EXHIBIT
10.14


 


FOURTH
AMENDMENT TO THIRD

AMENDED AND RESTATED CREDIT AGREEMENT


 


THIS FOURTH
AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (“Fourth Amendment”)
is made and entered into as of the 4th day of June, 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 and as further
amended by Third Amendment to Third Amended and Restated Credit Agreement dated
as of February 25, 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.                                     MTRI
has or is about to create a new wholly-owned Unrestricted Subsidiary to be
known as MTR-Harness, Inc., a Minnesota corporation (“MTR Harness”).  MTR Harness has proposed investing up to
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) for a fifty percent
(50.0%) equity interest in North Metro Harness Initiative, LLC, a Minnesota
limited liability company (“North Metro”) that has applied to the Minnesota
Racing Commission for a license to own and operate a harness race tack and card
club in Anoka County, Minnesota.


 


C.                                     The
Borrower Consolidation has requested Banks to amend the Existing Credit
Agreement for the purposes of: (i) amending Section 6.05 for the purpose
of permitting the Borrower Consolidation to make Distributions to MTR Harness
up to the aggregate amount of Ten Million Dollars ($10,000,000.00), and
(ii) amending Section 6.08 for the purpose of permitting the Borrower
Consolidation to make Investments in MTR Harness up to the aggregate amount of
Ten Million Dollars ($10,000,000.00).


 


D.                                    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 Fourth
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.


 


“Distributions”
shall mean and collectively refer to any and all cash dividends on stock,
loans, management fees, payments, advances or other distributions, fees or
compensation of any kind or character whatsoever, other than within the
Borrower Consolidation, but shall not include (i) consideration paid in
the ordinary course of business for tangible and intangible assets in an arms
length


 

















 


exchange for fair market value,
(ii) trade payments made and other payments for liabilities incurred in
the ordinary course of business, or (iii) compensation to officers,
directors and employees of Borrowers in the ordinary course of business.  For the purpose of clarification, capital
contributions, advances and other Investments made by the Borrower
Consolidation in Unrestricted Subsidiaries shall constitute Distributions.


 


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


 


“Fourth
Amendment” shall mean the Fourth Amendment to Third Amended and Restated Credit
Agreement dated as of June 4, 2004.


 


“Fourth
Amendment Effective Date” shall mean June 4, 2004, subject to the
satisfaction of each of the Conditions Precedent set forth in Paragraph 5
of the Fourth Amendment.


 


“MTR Harness”
shall have the meaning set forth in Recital Paragraph B.


 


“North Metro”
shall have the meaning set forth in Recital Paragraph B.


 


2.                                       Notice
of Creation of MTR Harness as an Unrestricted Subsidiary, Nonrecourse
Indebtedness and Stock Pledge.


 


a.                                       Banks
do hereby acknowledge receipt of notice of the creation of MTR Harness as a
wholly owned Unrestricted Subsidiary of MTRI and further acknowledge the
description of the New Venture in which MTR Harness will hold a fifty percent
(50.0%) equity interest has complied with the requirements of Section 5.27
of the Credit Agreement.


 


b.                                      No
member of the Borrower Consolidation shall be directly or indirectly liable for
any Indebtedness, contingent or otherwise, of MTR Harness or North Metro, other
than MTRI’s commitment to make an Investment in MTR Harness in an aggregate
amount up to Seven Million Five Hundred Thousand Dollars ($7,500,000.00).


 


c.                                       MTRI shall
execute and deliver to Timothy J. Henderson (“TJH”), as escrow holder, a duly
executed Subsidiary Stock Pledge of the capital stock of MTR Harness, together
with the original stock certificate evidencing MTRI’s one hundred percent
(100%) ownership of MTR Harness to be held by TJH pending approval by the
applicable Gaming Authorities. 
Borrowers agree to use their best efforts to procure all necessary
approvals to such Subsidiary Stock Pledge as soon as


 

















 


reasonably practical, but in any event within
one hundred twenty (120) days of the Fourth Amendment Effective Date.


 


3.                                       Restatement
of Section 6.05.  As of the
Fourth Amendment Effective Date, Section 6.05 of the Existing Credit
Agreement entitled “Restriction on Distributions” shall be and is hereby
deleted in its entirety and the following is substituted as a full restatement
thereof:


 


“Section 6.05.  Restriction
on Distributions.  No member of the
Borrower Consolidation shall make any Distributions, other than:
(a) Distributions to other members of the Borrower Consolidation,
(b) Distributions made in connection with Insider Cash Loans and Insider
Non-Cash Loans, (c) Share Repurchases to the extent permitted by
Section 6.08(i), and (d) Distributions to MTR Harness up to the
maximum cumulative aggregate amount of Ten Million Dollars ($10,000,000.00).”


 


4.                                       Restatement
of Section 6.08.  As of the
Fourth Amendment Effective Date, Section 6.08 of the Existing Credit
Agreement entitled “Investment Restrictions” shall be and is hereby deleted in
its entirety and the following is substituted as a full restatement thereof:


 


“Section 6.08.  Investment
Restrictions.  Other than
Investments permitted hereinbelow or approved in writing by Requisite Lenders,
the Borrower Consolidation shall not make any Investments (whether by way of
loan, stock purchase, capital contribution, or otherwise) other than the
following:


 


a.                                       Cash,
Cash Equivalents and direct
obligations of the United States Government;


 


b.                                      Prime
commercial paper (AA rated or better);


 


c.                                       Certificates
of Deposit or Repurchase Agreement issued by a commercial bank having capital
surplus in excess of One Hundred Million Dollars ($100,000,000.00);


 


d.                                      Money
market or other funds of nationally recognized institutions investing solely in
obligations described in (a), (b) and (c) above;


 

















 


e.                                       Insider
Cash Loans not exceeding One Million Five Hundred Thousand Dollars
($1,500,000.00) in the aggregate during any Fiscal Year, provided that each of
such Insider Cash Loans shall bear interest at a rate no less than the Prime
Rate plus one percent (1.0%) per annum and shall in each instance be fully due
and payable on or before two (2) years from the date such Insider Cash Loan is
advanced by any member of the Borrower Consolidation;


 


f.                                         Insider
Non-Cash Loans to the extent permitted by Law;


 


g.                                      the
amounts owing to SGRI under the terms of the RRLLC Note and SGRI Loan
Documents;


 


h.                                      Capital
Expenditures to the extent permitted under Section 6.06;


 


i.                                          Share
Repurchases up to the maximum cumulative aggregate amount of Thirty Million
Dollars ($30,000,000.00) during the period commencing on the Closing Date and
ending at Credit Facility Termination;


 


j.                                          New
Venture Investments, exclusive of the acquisition of the Horseshoe Property as
provided in subparagraph k below, but including, without limitation, the Scioto
Merger and all Alternative Payments which may be made under the terms thereof
following the Scioto Merger Effective Date, the exercise of the option to
acquire the Green Shingle Property or any other Acquisition made in connection
with the SDI Facility, the PIDI Facility or any New Venture, no greater than
the cumulative maximum aggregate amount of Fifty Million Dollars
($50,000,000.00) through Credit Facility Termination, so long as:


 


(i)                                     in
each instance the New Venture or assets acquired by such New Venture Investment
is concurrently pledged as additional Collateral securing the Bank Facilities;


 


(ii)                                  each
of the New Acquisition Certifications are made and delivered by Borrowers with
respect to any real property to be added as Collateral; and


 

















 


(iii)                               no
Default or Event of Default shall have occurred and remains continuing;


 


k.                                       Acquisition
of the Horseshoe Property pursuant to the terms of the HHLV Purchase Agreement
and Joint Operating Agreement, so long as:


 


(i)                                     concurrently
with the Horseshoe Acquisition Date and the effective date of the Joint
Operating Agreement, SGFI’s right to all payments to be paid to SGFI under the
Joint Operating Agreement, including, without limitation, the “Speakeasy’s
Remittance Amounts,” as therein defined, be collaterally assigned to and a
security interest perfected in favor of Agent Bank, on behalf of the Banks;


 


(ii)                                  Agent
Bank is designated with SGFI as an additional loss payee and party insured
pursuant to Section 7.02 of the Joint Operating Agreement, under the
policies of insurance maintained pursuant to Section 7.01 of the Joint
Operating Agreement; and


 


(iii)                               no
Default or Event of Default shall have occurred and remains continuing;


 


l.                                          the
Green Shingle Loan up to the maximum amount of Two Million Six Hundred Thousand
Dollars ($2,600,000.00), subject to compliance with the requirements of
Section 3.21(c); and


 


m.                                    Investments
made in MTR Harness up to the maximum cumulative aggregate amount of Ten
Million Dollars ($10,000,000.00).”


 


5.                                       Conditions
Precedent to Fourth Amendment Effective Date.  The occurrence of the Fourth 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
June 9, 2004:


 

















 


a.                                       due
execution by Borrowers and Agent Bank of six (6) duplicate originals of this
Fourth Amendment;


 


b.                                      organizational
and corporate documentation of MTR Harness, consisting of:


 


(i)             a
Certificate of Good Standing for MTR Harness issued by the Minnesota Secretary
of State and dated within thirty (30) calendar days of the Fourth Amendment
Effective Date;


 


(ii)          a
copy of the articles of incorporation and by-laws of MTR Harness certified as
of the Fourth Amendment Effective Date to be true, correct and complete by a
duly Authorized Officer of the Borrowers; and


 


(iii)       Subsidiary
Stock Pledge executed by MTRI pledging the capital stock of MTR Harness as
additional Collateral under the Credit Agreement, together with the stock
certificate evidencing MTRI’s ownership of such capital stock and a stock power
executed in blank.


 


c.                                       reimbursement
to Agent Bank by Borrowers for all reasonable fees and out-of-pocket expenses
incurred by Agent Bank in connection with the Fourth Amendment, but not limited
to, reasonable attorneys’ fees of Henderson & Morgan, LLC and all other
like expenses remaining unpaid as of the Fourth Amendment Effective Date; and


 


d.                                      such
other documents, instruments or conditions as may be reasonably required by
Agent Bank.


 


6.                                       Representations
of Borrowers.  Borrowers hereby
represent to the Banks, which representations shall survive the Fourth
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 Fourth Amendment Effective Date in all material
respects as though such representations and warranties had been made on and as
of the Fourth 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 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 Fourth Amendment has been duly
authorized by all necessary action of Borrowers and this Fourth Amendment
constitutes the valid, binding and enforceable obligation of Borrowers.


 


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


 


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


 


9.                                       Counterparts.  This Fourth 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.


 

















 


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 Fourth
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

  	
   

  



 

















 


	
  PRESQUE ISLE DOWNS, INC.,

  	
   

  
	
  a Pennsylvania corporation

  	
   

  
	
   

  	
   

  
	
  By 

  	
  /S/ Edson R. Arneault

  	
   

  	
   

  
	
   

  	
  Edson R. Arneault,

  	
   

  
	
   

  	
  President

  	
   

  
	
   

  	
   

  
	
  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