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FULL HOUSE RESORTS INC: Conclusion of a material definitive agreement, creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant, financial statements and exhibits (Form 8-K)

Item 1.01 Conclusion of a Material Definitive Agreement

Revolving credit facility

At March 31, 2021, the Company has entered into an agreement between the Company, as borrower, the lenders party to it and Capital One, National Association, as administrative agent (the “Administrative Agent” and this agreement, the “Credit Agreement”). The credit agreement provides for a $ 15.0 million five year senior secured revolving credit facility and includes a letters of credit sub-facility (the “Credit Facility”). The credit facility can be used for working capital and other general day-to-day purposes, excluding project costs for the Cripple Creek growth project, which was funded separately.

Until the completion of the Cripple Creek project, the annual interest rate applicable to borrowings under the credit facility will be, at the option of the Company, either (i) LIBOR plus a margin equal to 3.50%, or (ii) a rate base plus a margin equal to 2.50%. After this completion (as defined in the agreement), the annual interest rate applicable to loans under the credit facility will, at the option of the Company, be (i) LIBOR plus a margin equal to 3.00%, or (ii) a rate base increased by a margin equal to 2.00%. The commitment fee per year payable is equal to 0.50% of the unused portion of the credit facility. The Company has also agreed to pay customary letter of credit charges. The credit facility is available, subject to satisfaction of customary conditions, up to March 31, 2026 (unless the credit facility is terminated and matures earlier in accordance with the terms thereof) at which time all amounts borrowed must be repaid. From March 31, 2021, no amount is drawn on the credit facility.

The credit facility is equally and proportionately secured by the same assets securing the Company’s 8.25% senior secured bonds maturing in 2028 (the “bonds”) (other than securities accounts and accounts payable). deposit established in accordance with the Cash and Disbursement Guarantee Agreement, which is to be security only for the Notes), and borrowings under the Credit Facility will be guaranteed by all of the Guarantors; provided that, in accordance with the terms of the Guarantee Trust Agreement, the proceeds of any collateral securing the Credit Facility and the Notes (except with respect to securities accounts and deposit accounts established in accordance with the Guarantee Agreement and certain other amounts will be applied to borrowings under the Credit Facility before payments on the Notes.

The Company may make prepayments of any amount overdue under the Credit Facility (without any reduction in revolving commitments) in whole or in part at any time without penalty, subject to reimbursement of the breach charge in the event of any prepayment of LIBOR contracts and such prepayments amounting to specified minimum amounts.

The credit facility contains a number of negative covenants which, subject to certain exceptions, are substantially similar to covenants contained in the notes restricting or limiting the ability of the Company and the guarantors to, inter alia: (i) make assignments assets; (ii) participate in certain mergers and acquisitions; (iii) effect dividends and share repurchases and optional repurchases (and optional prepayments) of certain subordinated, junior lien or unsecured debt; (iv) get into debt; (v) make certain loans and investments; (vi) create privileges; (vii) transact with affiliates; and (viii) change our business and those of our restricted subsidiaries. The credit facility includes a requirement that the Company maintains, for quarters ending March 31, 2021 and June 30, 2021, minimum liquidity of $ 20.0 million. The credit facility also requires a financial commitment to be honored on the last day of each fiscal quarter, so the consolidated cash flows, as defined, must be equal to or greater than the utilized portion of the credit facility. For example, if the Company used $ 5.0 million of his $ 15.0 million Credit facility, then the consolidated cash flow for the twelve month period must be at least $ 5.0 million.

The Credit Facility contains a number of customary events of default (subject to certain grace periods and remedial rights) including, inter alia, non-payment of principal, interest or other amounts; the accuracy of certain representations and warranties; the non-respect or non-respect of certain commitments; a cross default on other debts, including the Notes; certain bankruptcy or insolvency events; certain ERISA events; the invalidity of certain loan documents; certain changes in control; and the loss of certain game operating licenses. Should an Event of Default occur, the lenders under the Credit Facility would be entitled to take various actions, including accelerating amounts due under it, terminating revolving commitments under it. and, subject to the security trust agreement, to take all actions authorized by a secured creditor.

The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as Exhibit 10.1 of this current report on Form 8- K and incorporated by reference herein.

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At March 31, 2021, the Company issued a press release announcing that it had entered into the credit agreement. A copy of the press release is attached hereto as Exhibit 99.1.

Item 2.03 Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant

The information set out in Section 1.01 of this current report on Form 8-K is incorporated in this Section 2.03 by reference.

Item 9.01  Financial Statements and Exhibits

 (d)  Exhibits
      No.           Description
      10.1*           Credit Agreement, dated as of March 31, 2021, among the
                    Company, as borrower, the subsidiary guarantors party thereto,
                    the lender parties thereto, and Capital One, National
                    Association, as administrative agent.
      99.1*           Press Release of the Company dated March 31, 2021.

* Filed herewith

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