EXHIBIT 10.31


 


AMENDMENT
NO. 2


 


AMENDMENT NO. 2 (this “Amendment”),
dated as of February 5, 2009, to that certain CREDIT AGREEMENT, dated as of June 16, 2006, among JACOBS
ENTERTAINMENT, INC., a Delaware corporation (“Borrower”), the Lenders from time to time party thereto,
CREDIT SUISSE SECURITIES (USA) LLC and CIBC WORLD MARKETS CORP., as Joint Lead
Arrangers and Joint Bookrunners, CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as
issuing bank, collateral agent and administrative agent (in such capacity, the
“Administrative Agent”),
CIBC WORLD MARKETS CORP., as syndication agent, CIT LENDING SERVICES
CORPORATION, as co-documentation agent, and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as co-documentation agent and swingline lender (as amended,
supplemented or otherwise modified up to the date hereof, the “Credit Agreement;” capitalized terms used herein without
definition herein having the meanings assigned thereto therein).


 


W  I  T  N  E  S
S  E  T  H :


 


WHEREAS, Borrower desires to make certain amendments to the Credit Agreement,
subject to the terms and conditions below;


 


WHEREAS, pursuant to Section 10.02 of the Credit Agreement the
Required Lenders desire to enter into this Amendment;


 


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


 


SECTION ONE - Amendment.  Subject to the satisfaction of the conditions
set forth in Section Two hereof:


 


(a)           Section 1.01 of the Credit Agreement is amended by
deleting the definition of “Applicable Margin” contained therein in its
entirety and replacing it with the following new definition:


 


““Applicable Margin”
shall mean, for any day, with respect to any Tranche B Loan, 2.75% in the case
of Eurodollar Loans and 1.75% in the case of ABR Loans and, with respect to any
Revolving Loan, the applicable percentage set forth below under the appropriate
caption based upon the Total Leverage Ratio as of the most recent determination
date:


 

















 


	
  Total

  	
   

  	
  Revolving Loans

  	
   

  
	
  Leverage Ratio

  	
   

  	
  LIBOR

  	
   

  	
  ABR

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level I

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  >
  5.50x

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level
  II

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.00x > but <
  5.50x

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level
  III

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.50x > but <
  5.00x

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level
  IV

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  <
  4.50x

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  



 


Each change in the Applicable Margin
resulting from a change in the Total Leverage Ratio shall be effective with respect to all
Revolving Loans and Letters of Credit outstanding on and after the date of
delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.01(a) or (b) and
Section 5.01(d), respectively, indicating such change until the
date immediately preceding the next date of delivery of such financial
statements and certificates indicating another such change.  Notwithstanding the
foregoing, the Total Leverage Ratio shall be deemed to be in Level III from the
Closing Date to the date of delivery to the Administrative Agent of the
financial statements and certificates required by Section 5.01(b) and
Section 5.01(d) for the fiscal period ended after the Closing
Date and shall be deemed to be in Level I (i) at any time during
which Borrower has failed to deliver the financial statements and certificates
required by Section 5.01(a) or (b) and Section 5.01(d),
respectively, and (ii) at any time during the existence of an Event of
Default.”


 


(b)           The definition of “Consolidated EBITDA” in Section 1.01 of the Credit
Agreement is amended by (x) deleting the word “and” at the end of clause (i) and
(y) inserting the following as a new clause (k):  “(k) Borrower’s costs and expenses, in
an aggregate amount not to exceed $1,450,000, directly related to lobbying
activity for and the promotion of passage of Amendment 50 to the constitution
of the State of Colorado; and”.


 


(c)           Section 1.01 of the Credit
Agreement is amended by inserting the following new defined terms in
alphabetical order:


 


“Amendment No. 2”
shall mean Amendment No. 2, dated as of February 5, 2009, to the Agreement,
among the Borrower, the Administrative Agent and the Lenders party thereto.


 


(d)           Section 6.10(b) of
the Credit Agreement is amended in its entirety to read as follows:


 


“(b)         Maximum Senior Secured Leverage
Ratio.  Permit the Senior Secured
Leverage Ratio, at the last day of any Test Period during any period set forth
in the table below, to exceed the ratio set forth opposite such period in the table
below:


 


2

















 


	
  Test Period

  	
   

  	
  Senior

  Leverage Ratio

  	
   

  
	
  July 1,
  2006 - December 31, 2006

  	
   

  	
  1.50 to 1.0

  	
   

  
	
  January 1,
  2007 - June 30, 2007

  	
   

  	
  1.75 to 1.0

  	
   

  
	
  July 1,
  2007 - December 31, 2007

  	
   

  	
  1.50 to 1.0

  	
   

  
	
  January 1,
  2008 - September 30, 2008

  	
   

  	
  1.25 to 1.0

  	
   

  
	
  October 1,
  2008 - December 31, 2009

  	
   

  	
  1.40 to 1.0

  	
   

  
	
  January 1,
  2010 and thereafter

  	
   

  	
  1.25 to 1.0”

  	
   

  



 


SECTION TWO - Amendment Fee.  In consideration of the agreements of the Required
Lenders contained in this Agreement, Borrower agrees to pay to the
Administrative Agent on February 5, 2009, for the account of each Lender
that delivers an executed counterpart of this Amendment prior to 1:00 p.m.,
New York City time, on February 4, 2009, an amendment fee (the “Amendment
Fee”) equal to 25 basis points (i.e., 0.25%) on the aggregate amount of the
Revolving Commitment and outstanding Tranche B Loans of such Lender.


 


SECTION THREE
- Conditions to Effectiveness.  This Amendment shall become effective when,
and only when (a) the Administrative Agent shall have received (i) counterparts
of this Amendment that, when taken together, bear the signatures of Borrower
and the Required Lenders and (ii) the Amendment Fee, (b) the
representations and warranties set forth in Section 4 hereof are true and
correct and (c) all fees and expenses required to be paid or reimbursed by
Borrower pursuant hereto or to the Credit Agreement or otherwise, including all
invoiced fees and expenses of counsel to the Agents, shall have been paid or
reimbursed, as applicable.


 


SECTION FOUR
- Representations and Warranties; Covenants.  In order to induce the Required Lenders to
enter into this Amendment, Borrower represents and warrants to each of the
Lenders and the Agents that after giving effect to this Amendment, (x) no
Default or Event of Default has occurred and is continuing under the Credit
Agreement; and (y) the representations and warranties made by Borrower in
the Credit Agreement are true and correct in all material respects (except that
any representation or warranty that is qualified as to “materiality” or
“Material Adverse Effect” is true and correct in all respects) on and as of the
date hereof with the same effect as if made on and as of the date hereof (or,
if any such representation or warranty is expressly stated to have been made as
of a specific date, as of such specific date).


 


SECTION FIVE
- Reference to and Effect on the Credit Agreement. On and after
the effectiveness of this Amendment, each reference in the Credit Agreement to
“this Agreement,” “hereunder,” “hereof” or words of like import referring to
the Credit Agreement shall mean and be a reference to the Credit Agreement, as
amended by this Amendment.  The Credit
Agreement as specifically amended by this Amendment is and shall continue to be
in full force and effect and is hereby in all respects ratified and confirmed.  The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as an 


 


3

















 


amendment or waiver of any
right, power or remedy of any Lender or any Agent under the Credit Agreement,
nor constitute an amendment or waiver of any provision of the Credit
Agreement.  This Amendment shall
constitute a Loan Document for all purposes.


 


SECTION SIX
- Costs, Expenses and Taxes.  Borrower agrees to pay all reasonable costs
and expenses of the Agents in connection with the preparation, execution and
delivery of this Amendment (including, without limitation, the reasonable fees
and expenses of Cahill Gordon & Reindel LLP), if any, in accordance
with the terms of Section 10.03 of the Credit Agreement.


 


SECTION SEVEN
- Execution in Counterparts.  This Amendment may be executed in
counterparts (and by different parties hereto in different counterparts) each
of which shall constitute an original, but all of which taken together shall
constitute a single agreement.  Delivery
of an executed counterpart of a signature page to this Amendment by
facsimile or “.pdf” file shall be effective as delivery of a manually executed
counterpart of this Amendment.


 


SECTION EIGHT
- Governing Law.  This
Amendment shall be governed by, and construed in accordance with, the laws of
the State of New York, without regard to conflicts of law principles that would
require the application of the laws of another jurisdiction.


 


4

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed and delivered as
of the day and year first above written.


 


 


	
   

  	
  JACOBS ENTERTAINMENT,
  INC.,

  
	
   

  	
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephen R. Roark

  
	
   

  	
   

  	
  Name:
  Stephen R. Roark

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE, CAYMAN
  ISLANDS

  
	
   

  	
  BRANCH,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Rianka Mohan

  
	
   

  	
   

  	
  Name:
  Rianka Mohan

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mikhail Faybusovich

  
	
   

  	
   

  	
  Name:
  Mikhail Faybusovich

  
	
   

  	
   

  	
  Title:
  Vice President