Exhibit 10.17

 

SIXTH AMENDMENT TO THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS SIXTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (“Sixth
Amendment”) is made and entered into as of the 29th day of September, 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, as further amended by
Third Amendment to Third Amended and Restated Credit Agreement dated as of
February 25, 2004, as further amended by Fourth Amendment to Third Amended and
Restated Credit Agreement dated as of June 4, 2004 and as further amended by
Fifth Amendment to Third Amended and Restated Credit Agreement dated as of
September 24, 2004 (collectively, the “Existing Credit Agreement”) for the
purpose of

 

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establishing a revolving line of credit in the principal amount of Fifty Million
Dollars ($50,000,000.00), including subfacilities for the funding of swingline
advances and issuance of Letters of Credit.

 

B.            International Paper Company, a New York corporation
(“International Paper”), as seller, and Tecnica Development Corp., a
Pennsylvania corporation (“Tecnica”), as purchaser, entered into an Agreement of
Sale dated March 9, 2004 (the “IP Sale Agreement”) under the terms of which
International Paper agreed to sell to Tecnica and Tecnica agreed to purchase
from International Paper on the terms and subject to the conditions set forth
therein, approximately two hundred fifteen (215) acres of land more particularly
described on Exhibit A to the IP Sale Agreement (the “IP Site”).  Tecnica has
assigned to PIDI and PIDI has assumed all of Tecnica’s rights, obligations and
responsibilities under the IP Sale Agreement pursuant to an Assignment and
Assumption of Purchase Agreement dated as of September 7, 2004.

 

C.            PIDI and International Paper have or are about to enter into a
Consent Order and Agreement (“Consent Order”) with the Commonwealth of
Pennsylvania, Department of Environmental Protection (“DEP”) concerning the
remediation of the “Identified Contamination” described in the Consent Order in
accordance with a remediation plan to be proposed by PIDI.

 

D.            PIDI is considering the development of the IP Site as a
thoroughbred racetrack, gaming and entertainment complex, including clubhouse,
hotels and amenities, exhibition halls, restaurants, retail outlets, recreation
and entertainment facilities, boating and related facilities, along with related
supporting animal care and receiving barns, stables, jockey motel complex and
parking facilities (collectively, the “Erie Project”).  Development of the Erie
Project at the IP Site is contingent upon, amongst other factors, the
Pennsylvania Racing Commission approving the location of the race track and
related gaming facilities at the IP Site.

 

E.             The Borrower Consolidation has requested Banks to amend the
Existing Credit Agreement for the purpose of evidencing certain consents and
modifications relating to the acquisition by PIDI of the IP Site in accordance
with the terms of the IP Sale Agreement.

 

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

 

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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:

 

“Consent Order” shall have the meaning ascribed to such term in Recital
Paragraph C of the Sixth Amendment.

 

“Credit Agreement” shall mean the Existing Credit Agreement as amended by the
Sixth 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.

 

“DEP” shall have the meaning ascribed to such term in Recital Paragraph C.

 

“Erie Project” shall have the meaning ascribed to such term in Recital Paragraph
D of the Sixth Amendment.

 

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

 

“International Paper” shall have the meaning ascribed to such term in Recital
Paragraph B of the Sixth Amendment.

 

“IP Sale Agreement” shall have the meaning ascribed to such term in Recital
Paragraph B of the Sixth Amendment.

 

“IP Site” shall have the meaning ascribed to such term in Recital Paragraph B of
the Sixth Amendment.

 

“Sixth Amendment” shall mean the Sixth Amendment to Third Amended and Restated
Credit Agreement dated as of September 29, 2004.

 

“Sixth Amendment Effective Date” shall mean September 30, 2004, subject to the
satisfaction of each of the Conditions Precedent set forth in Paragraph 4 of the
Sixth Amendment.

 

“Tecnica” shall have the meaning ascribed to such term in Recital Paragraph B of
the Sixth Amendment.

 

2.             Restatement of Section 6.08.  As of the Sixth Amendment Effective
Date, Section 6.08 of the Existing Credit Agreement entitled “Investment
Restrictions”

 

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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;

 

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

 

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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 (except with
respect to the IP Site as provided in Subparagraph (n) below:

 

(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

 

(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

 

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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);

 

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

 

n.             Acquisition of the IP Site pursuant to the terms of the IP Sale
Agreement  may be consummated by PIDI without complying with the requirements of
Subparagraphs (j) (i) and (ii) above, so long as: (x) on or before the date upon
which PIDI acquires title to the IP Site, International Paper and PIDI obtain
the environmental insurance coverage described in Paragraph 17(f) of the IP Sale
Agreement in an aggregate amount no less than Ten Million Dollars
($10,000,000.00) for a term no less than ten (10) years naming Agent Bank as an
additional  insured, and (y) the Borrower Consolidation does not expend in
excess of the cumulative aggregate amount of Six Million Dollars ($6,000,000.00)
for the acquisition, remediation and development of the IP Site without the
prior written consent of Requisite Lenders.  In no event shall Borrowers permit
any Lien to be filed against or to encumber the IP Site, except in favor of
Agent Bank as provided in Section 5.32 hereinbelow.

 

3.             Addition of Section 5.32 regarding IP Site Acquisition Date
Requirements.  As of the Sixth Amendment Effective Date, Section 5.32 entitled
“IP Site Acquisition Date Requirements” shall be and is hereby added to the
Existing Credit Agreement as follows:

 

“Section 5.32.  Post IP Site Acquisition Date Requirements.  At such time as the
Borrower Consolidation has complied or caused compliance with each requirement
and environmental remediation set forth in the Consent Order as applicable to
Borrowers, Borrowers shall give written notice of such full compliance to Agent
Bank.  Following receipt of such written notice, Agent Bank may request, in its
sole and absolute discretion, compliance with Section 6.08(j)(i) and (ii) with
respect

 

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to the IP Site.  Upon receipt of such request Borrowers shall and do hereby
agree to cause PIDI to promptly:

 

a.             complete any remaining remediations and/or recommended actions
necessary for the issuance of a certificate of closure or completion from the
DEP under the Consent Order which shall be deemed sufficient for the execution
of a New Acquisition Certification with respect to the IP Site in accordance
with the requirements set forth in (c) of the definition of New Acquisition
Certifications, which New Acquisition Certifications shall be delivered to Agent
Bank;

 

b.             execute all security instruments deemed necessary by Agent Bank
to cause the IP Site and all other leases and assets then owned or controlled by
PIDI at the IP Site to be pledged with a first priority Lien as additional
Collateral securing the Bank Facilities; and

 

c.             cause the insurance company or companies that issued the
environmental insurance coverages described in Section 6.08(n)(x) above to issue
endorsements to such coverages naming Agent Bank as the mortgagee, loss payee
and additional insured, and an endorsement providing that in the event that
Agent Bank acquires ownership of all or any portion of the IP Site by
foreclosure or deed in lieu of foreclosure that Agent Bank shall be a named
insured thereunder.”

 

4.             Conditions Precedent to Sixth Amendment Effective Date.  The
occurrence of the Sixth 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 September 30, 2004:

 

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

 

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

 

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

 

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5.             Representations of Borrowers.  Borrowers hereby represent to the
Banks, which representations shall survive the Sixth 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 SIXTH AMENDMENT EFFECTIVE DATE
IN ALL MATERIAL RESPECTS AS THOUGH SUCH REPRESENTATIONS AND WARRANTIES HAD BEEN
MADE ON AND AS OF THE SIXTH 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 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.     THE IP SALE AGREEMENT AND THE CONSENT ORDER DELIVERED TO THE AGENT BANK
AS OF THE SIXTH AMENDMENT EFFECTIVE DATE HAVE NOT BEEN FURTHER REVISED OR
MODIFIED;

 

D.     AFTER GIVING EFFECT TO THE SIXTH AMENDMENT, NO EVENT HAS OCCURRED AND IS
CONTINUING WHICH CONSTITUTES A DEFAULT OR EVENT OF DEFAULT UNDER THE TERMS OF
THE CREDIT AGREEMENT; AND

 

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

 

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

 

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

 

8.             Counterparts.  This Sixth Amendment may be executed in any number
of separate counterparts with the same effect as if the signatures hereto and

 

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hereby were upon the same instrument.  All such counterparts shall together
constitute one and the same document.

 

9.             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
Sixth 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

 

 

 

 

SCIOTO DOWNS, INC., an Ohio corporation,
successor by merger to RACING
ACQUISITION, INC.,
an Ohio corporation

 

 

 

 

 

 

 

By

  /s/ Edson R. Arneault

 

 

 

Edson R. Arneault,
President

 

 

 

 

SPEAKEASY GAMING OF FREMONT, INC.,
a Nevada corporation

 

 

 

 

 

 

 

By

  /s/ Edson R. Arneault

 

 

 

Edson R. Arneault,
President

 

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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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