Document:

Exhibit
10.58

 

FIRST AMENDMENT TO
CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO
CREDIT AGREEMENT (“First Amendment”) is made and entered into as of the 15th
day of December, 2003, by and among HERBST GAMING, INC., a Nevada corporation
(the “Borrower”), FLAMINGO PARADISE GAMING, LLC, a Nevada limited liability
company, dba TERRIBLE’S HOTEL & CASINO (the “Collateral Guarantor”) and
U.S. BANK NATIONAL ASSOCIATION (herein together with its successors and assigns
the “Lender”).

 

R_E_C_I_T_A_L_S;

 

WHEREAS:

 

A.                                   Borrower,
Collateral Guarantor and Lender entered into a Credit Agreement dated as of
September 6, 2002 (the “Existing Credit Agreement”) for the purpose of
establishing a secured revolving line of credit in favor of Borrower, up to the
maximum principal amount of Ten Million Dollars ($10,000,000.00), on the terms
and subject to the conditions, covenants and understandings therein set forth.

 

B.                                     For the
purpose of this First Amendment, all capitalized words and terms not otherwise
defined herein shall have the respective meanings and be construed herein as
provided in Section 1.01 of the Existing Credit Agreement and any reference to
a provision of the Existing Credit Agreement shall be deemed to incorporate
that provision as a part hereof, in the same manner and with the same effect as
if the same were fully set forth herein.

 

C.                                     Borrower and
Collateral Guarantor desire to attend the Existing Credit Agreement for the
following purposes:

 

(i)                                     Extending the
Maturity Date to December 15, 2004;

 

(ii)                                  Modifying and
deleting certain of the Financial Covenants and Definitions relating thereto as
hereinafter provided.

 

D.                                    Lender is
willing to agree to the amendments and modifications described hereinabove,
subject to the term and conditions which are hereinafter set forth.

 

 

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 in each instance effective as of the First Amendment Effective
Date, as specifically hereinafter provided as follows:

 

1.                                       Definitions.  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:

 

“Amendment
Fee” shall have the meaning set forth in Paragraph 5 of the First Amendment.

 

“Compliance
Certificate” shall mean a compliance certificate as described in Section
5.08(c) of the Credit Agreement, the form of which is more particularly
described on “Exhibit D”, affixed to the First Amendment and by this reference
incorporated herein and made a part hereof, which revised Exhibit D shall fully
supersede and restate Exhibit D attached to the Existing Credit Agreement.

 

“Credit
Agreement” shall mean the Existing Credit Agreement as amended by the First
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.

 

“Debt
Service Coverage Ratio” as of the end of any Fiscal Quarter shall mean with
reference to the Herbst Consolidation:

 

EBITDA
for the Fiscal Quarter under review, together with the most recently ended
three (3) preceding Fiscal Quarters

 

Divided
by (÷)

 

The
sum of: (i) the aggregate amount of Interest Expense (expensed and
capitalized), plus (ii) the aggregate of Mandatory Debt Reductions; in each
case determined for the Fiscal Quarter under review together with the most
recently ended three (3) preceding Fiscal Quarters.

 

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

 

“First
Amendment” shall mean the First Amendment to Credit Agreement.

 

2

 

“First
Amendment Effective Date” shall mean December 15, 2003, subject to the
occurrence of each of the conditions precedent set forth in Paragraph 5 of the
First Amendment.

 

“Maturity
Date” shall mean December 15, 2004, as may be further extended from time to
time for one (1) year periods in the manner and subject to the terms of Section
2.13 of the Credit Agreement.

 

2.                                       Extension of
Maturity Date.  As of the
First Amendment Effective Date, the Maturity Date shall be and is hereby
extended to December 15, 2004 and the definition of “Maturity Date” shall be
and is hereby modified as set forth in the definition of Maturity Date
contained in the First Amendment.

 

3.                                       Replacement of
Fixed Charge Coverage Ratio with Debt Service Coverage Ratio Covenant.  As of the First Amendment Effective Date,
Section 6.02 of the Existing Credit Agreement entitled “Fixed Charge Coverage
Ratio” shall be and is hereby fully amended and restated in its entirety as
follows:

 

“Section
6.02.                       Debt Service
Coverage Ratio. 
Commencing on the First Amendment Effective Date and continuing as of
each Fiscal Quarter end until Credit Facility Termination, the Herbst
Consolidation shall maintain a Debt Service Coverage Ratio no less than 1.65 to
1.00.”

 

4.                                       Deletion of
Sections 6.01 and 6.03.  As
of the First Amendment Effective Date, Section 6.01 entitled “Cash Flow
Leverage Ratio” and Section 6.03 entitled “Liquidity Requirement” shall be and
are hereby deleted in their entirety.

 

5.                                       Conditions
Precedent to First Amendment Effective Date.  The occurrence of the First Amendment Effective Date is subject
to Lender having received the following documents and payments, in each case in
a form and substance reasonably satisfactory to Lender, and the occurrence of
each other condition precedent set forth below on or before December 19, 2003:

 

a.                                       Due execution
by Borrower, Collateral Guarantor and Lender of three (3) duplicate originals
of this First Amendment;

 

b.                                      Corporate and
partnership resolutions or other evidence of requisite authority of Borrower
and each of the Subsidiary Guarantors to execute the First Amendment;

 

c.                                       Payment of
non-refundable fee (“Amendment Fee”) to Lender in the amount of Thirty-Seven
Thousand Five Hundred Dollars ($37,500.00);

 

3

 

d.                                      Reimbursement
to Lender by Borrower for all reasonable fees and out-of-pocket expenses
incurred by Lender in connection with the First Amendment, including, but not
limited to, reasonable attorneys’ fees of Henderson & Morgan, LLC and all
other like expenses remaining unpaid as of the First Amendment Effective Date; and

 

e.                                       Such other
documents, instruments or conditions as may be reasonably required by Lender.

 

6.                                       Representations
of Borrower and Collateral Guarantor.  Borrower and Collateral Guarantor hereby represent to the Lender
that:

 

a.                                       The
representation 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 First Amendment Effective Date in all
material respects as though such representations and warranties had been made
on and as of the First 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 Lender.

 

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 First Amendment has been duly authorized by
all necessary action of Borrower, Collateral Guarantor and each of the
Subsidiary Guarantors and this First Amendment constitutes a valid, binding and
enforceable obligation of Borrower, Collateral Guarantor and each of the
Subsidiary Guarantors.

 

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

 

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

 

4

 

9.                                       Counterparts.                       This First
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.

 

11.                                 Consent to
First Amendment and Affirmation and Ratification of Subsidiary Guaranty.  Each of the Subsidiary Guarantors join in
the execution of this First Amendment for the purpose of evidencing their
respective consent to the terms, covenants, provisions and conditions herein contained
and contained in the Existing Credit Agreement.  Subsidiary Guarantors further join in the execution of this First
Amendment for the purpose of ratifying and affirming their respective
obligations under the Subsidiary Guaranty for the guaranty of the full and
prompt payment and performance of all Indebtedness and Obligations under the
Credit Facility, as modified and amended under this First Amendment.

 

12.                                 Additional/Replacement
Exhibit Attached.                The following additional or
replacement Exhibits are attached hereto and incorporated herein and made a
part of the Credit Agreement as follows:

 

Exhibit D -    Compliance Certificate (First
Restated) – Form

 

5

 

IN
WITNESS WHEREOF, the parties hereto have executed this First Amendment as of
the day and year first above written.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  HERBST
  GAMING, INC.,

  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Edward
  Herbst

  	
   

  
	
   

  	
   

  	
  Edward
  Herbst,

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  COLLATERAL GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  FLAMINGO
  PARADISE GAMING, LLC, a

  Nevada limited liability company dba

  TERRIBLE’S HOTEL & CASINO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Edward
  Herbst

  	
   

  
	
   

  	
   

  	
  Edward
  Herbst,

  	
   

  
	
   

  	
   

  	
  Managing
  Member

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  FLAMINGO
  PARADISE GAMING, LLC,

  a Nevada limited liability company, dba

  Terrible’s Hotel & Casino

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Edward
  Herbst

  	
   

  
	
   

  	
   

  	
  Edward
  Herbst,

  	
   

  
	
   

  	
   

  	
  Managing
  Member

  	
   

  

 

6

 

	
   

  	
  E-T-T, INC.,
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
   

  	
  Edward Herbst,

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MARKET GAMING, INC.,

  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
   

  	
  Edward Herbst,

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  E-T-T ENTERPRISES, L.L.C.,

  a Nevada limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
   

  	
  Edward Herbst,

  	
   

  
	
   

  	
   

  	
  Managing Member

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CARDIVAN COMPANY,

  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
   

  	
  Edward Herbst,

  	
   

  
	
   

  	
   

  	
  President

  	
   

  

 

7

 

	
   

  	
  CORRAL COIN, INC., a Nevada

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
   

  	
  Edward Herbst,

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CORRAL COUNTRY COIN, INC.,

  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Edward Herbst

  	
   

  
	
   

  	
   

  	
  Edward Herbst,

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  U.S. BANK
  NATIONAL

  
	
   

  	
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Denette
  Corrales

  	
   

  
	
   

  	
   

  	
  Denette
  Corrales,

  	
   

  
	
   

  	
   

  	
  Vice
  President

  	
   

  

 

8Exhibit
10.11

 

THIRD
AMENDMENT TO LEASE AGREEMENT

 

This Third Amendment to Lease Agreement (the
“Amendment”) is made and entered into this      day of
November, 2003, by and between SARUM MANAGEMENT, INC.,  75 Marc Avenue, Cuyahoga Falls, Ohio 44223,
as agent of the Owner, (hereinafter referred to as “Lessor”) and ACCURIDE ERIE
L.P. (previously known as AKW, L.P.), 1015 East 12th Street, Suite 200, P.O.
Box 29, Erie, PA 16503, as successor by assignment to Kaiser Aluminum and
Chemical Corp. (hereinafter referred to as “Lessee”).

 

WITNESSETH:

 

WHEREAS, the parties hereto by their predecessors in
interest, have entered into a Lease Agreement, dated November 1, 1988, have
entered into a First Amendment to Lease Agreement, dated September 30, 1999,
and have entered into a Second Amendment to Lease Agreement dated, March 27,
2001 (hereinafter collectively referred to as the “Lease Agreement”).

 

WHEREAS, the parties desire to modify the Lease
Agreement pursuant to the terms hereof.

 

AGREEMENT:

 

NOW, THEREFORE, for valuable consideration, including
the covenants herein contained, receipt of which is hereby acknowledged, the
parties agree as follows:

 

A.            Paragraph
THREE: TERM, RENEWAL AND ASSIGNMENT, of the Lease Agreement, is
hereby amended and restated in its entirety to read as follows:

 

The term of this Lease shall commence on November 1,
1988 and terminate on December 31, 2007 (the “Term”).

 

Lessee shall have the option to renew the Lease for
two (2) successive two (2) year periods (each, an “Additional Term”) by providing Lessor with written notice of
Lessee’s intent to renew the Lease at least one hundred fifty (150) days prior
to the expiration of the Term or Additional Term, as the case may be.  The first Additional Term shall commence on
January 1, 2008 and terminate at 11:59 p.m. on December 31, 2009 (the “First Additional Term”).  The second Additional Term shall commence on
January 1, 2010 and terminate at 11:59 p.m. on December 31, 2011 (the “Second Additional Term”).

 

B.            Paragraph
FOUR: RENT, of the Lease Agreement, is hereby amended and
restated in its entirety to read as follows:

 

For the period from July 1, 2003 through June 30,
2005, Lessee agrees to pay to Lessor a monthly rental amount of Thirty Six
Thousand Two Hundred Ninety One and 53/100 Dollars ($36,291.53).  For the period of July 1, 2005 through June
30, 2007, Lessee agrees to pay to Lessor a monthly rental amount of Thirty
Eight Thousand Five Hundred One and 68/100 Dollars ($38,501.68).  For the period of July 1, 2007 through
December 31, 2007, Lessee agrees to pay

 

 

to Lessor a monthly rental amount of Forty Thousand Eight Hundred Forty
Six and 43/100 Dollars ($40,846.43).  In
the event Lessee elects to renew the Lease for the First Additional Term,
Lessee agrees to pay to Lessor a monthly rental amount for the period of
January 1, 2008 through June 30, 2009 of Forty Thousand Eight Hundred Forty Six
and 43/100 Dollars ($40,846.43) and for the period of July 1, 2009 through
December 31, 2009, Lessee agrees to pay to Lessor a monthly rental amount of
Forty Three Thousand Three Hundred Thirty Three and 98/100 Dollars
($43,333.98).  In the event Lessee
elects to renew the Lease for the Second Additional Term, Lessee agrees to pay
to Lessor a monthly rental amount for the Second Additional Term of Forty Three
Thousand Three Hundred Thirty Three and 98/100 Dollars ($43,333.98).

 

C.            The
third paragraph of Paragraph SIX, ACCEPTANCE AND MAINTENANCE, of
the Lease Agreement is hereby amended and restated in its entirety to read as
follows:

 

Lessor shall maintain the exterior of the Leased
Premises and common exterior grounds at Lessor’s own expense, provided,
however, that Lessee shall be obligated to maintain and/or repair at its own
expense any damage to the interior of the Leased Premises or the exterior of
the Leased Premises caused by misuse or the negligent or wrongful acts of
Lessee’s agents, invitees or employees, ordinary wear and tear, damage by
casualty and depreciation excepted; provided further that Lessee shall be
obligated to repair and/or maintain at its own expense any Capital Improvements
made by Lessee in accordance with Paragraph FIFTEEN, CAPITAL
IMPROVEMENT CREDIT of this Lease.

 

D.            Add
a new Paragraph as follows:  The first
sentence of the second paragraph of Paragraph Eight, “Insurance and
Indemnification” of the Lease Agreement is hereby amended and restated in its
entirety to read as follows:

 

Lessee, at its sole expense, shall insure Lessee’s
personal property, equipment, machinery, fixtures, and alterations,
improvements, repairs and additions which it makes pursuant to Paragraph Eleven
hereunder, against loss by fire or other casualty normally covered by risk
insurance coverage, with Lessor named as an additional insured.

 

E.Paragraph ELEVEN, ALTERATIONS, of the
Lease Agreement is hereby amended and restated in its entirety to read as
follows:

 

Lessee, from time to time at its expense and without
the prior consent of Lessor, may make such alterations, improvements, repairs
and additions to and upon the Leased Premises and install therein such
fixtures, equipment, furniture and property as it may consider advisable for
the conduct of its business.  Lessee
will not, without the prior written consent of Lessor, make or suffer to be
made by or on behalf of Lessee any alterations, improvements or additions which
will affect the structural portions of the Leased Premises.  Lessor agrees that it will not unreasonably
withhold or delay consent to the making of such alterations, improvements or
additions.  Lessee shall not be
obligated to remove, alter or change any alterations, improvements, repairs or
additions, or to restore the Leased Premises to their prior condition, upon the
expiration of the Term or Additional Term, as the case may be, or earlier
termination of

 

 

this Lease; provided, however, that Lessee may, at its option and in
its sole discretion, remove any alterations, improvements, repairs or additions
made pursuant to this paragraph prior to the expiration of the Term or
Additional Term, as the case may be, or earlier termination of this Lease.

 

In the event Lessee exercises its option to remove any
alterations, improvements, repairs or additions as herein permitted, it shall
restore the Leased Premises to the condition existing prior to the alteration,
improvement, repair or addition.

 

F.             The
following paragraph shall be included as an additional provision in the Lease
Agreement:

 

SIXTEEN:
INFRASTRUCTURE REPAIRS

 

Lessor agrees to repair the infrastructure of the
Leased Premises at its own expense in accordance with Exhibit B attached
hereto (the “Repair Schedule”).  Each repair to be made pursuant to
Exhibit B shall be made by persons or entities previously approved by both
Lessor and Lessee.  In the event Lessor
fails to make a repair as and when required by the terms and conditions in the
Repair Schedule, Lessee shall have the right to remedy such failure and offset
Lessee’s next monthly rental payment (the “Next
Rental Payment”) by an amount equal to all costs and expenses
incurred by Lessee in remedying such failure (the “Remedy Expenses”).  To
the extent the Next Rental Payment is insufficient to offset the amount of the
Remedy Expenses in full, the monthly rental payment or payments following the
Next Rental Payment shall be offset by an amount equal to the difference
between the Remedy Expenses and Next Rental Payment until such Remedy Expenses
have been reimbursed in full.  Lessee
shall not be entitled to offset any monthly rental payment unless and until
Lessee has given Lessor written notice of default in compliance with the Repair
Schedule and Lessor has failed to remedy the default in compliance with the
Repair Schedule within [[thirty (30)]] days of Lessor’s receipt of such
notice.  Further, Remedy Expenses shall
include only expenses incurred by Lessee with third party contractors that are
negotiated on an arms’ length basis, and in no event shall Remedy Expenses
include consequential damages.

 

F.             All
other terms and conditions of the Lease Agreement shall remain as set forth
therein and shall remain in full force and effect.

 

 

IN WITNESS WHEREOF, the parties have hereunto set
their hands on the      day of November, 2003.

 

	
   

  	
  SARUM MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCURIDE ERIE L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF OHIO

  	
  )

  
	
   

  	
  ) SS:

  
	
  COUNTY OF SUMMIT

  	
  )

  
							

 

BEFORE ME, a Notary Public, in and for such County and
State, personally appeared the above-named, Sarum Management, Inc., by
                                       ,
its
                                       ,
who acknowledged that [[he]] [[she]] did sign the foregoing instrument and that
the same is [[his]] [[her]] free act and deed and the free act and deed of such
entity.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal this      day of November, 2003.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF INDIANA

  	
  )

  
	
   

  	
  ) SS:

  
	
  COUNTY OF VANDERBURGH

  	
  )

  

 

BEFORE ME, a Notary Public, in and for such County and
State, personally appeared the above-named, ACCURIDE ERIE L.P., by David K.
Armstrong, Attorney in Fact, who acknowledged that he did sign the foregoing
instrument and that the same is his free act and deed and the free act and deed
of such entity.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal this      day of November, 2003.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  

 

 

EXHIBIT
B

 

	
  Repair

  	
   

  	
  Description

  	
   

  	
  Mandatory Completion Date

  
	
  Ducts

  	
   

  	
  Lessor shall replace each of the two “make-up” air
  canvas ducts with a NFPA approved spiral or rectangular metal duct

  	
   

  	
  On or before December 31, 2003

  
	
  Walls and
  ceiling in production area

  	
   

  	
  Lessor shall paint the walls and ceiling in the
  production area of the Leased Premises.

  	
   

  	
  On or before December 31, 2003.

  
	
  Vending and Office Areas

  	
   

  	
  Lessor shall restore
  the walls, ceilings and floors with materials comparable to the materials
  existing immediately prior to the recent casualty and to a condition
  comparable to the condition existing immediately prior to the recent
  casualty.

  	
   

  	
  On or before December 31, 2003.

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