UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 12, 2004
ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC.
ACE GAMING, LLC
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(Exact name of Registrant as specified in its Charter)
Delaware 333-110484 54-2131349
New Jersey 333-110485 54-2131351
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
c/o Sands Hotel & Casino
Indiana Avenue and Brighton Park, 9th Floor
Atlantic City, New Jersey 08401
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(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (609) 441-4633
Not Applicable
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(Former name and former address, as changed since last report)
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On November 12, 2004, Atlantic Coast Entertainment Holdings, Inc. ("Atlantic")
and ACE Gaming, LLC ("ACE"), a wholly-owned subsidiary of Atlantic, entered into
a Loan and Security Agreement (the "Loan Agreement"), by and among Atlantic, as
borrower, ACE, as guarantor, and Fortress Credit Corp. ("Fortress"), as lender,
and certain related ancillary documents, pursuant to which, Fortress agreed to
make available to Atlantic a senior secured revolving credit line providing for
working capital loans of up to $10 million (the "Loans"), to be used for working
capital purposes in the operation of The Sands Hotel and Casino ("The Sands"),
located in Atlantic City, New Jersey. The Loan Agreement and the Loans
thereunder have been designated by the Board of Directors of Atlantic and the
Manager of ACE, as Working Capital Indebtedness (as that term is defined in the
Indenture (the "Indenture"), dated as of July 22, 2004, among Atlantic, as
issuer, ACE, as guarantor, and Wells Fargo Bank, National Association, as
trustee (the "Trustee")).
The aggregate amount of the Loans shall not exceed $10 million plus interest.
All Loans under the Loan Agreement are payable in full by no later than the day
immediately prior to the one-year anniversary of the Loan Agreement, or any
earlier date on which the Loans are required to be paid in full, by acceleration
or otherwise, pursuant to the Loan Agreement.
The outstanding principal balance of the Loan Agreement will accrue interest at
a fixed rate to be set monthly which is equal to one month LIBOR (but not less
than 1.5%), plus 8% per annum. In addition to interest payable on the principal
balance outstanding from time to time under the Loan Agreement, Atlantic is
required to pay to Fortress an unused line fee for each preceding three-month
period during the term of the Loan Agreement in an amount equal to .35% of the
excess of the available commitment over the average outstanding monthly balance
during such preceding three-month period.
The Loans are secured by a first lien and security interest on all of Atlantic
and ACE's personal property and a first mortgage on The Sands Hotel & Casino.
Fortress entered into an Intercreditor Agreement, dated as of November 12, 2004,
with the Trustee pursuant to the Loan Agreement. The Liens (as that term defined
in the Indenture) of the Trustee on the Collateral (as that term is defined in
the Indenture), are subject and inferior to Liens which secure Working Capital
Indebtedness such as the Loans.
Fortress may terminate its obligation to advance and declare the unpaid balance
of the Loans, or any part thereof, immediately due and payable upon the
occurrence and during the continuance of customary defaults which include
payment default, covenant defaults, bankruptcy type defaults, attachments,
judgments, the occurrence of certain material adverse events, criminal
proceedings, and defaults by Atlantic or ACE under certain other agreements.
A copy of the Loan Agreement, the Guaranty to Fortress Credit Corp., dated as of
November 12, 2004, among ACE, as guarantor, and Fortress, as lender, and the
First Mortgage and Security Agreement, dated November 12, 2004, among ACE as
mortgagor, and Fortress, as mortgagee, is attached hereto as Exhibits 10.1,
10.2, and 10.3 respectively and is incorporated herein by reference. The
foregoing summary does not purport to be complete and is qualified in its
entirety by reference to the attached exhibits.
ITEM 8.01 OTHER EVENTS
In a joint press release, dated November 18, 2004, Atlantic and ACE announced
that, on November 12, 2004, Atlantic, as borrower, and ACE, as guarantor,
entered into a senior secured revolving credit line providing for working
capital loans of up to $10 million, which shall be used for working capital
purposes in the operation of The Sands. The Loan Agreement and the Loans
thereunder have been designated by the Board of Directors of Atlantic and the
Manager of ACE, as Working Capital Indebtedness (as that term is defined in the
Indenture, dated as of July 22, 2004, among Atlantic, as issuer, ACE, as
guarantor, and Wells Fargo Bank, National Association, as trustee).
The full text of the joint press release issued by Atlantic and ACE on November
18, 2004 is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit Description:
10.1* Loan and Security Agreement, dated November 12, 2004, by and among
Atlantic, as borrower, ACE, as guarantor, and Fortress, as lender.
10.2* Guaranty to Fortress Credit Corp, dated as of November 12, 2004, among
ACE, as guarantor, and Fortress as lender.
10.3* First Mortgage and Security Agreement, dated November 12, 2004, by and
among ACE, as mortgagor, and Fortress, as mortgagee,
99.1* Joint Press Release dated November 18, 2004.
*Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC.
ACE GAMING, LLC
Dated: November 18, 2004 By: /s/ Patricia M. Wild
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Name: Patricia M. Wild
Title: Vice President, General Counsel
and Secretary