Mr. Manu Sekhri reports

SEVEN ACES LIMITED ANNOUNCES NEW US$165 MILLION CREDIT FACILITY AND ACQUISITION OF ADDITIONAL GAMING CONTRACTS

Lucky Bucks LLC, Seven Aces Ltd.'s 70-per-cent-owned subsidiary, has entered into a definitive credit facility agreement with a syndicate of lenders led by KeyBank National Association, pursuant to which Lucky Bucks is entitled to borrow up to an aggregate of $165-million (U.S.). KeyBank National Association and KeyBanc Capital Markets Inc. are acting as a joint lead arranger and a joint bookrunner, and as administrative agent and collateral agent under the credit facility. The proceeds of the credit facility will be used to: finance the acquisition of gaming contracts and associated skill-based digital gaming terminals from Shivbhakti Inc.; refinance Lucky Bucks' existing indebtedness; finance certain fees and expenses associated with the closing of the credit facility and the related transactions; finance additional acquisitions, investments and capital expenditures from time to time; finance working capital; and finance other general corporate purposes of Lucky Bucks. Lucky Bucks' entry into the credit facility would have resulted in estimated interest expense savings of approximately $4-million (U.S.), based on Lucky Bucks' trailing 12 months from Sept. 30, 2019.

"This announcement reflects the recognition of the maturity of the Georgia coin-operated amusement machine market and the risk profile of our business. This credit facility provides interest expense savings and an unmatched flexibility to execute on our acquisition pipeline," commented Manu K. Sekhri, chief executive officer of the corporation.

Credit facility details

The credit facility comprises: a revolving credit facility in an aggregate principal committed amount of $50-million (U.S.); an initial term loan facility in an aggregate principal financed amount of $100-million (U.S.); and a delayed draw term loan facility in an aggregate principal committed amount of $15-million (U.S.).

The credit facility will be available to Lucky Bucks on agreed-upon terms, including the following:

• The interest rate under the credit facility is LIBOR (London interbank offered rate) plus a margin between 2 per cent and 2.75 per cent (or a base rate equivalent), based on Lucky Bucks' total leverage ratio. The total interest rate at close will be approximately 4.5 per cent. The credit facility reduces Lucky Bucks' effective financing interest rate from approximately 9 per cent/10 per cent to approximately 4.5 per cent (subject to LIBOR fluctuation).
• The acquisition of the game vendor closed simultaneously with the initial borrowing under the credit facility.
• The credit facility will be available immediately upon closing.
• The maturity date of the credit facility is five years after closing.
• The credit facility is secured by substantially all of the assets of Lucky Bucks and a pledge of the equity interests in Lucky Bucks made by its immediate parent company. The credit facility is to be guaranteed by any of Lucky Bucks' future subsidiaries.

Lucky Bucks' ability to draw on the credit facility is subject to borrowing covenants and conditions precedent typical of a credit facility of this nature. Lucky Bucks will pay KeyBank an arrangement fee, an upfront fee (a portion of which will be paid to the other lenders) and an annual administration fee, all of which are typical of these arrangements.

Acquisition of additional gaming contracts

Lucky Bucks has completed the acquisition of 160 gaming contracts and associated skill-based digital gaming terminals from the game vendor, which was initially announced in the corporation's press release dated Dec. 20, 2019. The purchase price for the acquisition was $32.5-million (U.S.) on closing, with potential additional payments that could result in the aggregate consideration payable increasing to a range of $36-million (U.S.) to $38-million (U.S.) (as currently best estimated by Lucky Bucks) in the event of the satisfaction of certain conditions related to postclosing revenue generation. Any such postclosing payments, if made, would be payable by Lucky Bucks on or before the date that is 12 months from the closing date.

About Seven Aces Ltd.

Seven Aces is a gaming company with a vision of building a diversified portfolio of world-class gaming operations. The corporation looks to enhance shareholder value by growing organically and through acquisitions. Currently, the corporation is the largest route operator of skill-based gaming machines in the state of Georgia, United States.

We seek Safe Harbor.