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Exhibit 10.1

 

EXECUTION COPY

 

AMENDMENT NO. 4 AND FORBEARANCE

AND STANDSTILL AGREEMENT

 

THIS AMENDMENT NO. 4 AND FORBEARANCE AND STANDSTILL AGREEMENT (this “ Agreement ”) is made and entered into as of the 15th day of May, 2008 by and among each lender executing a counterpart hereof, WILMINGTON TRUST COMPANY, as administrative agent (the “ Administrative Agent ”), HERBST GAMING, INC. (the “ Borrower ”) and the Subsidiaries of the Borrower executing a counterpart hereof (the “ Grantors ” and, together with the Borrower, the “ Loan Parties ”).

 

Statement of Purpose

 

WHEREAS, reference is made to the Second Amended and Restated Credit Agreement, dated as of January 3, 2007, among the Borrower, the lenders party thereto (the “ Lenders ”), certain other parties and the Administrative Agent (as amended by Amendment No. 1 to Second Amended and Restated Credit Agreement, dated as of August 14, 2007, Amendment No. 2 to Second Amended and Restated Credit Agreement, dated as of December 14, 2007, and Omnibus Amendment No. 3 and Appointment and Acceptance, dated as of April 24, 2008, and as further amended, supplemented and otherwise modified from time to time, the “ Credit Agreement ”; capitalized terms used not defined herein (including in Schedule A hereto) being used herein as therein defined);

 

WHEREAS, each Grantor has guaranteed the Obligations of the Borrower under the Credit Agreement;

 

WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders amend the Credit Agreement in certain respects and forbear from exercising certain rights and remedies under the Credit Agreement and the other Loan Documents provisionally through the Forbearance Maturity Date (as defined below) solely in respect of the Financial Statement Default (as defined below) that has occurred as of the date hereof and the other events set forth in Schedule A hereto (collectively with the Financial Statement Default, the “ Specified Defaults ”); and

 

WHEREAS, the Administrative Agent and the Lenders are willing to amend the Credit Agreement in certain respects and forbear from exercising certain rights and remedies under the Credit Agreement and the other Loan Documents provisionally only through the Forbearance Maturity Date regarding the Specified Defaults, subject to the express terms and provisions of this Agreement.

 

Agreement

 

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

 

1.              Acknowledgments by Loan Parties .  To induce the Administrative Agent and the Lenders to execute this Agreement, each Loan Party hereby acknowledges, stipulates, represents, warrants and agrees as follows:

 

(a)            The Financial Statement Default (as defined in Schedule A hereto) constitutes an Event of Default that has occurred, remains uncured, has not been waived and is continuing as of the date of this Agreement and cannot be cured.  Except for the Financial Statement Default, no other Defaults or Events of Default have occurred and are continuing as of the date hereof.

 



 

Except as expressly set forth in this Agreement, the agreements of the Administrative Agent and the Lenders hereunder to forbear provisionally in the exercise of their respective rights and remedies under the Credit Agreement and the other Loan Documents in respect of the Specified Defaults during the Forbearance Period (as defined below) does not in any manner whatsoever limit any right of any of the Administrative Agent and the Lenders to insist upon strict compliance by the Loan Parties with this Agreement or any Loan Document during the Forbearance Period.

 

(b)            To the knowledge of the Loan Parties, immediately prior to executing this Agreement nothing has occurred that constitutes or otherwise can be construed or interpreted as a waiver of, or otherwise to limit in any respect, any rights or remedies the Lenders, the Administrative Agent or any of them have or may have arising as the result of any Event of Default (including any Specified Default) that has occurred or that may occur under the Credit Agreement, the other Loan Documents or applicable law.  The Administrative Agent’s and the Lender’s actions in entering into this Agreement are without prejudice to the rights of any of the Administrative Agent and the Lenders to pursue any and all remedies under the Loan Documents pursuant to applicable law or in equity available to it in its sole discretion upon the termination (whether upon expiration thereof, upon acceleration or otherwise) of this Agreement.

 

(c)            The Revolving Loans outstanding as of the date hereof are in an amount equal to $98,859,000.  The Swing Line Loans outstanding as of the date hereof are in an amount equal to $0.  The Term Loans outstanding as of the date hereof are in an amount equal to $751,762,500.  The L/C Obligations of the Borrower outstanding as of the date hereof are in an amount equal to $1,141,000.  The foregoing amounts do not include interest, fees and expenses and other amounts that are chargeable or otherwise reimbursable under the Loan Documents.

 

(d)            All of the assets pledged, assigned, conveyed, mortgaged, hypothecated or transferred to the Administrative Agent for the benefit of the Lenders pursuant to the Collateral Documents (including without limitation the Collateral (including without limitation all proceeds thereof)) are (and shall continue to be) subject to valid and enforceable liens and security interests of the Administrative Agent (or, in the case of possessory security interests in respect of certificated Pledged Securities (as defined in the Pledge Agreement) or if required by Gaming Laws of Iowa, the predecessor Administrative Agent under the Credit Agreement (the “ Predecessor Agent ”)) for the benefit of the Lenders and the other Secured Parties (as defined in the Credit Agreement), as collateral security for all of the Obligations, subject to no Liens other than Liens permitted by Section 7.01 of the Credit Agreement.  Each of the Loan Parties hereby reaffirms and ratifies its prior conveyance to the Administrative Agent for the benefit of the Lenders and the other Secured Parties (as defined in the Credit Agreement) of a continuing security interest in and lien on the Collateral.

 

(e)            The obligations of the Loan Parties under this Agreement of any nature whatsoever, whether now existing or hereafter arising, are hereby deemed to be “Obligations” for all purposes of the Credit Agreement and the other Loan Documents.

 

(f)             The Obligations of the Loan Parties under this Agreement, the Credit Agreement and the other Loan Documents constitute “Senior Debt” (as such term is defined in the Credit Agreement).

 

(g)            Except as expressly modified by this Agreement or as required by Gaming Laws in Nevada, Missouri and Iowa, all terms and provisions of the Credit Agreement and the other Loan Documents are valid and enforceable and remain in full force and effect according to their respective terms.  Each Grantor, as debtor, grantor, pledgor, guarantor, assignor, or in other similar capacity in which such party grants liens or security interests in its properties or otherwise acts as an accommodation party or guarantor, as the case may be, under the Loan Documents, hereto hereby (i) agrees that the Credit Agreement as amended hereby is the Credit Agreement under and for all purposes of the Guaranties and the Collateral Documents and (ii) confirms that

 

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the obligations of the Loan Parties under the Loan Documents as modified hereby are entitled to the benefits of the guarantees set forth in the Guaranties and constitute “Guaranteed Obligations” (as defined in each of the Guaranties).

 

(h)            The Lenders’ entry into, and covenants to perform in accordance with, this Agreement and the Lenders’ consummation of the transactions contemplated hereby constitute “new value” and “reasonably equivalent value”, as those terms are used in Section 547 and 548 of Title 11 of the United States Code (the “ Bankruptcy Code ”), received by the Loan Parties as of the closing of this Agreement in contemporaneous exchange for the Loan Parties’ entry into, and covenants to perform in accordance with, this Agreement and the documents executed in connection with this Agreement, and the Loan Parties’ consummation of the transactions contemplated hereby and thereby.

 

(i)             The bank accounts listed in the April 15, 2008 schedule previously disclosed by the Borrower to the Administrative Agent (the “ Existing Bank Accounts ”) are the only bank accounts held or owned by the Loan Parties as of the date hereof and said schedule is accurate and complete.  Each Loan Party covenants (i) to not establish any new bank account other than those set forth on said schedule, unless such bank account is established and located in the United States and either pursuant to applicable law or re













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