Exhibit 10.39

 

AMENDMENT NO. 3 TO AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

THIS AMENDMENT NO. 3 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
“Amendment”) is made as of March 17, 2004, between CIT Group/Equipment
Financing, Inc. (“Secured Party”) and Resorts International Hotel, Inc.
(“Debtor”).

 

PRELIMINARY STATEMENTS

 

A. Pursuant to the Amended and Restated Loan and Security Agreement dated as of
June 24, 2002 (as may be further amended, supplemented or modified from time to
time, the “Loan Agreement”), by and between Debtor and Secured Party, Secured
Party agreed to make certain Loans to Debtor upon the terms and conditions set
forth therein.

 

B. Debtor and Secured Party desire to make certain amendments to the Loan
Agreement, based on the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Debtor and Secured Party agree as follows:

 

1. Capitalized terms used in this Amendment shall have the same meanings given
them in the Loan Agreement, unless otherwise defined herein.

 

2. Effectively automatically upon the consummation of the New Debtor’s Warehouse
Transaction (as such term is defined in Section 6 of this Amendment), clause (b)
of Section 3.1 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:

 

“(b) a principal sum up to an aggregate of Five Million Dollars ($5,000,000)
less an the principal amount outstanding from time to time under the Warehouse
Note (as such term is defined in Section 6 of this Amendment) less the principal
amount outstanding from time to time under the Existing Debt (the “Landmark Loan
Facility”), to be used by Debtor solely to acquire machinery, furniture and/or
equipment to be used in the business of Debtor other than in connection with the
Expansion Project (the “Landmark Equipment”).”

 

3. The first sentence of Section 7.5 of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:

 

“From the period beginning on the date hereof through the date on which all
principal and interest on all Loans are indefeasibly paid in full, fail to
maintain for the Debtor Group on a consolidated basis a minimum fixed charge
coverage (“Minimum Fixed Charge Covenant”) of the following:

 

Rolling 4 Quarters Ending:

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   Minimum Fixed Charge

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Inception through 12/31/03

   1.00:1.0

03/31/04

   1.00:1.0

06/30/04

   1.00:1.0

09/30/04

   1.00:1.0

12/31/04

   1.00:1.0

03/31/05

   1.00:1.0

06/30/05

   1.00:1.0

09/30/05

   1.05:1.0

12/31/05

   1.10:1.0

03/31/06

   1.15:1.0

06/30/06 and thereafter

   1.20:1.0

 

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4. Section 7.5 of the Loan Agreement is hereby further amended to insert the
following new text at the end of such section:

 

“· So long as (y) the CRDA Warehouse Transaction (as such term is defined in
Section 6 of this Amendment) and the New Debtor’s Warehouse Transaction are
consummated on terms no different than those described in clause (a) and (b) of
Section 6 of this Amendment, except with the prior written consent of the
Secured Party and (z) none of the representations, warranties or covenants set
forth in Section 6 of this Amendment are breached by Debtor, then capital
expenditures (plus related, reasonable and documented closing costs of the
Debtor Group required under GAAP to be capitalized) of up to $2,000,000 (in the
aggregate) solely for the New Debtor’s Warehouse Transaction and capital
improvements to the New Debtor’s Warehouse shall be excluded.”

 

5. Section 7.6 of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:

 

“7.6 Maximum Senior Indebtedness/EBITDA. From the period beginning on the date
hereof through the date on which all principal and interest on all Loans are
indefeasibly paid in full, fail to maintain a ratio, as determined on a Debtor
Group consolidated basis, between Senior Debt and EBITDA (“Senior Debt/EBITDA
Maximum Leverage Covenant”) that does not exceed the following:

 

Rolling 4 Quarters Ending:

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   Maximum Leverage Ratio

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Inception through 12/31/03

   6.75:1.0

03/31/04

   6.75:1.0

06/30/04

   7.75:1.0

09/30/04

   6.75:1.0

12/31/04

   6.25:1.0

03/31/05

   5.75:1.0

06/30/05

   5.25:1.0

09/30/05

   4.75:1.0

12/31/05

   4.25:1.0

03/31/06

   4.10:1.0

06/30/06

   4.00:1.0

09/30/06

   3.95:1.0

12/31/06

   3.90:1.0

03/31/07

   3.85:1.0

06/30/07

   3.80:1.0

09/30/07

   3.75:1.0

12/31/07

   3.70:1.0

03/31/08

   3.65:1.0

06/30/08

   3.60:1.0

09/30/08

   3.55:1.0

12/31/08 and thereafter

   3.50:1.0

 

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In the event Secured Party agrees to extend the Equipment Loan Period beyond
June 30, 2004 for any period of time, then the foregoing dates shall be deemed
extended by a like period of time.”

 

6. Debtor hereby represents, warrants and covenants to Secured Party that (a)
Debtor and the New Jersey Casino Reinvestment Development Authority (“CRDA”)
have agreed that (i) Debtor will sell to CRDA (and CRDA will purchase from
Debtor) Debtor’s Warehouse for a purchase price of $1,200,000 in immediately
available funds (the transaction described in this clause (a) shall be referred
to herein as the “CRDA Warehouse Transaction”), (b) Debtor and Robert D. and
Mildred N. Lehman (“Seller”) have agreed in principle that Debtor shall purchase
from Seller (and Seller shall sell to Debtor) the warehouse of Seller located at
6573 Delilah Road, Egg Harbor New Jersey (Lot 3, Block 407) (the “New Debtor’s
Warehouse”) for a purchase price of up to $1,800,000—$1,200,000 to be paid in
cash (subject to customary closing adjustments) and $600,000 to be paid by a
note (the “Warehouse Note”) (w) issued by Debtor to Seller, (x) in the aggregate
principal amount of $600,000 (y) payable in three installments of principal (a
$50,000 installment due on the earlier of December 15, 2004 or six months after
Debtor opens its new hotel tower to the public; a $300,000 installment due on
February 1, 2005; and the balance due on February 1, 2006 and (z) secured only
by the New Debtor’s Warehouse and not by any other assets of any member of the
Debtor Group (the transaction described in this clause (b) shall be referred to
herein as the “New Debtor’s Warehouse Transaction”), (c) Debtor will not
consummate the CRDA Transaction or the New Debtor’s Warehouse Transaction on
terms different from those described in the immediately preceding clauses (a)
and (b) (each a “Modified Transaction”) unless (I) Debtor delivers to Secured
Party at least 10 business days prior to the proposed closing date of any such
Modified Transaction a written certification executed by the Chief Financial
Officer of the Debtor for the benefit of Secured Party that includes (x) a
description in reasonable detail of such Modified Transaction, including,
without limitation, a description of the differences between such Modified
Transaction and the CRDA Transaction or the New Debtor’s Warehouse Transaction,
as the case may be, as originally proposed, (y) pro forma financial information
of Debtor that takes into account such differences and the affect of such
differences on the covenants and other obligations of Debtor under the Loan
Agreement, including, without limitation, the covenants of Debtor set forth in
Section 7 of the Loan Agreement and (z) a representation and warranty to the
effect that after giving effect to such Modified Transactions, Debtor will not
be and might reasonably be expected not to be (on a pro forma basis) in default
of the Loan Agreement, (d) if the CRDA Warehouse Transaction is consummated,
then Debtor will use 100 percent of the proceeds from the same to fund the cash
portion of the purchase price for the New Debtor’s Warehouse Transaction, and
(e) if a mortgage is placed on the New Debtor’s Warehouse, Debtor shall deliver
to Secured Party, in form and substance reasonably satisfactory to Secured
Party, an agreement from each corresponding mortgagee for the benefit of Secured
Party that, among other things, grants access rights to Secured Party in respect
of the Collateral that may be stored in the New Debtor’s Warehouse from time to
time.

 

7. If the New Debtor’s Warehouse Transaction occurs, then all references in the
Loan Agreement to “Debtor’s Warehouse” shall mean the New Debtor’s Warehouse.

 

8. The definition of “EBITDA” in Section 13.1 of the Agreement is hereby amended
and restated in its entirety to read as follows:

 

“EBITDA” means earnings before interest, taxes, depreciation, and amortization;
provided, that in the fiscal year of Debtor during which the Expansion Project
is

 

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completed, one-time pre-opening costs of up to $3,000,000 incurred in connection
with the Expansion Project that are required by GAAP to be charged as an expense
prior to or upon opening shall be excluded for purposes of calculating EBITDA
during such fiscal year.”

 

9. Pursuant to Section 15.7(a) of the Loan Agreement Debtor agrees to pay all
the reasonable legal fees and expenses incurred by Secured Party in connection
with the negotiation, preparation, execution and delivery of this Amendment (the
“Relevant Legal Fees”). Accordingly, upon receipt by Debtor of an invoice for
the Relevant Legal Fees from Secured Party’s counsel, Sills Cummis Radin
Tischman Epstein & Gross, Debtor shall pay the same.

 

10. In order to induce Secured Party to enter into this Amendment, Debtor hereby
represents and warrants that:

 

(a) Except as set forth herein, no Event of Default has occurred and is
continuing or will occur after giving effect to the transactions contemplated by
this Amendment.

 

(b) this Amendment has been duly authorized, executed and delivered by Debtor
and constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms;

 

(c) the Loan Agreement and each of the Relevant Documents, after giving effect
to this Amendment and the transactions contemplated hereby, continue to be in
full force and effect and to constitute the legal, valid and binding obligations
of Debtor, enforceable against Debtor in accordance with their respective terms;
and

 

(d) the representations and warranties made by Debtor in or pursuant to the Loan
Agreement or any Relevant Document, or which are contained in any certificate,
document or financial or other statement furnished at any time under or in
connection herewith or therewith, are true and correct in all material respects
on and as of the date hereof, as though made on and as of such date.

 

11. This Amendment shall become effective as of March 17, 2004 upon receipt by
Secured Party of (a) four (4) originals of this Amendment executed by each
member of the Debtor Group party hereto and an original of this Amendment
executed by Secured Party; (b) such other documents, instruments and
certificates as Secured Party may reasonably request, in form and substance
reasonably satisfactory to Secured Party (including, without limitation,
incumbency certificates, UCC-1 financing statements, UCC, judgment and tax lien
searches, charter documents and certificates of good standing); and (c) payment
of the Relevant Legal Fees, and (d) payment to the Secured Party of an amendment
fee of $20,000.

 

12. Debtor hereby confirms that all liens granted on the Collateral shall
continue unimpaired and in full force and effect.

 

13. This Amendment may be executed in several counterparts, each of which, when
executed and delivered, shall be deemed an original, and all of which together
shall constitute one agreement. Any signature delivered by a party by facsimile
transmission shall be deemed to be an original signature hereto.

 

14. This Amendment shall be governed by and construed in accordance with the
laws of the State of New Jersey without giving effect to principles of conflicts
of law. This Amendment shall be

 

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binding upon and inure to the benefit of Debtor, Secured Party, and their
respective successors and permitted assigns.

 

15. From and after the effectiveness hereof, all references to the Loan
Agreement in the Loan Agreement or in any Relevant Document shall mean the Loan
Agreement as amended and modified by this Amendment.

 

16. Except as amended and otherwise modified by this Amendment, the Loan
Agreement and the Relevant Documents shall remain in full force and effect in
accordance with their respective terms. Except as expressly provided herein,
this Amendment shall not constitute an amendment, waiver, consent or release
with respect to any provision of the Loan Agreement or any Relevant Document, a
waiver of any Event of Default thereunder, or a waiver or release of any of
Secured Party’s rights or remedies (all of which are hereby reserved). Debtor
expressly ratifies and confirms the waiver of jury trial and other provisions of
Section 15.2 of the Loan Agreement.

 

[NO FURTHER TEXT ON THIS PAGE: SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed,
all as of the day and year first above written.

 

Debtor: Resorts International Hotel, Inc. By:  

/s/ Audrey S. Oswell

   

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Name/Title:      Audrey S. Oswell

                         President and CEO

 

Secured Party: CIT Group/Equipment Financing, Inc. By:  

/s/ Troy D. Adair

   

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Name/Title:      Troy D. Adair

                         Senior Credit Analyst

 

The undersigned also affirms and agrees that (i) its obligations under the
Guaranty and Suretyship Agreement, dated June 24, 2002, for the benefit of
Secured Party shall be unimpaired by this Amendment and (ii) such obligations
remain unaltered and in full force and effect and are hereby ratified and
confirmed.

 

IN WITNESS WHEREOF, the undersigned has caused this Amendment to be duly
executed, all as of the day and year first above written.

 

Guarantor: Resorts International Hotel and Casino, Inc. By:  

/s/ Audrey S. Oswell

   

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Name/Title:      Audrey S. Oswell

                         President and CEO

 

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