EXHIBIT 10.1
AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT (this "Amendment"),
dated as of June 15, 2005, is entered into by and among THE MAJESTIC STAR
CASINO, LLC, an Indiana limited liability company ("Parent"), and each of
Parent's Subsidiaries identified on the signature pages hereof (such
Subsidiaries, together with Parent, 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 (together with its successors and permitted assigns, individually,
"Lender" and, collectively, "Lenders"), and ▇▇▇▇▇ 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 amend the
Loan Agreement in accordance with the provisions of this Amendment; and
WHEREAS, subject to the terms and conditions set forth in this Amendment, the
Lender Group is 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) Effective as of June 15, 2005, Section 1.1 of the Loan Agreement is
hereby amended by inserting the following new definitions in proper alphabetical
order:
"Black Hawk Termination" means the termination in April of 2005 of the Asset
Purchase Agreement dated as of July 12, 2004 that was previously executed by BCG
and Legends Gaming, LLC with respect to the proposed sale of substantially all
of the business, assets and properties of BCG, including its casino located in
Black Hawk, Colorado.
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"Third Amendment" means that certain Amendment Number Three to Loan and Security
Agreement dated as of June 15, 2005, by and among the Borrowers and the Lender
Group.
"Third Amendment Condition Precedent Satisfaction Date" means the date, if ever,
that all of the conditions set forth in Section 3 of the Third Amendment shall
be satisfied (or waived by Agent in its sole discretion).
"Third Amendment Fee" has the meaning set forth in Section 2.11(d).
(b) Effective as of June 15, 2005, Section 1.1 of the Loan Agreement is
hereby amended by amending and restating the following definition in its
entirety as follows:
"EBITDA" means, with respect to any fiscal period, (a) Parent's and its
Restricted Subsidiaries consolidated net earnings (or loss), minus (b)
extraordinary gains, plus (c) non-cash extraordinary losses, plus (d) 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) for such fiscal period, without duplication, losses from the
retirement of Indebtedness incurred during Borrowers' fourth fiscal quarter of
their 2003 fiscal year, plus (f) to the extent such amounts are deducted in
calculating such consolidated net earnings (or loss) for such fiscal period (to
the extent that it includes Borrowers' second fiscal quarter of its 2003 fiscal
year), without duplication, retroactive gaming tax payments that were made by
such Person during Borrowers' second fiscal quarter of its 2003 fiscal year, in
an aggregate amount not in excess of $2,072,000, plus (g) to the extent such
amounts are deducted in calculating such consolidated net earnings (or loss) for
such fiscal period (to the extent that it includes Borrowers' first fiscal
quarter of their 2004 fiscal year), without duplication, liabilities accrued
during Borrowers' first fiscal quarter of their 2004 fiscal year with respect to
Indiana property taxes relating solely to their 2002 and 2003 fiscal years, in
an aggregate amount not in excess of $2,500,000, plus (h) to the extent such
amounts are deducted in calculating such consolidated net earnings (or loss) for
such fiscal period (to the extent that it includes Borrowers' second fiscal
quarter of their 2005 fiscal year), without duplication, charges incurred by
Borrowers' during their second fiscal quarter of their 2005 fiscal year in
connection with the Black Hawk Termination, in an aggregate amount not in excess
of $2,400,000, in each case as determined in accordance with GAAP.
(c) Section 2.11 of the Loan Agreement is hereby amended (i) by
inserting the phrase "(except in the case of the fee described in clause (d) of
this Section 2.11, which fee shall be distributed ratably among the Lenders as
set forth in such clause (d) hereof)" immediately following the words
"(irrespective of whether this Agreement is terminated thereafter) and shall"
appearing in the first sentence therein, (ii) by deleting the word "and" at the
end of clause (b), (iii) by deleting the period at the end of clause (c) and
replacing it with ", and", and (iv) by adding the following new clause (d):
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"(d) THIRD AMENDMENT FEE. An amendment fee in the amount of $50,000 (the "Third
Amendment Fee"), which amendment fee shall be fully earned on the Third
Amendment Condition Precedent Satisfaction Date, 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)(ii) of the Loan Agreement is hereby amended by
deleting the table appearing in said Section and inserting the following table
in lieu thereof:
"Applicable Ratio Applicable Period
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1.80:1.0 For the 3 month period
ending March 31, 2004
1.80:1.0 For the 6 month period
ending June 30, 2004
1.80:1.0 For the 9 month period
ending September 30, 2004
1.80:1.0 For the 12 month period
ending December 31, 2004
1.80:1.0 For the 12 month period
ending March 31, 2005
1.80:1.0 For the 12 month period
ending June 30, 2005
1.85:1.0 For the 12 month period
ending September 30, 2005
1.85:1.0 For the 12 month period
ending December 31, 2005
1.85:1.0 For the 12 month period ending
March 31, 2006
1.90:1.0 For the 12 month period ending
June 30, 2006
1.95:1.0 For the 12 month period ending
September 30, 2006
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2.00:1.0 For the 12 month period ending
December 31, 2006
2.10:1.0 For the 12 month period ending
March 31, 2007 and on the last day of each
fiscal quarter of Borrowers thereafter"
3. 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 reaffirmation and consent of each
Guarantor and Limited Recourse Guarantor attached hereto as Exhibit A (the
"Consent"), duly executed and delivered by an authorized official of each
Guarantor and of Limited Recourse Guarantor;
(c) 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
(d) 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.
4. REPRESENTATIONS AND WARRANTIES. Each Borrower hereby represents and warrants
to the Lender Group as follows:
(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,
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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 each Guarantor's and Limited Recourse
Guarantor's legal, valid, and binding obligations, enforceable against each such
Person 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 each Guarantor
and Limited Recourse Guarantor.
5. 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.
6. 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
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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.
7. 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 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 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.
8. 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/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President and Chief Financial Officer
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▇▇▇▇▇▇ MISSISSIPPI GAMING, LLC
a Mississippi limited liability company
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President and Chief Financial Officer
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▇▇▇▇▇▇ COLORADO GAMING, LLC
a Colorado limited liability company
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President and Chief Financial Officer
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▇▇▇▇▇ FARGO FOOTHILL, INC.,
as Agent and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Vice President
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GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Secretary
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ALLIED IRISH BANKS PLC.,
as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Senior Vice President
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CANPARTNERS INVESTMENTS IV, LLC,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Managing Director
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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
("Parent"), and each of Parent's Subsidiaries identified on the signature pages
thereof (such Subsidiaries, together with Parent, 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 ▇▇▇▇▇ 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 Three to Loan and Security Agreement, dated as of June 15, 2005
(the "Amendment"), among the Borrowers and the Lender Group. The undersigned
each hereby (a) represent and warrant 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 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 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]
IN WITNESS WHEREOF, the undersigned have each caused this Reaffirmation and
Consent to be executed as of the date of the Amendment.
THE MAJESTIC STAR CASINO CAPITAL
CORP., an Indiana corporation
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President and Chief Financial Officer
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MAJESTIC INVESTOR, LLC,
a Delaware limited liability company
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President and Chief Financial Officer
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MAJESTIC INVESTOR HOLDINGS, LLC,
a Delaware limited liability company
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President and Chief Financial Officer
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MAJESTIC INVESTOR CAPITAL CORP.,
a Delaware corporation
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President and Chief Financial Officer
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