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EXHIBIT 10.37
AMENDMENT NO. 2 TO LOAN AGREEMENT
THIS AMENDMENT NO. 2 TO LOAN AGREEMENT (this "Amendment") is entered into
as of October 17, 2000 with reference to the Loan Agreement (as amended, the
"Loan Agreement") dated as of June 29, 1999 among Anchor Gaming, a Nevada
corporation ("Borrower"), the Lenders party thereto, Bank of America, N.A.
(formerly known as Bank of America National Trust and Savings Association), as
Administrative Agent for the Lenders, and Banc of America Securities, LLC, as
Lead Arranger and Sole Book Manager. Capitalized terms used but not defined
herein are used with the meanings set forth for those terms in the Loan
Agreement.
RECITALS
A. Borrower has executed a Stock Purchase Agreement dated as of September
24, 2000 with Stanley E. Fulton and certain of his family members and their
respective Affiliates who are shareholders in Borrower pursuant to which
Borrower intends to acquire 4,596,200 shares of its capital stock for $66.60 per
share plus interest in respect of such purchase price from and after October 16,
2000. Pursuant to the Stock Purchase Agreement, a $66,000,000 portion of the
total purchase price payable to Mr. Fulton shall be paid in the form of one or
more promissory notes of Borrower payable to Mr. Fulton (the "Fulton Notes").
B. Pursuant to the Asset Purchase Agreement, dated as of September 24,
2000 and between Nuevo Sol Turf Club, Inc., a New Mexico corporation ("Nuevo
Sol") and My Way Holdings, LLC (of which Mr. Fulton is the sole member) ("My
Way"), Nuevo Sol has agreed to sell the assets relating to the Sunland Park
Racetrack and Casino to My Way. Pursuant to an Assignment of Membership
Interests between Borrower and My Way, dated September 24, 2000, Borrower has
agreed to sell Borrower's 25% interest in Ourway Realty, LLC to My Way. Each of
such transactions is subject to necessary regulatory approvals. The aggregate
purchase price for such assets and interests is $66,000,000 (which purchase
price Mr. Fulton will be entitled to pay and intends to pay by the surrender of
the Fulton Notes).
C. In order to finance the transactions described in Recitals A and B,
Borrower proposes to issue $250,000,000 of its senior subordinated notes due
2008 (the "Senior Subordinated Notes").
D. Borrower has requested that the Lenders approve the transactions
described above and that the Lenders increase the Commitment from $300,000,000
to $325,000,000.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower and the Administrative
Agent, acting with the consent of all of the Lenders, hereby agree as follows:
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1. DEFINITIONS.
(a) EXISTING DEFINITIONS. The following definitions in Section 1.1
of the Loan Agreement are amended to read in full as follows:
"BASE RATE MARGIN" means, for each Pricing Period, the applicable
percentage set forth below opposite the Leverage Ratio as of the last day
of the Fiscal Quarter ending immediately prior to the beginning of that
Pricing Period:
<TABLE>
<CAPTION>
Leverage Ratio Base Rate Margin
-------------- ----------------
<S> <C>
Greater than or equal to 2.75:1.00 0.875%
Greater than or equal to 2.25:1.00 0.625%
but less than 2.75:1.00
Greater than or equal to 1.75:1.00 0.375%
but less than 2.25:1.00
Greater than or equal to 1.25:1.00 0.125%
but less than 1.75:1.00
Less than 1.25:1.00 0.000%
</TABLE>
"COMMITMENT" means, subject to any increase or decrease in the amount
thereof pursuant to Sections 2.6, 2.7 and 2.8, $325,000,000.
"EURODOLLAR MARGIN" means, for each Pricing Period, the applicable
percentage set forth below opposite the Leverage Ratio as of the last day
of the Fiscal Quarter ending immediately prior to the beginning of that
Pricing Period:
<TABLE>
<CAPTION>
Leverage Ratio Eurodollar Margin
-------------- -----------------
<S> <C>
Greater than or equal to 2.75:1.00 2.125%
Greater than or equal to 2.25:1.00 1.875%
but less than 2.75:1.00
Greater than or equal to 1.75:1.00 1.625%
but less than 2.25:1.00
Greater than or equal to 1.25:1.00 1.375%
but less than 1.75:1.00
Less than 1.25:1.00 1.125%
</TABLE>
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"REDUCTION DATE" means September 30, 2001 and each Quarterly Payment
Date thereafter.
(b) NEW DEFINITIONS. Section 1.1 of the Loan Agreement is
amended by adding the following new definition in the appropriate alphabetical
location:
"FULTON NOTES" means promissory notes of Borrower payable to Stanley
E. Fulton, his successors and assigns issued in connection with the Fulton
Transaction in the aggregate principal amount of $66,000,000 due October
17, 2001 and bearing interest at 11% per annum.
"FULTON TRANSACTION" means the transactions contemplated by (i) the
Stock Purchase Agreement dated as of September 24, 2000, by and among
Borrower, Stanley E. Fulton and certain of his family members and their
respective Affiliates, (ii) the Asset Purchase Agreement, dated as of
September 24, 2000, between Nuevo Sol Turf Club, Inc. and My Way Holdings,
LLC and (iii) the Assignment of Membership Interests, dated as of September
24, 2000, between Borrower and My Way Holdings, LLC, in each case as
amended and in effect on October 17, 2000.
"SENIOR SUBORDINATED NOTES" means Borrower's 9.875% Senior
Subordinated Notes due October 15, 2008, issued on October 17, 2000 in the
aggregate principal amount of $250,000,000.
2. PRICING FOLLOWING CONSUMMATION OF THE FULTON TRANSACTION.
Notwithstanding any other provision of the Loan Documents, Borrower hereby
agrees that during the period from the consummation of the Fulton Transaction to
January 31, 2001, interest, Commitment Fees and Letter of Credit Fees shall be
set at the levels applicable to a Leverage Ratio which is greater than
2.75:1.00. Following January 31, 2001, interest, Commitment Fees and Letter of
Credit Fees shall be set in the manner otherwise provided in the Loan Agreement.
3. TECHNICAL AMENDMENT TO COVENANT RE PAYMENT OF SUBORDINATED
OBLIGATIONS - SECTION 6.1. Section 6.1 of the Loan Agreement is hereby amended
to read in full as follows:
"6.1 PAYMENT OF SUBORDINATED OBLIGATIONS. Prepay any principal
(INCLUDING sinking fund payments) or any other amount (OTHER THAN scheduled
interest payments) with respect to any Subordinated Obligation, or purchase
or redeem (or offer to purchase or redeem) any Subordinated Obligation, or
deposit any monies, securities or other Property with any trustee or other
Person to provide assurance that the principal or any portion thereof of
any Subordinated Obligation will be paid when due or otherwise to provide
for the defeasance of any Subordinated Obligation PROVIDED THAT (a) current
interest may be paid with respect to Subordinated Obligations in accordance
with the subordination provisions thereof, and (b) the Fulton Notes may be
prepaid at any time."
4. AMENDMENT TO SECTION 6.5 - DISTRIBUTIONS. Section 6.5 of the
Loan Agreement is hereby amended to add new clause (c) thereto, to read in full
as follows:
"(c) Distributions made pursuant to the Fulton Transaction consisting
of of (i) cash in an aggregate amount not to exceed $240,106,920 plus
interest in respect thereof from and after October 16, 2000, in exchange
for 4,596,200 shares of the capital stock of Borrower and the
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Fulton Notes, and (ii) of the assets of Nuevo Sol Turf Club, Inc. relating
to the Sunland Park Racetrack and Casino, related personal property and
Borrower's direct or indirect membership interests in Ourway Realty, LLC."
5. AMENDMENT TO LIENS COVENANT - SECTION 6.8. Section 6.8 of the
Loan Agreement is hereby amended so that existing clause (h) reads in full as
follows and to add a new clause (i) as follows:
"(h) Liens on Property having an aggregate value not in excess of
$40,000,000 securing Indebtedness of the type described in Section
6.9(n); and
"(i) a Negative Pledge in favor of the holders of the Senior
Subordinated Notes which does not prohibit the granting of Liens and
Negative Pledges to the Administrative Agent or the Lenders, or prohibit
the granting of Liens and Negative Pledges to any other class of senior
Indebtedness of the Borrower which is permitted by the terms of the
Senior Subordinated Notes (as originally issued)."
6. AMENDMENT TO INDEBTEDNESS COVENANT - SECTION 6.9. Section 6.9 of
the Loan Agreement is hereby amended to restate clause (l) in its entirety,
and to add new clause (m) thereto, to read in full as follows:
"(l) the Senior Subordinated Notes (the terms of which are
hereby approved);
(m) Until the consummation of the transactions contemplated by
the Asset Purchase Agreement, dated as of September 24, 2000, by and
between Nuevo Sol Turf Club, Inc. and My Way Holdings, LLC, and the
Assignment of Membership Interests, dated as of September 24, 2000,
between Borrower and My Way Holdings, LLC, Indebtedness under the
Fulton Notes in an aggregate principal amount not to exceed $66,000,000
(the terms of which are hereby approved); and
(n) other Indebtedness in an aggregate principal amount not to
exceed $40,000,000 at any time."
7. AMENDMENT TO FIXED CHARGE COVERAGE RATIO - SECTION 6.11.
Section 6.11 of the Loan Agreement is hereby amended to read in full as follows:
"6.11 FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge Coverage
Ratio, (a) as of the last day of any Fiscal Quarter ending on or before
June 30 2003, to be less than 1.25:1.00, and (b) as of the last day of
any subsequent Fiscal Quarter, to be less than 1.50:1.00."
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8. AMENDMENT TO LEVERAGE RATIO - SECTION 6.12. Section 6.12 of the
Loan Agreement is hereby amended to read in full as follows:
"6.12 LEVERAGE RATIO. Permit the Leverage Ratio, as of the last
day of any Fiscal Quarter ending during a period set forth below, to be
greater than the ratio set forth opposite that period:
<TABLE>
<CAPTION>
FISCAL QUARTERS ENDING MAXIMUM PERMITTED RATIO
---------------------- -----------------------
<S> <C>
Closing Date through September 30, 2000 2.50:1.00
December 31, 2000 through June 30, 2001 3.35:1.00
September 30, 2001 through June 30, 2002 3.00:1.00
September 30, 2002 through June 30, 2003 2.75:1.00
Thereafter 2.50:1.00."
</TABLE>
9. GUARANTEES OF SENIOR SUBORDINATED NOTES. Section 6.15 is
amended to add a new clause (h) to read in full as follows:
"(h) Contingent Obligations consisting of guarantees of the
Senior Subordinated Notes, which Contingent Obligations shall be
subordinated to the Obligations on the same terms as the Senior
Subordinated Notes, and shall be executed by each of the same
Subsidiaries who are guarantors of the Obligations."
10. AMENDMENT TO LICENSE REVOCATION DEFAULT - SECTION 9.1(o).
Section 9.1(o) of the Loan Agreement is hereby amended to read in full as
follows (with the added text in bold and underscored for the convenience
of the reader):
"(o) The occurrence of a License Revocation WITH RESPECT TO ANY
PERSON OR GAMING ASSETS WHICH, DURING THE THEN MOST RECENT FOUR FISCAL
QUARTER PERIOD FOR WHICH A COMPLIANCE CERTIFICATE IS REQUIRED TO HAVE
BEEN DELIVERED, GENERATED 5% OR MORE OF BORROWER'S EBITDA, AND SUCH
License Revocation continues for three consecutive calendar days;"
11. COMPLIANCE CERTIFICATE. Exhibit B to the Loan Agreement is
hereby replaced in its entirety with Exhibit B attached hereto.
12. PRICING CERTIFICATE. Exhibit D to the Loan Agreement is
hereby replaced in its entirety with Exhibit D attached hereto.
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13. CONSENT TO DISPOSITION OF SUNLAND PARK ASSETS - WAIVER OF
SECTIONS 2.7 AND 6.2. The Administrative Agent and the Lenders hereby
consent to the Disposition of the assets of Nuevo Sol Turf Club, Inc.
relating to Sunland Park Racetrack and Casino and related personal property
and Borrower's interest in Ourway Realty, LLC pursuant to the Fulton
Transaction, or in exchange for the Fulton Notes, and hereby waive compliance
with Section 6.2 of the Loan Agreement to the extent necessary to consummate
the Disposition of the assets of Nuevo Sol Turf Park, Inc. relating to the
Sunland Park Racetrack and Casino and Borrower's interests in Ourway Realty,
LLC in connection with the Fulton Transaction. The Administrative Agent and
the Lenders hereby confirm that the consummation of the foregoing
transactions in connection with the Fulton Transaction shall not be deemed to
have occurred under Section 6.2(c) of the Loan Agreement. The Administrative
Agent and the Lenders also hereby waive the requirements of Section 2.7 of
the Loan Agreement with respect to the Disposition of the such assets in
connection with the Fulton Transaction and agree that the Commitment shall
not be reduced as a result of such Dispositions.
14. WAIVER OF SECTION 6.5 - AGREEMENT RE SECTION 6.10. The
Administrative Agent and the Lenders hereby waive the provisions of Section
6.5 of the Loan Agreement with respect to Distributions made pursuant to the
Fulton Transaction, and all such Distributions shall be disregarded for the
purposes of Section 6.5. It is further agreed that the limitations of Section
6.10 (regarding Transactions with Affiliates) shall not be deemed to apply to
the Fulton Transaction.
15. REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to the Administrative Agent and the Lenders that:
(a) Borrower has all necessary power and has taken all corporate
action necessary to enter into this Amendment and to make this Amendment
and all other agreements and instruments to which it is a party executed
in connection herewith, the valid and enforceable obligations they
purport to be.
(b) No Event of Default under the Loan Agreement has occurred and
remains continuing.
16. CONDITIONS; EFFECTIVENESS. The effectiveness of this
Amendment shall be subject to the conditions precedent that:
(a) The Administrative Agent shall have received counterparts of
this Amendment executed by Borrower;
(b) Borrower shall have delivered to the Administrative Agent a
copy of a resolution or resolutions passed by the Board of Directors of
Borrower, certified by the Secretary or an Assistant Secretary of
Borrower as being in full force and effect on the date hereof,
authorizing the execution, delivery and performance of this Amendment;
(c) The Administrative Agent shall have received written consents
hereto from all of the Lenders substantially in the form of Exhibit C
hereto;
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(d) The Administrative Agent shall have received written
consents hereto from all of the Guarantors substantially in the form of
Exhibit E hereto;
(e) The Administrative Agent shall have received an
amendment to that certain Guaranty (the "Anchor Guaranty") dated as of
June 15, 2000 executed by Borrower in favor of Bank of America, N.A.,
as Administrative Agent for the benefit of the Lenders that are party
to that certain Loan Agreement dated as of June 15, 2000 among The
Pala Band of Mission Indians, a federally recognized Indian tribe, the
Lenders therein named and Bank of America, N.A., as Administrative
Agent for such Lenders, executed by Borrower substantially in the form
of ANNEX 4 hereto;
(f) The Administrative Agent shall have received a
certificate signed by a Senior Officer of Borrower certifying that
attached thereto is a true and correct copy of each of the principal
instruments, documents and agreements governing the Fulton Transaction;
(g) Borrower shall have issued replacement Notes to each
Lender having a Pro Rata Share which has been increased in amount
pursuant hereto; and
(h) Borrower shall have paid to the Administrative
Agent, for the account of each Lender, a fee equal to 25 basis points
TIMES the Pro Rata Share of the Commitment (as in effect prior to the
amendment hereof) held by that Lender.
17. NO WAIVER. The waivers and consents contained in this
Amendment are limited to the matters expressed herein and do not constitute, nor
should they be construed as, a waiver of any other right, power or privilege
under the Loan Documents, or under any agreement, contract, indenture, document
or instrument mentioned in the Loan Documents.
18. EFFECTIVENESS OF THE LOAN AGREEMENT. Except as hereby
expressly amended, the Loan Agreement remains in full force and effect, and is
hereby ratified and confirmed in all respects.
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COUNTERPARTS
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument. This signed a copy hereof, whether the same instrument
or counterparts, and the same shall have been delivered
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly
ANCHOR GAMING,
By:
------------------------------------------
BANK OF AMERICA, N.A. (formerly known as Bank of
as Administrative Agent
Janice Hammond, Vice President
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[Exhibit C to Amendment No. 2]
CONSENT OF LENDER
This Consent of Lender is delivered with reference to the Loan
Agreement (the "Loan Agreement") dated as of June 29, 1999 among Anchor
Gaming, a Nevada corporation (the "Borrower"), the Lenders party thereto,
Bank of America, N.A. (formerly known as Bank of America National Trust and
Savings Association), as Administrative Agent for the Lenders, and Banc of
America Securities, LLC, as Lead Arranger and Sole Book Manager. Capitalized
terms used but not defined herein are used with the meanings set forth for
those terms in the Loan Agreement.
The undersigned Lender hereby consents to the execution, delivery
and performance of the proposed Amendment No. 2 to Loan Agreement,
substantially in the form provided to the undersigned as a draft, and without
limitation on the foregoing, specifically to Borrower entering into the
amendment to the Anchor Guaranty (as defined therein) in the form attached to
such Amendment No. 2 to Loan Agreement as ANNEX 4.
____________________________
[Name of Lender]
By:_________________________
____________________________
[Printed Name and Title]
By:_________________________
____________________________
[Printed Name and Title]
Date:_______________________
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[Exhibit E to Amendment No. 2]
CONSENT OF GUARANTORS
This Consent of Guarantors is delivered with reference to the Loan
Agreement (the "Loan Agreement") dated as of June 29, 1999 among Anchor
Gaming, a Nevada corporation (the "Borrower"), the Lenders party thereto, Bank
of America, N.A. (formerly known as Bank of America National Trust and Savings
Association), as Administrative Agent for the Lenders, and Banc of America
Securities, LLC, as Lead Arranger and Sole Book Manager. Capitalized terms
used but not defined herein are used with the meanings set forth for those
terms in the Loan Agreement.
Each Guarantor hereby consents to the execution, delivery and
performance of the proposed Amendment No. 2 to Loan Agreement, substantially
in the form provided to the undersigned as a draft, and specifically consents
to Borrower entering into the amendment to the Anchor Guaranty (as defined
therein) in the form attached to such Amendment No. 2 to Loan Agreement as
ANNEX 4.
Each of the undersigned acknowledges that, pursuant to the Amendment
No. 2, the amount of the Commitment under the Loan Agreement shall be
increased to $325,000,000, and agrees that the Guaranty shall be effective to
guarantee the entire amount of the Commitment as so increased.
Dated ____________, 2000 ANCHOR COIN,
ANCHOR GAMING CANADA INC.,
C. G. INVESTMENTS, INC.,
D D STUD, INC., and
GREEN MOUNTAIN ENTERTAINMENT, INC.
By:_____________________________
Title:__________________________
AUTOMATED WAGERING INTERNATIONAL, INC.
DYNATOTE OF PENNSYLVANIA, INC.,
NUEVO SOL TURF CLUB INC.,
POWERHOUSE TECHNOLOGIES, INC.,
RAVEN'S D&R MUSIC, INC.,
UNITED TOTE CANADA INC.,
UNITED TOTE COMPANY,
UNITED WAGERING SYSTEMS, INC.,
VLC, INC.,
VLC OF NEVADA, INC., and
VLT COMPANY, INC.
By:________________________________
Title:_____________________________
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ANCHOR PALA DEVELOPMENT, LLC
ANCHOR PALA MANAGEMENT, LLC
By: Anchor Native American Gaming Corporation
By:________________________________
Title:_____________________________
ANCHOR NATIVE AMERICAN GAMING CORPORATION
By:________________________________
Title:________________________________
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