Exhibit 10.58

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (“First Amendment”) is made and entered
into as of the 15th day of December, 2003, by and among HERBST GAMING, INC., a
Nevada corporation (the “Borrower”), FLAMINGO PARADISE GAMING, LLC, a Nevada
limited liability company, dba TERRIBLE’S HOTEL & CASINO (the “Collateral
Guarantor”) and U.S. BANK NATIONAL ASSOCIATION (herein together with its
successors and assigns the “Lender”).

 

R_E_C_I_T_A_L_S;

 

WHEREAS:

 

A.                                   Borrower, Collateral Guarantor and Lender
entered into a Credit Agreement dated as of September 6, 2002 (the “Existing
Credit Agreement”) for the purpose of establishing a secured revolving line of
credit in favor of Borrower, up to the maximum principal amount of Ten Million
Dollars ($10,000,000.00), on the terms and subject to the conditions, covenants
and understandings therein set forth.

 

B.                                     For the purpose of this First Amendment,
all capitalized words and terms not otherwise defined herein shall have the
respective meanings and be construed herein as provided in Section 1.01 of the
Existing Credit Agreement and any reference to a provision of the Existing
Credit Agreement shall be deemed to incorporate that provision as a part hereof,
in the same manner and with the same effect as if the same were fully set forth
herein.

 

C.                                     Borrower and Collateral Guarantor desire
to attend the Existing Credit Agreement for the following purposes:

 

(i)                                     Extending the Maturity Date to December
15, 2004;

 

(ii)                                  Modifying and deleting certain of the
Financial Covenants and Definitions relating thereto as hereinafter provided.

 

D.                                    Lender is willing to agree to the
amendments and modifications described hereinabove, subject to the term and
conditions which are hereinafter set forth.

 

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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 in each instance effective as of the First Amendment Effective
Date, as specifically hereinafter provided as follows:

 

1.                                       Definitions.  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:

 

“Amendment Fee” shall have the meaning set forth in Paragraph 5 of the First
Amendment.

 

“Compliance Certificate” shall mean a compliance certificate as described in
Section 5.08(c) of the Credit Agreement, the form of which is more particularly
described on “Exhibit D”, affixed to the First Amendment and by this reference
incorporated herein and made a part hereof, which revised Exhibit D shall fully
supersede and restate Exhibit D attached to the Existing Credit Agreement.

 

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

 

“Debt Service Coverage Ratio” as of the end of any Fiscal Quarter shall mean
with reference to the Herbst Consolidation:

 

EBITDA for the Fiscal Quarter under review, together with the most recently
ended three (3) preceding Fiscal Quarters

 

Divided by (÷)

 

The sum of: (i) the aggregate amount of Interest Expense (expensed and
capitalized), plus (ii) the aggregate of Mandatory Debt Reductions; in each case
determined for the Fiscal Quarter under review together with the most recently
ended three (3) preceding Fiscal Quarters.

 

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

 

“First Amendment” shall mean the First Amendment to Credit Agreement.

 

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“First Amendment Effective Date” shall mean December 15, 2003, subject to the
occurrence of each of the conditions precedent set forth in Paragraph 5 of the
First Amendment.

 

“Maturity Date” shall mean December 15, 2004, as may be further extended from
time to time for one (1) year periods in the manner and subject to the terms of
Section 2.13 of the Credit Agreement.

 

2.                                       Extension of Maturity Date.  As of the
First Amendment Effective Date, the Maturity Date shall be and is hereby
extended to December 15, 2004 and the definition of “Maturity Date” shall be and
is hereby modified as set forth in the definition of Maturity Date contained in
the First Amendment.

 

3.                                       Replacement of Fixed Charge Coverage
Ratio with Debt Service Coverage Ratio Covenant.  As of the First Amendment
Effective Date, Section 6.02 of the Existing Credit Agreement entitled “Fixed
Charge Coverage Ratio” shall be and is hereby fully amended and restated in its
entirety as follows:

 

“Section 6.02.                       Debt Service Coverage Ratio.  Commencing on
the First Amendment Effective Date and continuing as of each Fiscal Quarter end
until Credit Facility Termination, the Herbst Consolidation shall maintain a
Debt Service Coverage Ratio no less than 1.65 to 1.00.”

 

4.                                       Deletion of Sections 6.01 and 6.03.  As
of the First Amendment Effective Date, Section 6.01 entitled “Cash Flow Leverage
Ratio” and Section 6.03 entitled “Liquidity Requirement” shall be and are hereby
deleted in their entirety.

 

5.                                       Conditions Precedent to First Amendment
Effective Date.  The occurrence of the First Amendment Effective Date is subject
to Lender having received the following documents and payments, in each case in
a form and substance reasonably satisfactory to Lender, and the occurrence of
each other condition precedent set forth below on or before December 19, 2003:

 

a.                                       Due execution by Borrower, Collateral
Guarantor and Lender of three (3) duplicate originals of this First Amendment;

 

b.                                      Corporate and partnership resolutions or
other evidence of requisite authority of Borrower and each of the Subsidiary
Guarantors to execute the First Amendment;

 

c.                                       Payment of non-refundable fee
(“Amendment Fee”) to Lender in the amount of Thirty-Seven Thousand Five Hundred
Dollars ($37,500.00);

 

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d.                                      Reimbursement to Lender by Borrower for
all reasonable fees and out-of-pocket expenses incurred by Lender in connection
with the First Amendment, including, but not limited to, reasonable attorneys’
fees of Henderson & Morgan, LLC and all other like expenses remaining unpaid as
of the First Amendment Effective Date; and

 

e.                                       Such other documents, instruments or
conditions as may be reasonably required by Lender.

 

6.                                       Representations of Borrower and
Collateral Guarantor.  Borrower and Collateral Guarantor hereby represent to the
Lender that:

 

a.                                       The representation 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
First Amendment Effective Date in all material respects as though such
representations and warranties had been made on and as of the First 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 Lender.

 

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 First Amendment has been duly authorized by all necessary action of
Borrower, Collateral Guarantor and each of the Subsidiary Guarantors and this
First Amendment constitutes a valid, binding and enforceable obligation of
Borrower, Collateral Guarantor and each of the Subsidiary Guarantors.

 

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

 

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

 

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9.                                       Counterparts.                      
This First 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.

 

11.                                 Consent to First Amendment and Affirmation
and Ratification of Subsidiary Guaranty.  Each of the Subsidiary Guarantors join
in the execution of this First Amendment for the purpose of evidencing their
respective consent to the terms, covenants, provisions and conditions herein
contained and contained in the Existing Credit Agreement.  Subsidiary Guarantors
further join in the execution of this First Amendment for the purpose of
ratifying and affirming their respective obligations under the Subsidiary
Guaranty for the guaranty of the full and prompt payment and performance of all
Indebtedness and Obligations under the Credit Facility, as modified and amended
under this First Amendment.

 

12.                                 Additional/Replacement Exhibit
Attached.                The following additional or replacement Exhibits are
attached hereto and incorporated herein and made a part of the Credit Agreement
as follows:

 

Exhibit D -    Compliance Certificate (First Restated) – Form

 

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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of
the day and year first above written.

 

 

BORROWER:

 

 

 

HERBST GAMING, INC.,
a Nevada corporation

 

 

 

 

 

By

/s/ Edward Herbst

 

 

 

Edward Herbst,

 

 

 

President

 

 

 

 

COLLATERAL GUARANTOR:

 

 

 

FLAMINGO PARADISE GAMING, LLC, a
Nevada limited liability company dba
TERRIBLE’S HOTEL & CASINO

 

 

 

 

 

By

/s/ Edward Herbst

 

 

 

Edward Herbst,

 

 

 

Managing Member

 

 

 

 

SUBSIDIARY GUARANTORS:

 

 

 

FLAMINGO PARADISE GAMING, LLC,
a Nevada limited liability company, dba
Terrible’s Hotel & Casino

 

 

 

 

 

By

/s/ Edward Herbst

 

 

 

Edward Herbst,

 

 

 

Managing Member

 

 

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E-T-T, INC., a Nevada corporation

 

 

 

 

 

By

/s/ Edward Herbst

 

 

 

Edward Herbst,

 

 

 

President

 

 

 

 

 

 

MARKET GAMING, INC.,
a Nevada corporation

 

 

 

 

 

By

/s/ Edward Herbst

 

 

 

Edward Herbst,

 

 

 

President

 

 

 

 

 

 

E-T-T ENTERPRISES, L.L.C.,
a Nevada limited liability company

 

 

 

 

 

By

/s/ Edward Herbst

 

 

 

Edward Herbst,

 

 

 

Managing Member

 

 

 

 

 

 

CARDIVAN COMPANY,
a Nevada corporation

 

 

 

 

 

By

/s/ Edward Herbst

 

 

 

Edward Herbst,

 

 

 

President

 

 

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CORRAL COIN, INC., a Nevada
corporation

 

 

 

 

 

By

/s/ Edward Herbst

 

 

 

Edward Herbst,

 

 

 

President

 

 

 

 

 

 

CORRAL COUNTRY COIN, INC.,
a Nevada corporation

 

 

 

 

 

By

/s/ Edward Herbst

 

 

 

Edward Herbst,

 

 

 

President

 

 

 

 

LENDER:

 

 

 

U.S. BANK NATIONAL

 

ASSOCIATION

 

 

 

 

 

By

/s/ Denette Corrales

 

 

 

Denette Corrales,

 

 

 

Vice President

 

 

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