Item 1.01. Entry into a Material Definitive Agreement.
On December 5, 2017, Everi Holdings Inc. (the “
Company
”), as guarantor, and its wholly-owned subsidiary,
Everi Payments Inc. (“
Everi Payments
”), as issuer, completed the previously announced offering (the “
Offering
”) of $375.0 million in aggregate principal amount of Everi Payments’ 7.50% senior
unsecured notes due 2025 (the “
Notes
”). Pursuant to a Purchase Agreement dated November 20, 2017 (the “
Purchase Agreement
”) by and among the Company, Everi Payments and certain of the
Company’s direct and indirect domestic subsidiaries, as guarantors (together, with the Company, the “
Guarantors
”), and Jefferies LLC as representative for itself and for Macquarie Capital (USA) Inc., as initial
purchasers (the “
Initial Purchasers
”), Everi Payments issued and sold the Notes to the Initial Purchasers for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the
“
Securities Act
”), and to certain non-U.S. persons outside the United States pursuant to Regulation S of the Securities Act. The Notes and guarantees have not been and will not be registered under the Securities Act or the
securities laws of any state or other jurisdictions, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.
The Notes were issued under an indenture (the “
Indenture
”) dated December 5, 2017 by and among Everi
Payments, the Guarantors and Deutsche Bank Trust Company Americas, as trustee (the “
Trustee
”). The Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantors. Interest on the Notes accrues at
a rate of 7.50% per annum and is payable semi-annually in arrears on each June 15 and December 15, commencing on June 15, 2018. Everi Payments will make each interest payment to the holders of record on the immediately preceding
June 1 and December 1. The Notes will mature on December 15, 2025.
The Notes and the related guarantees are senior
obligations of Everi Payments and the Guarantors, respectively, and rank equally with all of Everi Payments’ and each Guarantor’s present and future senior indebtedness and rank senior in right of payment to all of Everi Payments’ and
each Guarantor’s present and future subordinated indebtedness. The Notes and related guarantees are effectively subordinated to all of Everi Payments’ and each Guarantor’s present and future secured indebtedness (to the extent of the
value of the assets securing such indebtedness). The Notes are structurally subordinated in right of payment to all present and future indebtedness and other liabilities of Everi Holdings’ subsidiaries that do not guarantee the Notes.
Everi Payments will have the option to redeem some or all of the Notes at any time on or after December 15, 2020 at the redemption prices
set forth in the Indenture, plus accrued and unpaid interest, if any, to the date of redemption. Everi Payments will also have the option to redeem some or all of the Notes at any time before December 15, 2020 at a redemption price of 100% of
the principal amount of the Notes to be redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to the date of redemption. In addition, at any time before December 15, 2020, Everi Payments may redeem up to 40%
of the aggregate principal amount of the Notes at a redemption price of 107.50% of the principal amount of the Notes redeemed and accrued and unpaid interest to, but excluding, the redemption date with the proceeds from certain equity issuances. The
Notes are also subject to redemption requirements under state and local gaming laws and regulations. If Everi Payments experiences specified changes of control, Everi Payments may be required to offer to purchase the Notes at 101% of their aggregate
principal amount plus accrued and unpaid interest, if any, to the date of purchase.
The Indenture contains customary covenants
restricting the Company’s ability and the ability of its restricted subsidiaries to: (i) incur additional indebtedness or issue certain preferred stock; (ii) pay dividends or repurchase or redeem capital stock or make other restricted
payments; (iii) limit dividends or other payments by the Company’s restricted subsidiaries to the Company or the Company’s other restricted subsidiaries; (iv) incur certain liens; (v) enter into transactions with affiliates;
(vi) become an investment company; (vii) consolidate or merge with or into certain other companies; and (viii) designate certain of the Company’s subsidiaries as unrestricted subsidiaries under the Indenture. These covenants are
subject to a number of important limitations and exceptions, including certain provisions permitting the Company, subject to the satisfaction of certain conditions, to transfer assets to certain of the Company’s unrestricted subsidiaries. The
Indenture also contains customary events of default. Upon an event of default under the Indenture, the Trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding may declare all amounts owing under the Notes
to be due and payable.
2
The foregoing description of the Indenture is not complete and is subject to and qualified in its
entirety by reference to the full text of the Indenture, which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated by reference herein.