Exhibit 10.1
EXECUTION COPY
AMENDMENT NO. 4 AND FORBEARANCE
AND STANDSTILL AGREEMENT
THIS AMENDMENT NO. 4 AND FORBEARANCE AND
STANDSTILL AGREEMENT (this “ Agreement ”) is
made and entered into as of the 15th day of May, 2008 by and
among each lender executing a counterpart hereof, WILMINGTON TRUST
COMPANY, as administrative agent (the “ Administrative
Agent ”), HERBST GAMING, INC. (the “
Borrower ”) and the Subsidiaries of the Borrower
executing a counterpart hereof (the “ Grantors ”
and, together with the Borrower, the “ Loan Parties
”).
Statement of Purpose
WHEREAS, reference
is made to the Second Amended and Restated Credit Agreement, dated
as of January 3, 2007, among the Borrower, the lenders party
thereto (the “ Lenders ”), certain other parties
and the Administrative Agent (as amended by Amendment No. 1 to
Second Amended and Restated Credit Agreement, dated as of
August 14, 2007, Amendment No. 2 to Second Amended and
Restated Credit Agreement, dated as of December 14, 2007, and
Omnibus Amendment No. 3 and Appointment and Acceptance, dated
as of April 24, 2008, and as further amended, supplemented and
otherwise modified from time to time, the “ Credit
Agreement ”; capitalized terms used not defined herein
(including in Schedule A hereto) being used herein as therein
defined);
WHEREAS, each Grantor has guaranteed the
Obligations of the Borrower under the Credit Agreement;
WHEREAS, the Borrower has requested that the
Administrative Agent and the Lenders amend the Credit Agreement in
certain respects and forbear from exercising certain rights and
remedies under the Credit Agreement and the other Loan Documents
provisionally through the Forbearance Maturity Date (as defined
below) solely in respect of the Financial Statement Default (as
defined below) that has occurred as of the date hereof and the
other events set forth in Schedule A hereto (collectively with the
Financial Statement Default, the “ Specified Defaults
”); and
WHEREAS, the Administrative Agent and the
Lenders are willing to amend the Credit Agreement in certain
respects and forbear from exercising certain rights and remedies
under the Credit Agreement and the other Loan Documents
provisionally only through the Forbearance Maturity Date regarding
the Specified Defaults, subject to the express terms and provisions
of this Agreement.
Agreement
NOW, THEREFORE in consideration of the
foregoing and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1.
Acknowledgments by Loan Parties . To induce the
Administrative Agent and the Lenders to execute this Agreement,
each Loan Party hereby acknowledges, stipulates, represents,
warrants and agrees as follows:
(a)
The Financial Statement Default (as defined in Schedule A hereto)
constitutes an Event of Default that has occurred, remains uncured,
has not been waived and is continuing as of the date of this
Agreement and cannot be cured. Except for the Financial
Statement Default, no other Defaults or Events of Default have
occurred and are continuing as of the date hereof.
Except as expressly set
forth in this Agreement, the agreements of the Administrative Agent
and the Lenders hereunder to forbear provisionally in the exercise
of their respective rights and remedies under the Credit Agreement
and the other Loan Documents in respect of the Specified Defaults
during the Forbearance Period (as defined below) does not in any
manner whatsoever limit any right of any of the Administrative
Agent and the Lenders to insist upon strict compliance by the Loan
Parties with this Agreement or any Loan Document during the
Forbearance Period.
(b)
To the knowledge of the Loan Parties, immediately prior to
executing this Agreement nothing has occurred that constitutes or
otherwise can be construed or interpreted as a waiver of, or
otherwise to limit in any respect, any rights or remedies the
Lenders, the Administrative Agent or any of them have or may have
arising as the result of any Event of Default (including any
Specified Default) that has occurred or that may occur under the
Credit Agreement, the other Loan Documents or applicable law.
The Administrative Agent’s and the Lender’s actions in
entering into this Agreement are without prejudice to the rights of
any of the Administrative Agent and the Lenders to pursue any and
all remedies under the Loan Documents pursuant to applicable law or
in equity available to it in its sole discretion upon the
termination (whether upon expiration thereof, upon acceleration or
otherwise) of this Agreement.
(c)
The Revolving Loans outstanding as of the date hereof are in an
amount equal to $98,859,000. The Swing Line Loans outstanding
as of the date hereof are in an amount equal to $0. The Term
Loans outstanding as of the date hereof are in an amount equal to
$751,762,500. The L/C Obligations of the Borrower outstanding
as of the date hereof are in an amount equal to $1,141,000.
The foregoing amounts do not include interest, fees and expenses
and other amounts that are chargeable or otherwise reimbursable
under the Loan Documents.
(d)
All of the assets pledged, assigned, conveyed, mortgaged,
hypothecated or transferred to the Administrative Agent for the
benefit of the Lenders pursuant to the Collateral Documents
(including without limitation the Collateral (including without
limitation all proceeds thereof)) are (and shall continue to be)
subject to valid and enforceable liens and security interests of
the Administrative Agent (or, in the case of possessory security
interests in respect of certificated Pledged Securities (as defined
in the Pledge Agreement) or if required by Gaming Laws of Iowa, the
predecessor Administrative Agent under the Credit Agreement (the
“ Predecessor Agent ”)) for the benefit of the
Lenders and the other Secured Parties (as defined in the Credit
Agreement), as collateral security for all of the Obligations,
subject to no Liens other than Liens permitted by Section 7.01
of the Credit Agreement. Each of the Loan Parties hereby
reaffirms and ratifies its prior conveyance to the Administrative
Agent for the benefit of the Lenders and the other Secured Parties
(as defined in the Credit Agreement) of a continuing security
interest in and lien on the Collateral.
(e)
The obligations of the Loan Parties under this Agreement of any
nature whatsoever, whether now existing or hereafter arising, are
hereby deemed to be “Obligations” for all purposes of
the Credit Agreement and the other Loan Documents.
(f)
The Obligations of the Loan Parties under this Agreement, the
Credit Agreement and the other Loan Documents constitute
“Senior Debt” (as such term is defined in the Credit
Agreement).
(g)
Except as expressly modified by this Agreement or as required by
Gaming Laws in Nevada, Missouri and Iowa, all terms and provisions
of the Credit Agreement and the other Loan Documents are valid and
enforceable and remain in full force and effect according to their
respective terms. Each Grantor, as debtor, grantor, pledgor,
guarantor, assignor, or in other similar capacity in which such
party grants liens or security interests in its properties or
otherwise acts as an accommodation party or guarantor, as the case
may be, under the Loan Documents, hereto hereby (i) agrees
that the Credit Agreement as amended hereby is the Credit Agreement
under and for all purposes of the Guaranties and the Collateral
Documents and (ii) confirms that
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the obligations of the
Loan Parties under the Loan Documents as modified hereby are
entitled to the benefits of the guarantees set forth in the
Guaranties and constitute “Guaranteed Obligations” (as
defined in each of the Guaranties).
(h)
The Lenders’ entry into, and covenants to perform in
accordance with, this Agreement and the Lenders’ consummation
of the transactions contemplated hereby constitute “new
value” and “reasonably equivalent value”, as
those terms are used in Section 547 and 548 of
Title 11 of the United States Code (the “ Bankruptcy
Code ”), received by the Loan Parties as of the closing
of this Agreement in contemporaneous exchange for the Loan
Parties’ entry into, and covenants to perform in accordance
with, this Agreement and the documents executed in connection with
this Agreement, and the Loan Parties’ consummation of the
transactions contemplated hereby and thereby.
(i)
The bank accounts listed in the April 15, 2008 schedule
previously disclosed by the Borrower to the Administrative Agent
(the “ Existing Bank Accounts ”) are the only
bank accounts held or owned by the Loan Parties as of the date
hereof and said schedule is accurate and complete. Each Loan
Party covenants (i) to not establish any new bank account
other than those set forth on said schedule, unless such bank
account is established and located in the United States and either
pursuant to applicable law or regulations or in the ordinary course
of business (such new bank accounts, together with the Existing
Bank Accounts, being herein called the “ Permitted Bank
Accounts ”), provided that the Borrower shall give
written notice to the Administrative Agent of any account so
established within five Business Days of the occurrence thereof,
and (ii) to not use amounts held in the Permitted Bank
Accounts for any purpose other than (a) ordinary course
funding of the operations of the Borrower and the other Loan
Parties, including without limitation capital expenditures made in
the ordinary course of business, in each case only as permitted by
the Loan Documents, (b) payments of interest, fees and
expenses under the Credit Agreement and (c) payment of fees
and expenses of professionals in connection with any restructuring
or reorganization efforts of the Borrower and the other Loan
Parties.
2.
Provisional Forbearance and Limited Deferral . Subject
to the satisfaction of the conditions precedent specified in
Section 5 below, but effective as of the date hereof, the
Administrative Agent and the Lenders agree, except as set forth in
this Agreement, to forbear provisionally in the exercise of their
respective rights and remedies under the Credit Agreement and the
other Loan Documents in respect of the Specified Defaults until the
date (the “ Forbearance Maturity Date ”; the
period from the date the conditions precedent specified in
Section 5 below are satisfied until the Forbearance Maturity
Date being herein called the “ Forbearance Period
”) which is the earliest to occur of:
(a)
September 30, 2008;
(b)
the occurrence of any Event of Default other than the Specified
Defaults; and
(c)
the date on which any breach of any of the conditions or agreements
provided in this Agreement shall occur; it being agreed that the
breach of any such condition or agreement shall constitute an
immediate Event of Default under the Credit Agreement without the
requirement of any demand, presentment, protest or notice of any
kind to any Loan Party (all of which each Loan Party waives);
provided that (i) the Revolving
Lenders shall have no obligation to make any further Revolving
Loans or other extensions of credit to any Loan Party, other than
in respect of Letters of Credit pursuant to
Section 2.05(c) of the Credit Agreement, (ii) each
Loan Party shall comply with all limitations, restrictions,
covenants and prohibitions that would otherwise be effective or
applicable under the Loan Documents, (iii) nothing herein
shall restrict, impair or otherwise affect any of the
Administrative Agent’s or the Lenders’ rights and
remedies under any agreement containing subordination provisions in
favor of any of the Administrative Agent or the Lenders (including
without limitation the right to give any payment blockage notices
to any of the trustees in respect of the Subordinated Debt
(including without limitation
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any payment blockage
notice based upon any Specified Default)) and (iv) nothing
herein shall be construed as a waiver by the Administrative Agent
or any Lender of any Specified Default.
Upon expiration of
the Forbearance Period, the agreement of the Administrative Agent
and the Lenders hereunder to forbear provisionally in the exercise
of their respective rights and remedies under the Credit Agreement
and the other Loan Documents in respect of the Specified Defaults
during the Forbearance Period shall immediately terminate without
the requirement of any demand, presentment, protest or notice of
any kind to any Loan Party (all of which each Loan Party
waives). Each of the Loan Parties agrees that any of the
Administrative Agent and the Lenders may at any time thereafter
proceed to exercise any and of their respective rights and remedies
under the Loan Documents or applicable law, including without
limitation their respective rights and remedies with respect to the
Specified Defaults.
Any agreement by
any of the Administrative Agent and the Lenders to extend the
Forbearance Period must be set forth in writing and signed by each
of the Administrative Agent and the Requisite Lenders. The
Administrative Agent and the Lenders are not obligated to extend
the Forbearance Period and may decide to do so (or not to do so) in
their sole discretion. Each of the Loan Parties acknowledges
that each of the Administrative Agent and the Lenders has not made
any assurances concerning the extension of the Forbearance
Period.
3.
Amendments to Credit Agreement . Subject to the
satisfaction of the conditions precedent specified in
Section 5 below, but effective (except as otherwise expressly
provided in this Section 3) as of the date hereof, the Credit
Agreement shall be amended as follows:
(a)
References Generally . References in the Credit
Agreement (including references to the Credit Agreement as amended
hereby) to “this Agreement” (and indirect references
such as “hereunder”, “hereby”,
“herein” and “hereof”) shall be deemed to
be references to the Credit Agreement as amended hereby.
(b)
Defined Terms Relating to Pricing . Effective as of
April 1, 2008, Section 1.01 of the Credit Agreement is
hereby amended to add, replace and otherwise revise (as the case
may be) definitions in alphabetical order as follows:
“ Applicable Rate ” means,
for each Pricing Period, the rates per annum set forth opposite the
Senior Debt to EBITDA Ratio in effect as of the Fiscal Quarter
endin
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