AMENDMENT NUMBER EIGHT TO LOAN AND SECURITY AGREEMENT
EXHIBIT 10.1
AMENDMENT NUMBER EIGHT TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER EIGHT TO LOAN
AND SECURITY AGREEMENT (this “Amendment”), dated as
of March 31, 2008, is entered into by and among THE MAJESTIC STAR CASINO, LLC,
an Indiana limited liability company (“MSC”), each of MSC’s
Subsidiaries identified on the signature pages hereof (such Subsidiaries,
together with MSC, are referred to hereinafter each individually as a “Borrower”, and
individually and collectively, jointly and severally, as the “Borrowers”), each of
the lenders that is a signatory to this Amendment, and XXXXX FARGO FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the Lenders
(in such capacity, together with its successors, if any, in such capacity,
“Agent”; and
together with each of the Lenders, individually and collectively, the “Lender Group”), in
light of the following:
W I T N E S S E T
H
WHEREAS, each Borrower and the
Lender Group are parties to that certain Loan and Security Agreement, dated as
of October 7, 2003 (as amended, restated, supplemented, or modified from time to
time, the “Loan
Agreement”);
WHEREAS, each Borrower has
requested that the Lender Group agree to (i) amend the Loan Agreement in
accordance with the provisions of this Amendment and (ii) waive the Event of
Default (the “Designated Event of
Default”) arising under Section 8.2 of the
Loan Agreement, due to Borrowers’ failure to comply with the minimum EBITDA
covenant for the twelve month period ending December 31, 2007, as set forth in
Section
7.18(a)(i); and
WHEREAS, subject to the terms
and conditions set forth in this Amendment, the Required Lenders are willing to
so amend the Loan Agreement.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree to amend the Loan Agreement as follows:
1. DEFINITIONS. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed to them in the Loan Agreement, as amended hereby.
2. AMENDMENTS TO LOAN
AGREEMENT.
(a) Section 1.1 of the
Loan Agreement is hereby amended by inserting the following new definitions in
proper alphabetical order:
“Eighth Amendment”
means that certain Amendment Number Eight to Loan and Security Agreement dated
as of March 31, 2008, by and among the Borrowers and the Lender Group.
“Eighth Amendment Fee”
has the meaning set forth in Section
2.11(g).
(b) Section 1.1 of the
Loan Agreement is hereby amended by amending and restating the following
definitions in their entirety as follows:
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“EBITDA” means, with
respect to any fiscal period, (a) MSC’s and its Restricted Subsidiaries’
consolidated net earnings (or loss) for such period, minus (b) MSC’s and its
Restricted Subsidiaries’ extraordinary gains for such period, plus (c) MSC’s and
its Restricted Subsidiaries’ non-cash extraordinary losses for such period, plus
(d) MSC’s and its Restricted Subsidiaries’ interest expense, income taxes, and
depreciation and amortization for such period, plus, (e) to the extent such
amounts are deducted in calculating such consolidated net earnings (or loss) of
MSC and its Restricted Subsidiaries for such fiscal period, without duplication,
non-cash losses incurred by MSC and its Restricted Subsidiaries during MSC’s
second fiscal quarter of its 2007 fiscal year in connection with the sale of
slot machines, in an aggregate amount not in excess of $820,000, in each case as
determined in accordance with GAAP.
(c) Section 2.11 of the
Loan Agreement is hereby amended (i) by deleting the phrase “(except in the case
of the fee described in clauses (d), (e), and (f) of this Section 2.11, which
fee shall be distributed ratably among the Lenders as set forth in such clauses (d), (e), and
(f) hereof)”
immediately following the words “(irrespective of whether this Agreement is
terminated thereafter) and shall” appearing in the first sentence therein and
replacing it with the phrase “(except in the case of the fees described in clauses (d), (e), (f), and (g) of this Section 2.11, which
fees shall be distributed ratably among the Lenders as set forth in such clauses (d), (e), (f), and (g) hereof)”, (ii) by
deleting the word “and” at the end of clause (e), (iii) by
deleting the period at the end of clause (f) and
replacing it with “, and”, and (iv) by adding the following new clause (g):
“(g) Eighth Amendment Fee. An amendment fee
in the amount of $100,000 (the “Eighth Amendment
Fee”), which amendment fee shall be fully earned on March 31, 2008, shall
be distributed ratably among the Lenders in accordance with their respective Pro
Rata Shares, and shall be charged to Borrowers’ Loan Account on such
date.”
(d) Section 7.18(a)(i) of
the Loan Agreement is hereby amended by deleting the chart appearing therein and
replacing it with the following chart:
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“Applicable
Amount
|
Applicable
Period
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$58,500,000
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For the 12 month period
ending March 31, 2008
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$58,500,000
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For the 12 month period
ending June 30, 2008
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$58,500,000
|
For the 12 month period
ending September 30, 2008
|
|
$58,500,000
|
For the 12 month period
ending December 31, 2008
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|
$58,500,000
|
For the 12 month period
ending March 31, 2009
|
|
$58,500,000
|
For the 12 month period
ending June 30, 2009
|
|
$58,500,000
|
For the 12 month period
ending September 30, 2009
|
|
$58,500,000
|
For the 12 month period
ending December 31, 2009
|
|
$58,500,000
|
For the 12 month period
ending March 31, 2010 and for the 12 month period
ending on the last day of each fiscal
quarter of Borrowers thereafter”
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(e) Section 7.18(a)(i) of
the Loan Agreement is hereby amended by inserting the following sentence at the
end therof:
“The foregoing to the contrary notwithstanding,
solely for the purposes of this Section 7.18(a)(i),
EBITDA for any twelve month period ending on the last day of any fiscal quarter
which ends after the date of the Eighth Amendment, EBITDA for such period shall
be deemed to be increased by the aggregate amount of cash common equity
contributions made by any Person that is not a Borrower or
Guarantor to Parent during such twelve month period, to the extent
that (x) such cash common equity contributions are made on terms and conditions
that are satisfactory to Agent, (y) 100% of the proceeds of such cash common
equity contributions are used by Parent to prepay the Obligations during such
twelve month period and (z) EBITDA was not increased pursuant to this sentence
as a result of cash common equity contributions made by any Person that is not a
Borrower or Guarantor to Parent during the immediately preceding fiscal quarter
of Parent; provided, however, that in no
event shall the EBITDA of Parent and its Restricted Subsidiaries be increased by
more than $5,000,000 in the aggregate on or after the date of the Eighth
Amendment pursuant to this sentence.”
(f) Section 7.18(a)(ii)
of the Loan Agreement is hereby amended by deleting the chart appearing therein
and replacing it with the following chart:
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“Applicable
Ratio
|
Applicable
Period
|
|
1.20:1.0
|
For the 12 month period
ending December 31, 2007
|
|
1.0:1.0
|
For the 12 month period
ending March 31, 2008
|
|
1.0:1.0
|
For the 12 month period
ending June 30, 2008
|
|
1.0:1.0
|
For the 12 month period
ending September 30, 2008
|
|
1.0:1.0
|
For the 12 month period
ending December 31, 2008
|
|
1.0:1.0
|
For the 12 month period
ending March 31, 2009
|
|
1.0:1.0
|
For the 12 month period
ending June 30, 2009
|
|
1.0:1.0
|
For the 12 month period
ending September 30, 2009
|
|
1.0:1.0
|
For the 12 month period
ending December 31, 2009
|
|
1.0:1.0
|
For the 12 month period
ending March 31, 2010 and for the 12 month period
ending on the last day of each fiscal
quarter of Borrowers thereafter”
|
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3. WAIVER. Anything
in the Loan Agreement to the contrary notwithstanding, and subject to the
satisfaction or waiver of the conditions precedent set forth in Section 4 hereof, the
Agent and the Required Lenders hereby waive the Designated Event of Default;
provided, however, nothing herein, nor any communications among any Borrower,
Agent, or any Lender shall be deemed a waiver with respect to any Default or
Event of Default, other than the Designated Event of Default, or any future
failure of any Borrower or any Guarantor to comply fully with any
provision of the Loan Agreement or any provision of any other Loan Document, and
in no event shall this waiver be deemed to be a waiver of enforcement of any of
the Agent’s or Lenders’ rights or remedies under the Loan Agreement and the
other Loan Documents, at law (including under the Code), in equity, or otherwise
including, without limitation, the right to declare all Obligations immediately
due and payable pursuant to Section 8 of the Loan
Agreement, with respect to any other Defaults or Events of
Default now existing or hereafter arising. Except as
expressly provided herein, Agent and each Lender herby reserves and preserves
all of its rights and remedies against the Borrowers and the Guarantors under
the Loan Agreement and the other Loan Documents, at law (including under the
Code), in equity, or otherwise including, without limitation, the right to
declare all Obligations immediately due and payable pursuant to Section 8 of the Loan
Agreement.
4. CONDITIONS PRECEDENT TO THIS
AMENDMENT. The satisfaction of each of the following
shall constitute conditions precedent to the effectiveness of this Amendment and
each and every provision hereof:
(a) After giving effect to this Amendment,
the representations and warranties in this Amendment, the Loan Agreement and the
other Loan Documents shall be true and correct in all respects on and as of the
date hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date);
(b) Agent shall have received the Eighth
Amendment Fee, which fee shall be fully earned on the date hereof, shall be due
and payable in full in cash on the date hereof, and shall be non-refundable when
paid;
(c) Agent shall have received the
reaffirmation and consent of Parent attached hereto as Exhibit A (the “Consent”), duly
executed and delivered by an authorized official of Parent;
(d) Borrower shall have remitted to Agent,
in immediately available funds, all unpaid legal fees, costs and expenses which
are payable in connection with this Amendment and any other Loan Document;
(e) After giving effect to this Amendment,
no Default or Event of Default shall have occurred and be continuing on the date
hereof or as of the date of the effectiveness of this Amendment; and
(f) No injunction, writ, restraining order,
or other order of any nature prohibiting, directly or indirectly, the
consummation of the transactions contemplated herein shall have been issued and
remain in force by any Governmental Authority against any Borrower, any
Guarantor, Limited Recourse Guarantor, or any member of the Lender Group.
5. REPRESENTATIONS AND
WARRANTIES. Each Borrower hereby represents and
warrants to the Lender Group as follows:
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(a) After giving effect to this Amendment,
the representations and warranties in this Amendment, the Loan Agreement and the
other Loan Documents are true and correct in all respects on and as of the date
hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date);
(b) The execution, delivery, and
performance of this Amendment and of the Loan Agreement, as amended by this
Amendment, are within each Borrower’s corporate powers, have been duly
authorized by all necessary corporate action, and are not in contravention of
any law, rule, or regulation, or any order, judgment, decree, writ, injunction,
or award of any arbitrator, court, or governmental authority, or of the terms of
its charter or bylaws, or of any contract or undertaking to which it is a party
or by which any of its properties may be bound or affected;
(c) This Amendment and the Loan Agreement,
as amended by this Amendment, constitute each Borrower’s legal, valid, and
binding obligation, enforceable against such Borrower in accordance with its
terms;
(d) This Amendment has been duly executed
and delivered by each Borrower;
(e) The execution, delivery, and
performance of the Consent is within each Guarantor’s and Limited Recourse
Guarantor’s corporate power, has been duly authorized by all necessary corporate
action, and is not in contravention of any law, rule or regulation, or any
order, judgment, decree, writ, injunction, or award of any arbitrator, court or
governmental authority, or of the terms of its charter or bylaws, or of any
contract or undertaking to which it is a party or by which any of its properties
may be bound or affected;
(f) The Consent constitutes Parent’s legal,
valid, and binding obligations, enforceable against Parent in accordance with
its terms;
(g) After giving effect to this Amendment,
no Default or Event of Default has occurred and is continuing on the date hereof
or as of the date of the effectiveness of this Amendment;
(h) No injunction, writ, restraining order,
or other order of any nature prohibiting, directly or indirectly, the
consummation of the transactions contemplated herein has been issued and remains
in force by any Governmental Authority against Borrower, any Guarantor, Limited
Recourse Guarantor, or any member of the Lender Group; and
(i) The Consent has been duly executed and
delivered by Parent.
6. CONSTRUCTION. THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE
STATE OF CALIFORNIA.
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7. ENTIRE AMENDMENT; EFFECT OF
AMENDMENT. This Amendment, and terms and provisions
hereof, constitute the entire agreement among the parties pertaining to the
subject matter hereof and supersedes any and all prior or contemporaneous
amendments relating to the subject matter hereof. Except for the amendments to
the Loan Agreement expressly set forth in Section 2 hereof, the
Loan Agreement and other Loan Documents shall remain unchanged and in full force
and effect. The execution, delivery, and performance of this Amendment shall not
operate as a waiver of or, except as expressly set forth herein, as an amendment
of, any right, power, or remedy of the Lender Group as in effect prior to the
date hereof. The amendments set forth herein are limited to the
specifics hereof, shall not apply with respect to any facts or occurrences other
than those on which the same are based, and except as expressly set forth
herein, shall neither excuse any future non-compliance with the Loan Agreement,
nor shall operate as a waiver of any Default or Event of Default. To
the extent any terms or provisions of this Amendment conflict with those of the
Loan Agreement or other Loan Documents, the terms and provisions of this
Amendment shall control. This Amendment is a Loan Document.
8. COUNTERPARTS; TELEFACSIMILE
EXECUTION. This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed counterpart of this
Amendment by telefacsimile or electronic mail shall be equally as effective as
delivery of an original executed counterpart of this Amendment. Any
party delivering an executed counterpart of this Amendment by telefacsimile or
electronic mail also shall deliver an original executed counterpart of this
Amendment, but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Amendment.
9. MISCELLANEOUS.
(a) Upon the effectiveness of this
Amendment, each reference in the Loan Agreement to “this Agreement”,
“hereunder”, “herein”, “hereof” or words of like import referring to the Loan
Agreement shall mean and refer to the Loan Agreement as amended by this
Amendment.
(b) Upon the effectiveness of this
Amendment, each reference in the Loan Documents to the “Loan Agreement”,
“thereunder”, “therein”, “thereof” or words of like import referring to the Loan
Agreement shall mean and refer to the Loan Agreement as amended by this
Amendment.
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IN WITNESS WHEREOF, the parties have caused this
Amendment to be executed and delivered as of the date first written above.
THE MAJESTIC STAR CASINO,
LLC
an Indiana limited liability company
By: /s/ Xxx X.
Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: Vice President and Chief Financial Officer
THE MAJESTIC STAR CASINO
II, INC.,
an Indiana corporation
By: /s/ Xxx X.
Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: Vice President and Chief Financial Officer
XXXXXX MISSISSIPPI GAMING,
LLC
a Mississippi limited liability company
By: /s/ Xxx X.
Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: Vice President and Chief Financial Officer
XXXXXX COLORADO GAMING,
LLC
a Colorado limited liability company
By: /s/ Xxx X.
Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: Vice President and Chief Financial Officer
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XXXXX FARGO FOOTHILL,
INC.,
as Agent and as a Lender
By: /s/ Xxxxx X.
Xxxxxxxxx
Name: Xxxxx X.
Xxxxxxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION,
as a Lender
By: /s/ Bond
Xxxxxxxx
Name: Bond
Xxxxxxxx
Title: Vice President
ALLIED IRISH BANK,
as a Lender
By: /s/ Xxxxxx X.
XxXxxxxx
Name: Xxxxxx X.
XxXxxxxx
Title: Assistant Vice President
By: /s/ Xxx
Xxxxx
Name: Xxx Xxxxx
Title: Assistant Vice
President
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Exhibit
A
REAFFIRMATION AND
CONSENT
All capitalized terms used herein but not
otherwise defined herein shall have the meanings ascribed to them in that
certain Loan and Security Agreement by and among THE MAJESTIC STAR CASINO, LLC,
an Indiana limited liability company (“MSC”), and each of MSC’s Subsidiaries
identified on the signature pages thereof (such Subsidiaries, together with MSC,
are referred to hereinafter each individually as a “Borrower”, and individually
and collectively, jointly and severally, as the “Borrowers”), each of the
lenders that is from time to time a party thereto (together with their
respective successors and permitted assigns, individually, “Lender” and,
collectively, “Lenders”), and XXXXX FARGO FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the Lenders
(in such capacity, together with its successors, if any, in such capacity,
“Agent”; and together with each of the Lenders, individually and collectively
the “Lender Group”), dated as of October 7, 2003 (as amended, restated,
supplemented or otherwise modified, the “Loan Agreement”), or in Amendment
Number Eight to Loan and Security Agreement, dated as of March 31, 2008 (the
“Amendment”), among the Borrowers and the Lender Group. The
undersigned hereby (a) represents and warrants to the Lender Group that the
execution, delivery, and performance of this Reaffirmation and Consent are
within its powers, have been duly authorized by all necessary action, and are
not in contravention of any law, rule, or regulation, or any order, judgment,
decree, writ, injunction, or award of any arbitrator, court, or governmental
authority, or of the terms of its charter or bylaws, or of any contract or
undertaking to which it is a party or by which any of its properties may be
bound or affected; (b) consents to the amendment of the Loan Agreement by the
Amendment; (c) acknowledges and reaffirms its obligations owing to the Lender
Group under any Loan Documents to which it is a party; and (d) agrees that each
of the Loan Documents to which it is a party is and shall remain in full force
and effect. Although the undersigned has been informed of the matters
set forth herein and has acknowledged and agreed to same, it understands that
the Lender Group has no obligations to inform it of such matters in the future
or to seek its acknowledgment or agreement to future amendments, and nothing
herein shall create such a duty. Delivery of an executed counterpart
of this Reaffirmation and Consent by telefacsimile or electronic mail shall be
equally as effective as delivery of an original executed counterpart of this
Reaffirmation and Consent. Any party delivering an executed
counterpart of this Reaffirmation and Consent by telefacsimile or electronic
mail also shall deliver an original executed counterpart of this Reaffirmation
and Consent but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this
Reaffirmation and Consent. This Reaffirmation and Consent shall be
governed by the laws of the State of California.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned have each
caused this Reaffirmation and Consent to be executed as of the date of the
Amendment.
MAJESTIC
HOLDCO, LLC,
anIndiana
limited liability company
By:
/s/ Xxx X.
Xxxxxxx
Name: Xxx X.
Xxxxxxx
Title:
Vice President and Chief Financial Officer
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