Trustee") which shall provide, among other things, that the transferee is
an institutional "accredited investor" within the meaning of subparagraph
(a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501 of Regulation D under the
Securities Act and that it is acquiring such Securities for investment
purposes and not for distribution in violation of the Securities Act. The
Trustee and the Company reserve the right prior to any offer, sale or
other transfer of the Securities pursuant to clause (B), (C), (D), or (E)
above to require the delivery of a written opinion of counsel,
certifications, and or other information satisfactory to the Company and
the Trustee.
4. We understand that, on any proposed resale of Securities, we will
be required to furnish to the Trustee and the Company such certification,
legal opinions and other information as the Trustee and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Securities
purchased by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (a)(2), (a)(3) or (a)(7) of Regulation D under the Securities
Act) purchasing for our own account or for the account of such an
institutional "accredited investor", and we are acquiring the Securities
for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act and
we have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment for an indefinite
period.
6. We are acquiring the Securities purchased by us for our account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:_____________________________________
[Authorized Signatory]
D-2
EXHIBIT E
Form of Certification for Transfer or Exchange
of Restricted Global Security to
Regulation S Global Security
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: Autotote Corporation
12 1/2% Senior Subordinated Notes
due 2010 (the "Securities")
Reference is hereby made to the Indenture, dated as of August 14,
2000 (the "Indenture"), by and among Autotote Corporation, as Issuer, the
guarantors named therein and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in this
Indenture.
This letter relates to U.S.$____________ aggregate principal amount
of Securities which are held in the form of the Restricted Global Security
(CUSIP No. ) with the Depository in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Securities to a Person who will take delivery thereof in the
form of an equal aggregate principal amount of Securities evidenced by the
Regulation S Global Security (CUSIP No. ).
In connection with such request, and in respect of such Securities,
the Transferor does hereby certify that such transfer has been effected in
accordance with the transfer restrictions set forth in the Securities and,
(1) with respect to transfers made in reliance on Regulation S under
the Securities Act of 1933, as amended (the "Securities Act"), the Transferor
does hereby certify that:
(A) the offer of the Securities was not made to a person in the
United States;
[(B) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the transferee was outside the United
States;]
E-1
[(B) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the Transferor nor
any person acting on its behalf knows that the transaction was
pre-arranged with a buyer in the United States;](1)
(C) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S under the
Securities Act, as applicable; and
(D) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(2) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Securities are being
transferred in a transaction permitted by Rule 144 under the Securities Act.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Issuer, the Guarantors and the Initial Purchasers.
[Insert Name of Transferor]
By:
____________________________________
Name:
Title:
Dated: ________________________________
cc: Autotote Corporation
----------
(1) Insert one of these two provisions, which come from the definition of
"offshore transactions" in Regulation S under the Securities Act.
E-2
EXHIBIT F
Form of Certification for Transfer or Exchange
of Regulation S Global Security to
Restricted Global Security
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: Autotote Corporation
12 1/2% Senior Subordinated Notes
due 2010 (the "Securities")
Reference is hereby made to the Indenture, dated as of August 14,
2000 (the "Indenture"), by and among Autotote Corporation, as Issuer, the
guarantors named therein and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in this
Indenture.
This letter relates to U.S.$_____ aggregate principal amount of
Securities which are evidenced by a [Regulation S Global Security (CUSIP No. )]
and held with the Depository through [Euroclear] [Clearstream] (Common Code ___)
in the name of [insert name of transferor] (the "Transferor"). The Transferor
has requested a transfer of such beneficial interest in Securities to a person
that will take delivery thereof in the form of an equal principal amount of
Securities evidenced by a Restricted Global Security of the same series and of
like tenor as the Securities (CUSIP No. ).
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that such transfer is being effected pursuant
to and in accordance with Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act") and, accordingly, the Transferor does hereby further
certify that the Securities are being transferred to a person that the
Transferor reasonably believes is purchasing the Securities for its own account,
or for one or more accounts with respect to which such person exercises sole
investment discretion, and such person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act,
in each case in a transaction meeting the requirements of Rule 144A under the
Securities Act and in accordance with any applicable securities laws of any
state of the United States.
F-1
This certificate and the statements contained herein are made for
your benefit and the benefit of the Issuer, the Guarantors and the Initial
Purchasers.
[Insert Name of Transferor]
By:
_____________________________________
Name:
Title:
Dated: ________________________________
cc: Autotote Corporation
F-2
EXHIBIT G-1
Form of Certification for Transfer
or Exchange of Non-Global Restricted Security to
Restricted Global Security
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: Autotote Corporation
12 1/2% Senior Subordinated Notes
due 2010 (the "Securities")
Reference is hereby made to the Indenture, dated as of August 14,
2000 (the "Indenture"), by and among Autotote Corporation, as Issuer, the
guarantors named therein and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in this
Indenture.
This letter relates to $ principal amount of Restricted Securities
held in definitive form (CUSIP No. ) by [insert name of transferor] (the
"Transferor"). The Transferor has requested an exchange or transfer of such
Securities.
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 144A or Rule 144 under the
United States Securities Act of 1933, as amended (the "Securities Act") and
accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 144A under
the Securities Act:
(A) the Securities are being transferred to a person that the
Transferor reasonably believes is purchasing the Securities for its
own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion;
(B) such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the
Securities Act; and
(C) the Securities have been transferred in a transaction
meeting the requirements of Rule 144A under the Securities Act and
in accordance with any applicable securities laws of any state of
the United States; or
G-1-1
(2) if the transfer has been effected pursuant to Rule 144 under the
Securities Act:
(A) more than two years has elapsed since the date of the
closing of the initial placement of the Securities pursuant to the
Purchase Agreement; and
(B) the Securities have been transferred in a transaction
permitted by Rule 144 and made in accordance with any applicable
securities laws of any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Issuer, the Guarantors and the Initial Purchasers.
Dated: _____________, ____
[Insert Name of Transferor]
By:
_____________________________________
Name:
Title:
cc: Autotote Corporation
G-1-2
EXHIBIT G-2
Form of Certification for Transfer
or Exchange of Non-Global Restricted Security to
Regulation S Global Security
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: Autotote Corporation
12 1/2% Senior Subordinated Notes
due 2010 (the "Securities")
Reference is hereby made to the Indenture, dated as of August 14,
2000 (the "Indenture"), by and among Autotote Corporation, as Issuer, the
guarantors named therein and The Bank of New York, as Trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in this
Indenture.
This letter relates to $____ principal amount of Restricted
Securities held in definitive form (CUSIP No. ) by [insert name of transferor]
(the "Transferor"). The Transferor has requested an exchange or transfer of such
Securities.
In connection with such request and in respect of such Securities,
the Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with (a) Rule 903 or Rule 904 under
the Securities Act of 1933, as amended (the "Securities Act"), or (b) Rule 144
under the Securities Act, and accordingly the Transferor does hereby further
certify that:
(1) if the transfer has been effected pursuant to Rule 903 or Rule
904 under the Securities Act:
(A) the offer of the Securities was not made to a person in
the United States;
(B) either;
(i) at the time the buy order was originated, the transferee
was outside the United States or the Transferor and any person
acting on its behalf reasonably believed that the transferee was
outside the United States, or
G-2-1
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither
the Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States;
(C) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation S under the Securities Act, as applicable;
(D) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(E) if such transfer is to occur during the Restricted Period,
upon completion of the transaction, the beneficial interest being
transferred as described above was held with the Depository through
[Euroclear] [Clearstream]; or
(2) if the transfer has been effected pursuant to Rule 144
under the Securities Act:
(A) more than two years has elapsed since the date of the
closing of the initial placement of the Securities pursuant to the
Purchase Agreement; and
(B) the Securities have been transferred in a transaction
permitted by Rule 144 and made in accordance with any applicable
securities laws of any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements contained herein are made for your benefit and
the benefit of the Issuer, the Guarantors and the Initial Purchasers.
Dated: _____________, ____
[Insert Name of Transferor]
By:
_____________________________________
Name:
Title:
cc: Autotote Corporation
G-2-2
EXHIBIT H
GUARANTEE
For value received, the undersigned hereby unconditionally
guarantees, as principal obligor and not only as a surety, to the Holder of this
Security the cash payments in United States dollars of principal of, premium, if
any, and interest on this Security (and including Liquidated Damages payable
thereon) in the amounts and at the times when due and interest on the overdue
principal, premium, if any, and interest, if any, of this Security, if lawful,
and the payment or performance of all other Obligations of the Company under the
Indenture (as defined below) or the Security, to the Holder of this Security and
the Trustee, all in accordance with and subject to the terms and limitations of
this Security, Article Eleven and Article Twelve of the Indenture and this
Guarantee. This Guarantee will become effective in accordance with Article
Eleven of the Indenture and its terms shall be evidenced therein. The validity
and enforceability of this Guarantee shall not be affected by the fact that it
is not affixed to any particular Security. Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Indenture dated
as of August 14, 2000, among Autotote Corporation, a Delaware corporation, as
issuer (the "Company"), each of the Guarantors named therein and The Bank of New
York, as trustee (the "Trustee") (as amended or supplemented, the "Indenture").
The obligations of the undersigned to the Holders of Securities and
to the Trustee pursuant to this Guarantee and the Indenture are expressly set
forth in Articles Eleven and Twelve of the Indenture and are expressly
subordinated in right of payment to the prior payment in full of all Guarantor
Senior Debt of the Guarantor issuing this Guarantee, to the extent and in the
manner provided in Article Twelve of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Guarantee and all of the other
provisions of the Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. Each Guarantor hereby agrees to submit to the jurisdiction of
the courts of the State of New York in any action or proceeding arising out of
or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
H-1
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be
duly executed.
Date:____________________
[NAME OF GUARANTOR], as Guarantor
By:
_____________________________________
Name:
Title:
By:
_____________________________________
Name:
Title:
H-2
