Item 1.01
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Entry into Material Definitive Agreement.
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On October 5, 2018 (the Closing Date), AP Gaming I, LLC (the Borrower), a Delaware limited liability company and
wholly owned indirect subsidiary of PlayAGS, Inc. (the Company), as borrower, and AP Gaming Holdings, LLC, a Delaware limited liability company and wholly owned indirect subsidiary of the Company (Holdings), as holdings,
entered into an Incremental Assumption and Amendment Agreement No. 2 (the Incremental Agreement) with certain of the Borrowers subsidiaries, the lenders party thereto from time to time and Jefferies Finance LLC, as
administrative agent (the Administrative Agent). The Incremental Agreement amended and restated that certain First Lien Credit Agreement, dated as of June 6, 2017, as amended on December 6, 2017 and as amended and restated on
February 7, 2018 (the Existing Credit Agreement), among the Borrower, Holdings, the lenders party thereto, the Administrative Agent and other parties named therein (the Amended and Restated Credit Agreement), to
(a) reduce the applicable interest rate margin for the Term B Loans (as repriced, the Repriced Term B Loans) under the Credit Agreement by 0.75% (which reduction shall be by 1.00% if at any time on or after the Closing Date the
Borrower receives a corporate credit rating of at least B1 from Moodys, regardless of any future rating) and (b) provide for the incurrence by the Borrower of incremental term loans in an aggregate principal amount of $30,000,000 (the
Incremental Term Loans and together with the Repriced Term B Loans, the Term B Loans). The net proceeds of the Incremental Term Loans are expected to be used for general corporate purposes and additional capital to accelerate
growth.
The Amended and Restated Credit Agreement also provides that any refinancing of the Term B Loans through the issuance of certain
debt or any repricing amendment, in either case, that constitutes a repricing event applicable to the Term B Loans resulting in a lower yield occurring at any time during the first six months after the Closing Date will be accompanied by
a 1.00% prepayment premium or fee, as applicable.
The Incremental Term Loans have the same terms as the Borrowers Repriced Term B
Loans. Other than as described above, the Term B Loans continue to have the same terms as provided under the Existing Credit Agreement. Additionally, the parties to the Amended and Restated Credit Agreement continue to have the same obligations set
forth in the Existing Credit Agreement. Other than as described above, the provisions of the Term B Loans and the obligations under the Existing Credit Agreement are described in Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations Indebtedness First Lien Credit Facilities in the Companys Annual Report on Form
10-K/A,
filed with the Securities and Exchange Commission on
March 30, 2018, which description is hereby incorporated by reference into this Form
8-K.
The
foregoing description of the Incremental Agreement and the Amended and Restated Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Incremental Agreement, a copy of which is
filed as Exhibit 10.1 hereto and the full text of the Amended and Restated Credit Agreement, which is attached as Annex A to the Incremental Agreement.