EXHIBIT 10.14

 

FOURTH AMENDMENT TO THIRD
AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (“Fourth
Amendment”) is made and entered into as of the 4th day of June, 2004, by and
among MTR GAMING GROUP, INC., a Delaware corporation (“MTRI”), MOUNTAINEER PARK,
INC., a West Virginia corporation (“MPI”), SPEAKEASY GAMING OF LAS VEGAS, INC.,
a Nevada corporation (“SGLVI”), SPEAKEASY GAMING OF RENO, INC., a Nevada
corporation (“SGRI”), PRESQUE ISLE DOWNS, INC., a Pennsylvania corporation
(“PIDI”), SCIOTO DOWNS, INC., an Ohio corporation (“SDI”), successor by merger
to RACING ACQUISITION, INC., an Ohio corporation and SPEAKEASY GAMING OF
FREMONT, INC., a Nevada corporation (“SGFI” and together with MTRI, MPI, SGLVI,
SGRI, PIDI and SDI, collectively referred to as the “Borrowers”), WELLS FARGO
BANK, National Association, NATIONAL CITY BANK OF PENNSYLVANIA, BRANCH BANKING
AND TRUST COMPANY and THE CIT GROUP/EQUIPMENT FINANCING, INC. (each individually
a “Lender” and collectively the “Lenders”), WELLS FARGO BANK, National
Association, as the swingline lender (herein in such capacity, together with its
successors and assigns, the “Swingline Lender”), WELLS FARGO BANK, National
Association, as the issuer of letters of credit (in such capacity, together with
it successors and assigns, the “L/C Issuer”), and WELLS FARGO BANK, National
Association, as administrative and collateral agent for the Lenders, Swingline
Lender and L/C Issuer (herein, in such capacity, called the “Agent Bank” and,
together with the Lenders, Swingline Lender and L/C Issuer collectively referred
to as the “Banks”).

 

R E C I T A L S:

 

WHEREAS:

 

A.                                   MTRI, MPI, SGLVI, SGRI, PIDI and SDI, as
borrowers, and Banks entered into a Third Amended and Restated Credit Agreement
dated as of March 28, 2003, as amended by First Amendment to Amended and
Restated Credit Agreement dated as of June 18, 2003, as further amended by
Second Amendment to Amended and Restated Credit Agreement dated as of
November 12, 2003 and as further amended by Third Amendment to Third Amended and
Restated Credit Agreement dated as of February 25, 2004 (collectively, the
“Existing Credit Agreement”) for the purpose of establishing a revolving line of
credit in the principal amount of Fifty Million

 

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Dollars ($50,000,000.00), including subfacilities for the funding of swingline
advances and issuance of Letters of Credit.

 

B.                                     MTRI has or is about to create a new
wholly-owned Unrestricted Subsidiary to be known as MTR-Harness, Inc., a
Minnesota corporation (“MTR Harness”).  MTR Harness has proposed investing up to
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) for a fifty percent
(50.0%) equity interest in North Metro Harness Initiative, LLC, a Minnesota
limited liability company (“North Metro”) that has applied to the Minnesota
Racing Commission for a license to own and operate a harness race tack and card
club in Anoka County, Minnesota.

 

C.                                     The Borrower Consolidation has requested
Banks to amend the Existing Credit Agreement for the purposes of: (i) amending
Section 6.05 for the purpose of permitting the Borrower Consolidation to make
Distributions to MTR Harness up to the aggregate amount of Ten Million Dollars
($10,000,000.00), and (ii) amending Section 6.08 for the purpose of permitting
the Borrower Consolidation to make Investments in MTR Harness up to the
aggregate amount of Ten Million Dollars ($10,000,000.00).

 

D.                                    Subject to the terms and conditions
hereinafter set forth Requisite Lenders have approved the amendments requested
as set forth above.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree to the amendments and modifications to the Existing
Credit Agreement as specifically hereinafter provided as follows:

 

1.                                       Definitions.  As of the Effective Date,
Section 1.01 of the Existing Credit Agreement entitled “Definitions” shall be
and is hereby amended to include the following definitions.  Those terms which
are currently defined by Section 1.01 of the Existing Credit Agreement and which
are also defined below shall be superseded and restated by the applicable
definition set forth below:

 

“Credit Agreement” shall mean the Existing Credit Agreement as amended by the
Fourth Amendment, together with all Schedules, Exhibits and other attachments
thereto, as it may be further amended, modified, extended, renewed or restated
from time to time.

 

“Distributions” shall mean and collectively refer to any and all cash dividends
on stock, loans, management fees, payments, advances or other distributions,
fees or compensation of any kind or character whatsoever, other than within the
Borrower Consolidation, but shall not include (i) consideration paid in the
ordinary course of business for tangible and intangible assets in an arms length

 

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exchange for fair market value, (ii) trade payments made and other payments for
liabilities incurred in the ordinary course of business, or (iii) compensation
to officers, directors and employees of Borrowers in the ordinary course of
business.  For the purpose of clarification, capital contributions, advances and
other Investments made by the Borrower Consolidation in Unrestricted
Subsidiaries shall constitute Distributions.

 

“Existing Credit Agreement” shall have the meaning set forth in Recital
Paragraph A of the Fourth Amendment.

 

“Fourth Amendment” shall mean the Fourth Amendment to Third Amended and Restated
Credit Agreement dated as of June 4, 2004.

 

“Fourth Amendment Effective Date” shall mean June 4, 2004, subject to the
satisfaction of each of the Conditions Precedent set forth in Paragraph 5 of the
Fourth Amendment.

 

“MTR Harness” shall have the meaning set forth in Recital Paragraph B.

 

“North Metro” shall have the meaning set forth in Recital Paragraph B.

 

2.                                       Notice of Creation of MTR Harness as an
Unrestricted Subsidiary, Nonrecourse Indebtedness and Stock Pledge.

 

A.                                       BANKS DO HEREBY ACKNOWLEDGE RECEIPT OF
NOTICE OF THE CREATION OF MTR HARNESS AS A WHOLLY OWNED UNRESTRICTED SUBSIDIARY
OF MTRI AND FURTHER ACKNOWLEDGE THE DESCRIPTION OF THE NEW VENTURE IN WHICH MTR
HARNESS WILL HOLD A FIFTY PERCENT (50.0%) EQUITY INTEREST HAS COMPLIED WITH THE
REQUIREMENTS OF SECTION 5.27 OF THE CREDIT AGREEMENT.

 

B.                                      NO MEMBER OF THE BORROWER CONSOLIDATION
SHALL BE DIRECTLY OR INDIRECTLY LIABLE FOR ANY INDEBTEDNESS, CONTINGENT OR
OTHERWISE, OF MTR HARNESS OR NORTH METRO, OTHER THAN MTRI’S COMMITMENT TO MAKE
AN INVESTMENT IN MTR HARNESS IN AN AGGREGATE AMOUNT UP TO SEVEN MILLION FIVE
HUNDRED THOUSAND DOLLARS ($7,500,000.00).

 

C.                                       MTRI SHALL EXECUTE AND DELIVER TO
TIMOTHY J. HENDERSON (“TJH”), AS ESCROW HOLDER, A DULY EXECUTED SUBSIDIARY STOCK
PLEDGE OF THE CAPITAL STOCK OF MTR HARNESS, TOGETHER WITH THE ORIGINAL STOCK
CERTIFICATE EVIDENCING MTRI’S ONE HUNDRED PERCENT (100%) OWNERSHIP OF MTR
HARNESS TO BE HELD BY TJH PENDING APPROVAL BY THE APPLICABLE GAMING
AUTHORITIES.  BORROWERS AGREE TO USE THEIR BEST EFFORTS TO PROCURE ALL NECESSARY
APPROVALS TO SUCH SUBSIDIARY STOCK PLEDGE AS SOON AS

 

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REASONABLY PRACTICAL, BUT IN ANY EVENT WITHIN ONE HUNDRED TWENTY (120) DAYS OF
THE FOURTH AMENDMENT EFFECTIVE DATE.

 

3.                                       Restatement of Section 6.05.  As of the
Fourth Amendment Effective Date, Section 6.05 of the Existing Credit Agreement
entitled “Restriction on Distributions” shall be and is hereby deleted in its
entirety and the following is substituted as a full restatement thereof:

 

“Section 6.05.  Restriction on Distributions.  No member of the Borrower
Consolidation shall make any Distributions, other than: (a) Distributions to
other members of the Borrower Consolidation, (b) Distributions made in
connection with Insider Cash Loans and Insider Non-Cash Loans, (c) Share
Repurchases to the extent permitted by Section 6.08(i), and (d) Distributions to
MTR Harness up to the maximum cumulative aggregate amount of Ten Million Dollars
($10,000,000.00).”

 

4.                                       Restatement of Section 6.08.  As of the
Fourth Amendment Effective Date, Section 6.08 of the Existing Credit Agreement
entitled “Investment Restrictions” shall be and is hereby deleted in its
entirety and the following is substituted as a full restatement thereof:

 

“Section 6.08.  Investment Restrictions.  Other than Investments permitted
hereinbelow or approved in writing by Requisite Lenders, the Borrower
Consolidation shall not make any Investments (whether by way of loan, stock
purchase, capital contribution, or otherwise) other than the following:

 

a.                                       Cash, Cash Equivalents and direct
obligations of the United States Government;

 

b.                                      Prime commercial paper (AA rated or
better);

 

c.                                       Certificates of Deposit or Repurchase
Agreement issued by a commercial bank having capital surplus in excess of One
Hundred Million Dollars ($100,000,000.00);

 

d.                                      Money market or other funds of
nationally recognized institutions investing solely in obligations described in
(a), (b) and (c) above;

 

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e.                                       Insider Cash Loans not exceeding One
Million Five Hundred Thousand Dollars ($1,500,000.00) in the aggregate during
any Fiscal Year, provided that each of such Insider Cash Loans shall bear
interest at a rate no less than the Prime Rate plus one percent (1.0%) per annum
and shall in each instance be fully due and payable on or before two (2) years
from the date such Insider Cash Loan is advanced by any member of the Borrower
Consolidation;

 

f.                                         Insider Non-Cash Loans to the extent
permitted by Law;

 

g.                                      the amounts owing to SGRI under the
terms of the RRLLC Note and SGRI Loan Documents;

 

h.                                      Capital Expenditures to the extent
permitted under Section 6.06;

 

i.                                          Share Repurchases up to the maximum
cumulative aggregate amount of Thirty Million Dollars ($30,000,000.00) during
the period commencing on the Closing Date and ending at Credit Facility
Termination;

 

j.                                          New Venture Investments, exclusive
of the acquisition of the Horseshoe Property as provided in subparagraph k
below, but including, without limitation, the Scioto Merger and all Alternative
Payments which may be made under the terms thereof following the Scioto Merger
Effective Date, the exercise of the option to acquire the Green Shingle Property
or any other Acquisition made in connection with the SDI Facility, the PIDI
Facility or any New Venture, no greater than the cumulative maximum aggregate
amount of Fifty Million Dollars ($50,000,000.00) through Credit Facility
Termination, so long as:

 

(i)                                     in each instance the New Venture or
assets acquired by such New Venture Investment is concurrently pledged as
additional Collateral securing the Bank Facilities;

 

(ii)                                  each of the New Acquisition Certifications
are made and delivered by Borrowers with respect to any real property to be
added as Collateral; and

 

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(iii)                               no Default or Event of Default shall have
occurred and remains continuing;

 

k.                                       Acquisition of the Horseshoe Property
pursuant to the terms of the HHLV Purchase Agreement and Joint Operating
Agreement, so long as:

 

(i)                                     concurrently with the Horseshoe
Acquisition Date and the effective date of the Joint Operating Agreement, SGFI’s
right to all payments to be paid to SGFI under the Joint Operating Agreement,
including, without limitation, the “Speakeasy’s Remittance Amounts,” as therein
defined, be collaterally assigned to and a security interest perfected in favor
of Agent Bank, on behalf of the Banks;

 

(ii)                                  Agent Bank is designated with SGFI as an
additional loss payee and party insured pursuant to Section 7.02 of the Joint
Operating Agreement, under the policies of insurance maintained pursuant to
Section 7.01 of the Joint Operating Agreement; and

 

(iii)                               no Default or Event of Default shall have
occurred and remains continuing;

 

l.                                          the Green Shingle Loan up to the
maximum amount of Two Million Six Hundred Thousand Dollars ($2,600,000.00),
subject to compliance with the requirements of Section 3.21(c); and

 

m.                                    Investments made in MTR Harness up to the
maximum cumulative aggregate amount of Ten Million Dollars ($10,000,000.00).”

 

5.                                       Conditions Precedent to Fourth
Amendment Effective Date.  The occurrence of the Fourth Amendment Effective Date
is subject to Agent Bank having received the following documents and payments,
in each case in a form and substance reasonably satisfactory to Agent Bank, and
the occurrence of each other condition precedent set forth below on or before
June 9, 2004:

 

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A.                                       DUE EXECUTION BY BORROWERS AND AGENT
BANK OF SIX (6) DUPLICATE ORIGINALS OF THIS FOURTH AMENDMENT;

 

B.                                      ORGANIZATIONAL AND CORPORATE
DOCUMENTATION OF MTR HARNESS, CONSISTING OF:

 

(i)             a Certificate of Good Standing for MTR Harness issued by the
Minnesota Secretary of State and dated within thirty (30) calendar days of the
Fourth Amendment Effective Date;

 

(ii)          a copy of the articles of incorporation and by-laws of MTR Harness
certified as of the Fourth Amendment Effective Date to be true, correct and
complete by a duly Authorized Officer of the Borrowers; and

 

(iii)       Subsidiary Stock Pledge executed by MTRI pledging the capital stock
of MTR Harness as additional Collateral under the Credit Agreement, together
with the stock certificate evidencing MTRI’s ownership of such capital stock and
a stock power executed in blank.

 

C.                                       REIMBURSEMENT TO AGENT BANK BY
BORROWERS FOR ALL REASONABLE FEES AND OUT-OF-POCKET EXPENSES INCURRED BY AGENT
BANK IN CONNECTION WITH THE FOURTH AMENDMENT, BUT NOT LIMITED TO, REASONABLE
ATTORNEYS’ FEES OF HENDERSON & MORGAN, LLC AND ALL OTHER LIKE EXPENSES REMAINING
UNPAID AS OF THE FOURTH AMENDMENT EFFECTIVE DATE; AND

 

D.                                      SUCH OTHER DOCUMENTS, INSTRUMENTS OR
CONDITIONS AS MAY BE REASONABLY REQUIRED BY AGENT BANK.

 

6.                                       Representations of Borrowers. 
Borrowers hereby represent to the Banks, which representations shall survive the
Fourth Amendment Effective Date and be deemed incorporated into Article IV of
the Credit Agreement, that:

 

A.                                       THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN ARTICLE IV OF THE EXISTING CREDIT AGREEMENT AND CONTAINED IN EACH
OF THE OTHER LOAN DOCUMENTS (OTHER THAN REPRESENTATIONS AND WARRANTIES WHICH
EXPRESSLY SPEAK ONLY AS OF A DIFFERENT DATE, WHICH SHALL BE TRUE AND CORRECT IN
ALL MATERIAL RESPECTS AS OF SUCH DATE) ARE TRUE AND CORRECT ON AND AS OF THE
FOURTH AMENDMENT EFFECTIVE DATE IN ALL MATERIAL RESPECTS AS THOUGH SUCH
REPRESENTATIONS AND WARRANTIES HAD BEEN MADE ON AND AS OF THE FOURTH AMENDMENT
EFFECTIVE DATE, EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES
ARE NOT TRUE AND CORRECT AS A RESULT OF A CHANGE WHICH IS PERMITTED BY THE

 

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CREDIT AGREEMENT OR BY ANY OTHER LOAN DOCUMENT OR WHICH HAS BEEN OTHERWISE
CONSENTED TO BY AGENT BANK OR, WHERE APPLICABLE, THE REQUISITE LENDERS;

 

B.                                      SINCE THE DATE OF THE MOST RECENT
FINANCIAL STATEMENTS REFERRED TO IN SECTION 5.08 OF THE EXISTING CREDIT
AGREEMENT, NO MATERIAL ADVERSE CHANGE HAS OCCURRED AND NO EVENT OR CIRCUMSTANCE
WHICH COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE CHANGE HAS
OCCURRED;

 

C.                                       NO EVENT HAS OCCURRED AND IS CONTINUING
WHICH CONSTITUTES A DEFAULT OR EVENT OF DEFAULT UNDER THE TERMS OF THE CREDIT
AGREEMENT; AND

 

D.                                      THE EXECUTION, DELIVERY AND PERFORMANCE
OF THIS FOURTH AMENDMENT HAS BEEN DULY AUTHORIZED BY ALL NECESSARY ACTION OF
BORROWERS AND THIS FOURTH AMENDMENT CONSTITUTES THE VALID, BINDING AND
ENFORCEABLE OBLIGATION OF BORROWERS.

 

7.                                       Incorporation by Reference.  This
Fourth Amendment shall be and is hereby incorporated in and forms a part of the
Existing Credit Agreement.

 

8.                                       Governing Law.  This Fourth Amendment
to Credit Agreement shall be governed by the internal laws of the State of
Nevada without reference to conflicts of laws principles.

 

9.                                       Counterparts.  This Fourth Amendment
may be executed in any number of separate counterparts with the same effect as
if the signatures hereto and hereby were upon the same instrument.  All such
counterparts shall together constitute one and the same document.

 

10.                                 Continuance of Terms and Provisions.  All of
the terms and provisions of the Credit Agreement shall remain unchanged except
as specifically modified herein.

 

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IN WITNESS WHEREOF, Borrowers and the Agent Bank (acting on behalf of the
Lenders pursuant to Section 10.11 of the Credit Agreement) have executed this
Fourth Amendment as of the day and year first above written.

 

BORROWERS:

 

 

 

MTR GAMING GROUP, INC.,

 

a Delaware corporation

 

 

 

By

/S/ Edson R. Arneault

 

 

 

Edson R. Arneault

 

 

President

 

 

 

MOUNTAINEER PARK, INC.,

 

a West Virginia corporation

 

 

 

By

/S/ Edson R. Arneault

 

 

 

Edson R. Arneault,

 

 

President

 

 

 

SPEAKEASY GAMING OF LAS VEGAS,

 

INC., a Nevada corporation

 

 

 

By

/S/ Edson R. Arneault

 

 

 

Edson R. Arneault,

 

 

President

 

 

 

SPEAKEASY GAMING OF RENO,

 

INC., a Nevada corporation

 

 

 

By

/S/ Edson R. Arneault

 

 

 

Edson R. Arneault,

 

 

President

 

 

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PRESQUE ISLE DOWNS, INC.,

 

a Pennsylvania corporation

 

 

 

By

/S/ Edson R. Arneault

 

 

 

Edson R. Arneault,

 

 

President

 

 

 

AGENT BANK:

 

 

 

WELLS FARGO BANK,

 

National Association,

 

Agent Bank, on behalf of the Lenders,

 

Swingline Lender and L/C Issuer

 

 

 

By

/S/ Rochanne Hackett

 

 

 

Rochanne Hackett,

 

 

Vice President

 

 

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