Exhibit
10.1


 


AMENDMENT NO. 2 TO
CREDIT AGREEMENT


 


This LIMITED WAIVER AND AMENDMENT NO. 2 TO CREDIT
AGREEMENT (this “Agreement”) is entered into as of July 1, 2008, by
and among NORTH METRO
HARNESS INITIATIVE, LLC, a Minnesota limited liability company (“Borrower”),
the other persons designated as “Loan Parties” on the signature pages hereof,  the financial institutions who are or hereafter become
parties to this Agreement as Lenders, and BLACK DIAMOND COMMERCIAL FINANCE,
L.L.C., a Delaware limited liability company (in its individual capacity, “BDCF”),
as Agent.  Unless otherwise
specified herein, capitalized terms used in this Agreement shall have the
meanings ascribed to them in the Credit Agreement (as hereinafter defined).


 


RECITALS


 


WHEREAS, Borrower, the other Loan Parties, Agent and
Lenders have entered into that certain Credit Agreement, dated as of April 20,
2007 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”);


 


WHEREAS, Borrower, Agent and Lenders have agreed to
amend certain terms of the Credit Agreement as described herein.


 


NOW THEREFORE, in consideration of the mutual
execution hereof and other good and valuable consideration, the parties hereto
agree as follows:


 


SECTION 1.           Amendments to Credit
Agreement.  Subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof,
the Credit Agreement is hereby amended as follows:


 


(a)                                  Clause (l) of the definition of “Permitted
Encumbrances” is hereby amended and restated to read in its entirety as
follows:


 


                “(l) Liens arising pursuant to purchase
money mortgages or security interests securing Indebtedness representing the
purchase price (or financing of the purchase price within 90 days after the
respective purchase) of fixed assets acquired after the Closing Date, provided
that (1) any such Liens attach only to the assets so purchased, upgrades
thereon and, if the asset so purchased is an upgrade, the original asset itself
(and such other assets financed by the same financing source), (2) the
Indebtedness (other than Indebtedness incurred from the same financing source
to purchase other assets and excluding Indebtedness representing obligations to
pay installation and delivery charges for the property so purchased) secured by
any such Lien (a) does not exceed 100% of the lesser of the fair market
value or the purchase price of the property being purchased at the time of the
incurrence of such Indebtedness and (b) is not less than 75% of fair
market value of the applicable property and (3) the Indebtedness secured
thereby is permitted to be incurred pursuant to this Agreement;”


 


(b)                                 Clause (o) of the definition of “Permitted
Encumbrances” is hereby amended and restated to read in its entirety as
follows:


 

















 


                “(o) [reserved]; and”


 


(c)                                  Section 2.1(a) of the Credit Agreement is
hereby amended by addition the following new sentence hereto at the end of such
first paragraph:


 


“(a)         Notwithstanding
anything to the contrary contained herein, the Borrower may borrow Advances, in
an aggregate amount not to exceed $600,000, on July 1, 2008 (and the
provisions of (i) Section 2.1(b) (other than Section 2.1(b)(iii)(C) and
Section 2.1(b)(iii)(D)) shall be not be applicable to any such
Advance and (ii) Section 3.2 (i), (ii), (iii), (iv), (vii),
(viii), (ix), (x) and (xi) shall not apply to any such Advance (and
the entire amount of such Advance shall be funded by Grand Central Asset Trust, BDC Series).”


 


(d)                                 Section 2.1(a) of the Credit Agreement is
hereby amended by deleting the dollar amount “$104,250” which appears therein
and replacing the same with the dollar amount “$105,750”.


 


(e)                                  Section 2.2 of the Credit Agreement is hereby
amended and restated to read in its entirety as follows:


 


“2.2         Interest
and Applicable Margins


 


(a)           Borrower shall pay interest to Agent, for the ratable
benefit of Lenders with respect to the Term Loan made by each Lender, in
arrears on each applicable Interest Payment Date, with respect to such portion
of the Term Loan designated as an Index Rate Loan, the Index Rate plus the
Applicable Term Loan Index Margin per annum or, with respect to such portion of
the Term Loan designated as a LIBOR Loan, the applicable LIBOR Rate plus the
Applicable Term Loan LIBOR Margin per annum.


 


As of the Closing Date, the
Applicable Margins are as follows:


 


	
  Applicable Term Loan Index Margin

  	
   

  	
  4.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Term Loan LIBOR Margin

  	
   

  	
  6.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Unused Line Fee Margin

  	
   

  	
  4.50

  	
  %

  



 


As of July 1, 2008, the
Applicable Margins shall be as follows:


 


	
  Applicable Term Loan Index Margin

  	
   

  	
  4.30

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Term Loan LIBOR Margin

  	
   

  	
  6.30

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable Unused Line Fee Margin

  	
   

  	
  4.80

  	
  %

  



 


2

















 


On
and after the Project Opening, the Applicable Margins shall be as follows:


 


	
  Applicable
  Term Loan Index Margin

  	
   

  	
  2.80

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable
  Term Loan LIBOR Margin

  	
   

  	
  4.80

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Applicable
  Unused Line Fee Margin

  	
   

  	
  4.80

  	
  %”

  



 


(f)                                    Section 6.1(c) of the Credit Agreement is
amended and restated in its entirety to read as follows:


 


“(c)         Indebtedness not to exceed $2,500,000 (less the aggregate
amount of all Indebtedness permitted pursuant to Section 6.1(d) hereof
that refinanced Indebtedness previously permitted pursuant to this Section 6.1(c))
in an aggregate principal amount at any time outstanding secured by purchase
money Liens or incurred with respect to Capital Leases and purchase money
Indebtedness for the purchase of fixed assets;”


 


(g)                                 Section 6.16 of the Credit Agreement is hereby
amended and restated to read in its entirety as follows:


 


“6.16           Availability.  The Borrower shall at no time set forth below
permit the sum of Availability and Unrestricted Cash to be less than the amount
set forth below opposite such time.


 


	
  Time

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  From and including July 1, 2008 through but
  excluding August 31, 2008

  	
   

  	
  $

  	
  750,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  From and including August 31, 2008 through
  but excluding September 30, 2008

  	
   

  	
  $

  	
  850,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  From and including September 30, 2008
  through but excluding October 31, 2008

  	
   

  	
  $

  	
  950,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  From and including October 31, 2008
  through but excluding November 30, 2008

  	
   

  	
  $

  	
  1,100,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  At all times on or after November 30, 2008

  	
   

  	
  $

  	
  1,250,000

  	
   

  



 


(h)                                 Annex A to the Credit Agreement is hereby
amended and restated in its entirety to read as Annex A hereto.


 


SECTION 2.           Representations
And Warranties Of Loan Parties. 
Each Loan Party represents and warrants that:


 


(a)                                  The
consummation of the transactions contemplated hereby does not and will not (i) violate
or conflict with any laws, rules, regulations or orders of any Governmental
Authority 


 


3

















 


or violate, conflict with, result in a breach of, or
constitute a default (with due notice or lapse of time or both) under any
Contractual Obligation or organizational documents of any Loan Party or any of
its Subsidiaries or (ii) require the consent of, or any filing with, any
Person that has not been obtained or made;


 


(b)           The execution, delivery and
performance by such Loan Party of this Agreement has been duly authorized by
all necessary corporate action and is the legal, valid and binding obligation
of such Loan Party enforceable against such Loan Party in accordance with its
terms, except as the enforcement thereof may be subject to (i) the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or similar
law affecting creditors’ rights generally and (ii) general principles of
equity (regardless of whether such enforcement is sought in a proceeding in
equity or at law);


 


(c)           Each of the representations
and warranties of each Loan Party contained in the Loan Documents are true,
correct and complete as of the date (except to the extent that such
representation or warranty expressly relates to an earlier date in which case
it shall be true as of such earlier date);


 


(d)           After giving effect to this
Agreement, no Default or Event of Default shall have occurred and be continuing
under the Credit Agreement.


 


SECTION 3.           Condition To Effectiveness.  This Agreement shall be effective upon
satisfaction of the following conditions precedent:


 


(a)           Evidence satisfactory to the Agent
that the Borrower has received an aggregate cash equity capital contribution
from Sponsors on or about June 20, 2008 of at least $615,000 (it being
agreed that such equity contribution shall not, pursuant to Section 2.5(d) of
the Credit Agreement be required to be used to prepay the Term Loan);


 


(b)           Execution and delivery of this
Agreement by the Borrower, Hotel, Agent and the Requisite Lenders;


 


(c)           Each representation and warranty
contained herein shall be true and correct in all material respects;


 


(d)           Execution and delivery by each of MTR-Harness, Inc.
and MTR Gaming Group, Inc. of the consent and reaffirmation attached
hereto as Exhibit A;


 


(e)           Execution and delivery by each of
Southwest Casino and Hotel Corp. and Southwest Casino Corporation of the
consent and reaffirmation attached hereto as Exhibit B; and


 


(f)            Receipt by the Agent of each of the
documents and agreements described in Annex I hereto.


 


4

















 


SECTION 4.           Reference To And Effect
Upon The Credit Agreement.


 


(a)           Except as specifically modified
above, the Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.


 


(b)           The execution, delivery and
effectiveness of this Agreement shall not operate as a waiver of any right,
power or remedy of Agent or any Lender under the Credit Agreement or any Loan
Documents, nor constitute an amendment of any provision of the Credit Agreement
or any Loan Documents, except as specifically set forth herein.


 


SECTION 5.           Costs And Expenses.  Borrower agrees to reimburse Agent for all
reasonable fees, costs and expenses incurred by Agent, including the reasonable
fees, costs and expenses of counsel or other advisors to Agent for advice,
assistance, or other representation in connection with this Agreement.


 


SECTION 6.           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS.


 


SECTION 7.           Headings.  Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purposes.


 


SECTION 8.           Counterparts.  This Agreement may be executed in any number
of counterparts (including by means of facsimile transmission), each of which
when so executed shall be deemed an original, but all such counterparts shall
constitute one and the same instrument.


 


(signature pages follow)


 


5

















 


IN WITNESS WHEREOF, the parties hereto hereupon set
their hands as of the date first written above.


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  NORTH METRO HARNESS INITIATIVE,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OTHER LOAN PARTIES:

  
	
   

  	
   

  
	
   

  	
  NORTH METRO HOTEL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BLACK DIAMOND COMMERCIAL FINANCE,

  L.L.C.,

  
	
   

  	
  as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BLACK DIAMOND INTERNATIONAL FUNDING,

  LTD.,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  GRAND CENTRAL ASSET TRUST, BDC SERIES,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title: