Exhibit 10.16

 

FIFTH AMENDMENT TO THIRD

AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FIFTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (“Fifth
Amendment”) is made and entered into as of the 24th 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, and as further amended by Fourth Amendment to Third Amended
and Restated Credit Agreement dated as of June 4, 2004 (collectively, the
“Existing Credit Agreement”) for the purpose of 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.            The Borrower Consolidation has requested Banks to amend the
Existing Credit Agreement for the purpose of revising the rating requirements
for the issuers of insurance in accordance with Section 5.09 of the Existing
Credit Agreement.

 

C.            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
Fifth 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.

 

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

 

“Fifth Amendment” shall mean the Fifth Amendment to Third Amended and Restated
Credit Agreement dated as of September 24, 2004.

 

“Fifth Amendment Effective Date” shall mean September 24, 2004, subject to the
satisfaction of each of the Conditions Precedent set forth in Paragraph 3 of the
Fifth Amendment.

 

2.             Amendment of Section 5.09(m).  As of the Fifth Amendment
Effective Date, the first sentence of Section 5.09(m) of the Existing Credit
Agreement entitled “Ratings” shall be and is hereby deleted in its entirety and
the following is substituted as a full restatement thereof:

 

2

--------------------------------------------------------------------------------

“All policies indicated above shall be written with insurance companies licensed
and admitted to do business in all states where the Borrower Consolidation, or
any of them, is operating and shall be rated no lower than “A XII” in the most
recent addition of A.M. Best’s and “AA-” in the most recent edition of Standard
& Poor’s, or such other carrier reasonably acceptable to Agent Bank.”

 

3.             Conditions Precedent to Fifth Amendment Effective Date.  The
occurrence of the Fifth 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 August 31, 2004:

 

A.             DUE EXECUTION BY BORROWERS AND AGENT BANK OF SIX (6) DUPLICATE
ORIGINALS OF THIS FIFTH 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 FIFTH
AMENDMENT, BUT NOT LIMITED TO, REASONABLE ATTORNEYS’ FEES OF HENDERSON & MORGAN,
LLC AND ALL OTHER LIKE EXPENSES REMAINING UNPAID AS OF THE FIFTH AMENDMENT
EFFECTIVE DATE; AND

 

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

 

4.             Representations of Borrowers.  Borrowers hereby represent to the
Banks, which representations shall survive the Fifth 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 FIFTH AMENDMENT EFFECTIVE DATE
IN ALL MATERIAL RESPECTS AS THOUGH SUCH REPRESENTATIONS AND WARRANTIES HAD BEEN
MADE ON AND AS OF THE FIFTH 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

 

3

--------------------------------------------------------------------------------

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 FIFTH AMENDMENT
HAS BEEN DULY AUTHORIZED BY ALL NECESSARY ACTION OF BORROWERS AND THIS FIFTH
AMENDMENT CONSTITUTES THE VALID, BINDING AND ENFORCEABLE OBLIGATION OF
BORROWERS.

 

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

 

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

 

7.             Counterparts.  This Fifth 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.

 

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

 

4

--------------------------------------------------------------------------------

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
Fifth 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

 

 

S-1

--------------------------------------------------------------------------------

 

 

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

 

 

S-2

--------------------------------------------------------------------------------

 

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

 

 

S-3

--------------------------------------------------------------------------------