Exhibit 10.1


 


AMENDMENT NUMBER ONE 

TO CREDIT AGREEMENT


 


This AMENDMENT NUMBER ONE TO CREDIT AGREEMENT (this “Amendment”) is entered
into as of January 30, 2006, by the lenders identified on the signature pages
hereof (the “Lenders”), WELLS FARGO FOOTHILL, INC., a California corporation (“Agent”;
and together with the Lenders, the “Lender Group”), as the arranger and
administrative agent for the Lenders, and 155 EAST TROPICANA, LLC,
a Nevada limited liability company (“Parent”) and each of Parent’s
Subsidiaries identified on the signature pages hereof (such Subsidiaries,
together with Parent, are referred to hereinafter each individually as “Borrower”,
and individually and collectively, jointly and severally, as the “Borrowers”),
with reference to the following:


 


WHEREAS, Borrowers and the
Lender Group are parties to that certain Credit Agreement, dated as of March
29, 2005 (as amended, restated, supplemented, or otherwise modified from time
to time, the “Credit Agreement”);


 


WHEREAS, Borrowers have
requested that the Lender Group make certain amendments to the Credit Agreement
that will allow Borrowers, during the period of February 1, 2006 to June 30,
2006, to obtain Advances in the aggregate principle amount of up to $15
million, without regard to the borrowing limitations in Section (a) of the
definition of “Borrowing Base” in Schedule 1.1; but subject otherwise to the
terms and conditions of the Agreement; and


 


WHEREAS, subject to the terms
and conditions set forth herein, the Lender Group is willing to make the
amendments requested by Borrowers.


 


NOW, THEREFORE, in consideration
of the foregoing and the mutual covenants herein contained, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:


 


1.     Defined
Terms.  Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in
the Credit Agreement, as amended hereby.


 


2.     Amendments
to Credit Agreement.


 


(a)           Section 2.5 of the Credit
agreement is hereby amended and restated in its entirety as follows:


 


“2.5         Overadvances.      If, at any time or for any reason, the amount of
Obligations owed by Borrowers to the Lender Group pursuant to Section 2.1
or Section 2.12 is greater than any of the limitations set forth in Section
2.1 or Section 2.12, as applicable (an “Overadvance”),
Borrowers immediately shall pay to Agent, in cash, the amount of such excess,
which amount shall be used by Agent to reduce the Obligations in accordance
with the priorities set forth in Section 2.4(b).  In addition, Borrowers hereby promise to pay
the Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full as and when due and


 

















 


payable under the terms of this Agreement and the other Loan
Documents.  Anything to the contrary
contained in this Agreement notwithstanding, from the period (the
“Temporary Overadvance Period”) commencing on February 1, 2006, and
ending on June 30, 2006 (the “Temporary Overadvance Termination Date”), the
amount of Obligations owed by Borrowers to the Lender Group pursuant to Sections
2.1 and 2.12 may exceed (and Borrowers shall receive at Borrowers’ request,
subject to the terms and conditions in this Agreement (other than the borrowing
limitation in Section (a) of the definition of “Borrowing Base” in Schedule
1.1), Advances that would cause the amount of the Obligations to so exceed) the
limitations set forth in Sections 2.1 and 2.12  in an amount not to
exceed $7,500,000 (the “Temporary Overadvance Amount”); provided,
however, in no event shall the amount of Obligations (taking into account
the Temporary Overadvance Amount) owed by Borrowers to the Lender Group exceed
the Maximum Revolver Amount less the Letter
of Credit Usage at such time and less the Bank
Product Reserve.  On the Temporary
Overadvance Termination Date, Borrowers shall pay the then outstanding
Overadvances in full.”


 


(b)           Schedule 1.1 of the Credit
Agreement is hereby amended by adding the following definitions thereto in
alphabetical order to read as follows:


 


“Temporary Overadvance Amount” means the temporary overadvance
amount set forth in Section 2.5.


 


“Temporary Overadvance
Period” means the temporary overadvance period set forth in Section
2.5.


 


“Temporary Overadvance
Termination Date” means the temporary overadvance termination date
set forth in Section 2.5.


 


3.     Conditions
Precedent to Amendment.  The
satisfaction of each of the following shall constitute conditions precedent to
the effectiveness of this Amendment and each and every provision hereof:


 


(a)           Agent shall have received this
Amendment, duly executed by the parties hereto, and the same shall be in full
force and effect.


 


(b)           Agent shall have received an
amendment fee in the amount of $100,000, which amount Borrower authorizes Agent,
for the benefit of the Lenders, to charge to the Loan Account.  Such fee shall be fully earned and paid in
full in immediately available funds on or before the date hereof.


 


(c)           The representations and warranties
herein and in the Credit Agreement and the other Loan Documents shall be true
and correct in all material respects on and as of the date hereof, as though
made on such date (except to the extent that such representations and
warranties relate solely to an earlier date).


 


(d)           No Default or Event of Default shall
have occurred and be continuing on the date hereof, nor shall result from the
consummation of the transactions contemplated herein.


 


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(e)           No injunction, writ, restraining
order, or other order of any nature prohibiting, directly or indirectly, the
consummation of the transactions contemplated herein shall have been issued and
remain in force by any Governmental Authority against any Borrower, any
Guarantor, Agent, or any Lender.


 


4.     Representations
and Warranties.  Each Borrower
represents and warrants to the Lender Group that (a) the execution, delivery,
and performance of this Amendment and of the Credit Agreement, as amended
hereby, (i) are within its powers, (ii) have been duly authorized by all
necessary action, and (iii) are not in contravention of any law, rule, or
regulation applicable to it, or any order, judgment, decree, writ, injunction,
or award of any arbitrator, court, or Governmental Authority, or of the terms
of its Governing Documents, or of any contract or undertaking to which it is a
party or by which any of its properties may be bound or affected; (b) this
Amendment and the Credit Agreement, as amended hereby, are legal, valid and
binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms; and (c) no Default or Event of Default
has occurred and is continuing on the date hereof or as of the date upon which
the conditions precedent set forth herein are satisfied.


 


5.     Choice
of Law.  The validity of this
Amendment, its construction, interpretation and enforcement, the rights of the
parties hereunder, shall be determined under, governed by, and construed in
accordance with the laws of the State of New York.


 


6.     Counterpart
Execution.  This Amendment may be
executed in any number of counterparts, all of which when taken together shall
constitute one and the same instrument, and any of the parties hereto may
execute this Amendment by signing any such counterpart.  Delivery of an executed counterpart of this
Amendment by telefacsimile or electronic mail shall be equally as effective as
delivery of an original executed counterpart of this Amendment.  Any party delivering an executed counterpart
of this Amendment by telefacsimile or electronic mail also shall deliver an
original executed counterpart of this Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Amendment.


 


7.     Effect
on Loan Documents.


 


(a)           The Credit Agreement, as amended
hereby, and each of the other Loan Documents shall be and remain in full force
and effect in accordance with their respective terms and hereby are ratified
and confirmed in all respects.  The execution,
delivery, and performance of this Amendment shall not operate, except as
expressly set forth herein, as a modification or waiver of any right, power, or
remedy of Agent or any Lender under the Credit Agreement or any other Loan
Document.  The waivers, consents, and
modifications herein are limited to the specifics hereof, shall not apply with
respect to any facts or occurrences other than those on which the same are
based, shall not excuse future non-compliance with the Loan Documents, and
shall not operate as a consent to any further or other matter under the Loan
Documents.


 


(b)           Upon and after the effectiveness of
this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”,
“herein”, “hereof” or words of like import referring to the Credit Agreement,
and each reference in the other Loan


 


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Documents to “the Credit Agreement”, “thereunder”,
“therein”, “thereof” or words of like import referring to the Credit Agreement,
shall mean and be a reference to the Credit Agreement as modified and amended
hereby.


 


(c)           To the extent that any terms and
conditions in any of the Loan Documents shall contradict or be in conflict with
any terms or conditions of the Credit Agreement, after giving effect to this
Amendment, such terms and conditions are hereby deemed modified or amended
accordingly to reflect the terms and conditions of the Credit Agreement as
modified or amended hereby.


 


(d)           This Amendment is a Loan Document.


 


8.     Entire
Agreement.  This Amendment embodies
the entire understanding and agreement between the parties hereto with respect
to the subject matter hereof and supersedes any and all prior or
contemporaneous agreements or understandings with respect to the subject matter
hereof, whether express or implied, oral or written.


 


[signature page follows]


 


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IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first above written.


 


	
   

  	
  155 EAST TROPICANA, LLC,

  	
   

  
	
   

  	
   a Nevada
  limited liability company, as a 

  Borrower

  
	
   

  	
   

  	
  /s/ Neil Kiefer

  	
   

  
	
   

  	
  By:

  	
  Neil Kiefer

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  155 EAST TROPICANA FINANCE CORP.

  
	
   

  	
   a Nevada
  corporation, as a Borrower

  
	
   

  	
   

  	
  /s/ Neil Kiefer

  	
   

  
	
   

  	
  By:

  	
  Neil Kiefer

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO FOOTHILL, INC.,

  
	
   

  	
  a California corporation, as Agent and as a 

  Lender

  
	
   

  	
   

  	
  /s/ Kevin P. Smith

  	
   

  
	
   

  	
  By:

  	
  Kevin P. Smith

  
	
   

  	
  Title:

  	
  Vice President