Item 1.01. Entry into a Material Definitive Agreement.
Fourth Amendment to Credit Agreement
On April 21, 2020, Everi Payments Inc. (“Everi Payments”), a wholly owned subsidiary of Everi Holdings Inc. (the “Company”) entered into an amendment (the “Amendment”) to its existing Credit Agreement, dated May 9, 2017, as amended (collectively, the “Existing Credit Agreement”), among Everi Payments, as borrower, the Company, as a guarantor, the lenders party thereto and Jefferies Finance LLC, as administrative agent, collateral agent, swing line lender, letter of credit issuer, sole lead arranger and sole bookrunner.
The Amendment, among other things: (i) permits the incurrence of incremental equivalent debt subject to a 4.50:1.00 Consolidated Secured Leverage Ratio for calculation periods prior to December 31, 2021; and (ii) amends the consolidated secured leverage ratio covenant, including to remove the maximum consolidated secured leverage ratio for the quarters ending June 30, 2020, September 30, 2020 and December 31, 2020 and to change the computation methodology of the consolidated leverage ratio for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021.
A copy of the Amendment is attached as Exhibit 10.1 hereto and is incorporated herein by reference. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to such exhibit.
New Term Loan Facility
On April 21, 2020 (the “Closing Date”), the Company entered into a Credit Agreement, dated as of April 21, 2020, among Everi Payments, as borrower, the Company, the lenders party thereto and Jefferies Finance LLC, as administrative agent and collateral agent, (the “New Credit Agreement”). The New Credit Agreement provides for a $125 million senior secured term loan (the “New Term Loan”), which is secured on a pari passu basis with the loans under the Existing Credit Agreement. The entire amount of the New Term Loan was borrowed on April 21, 2020.
The New Term Loan matures May 9, 2024. The interest rate per annum applicable to the New Term Loan will be, at Everi Payments’ option, the Eurodollar rate plus 10.50% or the base rate plus 9.50%.
Voluntary prepayments of the New Term Loan prior to the two-year anniversary of the Closing Date will be subject to a make-whole premium, and voluntary prepayments for the 6 month period thereafter will be subject to a prepayment premium of 1.00% of the principal amount repaid.
The obligations under the New Credit Agreement are secured, on a pari passu basis with the loans under the Existing Credit Agreement, by substantially all of the present and after acquired assets of each of Everi Payments, the Company and the subsidiary guarantors party thereto.
The New Credit Agreement contains certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur additional indebtedness, sell assets or consolidate or merge with or into other companies, pay dividends or repurchase or redeem capital stock, make certain investments, issue capital stock of subsidiaries, incur liens, prepay, redeem or repurchase subordinated debt, and enter into certain types of transactions with its affiliates. The New Credit Agreement also requires the Company, together with its subsidiaries, to comply with a maximum consolidated secured leverage ratio, except that no such requirement shall apply for the quarters ending June 30, 2020, September 30, 2020 and December 31, 2020.
A copy of the New Credit Agreement is attached as Exhibit 10.2 hereto and is incorporated herein by reference. The foregoing description of the New Credit Agreement does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under “Item 1.01—Entry into a Material Definitive Agreement” is incorporated herein by reference.