Exhibit 99.6
AMENDMENT NUMBER 1 TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER 1 TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), is entered into as of August ___, 2002, by and among, on the one
hand FOOTHILL CAPITAL CORPORATION, a California corporation ("Lender") and, on
the other hand MIKOHN GAMING CORPORATION, a Nevada corporation ("Borrower"), and
the other Obligors identified on the signature pages hereof.
W I T N E S S E T H
WHEREAS, Borrower, the other Obligors and Lender are parties to that
certain Loan and Security Agreement, dated as of February 14, 2002 (as amended,
restated, supplemented, or modified from time to time, the "Loan Agreement");
WHEREAS, Borrower has requested that the Loan Agreement be amended to
reflect Borrower's operations since the Closing Date; and
WHEREAS, subject to the satisfaction of the conditions set forth
herein, Lender is willing to so consent to the amendment of 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 adding the
following defined terms in proper alphabetical order or amending and restating
the following definitions in their entirety, as the case may be:
"Consolidated EBITDA" means, with respect to any Person, for any
period, the Consolidated Net Income of such Person for such period adjusted to
add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of
(1) Consolidated income tax expense;
(2) Consolidated depreciation and amortization expense;
(3) Consolidated Interest Expense;
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(4) all other non-cash charges attributable to the grant,
exercise or repurchase of options for or shares of Qualified Capital Stock to or
from employees of such Person and its Consolidated Subsidiaries;
(5) with respect to Borrower, all other non-cash restructuring
charges, as demonstrated to Lender's satisfaction, of no greater than
$10,500,000, taken during the three consecutive fiscal quarters of Borrower
ending March 31, 2003; and
(6) with respect to Borrower, all other non-cash charges
attributable to the write-off of intangible assets, as demonstrated to Lender's
satisfaction, of no greater than $3,500,000, taken during the three consecutive
fiscal quarters of Borrower ending March 31, 2003; less
the amount of all cash payments made by such Person or any of its
Subsidiaries during such period to the extent such payments relate to non-cash
charges that were added back in determining Consolidated EBITDA for such period
or any prior period, provided, that consolidated income tax expense and
depreciation and amortization of a Subsidiary that is less than a Wholly Owned
Subsidiary shall only be added to the extent of the equity interest of Borrower
in such Subsidiary.
"Maximum Revolving Loan B Amount" means $10,000,000 less the Revolving
Loan B Reserve.
"Revolving Loan B Reserve" means $5,000,000; provided, however, that
so long as no Event of Default has occurred and is continuing, the Revolving
Loan B Reserve shall be zero, effective from the first day of the calendar month
immediately following Lender's receipt of a Compliance Certificate which
demonstrates Consolidated EBITDA of Obligors for the immediately preceding three
consecutive fiscal quarters of no less than $20,000,000 on an annualized basis
(provided that such Compliance Certificate is received by Lender no later than
11:00 a.m., California time, at least 1 Business Day prior to the first day of
such calendar month) until the date on which Lender receives a Compliance
Certificate which fails to demonstrate Consolidated EBITDA of Obligors for the
immediately preceding three consecutive fiscal quarters of no less than
$20,000,000 on an annualized basis. The failure to deliver any Compliance
Certificate by the date required hereunder (after giving effect to any
applicable grace period) shall automatically cause the Revolving Loan B Reserve
to be $5,000,000, effective immediately.
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(b) Section 7.20(a)(i) of the Loan Agreement is hereby amended and
restated in its entirety as follows:
(i) Minimum Consolidated EBITDA. Consolidated EBITDA, measured on
a fiscal quarter-end basis, of not less than the required amount set
forth in the following table for the applicable period set forth
opposite thereto:
Applicable Amount Applicable Period
$14,391,000 For the 12 month period ending
September 30, 2002
$14,669,000 For the 12 month period ending
December 31, 2002
$14,724,000 For the 12 month period ending
March 31, 2003
$17,496,000 For the 12 month period ending
June 30, 2003
$20,000,000 For the 12 month period ending
September 30, 2003
$20,000,000 For the 12 month period ending on
the last day of each fiscal quarter
thereafter
3. LIMITED ONE-TIME WAIVER.
(a) Pursuant to Section 7.20(a)(i) of the Loan Agreement, Obligors have
failed to maintain minimum Consolidated EBITDA of no less than $20,000,000 for
the 12 month period ending on June 30, 2002.
(b) Lender waives any Event of Default arising from Obligors' failure to
maintain minimum Consolidated EBITDA of no less than $20,000,000 for the period
described in Section 3(a) hereof.
(c) This Amendment does not constitute a waiver of any other provision of
the Loan Documents or of the provision of the Loan Agreement referenced in
Section 3(a) hereof in any other instance.
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4. REAFFIRMATION AND CONSENT. Each Guarantor hereby (a) represents and warrants
to Lender that the execution, delivery, and performance of this Amendment 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 transactions contemplated by this
Amendment; (c) acknowledges and reaffirms its obligations owing to Lender 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 each Guarantor has been informed of the matters set forth herein and
has acknowledged and agreed to same, it understands that Lender has no
obligations to inform it of such matters in the future or to seek its
acknowledgement or agreement to future amendments, and nothing herein shall
create such a duty.
5. 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) The representations and warranties in 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) Borrower shall have paid Lender an amendment fee of $75,000;
(c) 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 Obligor or Lender.
6. CONSTRUCTION. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEVADA APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED IN THE STATE OF NEVADA.
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. To
the extent any terms or provisions of this Amendment conflict with those of the
Loan Agreement or
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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 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.
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.
[Signature pages follow.]
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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.
MIKOHN GAMING CORPORATION,
a Nevada corporation, as Borrower
By: _______________________________
Title: _______________________________
CASINO EXCITEMENT, INC.,
a Nevada corporation, as a Guarantor
By: _______________________________
Title: _______________________________
GAMES OF NEVADA, INC.,
a Nevada corporation, as a Guarantor
By: _______________________________
Title: _______________________________
MGC, INC.,
a Nevada corporation, as a Guarantor
By: _______________________________
Title: _______________________________
MIKOHN INTERNATIONAL, INC.,
a Nevada corporation, as a Guarantor
By: _______________________________
Title: _______________________________
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MIKOHN NEVADA,
a Nevada corporation, as a Guarantor
By: _______________________________
Title: _______________________________
PROGRESSIVE GAMES, INC.,
a Delaware corporation, as a Guarantor
By: _______________________________
Title: _______________________________
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Lender
By: _______________________________
Title: _______________________________
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