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Subsequent Events | 3 Months Ended
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Mar. 31, 2022
Subsequent Events [Abstract] |
Subsequent Events | 13.SUBSEQUENT EVENTS The Company evaluated subsequent events and accounting and disclosure requirements related to material subsequent events in its condensed consolidated financial statements and related notes. Goldman Credit Agreement On April 1, 2022 (the “Closing Date”), the Company entered into a Credit Agreement (the “Goldman Credit Agreement”) by and among the Company, as borrower, the subsidiary guarantors party thereto, Goldman Sachs Bank USA, as administrative agent (the “Administrative Agent”) and collateral agent, Goldman Sachs Bank USA and BOFA Securities, Inc., as joint lead arrangers and joint bookrunners, and the Lenders and L/C Lenders party thereto. The Goldman Credit Agreement replaces the Macquarie Credit Agreement. The Goldman Credit Agreement provides for a $350.0 million term loan (the “Term Loan”) and a $30.0 million revolving credit facility (the “Revolving Facility”). The Company drew $350.0 million under the Term Loan on the Closing Date. Proceeds from the Term Loan were used to fund the PropCo Acquisition, for the repayment of approximately $166.2 million outstanding under the Macquarie Credit Agreement, to fund the Acquisition Escrow (as defined below) and for related fees and expenses. The Company did not draw on the Revolving Facility on the Closing Date. The Term Loan matures on April 1, 2029, and the Revolving Facility matures on April 1, 2027. The Revolving Facility includes up to $10.0 million available for the issuance of letters of credit. The Term Loan requires scheduled quarterly payments in amounts equal to 0.25% of the original aggregate principal amount of the Term Loan, with the balance due at maturity. Borrowings under the Goldman Credit Agreement, bear interest at a rate equal to, at the Company’s option, either (a) the Adjusted Term SOFR (as defined in the Goldman Credit Agreement), plus an applicable margin (each loan, being a “SOFR Loan”) or (b) the ABR (as defined in the Goldman Credit Agreement), plus an applicable margin (each loan, being a “ABR Loan”). The applicable margin for the Term Loan is 6.00% per annum with respect to SOFR Loans and 5.00% per annum with respect to ABR Loans. The applicable margin for Revolving Loans is currently 5.25% per annum, with respect to SOFR Loans and 4.25% per annum, with respect to ABR Loans. Beginning in the third quarter of 2022, (1) so long as the Consolidated First Lien Net Leverage Ratio (as defined in the Goldman Credit Agreement) of the Company is greater than 2.75 to 1.00, the applicable margin for Revolving Loans that are SOFR Loans will be 5.25% per annum, and for Revolving Loans that are ABR Loans will be 4.25% per annum; (2) so long as the Consolidated First Lien Net Leverage Ratio of the Company is less than or equal to 2.75 to 1.00 but greater than 2.25 to 1.00, the applicable margin for Revolving Loans that are SOFR Loans will be 5.00% per annum, and for Revolving Loans that are ABR Loans will be 4.00% per annum; and (3) so long as the Consolidated First Lien Net Leverage Ratio of the Company is less than or equal to 2.25 to 1.00, the applicable margin for Revolving Loans that are SOFR Loans will be 4.75% per annum, and for Revolving Loans that are ABR Loans will be 3.75% per annum. In addition, on a quarterly basis, the Company is required to pay each lender under the Revolving Facility a commitment fee in respect of any unused commitments under the Revolving Facility at a per annum rate of 0.50% of the principal amount of unused commitments of such lender, subject to a stepdown to 0.375% based upon the Company’s Consolidated First Lien Net Leverage Ratio. The Company is also required to pay letter of credit fees equal to the applicable margin then in effect for SOFR Loans that are Revolving Loans multiplied by the average daily maximum aggregate amount available to be drawn under all letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee in an amount equal to 0.125% of the face amount of such letter of credit. The Company is also required to pay customary agency fees. The Goldman Credit Agreement requires the Company to prepay the Term Loan, subject to certain exceptions, with: • 100% of the net cash proceeds of certain non-ordinary course asset sales or certain casualty events, subject to certain exceptions; and • 50% of the Company’s annual Excess Cash Flow (as defined in the Goldman Credit Agreement) (which percentage will be reduced to 25% if the Consolidated First Lien Net Leverage Ratio is greater than 2.25 to 1.00 but less than or equal to 2.75 to 1.00, and to 0% if the Consolidated First Lien Net Leverage Ratio is less than or equal to 2.25 to 1.00); and • 100% of the funds in the Acquisition Escrow if the OpCo Acquisition does not occur. The Goldman Credit Agreement provides that the Term Loan may be prepaid, subject to a prepayment premium in an amount equal to 1.00% of the principal amount of the Term Loan if such event occurs on or before the date that is 12 months following the Closing Date. This premium does not apply if there is a mandatory prepayment with respect to the Acquisition Escrow. ‎ The borrowings under the Credit Agreement are guaranteed by the material subsidiaries of the Company, subject to certain exceptions (including as of the Closing Date, the exclusion of the Company’s non-domestic subsidiaries), and are secured by a pledge (and, with respect to real property, mortgage) of substantially all of the existing and future property and assets of the Company and the guarantors, subject to certain exceptions. The Goldman Credit Agreement contains customary representations and warranties, affirmative, negative and financial covenants, and events of default. All future borrowings under the Credit Agreement are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties. In connection with the prepayment of the Macquarie Credit Agreement the Company will write-off approximately $7.3 million of deferred financing costs to interest expense in the second quarter of 2022. Nugget Acquisition On the Closing Date, pursuant to a Membership Interest Purchase Agreement dated February 22, 2022 (the “Purchase Agreement”), the Company completed its previously announced acquisition of 50% of the membership interests in PropCo from Marnell for approximately $95.0 million. The PropCo Acquisition was financed through borrowings under the Goldman Credit Agreement, as described above, and approximately $29.3 million of cash on hand. Pursuant to the Purchase Agreement, the Company also agreed to purchase 100% of the membership interests in OpCo, the operator of the Nugget Casino Resort (the “Casino”) in Sparks, Nevada for approximately $100.0 million. The purchase of OpCo is expected to occur within one year and is subject to approval by the Nevada Gaming Commission. The purchase price for the OpCo Acquisition will be paid from $100.0 million of the proceeds of the Term Loan that were borrowed and deposited in escrow (the “Acquisition Escrow”) on the Closing Date. Following the closing of the OpCo Acquisition, the Company will own the operating assets of the Casino. The Company also has a five year option to acquire the remaining 50% of the membership interests in PropCo for $105.0 million plus 2% per annum. On the Closing Date, PropCo and OpCo entered into a triple net lease agreement (the “Lease”) for the real property on which OpCo is located. The Lease has an initial annual rent of approximately $15.0 million and an initial term of 15 years, with four five year renewal options. ‎

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI http://asc.fasb.org/topic&trid=2122774 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6842918&loc=SL6314017-165662 + Details
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