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

Exhibit 10.1
 
SECOND AMENDMENT TO
FIRST LIEN CREDIT AGREEMENT
 
THIS SECOND AMENDMENT TO FIRST LIEN CREDIT AGREEMENT (this “Amendment”), dated
as of June 30, 2014 (the “Effective Date”), is entered into by and among FULL
HOUSE RESORTS, INC., a Delaware corporation (the “Borrower”); each of the
undersigned financial institutions (collectively, the “Lenders”); and CAPITAL
ONE, NATIONAL ASSOCIATION (“Capital One”), as administrative agent for the
Lenders (in such capacity, the “Administrative Agent”), as L/C Issuer and as
Swing Line Lender (as such terms are defined in the Credit Agreement referenced
below).
 
RECITALS
 
A.           The Borrower, Administrative Agent and Lenders have executed a
First Lien Credit Agreement, dated as of June 29, 2012 (as amended, the “Credit
Agreement”) providing for a Revolving Loan in the maximum aggregate principal
amount of $5,000,000, a Term Loan in the original principal amount of
$50,000,000, a Term Loan (Hotel) in the maximum principal amount of $10,000,000
and a Swing Line Loan in the maximum principal amount of
$1,000,000.  Capitalized terms used herein and not otherwise defined herein
shall have the meanings defined in the Credit Agreement.
 
B.           The Borrower has also requested that certain of the financial
covenants be modified; the Administrative Agent and Lenders are willing to
accept such requests on the terms and conditions set forth below.
 
I.           AMENDMENTS TO CREDIT AGREEMENT
 
NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
 
1.             Section 1.01 (Definitions) of the Credit Agreement is hereby
amended to modify the following definitions:
 
“Adjusted EBITDA” shall mean, for any four fiscal quarter period, (a) Net Income
for such period, plus (b) to the extent deducted in determining Net Income of
the Borrower Parties for such period, the sum of the following for such period
(without duplication): (i) Interest Expense, (ii) provisions for income taxes,
(iii) depreciation and amortization expenses, (iv) extraordinary losses
(including non-cash impairment charges), (v) stock compensation expense, (vi)
acquisition costs related to the Fitz Casino in Tunica, Mississippi that are
required to be expensed in accordance with GAAP for any fiscal quarter in fiscal
year 2014 in an aggregate amount not to exceed $325,000; and (vii) costs related
to the Borrower’s S-1 2014 Registration Statement filing that are required to be
expensed in accordance with GAAP for any quarter in fiscal year 2014 in an
aggregate amount not to exceed $650,000, minus (c) to the extent added in
determining Net Income of the Borrower Parties for such period, extraordinary
gains, minus (d) the portion of Net Income for such period attributable to any
Joint Venture or any other Person (other than a Subsidiary) in which any
Borrower Party has ownership interest, except to the extent that any such Net
Income has been actually received by such Borrower Party in the form of cash
dividends or distributions.
 

 

 

 

 
Pro forma credit shall be given for an Acquired Person’s Adjusted EBITDA as if
owned on the first day of the applicable period; companies (or identifiable
business units or divisions) sold, transferred or otherwise disposed of during
any period will be treated as if not owned during the entire applicable period.
 
Pro forma credit for the Indiana gaming tax reductions shall be also be given
for the following periods in the amounts indicated:  for the four fiscal
quarters ending June 30, 2014, $2,500,000; for the four fiscal quarters ending
September 30, 2014, $1,875,000; for the four fiscal quarters ending December 31,
2014, $1,250,000; and for the four fiscal quarters ending March 31, 2015,
$625,000.
 
   *     *     *     *     *
 
“Fixed Charges” shall mean, for any four fiscal quarter period, the sum, for the
Borrower Parties (determined on a consolidated basis without duplication), of
the following items: (a) interest, fees, charges and related expenses for such
period actually paid in cash, (b) Rent Expense for such period, (c) scheduled
principal payments of Indebtedness actually paid in cash during such period,
including any optional prepayments made during a prior period that reduce
otherwise scheduled principal payments for such period, and (d) the portion of
payments under Capital Leases that should be treated as payment of principal in
accordance with GAAP scheduled to be paid during such period.”
 
Notwithstanding the foregoing, principal amounts prepaid on the Term Loan during
the fiscal quarter ending December 31, 2013 in the aggregate principal amount of
$8,750,000, which were paid on behalf of the principal payments due on January
1, 2014 and each quarterly principal payment thereafter through and including
the principal payment due July 1, 2015, shall be excluded from Fixed Charges for
those fiscal quarter periods ending March 31, 2014 through September 30, 2015.
 
*     *     *     *     *
 
“Total Debt” shall mean , as of any date of determination, without duplication
(a) the aggregate principal amount of Indebtedness of the Borrower Parties
outstanding on such date, in an amount that would be reflected on a balance
sheet prepared as of such date on a consolidated basis in accordance with GAAP
consisting of Indebtedness for borrowed money, obligations of the Borrower
Parties as lessee under or with respect to Capital Leases (excluding
Indebtedness or Capital Leases in an aggregate principal amount not to exceed
$9,000,000 incurred to construct a hotel adjacent to Rising Star Casino), debt
obligations evidenced by promissory notes or similar instruments plus (b)
obligations with respect to letters of credit, whether drawn or undrawn,
contingent or otherwise; provided that Total Debt shall not include Indebtedness
in respect of Unrestricted Subsidiaries.
 

- 2 -

 

 

 
2.             Sections 2.01(g)(iii) (Loan Facilities, Scheduled Payments;
Schedule Principal Payments – Term Loans); 2.01(h)(iii) (Loan Facilities, Term
Loan (Hotel)), 2.04(b)(ii) (Amount Limitations, Commitment Reductions, Etc.;
Mandatory Reductions of Commitments), and 2.05(c) (Fees;  Commitment Fees) of
the Credit Agreement are hereby amended to substitute March 31, 2015 for
December 31, 2014, and April 1, 2015 for January 1, 2015.
 
3.             Section 5.03 (Financial Covenants) of the Credit Agreement is
hereby amended to read as follows:
 
 5.03           Financial Covenants.  So long as any Loan or L/C Obligation
remains unpaid, or any other Obligation remains unpaid, or any portion of any
Commitment remains in force, the Borrower will comply, and will cause
compliance, with the following financial covenants, unless the Required Lenders
shall otherwise consent in writing:
 
 (a)            Total Leverage Ratio.  The Borrower shall not permit the Total
Leverage Ratio as of the last day of any fiscal quarter to be greater than the
ratio set forth opposite the applicable period below:
 
Applicable Period
 
Maximum Total Leverage Ratio
 
June 30, 2014 through and including
September 29, 2014
 
          4.75 to 1.00
          September 30, 2014 through and
including December 30, 2014             5.50 to 1.00           December 31, 2014
through and
including June 29,  2015             5.50 to 1.00          
June 30, 2015 through and including
September 29, 2015
 
          4.75 to 1.00
          September 30, 2015 through and
including December 30, 2015             4.50 to 1:00           December 31, 2015
through and
including March 30, 2016             4.25 to 1.00          
March 31, 2016 and thereafter
 
          4.25 to 1.00
 

 

- 3 -

 

 

 
(b)            First Lien Leverage Ratio.  The Borrower shall not permit the
First Lien Leverage Ratio as of the last day of any fiscal quarter to be greater
than the ratio set forth opposite the applicable period below:
 
Applicable
Period
   
Maximum First
Lien Leverage
Ratio
 
June 30, 2014 through and including
September 29, 2014
   
          3.50 to 1.00
            September 30, 2014 through and
including December 30, 2014               3.50 to 1.00             December 31,
2014 through and
including June 29,  2015               4.00 to 1.00            
June 30, 2015 through and including
September 29, 2015
   
          3.50 to 1.00
            September 30, 2015 through and
including December 30, 2015               3.25 to 1:00             December 31,
2015 through and
including March 30, 2016               3.00 to 1.00            
March 31, 2016 and thereafter
   
          3.00 to 1.00
 

 
(c)            Fixed Charge Coverage Ratio.  The Borrower shall not permit the
Fixed Charge Coverage Ratio as of the last day of any fiscal quarter to be less
than 1.10 to 1.00.
 
(d)            Capital Expenditures.  The Borrower shall not permit the
aggregate amount of Capital Expenditures made by the Loan Parties in any fiscal
year (i) to exceed 5% of total revenues for the immediately preceding year or
(ii) to be less than 1.5% of the total revenues for the immediately preceding
fiscal year; provided, that the foregoing shall not include or limit (x) capital
expenditures in an aggregate amount not to exceed $17,500,000 to construct a
hotel adjacent to the Silver Slipper Casino or (y) for the avoidance of doubt,
the acquisition of Capital Assets in connection with Capital Lease obligations
in an aggregate principal amount not to exceed $9,000,000 incurred to construct
a hotel adjacent to the Rising Star Casino.
 
4.             Except as specifically amended hereby, all of the remaining terms
and conditions of the Credit Agreement shall remain in full force and effect.
 
II.           MISCELLANEOUS
 
1.             Representations and Warranties.  Borrower represents to the
Administrative Agent and the Lenders as follows:
 
 (a)            The representations and warranties of the Loan Parties set forth
in Article IV of the Credit Agreement and in the other Credit Documents are true
and correct in all material respects (except to the extent that such
representation and warranty is qualified by materiality, in which case such
representation and warranty must be true in all respects) as if made on such
date (except for representations and warranties expressly made as of a specified
date, which shall be true and correct in all material respects (except to the
extent that such representation and warranty is qualified by materiality, in
which case such representation and warranty must be true in all respects) as of
such date);
 

- 4 -

 

 

 
(b)            No Default has occurred and is continuing; and
 
(c)            No material adverse change in the business, operations, condition
(financial or otherwise), assets or liabilities (whether actual or contingent)
of the Borrower Parties taken as a whole has occurred since March 31, 2014.
 
2.             Conditions Precedent.  As conditions precedent to the execution
and delivery by the Agent and the Lenders of this Amendment, (i) the Borrower
shall have paid or caused to be paid all costs and expenses incurred by the
Agent and the Lenders through the date hereof and (ii) the Agent and the Lenders
shall have received the following, all of which shall be in form and substance
satisfactory to the Agent and in sufficient counterparts:
 
(a)            Duly executed counterparts of this Amendment signed by all of the
Loan Parties.
 
(b)            Acknowledgment of First Lien Guarantors to this Amendment.
 
(c)            Acknowledgment of Second Lien Lenders to this Amendment, and
execution of Amendment No. 2 to Second Lien Credit Agreement to be consistent
with this Amendment.
 
(d)            Flood hazard determination certificates for Silver Slipper Casino
property, if required by Administrative Agent.
 
(e)            Such other documents as the Agent may have reasonably requested.
 
(f)            Certificate of Borrower stating that (i) all material consents
necessary or advisable in connection with the transactions contemplated by this
Amendment, including the consent of the Indiana Gaming Commission, have been
obtained, (ii) all of the foregoing conditions precedent have been satisfied and
(iii) the Effective Date has occurred; provided that if such certificate is not
received by August 31, 2014 (unless such date is extended by the Administrative
Agent), this Amendment shall become null and void.
 
3.             Counterparts.  This Amendment may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all
purposes.  Transmission by facsimile, “pdf” or similar electronic copy of an
executed counterpart of this Credit Agreement shall be deemed to constitute due
and sufficient delivery of such counterpart.  Any party hereto may request an
original counterpart of any party delivering such electronic counterpart.
 
4.             Effective Date.  Upon the satisfaction of the conditions
precedent set forth in Section 2 of this Article II, this Amendment shall become
effective as of the Effective Date (defined above).
 

- 5 -

 

 

 
IN WITNESS WHEREOF, the Borrower, the Lenders, the Administrative Agent, the L/C
Issuer and the Swing Line Lender have caused this Agreement to be executed as of
the day and year first above written.

             
BORROWER:
 
FULL HOUSE RESORTS, INC.,
   
a Delaware corporation
                  By: /s/ Andre M. Hilliou       Name:  Andre M. Hilliou      
Title:  Andre M. Hilliou, CEO                

- 6 -

 

 

 

             
ADMINISTRATIVE AGENT,
COLLATERAL TRUSTEE, L/C
ISSUER. SWING LINE LENDER
AND LENDER:
  CAPITAL ONE, NATIONAL ASSOCIATION,                                 By: /s/
Ross S. Wales       Name:  Ross S. Wales       Title:  Sr. Vice President      
         

- 7 -

 

 

 

             
LENDERS:
 
NEVADA STATE BANK
                                By: /s/ Jamie Gazza       Name:  Jamie Gazza    
  Title:  Vice President                

- 8 -

 

 

 

             
 
 
FIRST TENNESSEE BANK
NATIONAL ASSOCIATION
                                By: /s/ Sharon Shipley       Name:  Sharon
Shipley       Title:  Vice President                

- 9 -

 

 

 

             
 
 
TRUSTMARK NATIONAL BANK
                                By: /s/ Craig E. Sosebee       Name:  Craig E.
Sosebee       Title:  First Vice President                

- 10 -

 

 

 

             
 
 
BANK OF NEVADA
                                By: /s/ Doron Joseph       Name:  Doron Joseph  
    Title:  Sr. Vice President                

- 11 -