Scientific Games tenders for 12½% notes

New York, Nov. 29 - Scientific Games Corp. said it has begun a cash tender offer for any and all of its $65,584,125 of outstanding 12½% senior subordinated notes due 2010 and is also soliciting consents to proposed indenture changes that would eliminate substantially all of the restrictive covenants and certain default provisions.

The company said the price it will pay for the notes will be set at 2 p.m. ET on Dec. 8. It set a consent deadline of 5 p.m. ET on Dec. 8 and an expiration deadline of 5 p.m. ET on Dec. 22, with all deadlines subject to possible extension. The price determination date will be reset if the company extends the tender offer by more than 10 full business days.

Scientific Games, a New York-based supplier of instant tickets, wagering systems and services to lotteries and to pari-mutuel operators, said the total consideration it will offer holders of the notes will be set on the price determination date using a formula based on a 100 basis point fixed spread over the yield of a designated reference security, the 6.5% U.S. Treasury note due Aug. 15, 2005. The total consideration will be equal to the present value on the payment date of $1,062.50 per $1,000 principal amount of notes (i.e. the redemption price for the notes on their first call date of Aug. 15, 2005), plus the present value of the interest that would accrue from the payment date until the first call date.

The total consideration, which will be paid only to holders tendering by the consent deadline and thus delivering their consents, will include at $20 per $1,000 principal amount consent payment. Holders tendering their notes after the consent deadline will not receive the consent payment. All tendering holders will receive unpaid and accrued interest on their notes up to but excluding the payment date.

Holders cannot tender their notes without also delivering a consent and cannot deliver a consent without also tendering their notes. The proposed indenture amendments require the consent of holders of at least a majority of the notes' outstanding principal amount for their adoption. Notes tendered before the consent deadline may be withdrawn at any time before that deadline, but not after that.

The closing of the tender offer is subject to the satisfaction or waiver of certain conditions, including the valid tender of a majority of the outstanding principal amount of the notes; the receipt by Scientific Games of the consents to the proposed indenture amendments and the execution by Scientific Games, the subsidiary guarantors to the indenture and the notes' trustee of a supplemental indenture incorporating the proposed amendment; and the consent of Scientific Games' senior secured lenders to the completion of the tender offer.

The dealer managers and solicitation agents are J.P. Morgan Securities Inc. (call Lenny Carey collect at 212 270-9769) and Bear, Stearns & Co. Inc. (call Global Liability Management Group at 877 696-2327 or collect at 212 272-5112). D.F. King & Co., Inc. is the information agent (call Fran Beckesh collect at 212-269-5550, ext. 6831).

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