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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

ý

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

Affinity Gaming

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o

 

No fee required.

ý

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        Affinity Gaming Common Stock, $0.001 par value per share.
 
    (2)   Aggregate number of securities to which transaction applies:
        11,970,274 shares of common stock (including 25,835 shares of restricted stock) and 217,158 shares of common stock underlying stock options with an exercise price of $17.35 per share or less.
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        The filing fee is determined based on the aggregate merger consideration, which is the sum of (a) the product of 11,970,274 shares of common stock and the merger consideration of $17.35 per share (equal to $207,684,254) and (b) the difference between the merger consideration of $17.35 per share and the exercise price per share of each of the 217,158 stock options outstanding for which the exercise price per share is less than $17.35 (equal to $1,365,922). In accordance with Exchange Act Rule 0-11(c), the filing fee of $24,228.92 was determined by multiplying 0.0001159 by the aggregate merger consideration of $209,050,176.
 
    (4)   Proposed maximum aggregate value of transaction:
        $209,050,176
 
    (5)   Total fee paid:
        $24,228.92
 

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

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LOGO

[-], 2016

Dear Stockholder:

          We cordially invite you to attend a special meeting of the stockholders of Affinity Gaming, a Nevada corporation ("Affinity"), to be held at [-], Eastern Daylight Time, on [-], 2016, at the New York City offices of Morrison & Foerster LLP, 250 West 55th Street, New York, NY 10019.

          At the special meeting, you will be asked to consider and adopt an Agreement and Plan of Merger, dated as of August 22, 2016, among Z Capital Affinity Owner, LLC, a Delaware limited liability company ("Parent"), Affinity Merger Sub, Inc., a Nevada corporation ("Merger Sub," and together with Parent, the "Purchaser Parties") and Affinity (as amended from time to time, the "merger agreement"). Pursuant to the merger agreement, Merger Sub will be merged with and into Affinity (the "merger"), with Affinity surviving the merger as a wholly owned subsidiary of Parent. Each of the Purchaser Parties is an affiliate of Z Capital Partners, L.L.C., a Delaware limited liability company ("Z Capital"). Certain affiliates of Z Capital own approximately 41.2% of Affinity's outstanding shares of common stock, $0.001 par value per share. Upon completion of the merger, each outstanding share of Affinity common stock will be converted into the right to receive $17.35 in cash, without interest and subject to deduction for any required withholding tax, other than shares held in treasury of Affinity or owned, directly or indirectly, by the Purchaser Parties, the Z Capital Rollover Investors, the Management Rollover Investors or shares for which dissenters' rights are properly demanded and perfected pursuant to Nevada Revised Statute 92A.300 through 92A.500, provided that each share contributed by certain affiliates of Z Capital to Parent immediately prior to the time the merger becomes effective or at such later time as may be agreed by Affinity and Parent and specified in the articles of merger (such time, the "Effective Time"), will not be cancelled and will remain outstanding.

          The proposed merger is a "going private" transaction under the Securities and Exchange Commission rules. Immediately following the Effective Time of the merger, Affinity will be a wholly owned subsidiary of Parent, which is controlled by affiliates of Z Capital.

          Affinity's board of directors (the "Board") formed a special committee consisting solely of independent and disinterested members of the Board (the "Special Committee") to, among other things, (i) review and evaluate the proposal received from Z Capital to acquire all of the outstanding shares of Affinity common stock that are not already owned by affiliates of Z Capital, and any other offer to acquire Affinity and any other strategic alternatives available to Affinity, including the alternative of remaining a stand-alone company, and (ii) negotiate and make recommendations to the Board with respect to any such proposals or other alternatives. The members of the Board present and voting, in accordance with the unanimous recommendation of the members of the Special Committee present and voting, unanimously (a) approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, (b) determined that the terms of the merger agreement are just and reasonable as to Affinity, (c) determined that the merger agreement and the transactions contemplated thereby, including the merger and the merger consideration, are fair to and in the best interests of Affinity and its stockholders (other than affiliates of Z Capital) and (d) resolved to recommend that Affinity's stockholders adopt and approve the merger agreement and the transactions contemplated thereby. Accordingly, the Board recommends that stockholders vote "FOR" the adoption of the merger agreement. The Board also recommends that stockholders vote "FOR" the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to the named executive officers of Affinity in connection with the merger, as disclosed under "Special Factors—Potential Change of Control Payments to Named Executive Officers" in the accompanying proxy statement, as required by the rules adopted by the Securities and Exchange Commission, and "FOR" any adjournment or postponement of the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

          We encourage you to read the accompanying proxy statement carefully as it sets forth the specifics of the merger and other important information related to the merger. In addition, you may obtain information about us from documents filed with the Securities and Exchange Commission.

          Regardless of the number of shares of Affinity common stock that you own, your vote is very important. The merger cannot be completed unless holders of at least a majority of the issued and outstanding shares of Affinity common stock vote in favor of the adoption of the merger agreement. If you fail to vote or abstain from voting on the merger agreement, the effect will be the same as a vote "AGAINST" adoption of the merger agreement.

          We hope that you will be able to attend the special meeting. However, whether or not you plan to attend in person, please complete, sign, date and return the accompanying proxy card in the enclosed postage prepaid envelope as promptly as possible. You also may submit a proxy by using the toll-free telephone number or by accessing the Internet website specified on your proxy card. If your shares are held in the name of a broker, bank or other nominee, please follow the instructions on the voting instructions card furnished by the bank, broker or other nominee.

          Thank you for your attention to this important matter.

    Sincerely,

 

 


GRAPHIC
    Michael Silberling
Chief Executive Officer

          The accompanying proxy statement is dated [-], 2016 and, together with the enclosed form of proxy, is first being mailed to stockholders on or about [-], 2016.

          Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.


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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [-], 2016

        We cordially invite you to attend a special meeting of the stockholders of Affinity Gaming, a Nevada corporation ("Affinity"). The special meeting will be held at [-], Eastern Daylight Time, on [-], 2016, at the New York City offices of Morrison & Foerster LLP, 250 West 55th Street, New York, NY 10019. The meeting is being held for the following purposes:

    1.
    to approve the adoption of the Agreement and Plan of Merger (including the principal terms thereof), dated as of August 22, 2016, among Z Capital Affinity Owner, LLC, a Delaware limited liability company ("Parent"), Affinity Merger Sub, Inc., a Nevada corporation ("Merger Sub," and together with Parent, the "Purchaser Parties") and Affinity (as amended from time to time, the "merger agreement"), and the merger, pursuant to which Merger Sub will be merged with and into Affinity (the "merger"), with Affinity surviving the merger as a wholly owned subsidiary of Parent;

    2.
    to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to the named executive officers of Affinity in connection with the merger, as disclosed under "Special Factors—Potential Change of Control Payments to Named Executive Officers;" and

    3.
    to approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

        Affinity's board of directors (the "Board") has fixed the close of business on [-], 2016 as the record date for the determination of stockholders entitled to notice of, and to vote at, the special meeting or any adjournment or postponement of the meeting. Affinity will transact no other business at the special meeting except such business as may properly be brought before the special meeting or any adjournment or postponement thereof by or at the direction of the Board.

        The Board formed a special committee consisting solely of independent and disinterested members of the Board (the "Special Committee") to, among other things, (i) review and evaluate the proposal received from Z Capital to acquire all of the outstanding shares of Affinity common stock that are not already owned by affiliates of Z Capital, and any other offer to acquire Affinity and any other strategic alternatives available to Affinity, including the alternative of remaining a stand-alone company, and (ii) negotiate and make recommendations to the Board with respect to any such proposals or other alternatives. The members of the Board present and voting, in accordance with the unanimous recommendation of the members of the Special Committee present and voting, unanimously (a) approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, (b) determined that the terms of the merger agreement are just and reasonable as to Affinity, (c) determined that the merger agreement and the transactions contemplated thereby, including the merger and the merger consideration, are fair to and in the best interests of Affinity and its stockholders (other than affiliates of Z Capital) and (d) resolved to recommend that Affinity's stockholders adopt and approve the merger agreement and the transactions contemplated thereby. Accordingly, the Board recommends that stockholders vote "FOR" the adoption of the merger agreement. The Board also recommends that stockholders vote "FOR" the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to the named executive officers of Affinity in connection with the merger, and "FOR" any adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

        Your vote is very important. The merger cannot be completed unless holders of at least a majority of the issued and outstanding shares of Affinity common stock vote in favor of the adoption of the merger agreement. Even if you plan to attend the special meeting in person, please complete, date, sign and return the enclosed proxy card to ensure that your shares will be represented at the special


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meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for that purpose. You also may submit your proxy by using the toll-free telephone number or by accessing the Internet website specified on your proxy card. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instructions card furnished by the bank, broker or other nominee.

        Your proxy may be revoked at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement. Even if you have voted by proxy, you may still vote in person if you attend the special meeting and withdraw your proxy.

        The merger is described in the accompanying proxy statement, which we urge you to read carefully. A copy of the merger agreement is included as Appendix A to the accompanying proxy statement.

    By order of the board of directors,

 

 

Marc H. Rubinstein
    Senior Vice President, General Counsel & Secretary

[-], 2016


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TABLE OF CONTENTS

 
  Page

SUMMARY TERM SHEET

  1

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

 
11

The Merger

 
11

The Special Meeting

  11

Voting and Proxy Procedures

  12

Getting More Information

  15

SPECIAL FACTORS

 
17

Background of the Merger and Special Committee Proceedings

 
17

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger

  35

Opinion of Financial Advisor to the Special Committee

  42

Position of the Purchaser Parties and the Z Capital Filing Persons as to the Fairness of the Merger to Affinity's Stockholders that are not Z Capital Rollover Investors

  48

Purposes and Reasons of Affinity for the Merger

  52

Purposes and Reasons of the Purchaser Parties and the Z Capital Filing Persons for the Merger

  52

Treatment of Stock Options and Restricted Stock

  52

Certain Effects of the Merger

  55

Plans for Affinity after the Merger

  57

Projected Financial Information

  58

Structure of the Merger

  61

Effective Time of the Merger

  61

Payment of the Merger Consideration and Surrender of Stock Certificates

  61

Merger Financing

  62

Interests of Affinity's Directors and Executive Officers in the Merger; Potential Conflicts of Interest

  66

Potential Change of Control Payments to Named Executive Officers

  70

Intent to Vote

  73

Estimated Fees and Expenses of the Merger

  73

Appraisal and Dissenters' Rights

  74

Material U.S. Federal Income Tax Consequences

  75

Anticipated Accounting Treatment of the Merger

  79

Certain Legal Matters

  79

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

 
81

THE MERGER AGREEMENT

 
82

Explanatory Note Regarding the Merger Agreement

 
82

The Merger

  82

Closing and Effectiveness of the Merger

  82

Representations and Warranties

  83

Conditions to the Merger

  85

Effect of the Merger on the Common Stock

  86

Treatment of Stock Options and Restricted Stock

  87

Dissenting Shares

  87

Interim Operations

  88

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  Page

Employee Benefits

  90

Consents and Filings

  90

No Solicitation

  90

Access to Information

  93

Director and Officer Indemnification and Insurance

  93

Agreements Concerning the Purchaser Parties

  93

Financing

  94

Director Resignations

  97

Standstill

  97

Termination

  97

Company Termination Fee

  99

Parent Termination Fee

  100

Amendments; Waiver

  100

Governing Law and Venue

  101

Specific Performance

  101

THE LIMITED GUARANTEE

 
102

AGREEMENTS INVOLVING COMMON STOCK

 
103

Voting Agreements

 
103

Joinder Agreement

  104

THE SPECIAL MEETING

 
105

Date, Time and Place

 
105

Purpose of the Special Meeting

  105

Recommendations of the Board and the Special Committee

  105

Voting Rights; Quorum

  105

Voting and Revocation of Proxies

  106

Abstentions and Broker Non-Votes

  106

Failure to Vote

  107

Other Matters at the Special Meeting

  107

Adjournments and Postponements

  107

Appraisal and Dissenters' Rights

  107

Proxy Solicitation

  108

Additional Assistance

  108

APPROVAL OF THE MERGER PROPOSAL (PROPOSAL 1)

 
109

The Proposal

 
109

Vote Required and Board Recommendation

  109

ADVISORY VOTE ON MERGER-RELATED COMPENSATION (PROPOSAL 2)

 
110

The Proposal

 
110

Vote Required and Board Recommendation

  110

APPROVAL OF THE ADJOURNMENT PROPOSAL (PROPOSAL 3)

 
111

The Proposal

 
111

Vote Required and Board Recommendation

  111

INFORMATION ABOUT AFFINITY

 
112

Background

 
112

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SUMMARY TERM SHEET

        This summary term sheet summarizes selected information contained elsewhere in this proxy statement, but may not contain all of the information that is important to you. Affinity urges you to read the entire proxy statement carefully, including the attached appendices. For additional information on Affinity included in documents incorporated by reference into this proxy statement, see the section entitled "Other Matters—Information Incorporated by Reference." The items in this summary term sheet include page references directing you to a more complete description of that topic in this proxy statement.

The Parties to the Merger (pages 112 and 123)

Affinity Gaming
3755 Breakthrough Way, Suite 300
Las Vegas, Nevada 89135
Tel: (702) 341-2400

        Affinity Gaming ("Affinity") is a Nevada corporation, headquartered in Las Vegas, which emerged from Chapter 11 bankruptcy proceedings on December 31, 2010 and converted from a Nevada limited liability company (under the name Affinity Gaming, LLC) into a Nevada corporation on December 20, 2012. Affinity owns and operates 11 casinos in four states—five in Nevada, three in Colorado, two in Missouri and one in Iowa. See "Information about Affinity—Background."

Z Capital Affinity Owner, LLC
c/o Z Capital Partners, L.L.C.
Financial Times Building
1330 Avenue of the Americas, 16th Floor
New York, NY 10019
(212)595-8400

        Z Capital Affinity Owner, LLC ("Parent") is a newly formed Delaware limited liability company. Parent was formed for purposes of entering into the merger agreement and consummating the transactions contemplated by the merger agreement. Parent has not carried on any activities other than in connection with the merger and the merger agreement. The sole member and managing member of Parent is Z Capital Affinity Holdings, L.L.C. ("Holdings"), a privately-held Delaware limited liability company which was formed for purposes of consummating the transactions contemplated by the merger agreement. Prior to the Effective Time of the merger, the members of Holdings consist of Z Capital Partners II, L.P., a Delaware limited partnership, Z Capital Partners II-A, L.P, a Delaware limited partnership, and Z Capital Partners II-B, L.P., a Delaware limited partnership, which are affiliated investment funds of Z Capital Partners, L.L.C. ("Z Capital"), a Delaware limited liability company. Z Capital Partners II-B, L.P. is the managing member of Holdings, and as of the Effective Time Z Capital Group, L.L.C., a Delaware limited liability company, will be the manager of Holdings. Z Capital is a private equity fund manager that manages investments of affiliated investment funds in various industries.

        Subject to the terms and conditions of the rollover commitment letter, described below under "Special Factors—Merger Financing—Rollover Investments," certain affiliates of Z Capital that, prior to the Effective Time of the merger, collectively hold approximately 41.2% of the outstanding shares of Affinity's common stock, consisting of Z Capital Partners II, L.P., Z Capital Partners II-A, L.P., Z Capital Partners II-B, L.P., Z Capital Partners GP I, L.P., a Delaware limited partnership, Z Capital CUAL Co-Invest, L.L.C., a Delaware limited liability company, Z Capital HG-C, L.L.C., a Delaware limited liability company, Z Capital HG, L.L.C., a Delaware limited liability company, and Z Capital Partners Fund Holdings I, L.L.C., a Delaware limited liability company (collectively, the "Z Capital

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Rollover Investors"), will contribute all of their shares of common stock in exchange for membership interests in Holdings.

        Z Capital Partners GP II, L.P., a Delaware limited partnership, is the general partner of each of Z Capital Partners II, L.P., Z Capital Partners II-A, L.P., and Z Capital Partners II-B, L.P. The managing member of Z Capital Partners Fund Holdings I, L.L.C. is Z Capital Partners I, L.P., a Delaware limited partnership. Z Capital Partners GP I, L.P. is the managing member of each of Z Capital HG, L.L.C., Z Capital HG-C, L.L.C., and Z Capital CUAL Co-Invest, L.L.C. Z Capital Partners GP I, L.P. is the general partner of Z Capital Partners I, L.P. The general partner of each of Z Capital Partners GP II, L.P. and Z Capital Partners GP I, L.P. is Z Capital Partners UGP, L.L.C., a Delaware limited liability company. Z Capital is the sole member and managing member of Z Capital Partners UGP, L.L.C. The sole member and managing member of Z Capital is Z Capital Group, L.L.C., a Delaware limited liability company. The managing member of Z Capital Group, L.L.C. is Zenni Holdings, LLC, a Delaware limited liability company. The sole member and managing member of Zenni Holdings, LLC is James J. Zenni, Jr. We refer to James J. Zenni, Jr., Zenni Holdings, LLC, Z Capital Group, L.L.C., Z Capital, Z Capital Partners UGP, L.L.C., Z Capital Partners GP II, L.P., Z Capital Partners I, L.P., and the Z Capital Rollover Investors, collectively with Holdings, as the "Z Capital Filing Persons." Each of the Z Capital Filing Persons is engaged, directly or indirectly, in the private equity and leveraged buyout business. For further information about the Z Capital Filing Persons, see "Information Concerning the Purchaser Parties and the Z Capital Filing Persons."

        Immediately following the Effective Time of the merger, Affinity will be a wholly owned subsidiary of Parent, and an indirect wholly owned subsidiary of Holdings.

Affinity Merger Sub, Inc.
c/o Z Capital Partners, L.L.C.
Financial Times Building
1330 Avenue of the Americas, 16th Floor
New York, NY 10019
(212) 595-8400

        Affinity Merger Sub, Inc. ("Merger Sub") is a newly formed Nevada corporation and a wholly owned subsidiary of Parent. Merger Sub has not carried on any activities other than in connection with the merger.

        In this proxy statement, the term "Purchaser Parties" refers to Merger Sub and Parent, collectively. Each of the Purchaser Parties is an affiliate of Z Capital. The Z Capital Rollover Investors own approximately 41.2% of Affinity's outstanding shares of common stock, $0.001 par value per share. See "Information Concerning the Purchaser Parties and Z Capital Filing Persons."

Structure of the Merger (page 82)

        The proposed acquisition of Affinity has been structured as a merger of Merger Sub with and into Affinity, with Affinity surviving as a wholly owned subsidiary of Parent.

Payment of the Merger Consideration (page 86)

        Each outstanding share of Affinity common stock (other than shares held in treasury of Affinity or owned, directly or indirectly, by the Purchaser Parties or the Management Rollover Investors (as defined below) or shares for which dissenters' rights are properly demanded and perfected pursuant to Nevada Revised Statute 92A.300 through 92A.500) will be converted into the right to receive $17.35 in cash (the "Merger Consideration"), without interest and subject to deduction for any required withholding tax; provided that each share contributed by certain affiliates of Z Capital to Parent immediately prior to the Effective Time will not be cancelled and will remain outstanding.

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Treatment of Stock Options and Restricted Stock (page 52 and 87)

Stock Options and Restricted Stock Cash-Out and Rollover Contribution by Michael Silberling, Walter Bogumil and Jeffrey Solomon

        On October 13, 2016, Holdings and Michael Silberling, Walter Bogumil and Jeffrey Solomon (the "Management Rollover Investors") agreed that each of their previously owned shares, options to purchase common stock of Affinity, whether vested or unvested, each of their outstanding shares of restricted stock that are unvested and outstanding immediately prior to the Effective Time, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards will be treated as follows: Mr. Silberling's previously owned shares, outstanding options, outstanding shares of restricted stock, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards will be cancelled and, in exchange therefor, Holdings will provide Mr. Silberling $1,901,647 in cash, vested options to purchase 269,232 Class A units of Holdings and 854,586 profits interest awards in the form of restricted Class B units of Holdings (subject to the terms and conditions described in the "Special Factors—Treatment of Stock Options and Restricted Stock—Details of Class A and Class B Units of Holdings" section starting on page 53). Mr. Bogumil's previously owned shares, outstanding options, outstanding shares of restricted stock, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards, will be cancelled and, in exchange therefor, Holdings will provide Mr. Bogumil $52,050 in cash, 28,804 Class A units of Holdings, vested options to purchase 135,547 Class A units of Holdings and 421,440 profits interest awards in the form of restricted Class B units of Holdings (subject to the terms and conditions described in the "Special Factors—Treatment of Stock Options and Restricted Stock—Details of Class A and Class B Units of Holdings" section starting on page 53). Mr. Solomon's outstanding options, outstanding shares of restricted stock, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards, will be cancelled and, in exchange therefor, Holdings shall provide to Mr. Solomon options to purchase 135,547 Class A units of Holdings (67,774 of which will be subject to time-based vesting, fifty percent (50%) of which will vest on December 31, 2017 and fifty percent (50%) of which will vest on December 31, 2018, and 67,773 of which will be fully vested at the Effective Time) and 374,705 profits interest awards in the form restricted Class B units of Holdings (subject to the terms and conditions described in the "Special Factors—Treatment of Stock Options and Restricted Stock—Details of Class A and Class B Units of Holdings" section starting on page 53).

        Immediately prior to the closing of the merger, the Management Rollover Investors will enter into a limited liability company agreement (the "LLC Agreement"), option award agreements and profits interest award agreements with Holdings. These agreements will govern the Class A units, options to purchase Class A units and the Class B units described above. The Class A units and the Class B units generally will not have any voting rights. The Management Rollover Investors' entitlement to allocations, distributions and other rights with respect to the Class A and Class B units, as applicable (including, without limitation, drag-along rights, tag-along rights, put rights, call rights, and participation rights), will be set forth in the LLC Agreement. The LLC Agreement will also provide for the establishment of a management long-term incentive plan (the "MIP"). As of the date hereof, no commitments with respect to grants of awards under the MIP have been made to any directors or executive officers of Affinity other than the Management Rollover Investors. See the "Special Factors—Treatment of Stock Options and Restricted Stock—Details of Class A and Class B Units of Holdings" section starting on page 53.

Treatment of Stock Options and Restricted Stock Held By Non-Management Rollover Investors

        The merger constitutes a change in control as defined in Affinity's Amended and Restated 2011 Long Term Incentive Plan (the "2011 LTIP") and, therefore, for any awards outstanding under the 2011 LTIP and held by non-Management Rollover Investors: (1) each option to purchase common stock of Affinity, whether vested or unvested, that is outstanding immediately prior to the Effective

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Time shall become fully vested (to the extent unvested) and be converted into the right to receive an amount in cash equal to the product of (i) the excess, if any, of $17.35 over the exercise price per share under such stock option by (ii) the number of shares of Affinity common stock subject to the option, and (2) each outstanding share of restricted stock subject to time-based vesting restrictions that is unvested and outstanding immediately prior to the Effective Time shall become fully vested and be converted into the right to receive an amount in cash equal to the product of (i) $17.35 and (ii) the number of shares of Affinity common stock subject to the restricted stock award.

Affinity's Directors' and Executive Officers' Voting Intentions (pages 73 and 103)

        Except in their capacities as members of the Board and/or the Special Committee, no officer or director of Affinity, nor any of the Purchaser Parties, has made any recommendation either in support of or in opposition to the merger or the merger agreement. To Affinity's knowledge, each of Affinity's directors and executive officers intends to vote all shares of Affinity common stock he or she beneficially owns in favor of adoption of the merger agreement and each of the other proposals described below. Subject to the terms of voting and support agreements, Z Capital, an affiliate of Affinity director James J. Zenni, Jr. and the employer of Affinity director Andrei Scrivens, SPH Manager, LLC ("SPH Manager"), an affiliate of Affinity director David Reganato, and One East Partners Master, L.P., One East Partners Opportunities, L.P., One East Capital Advisors, L.P. and One East Partners Capital Management LLC (collectively, "One East"), an affiliate of Affinity director James Cacioppo, each have agreed to vote all shares of Affinity common stock they beneficially own in favor of adopting the merger agreement and approving the terms thereof. See "Agreements Involving Common Stock—Voting Agreements" beginning on page 103.

Required Vote (pages 85 and 105)

        For Affinity to complete the merger, under Nevada law, holders of a majority of the outstanding shares of common stock at the close of business on the record date must vote "FOR" the adoption of the merger agreement. Approval of the holders of at least a majority of the shares of Affinity common stock not owned by affiliates of Z Capital is not required for Affinity to complete the merger. Subject to the terms of voting and support agreements, Z Capital and each Z Capital affiliate which is the beneficial owner of Affinity common stock, SPH Manager and One East each have agreed to vote all shares of Affinity common stock they beneficially own in favor of adopting the merger agreement and approving the terms thereof. See "Agreements Involving Common Stock—Voting Agreements" beginning on page 103.

        Holders of common stock as of the record date have one vote for each share of common stock owned by such stockholder as of the close of business on the record date. As of the record date, there were [-] shares of Affinity common stock outstanding, of which the Purchaser Parties and their affiliates (including Z Capital) may be deemed to beneficially own 8,418,616 shares of Affinity common stock, including 8,333 shares of unvested restricted stock, representing in the aggregate approximately 41.2% of the outstanding shares of common stock as of the record date. SPH Manager may be deemed to beneficially own 5,544,092 shares, representing in the aggregate approximately 27.1% of the outstanding shares of common stock as of the record date. One East may be deemed to beneficially own 334,940 shares, representing in the aggregate approximately 1.6% of the outstanding shares of common stock as of the record date.

        Stockholders holding a majority of the aggregate voting power of the Common Stock present in person or represented by proxy at the meeting and entitled to vote must vote "FOR" the non-binding, advisory proposal regarding compensation that may become payable to Affinity's named executive officers in connection with the merger (as described in the "Special Factors—Interests of Affinity's Directors and Executive Officers in the Merger; Potential Conflicts of Interest" section starting on page 66), referred to as the "Non-Binding Merger-Related Compensation Proposal," in order for such proposal

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to be approved. Approval of the Non-Binding Merger-Related Compensation Proposal is not a condition to the completion of the merger, and the vote with respect to the Non-Binding Merger-Related Compensation Proposal is advisory only and will not be binding on Parent or Affinity.

        Interests of Affinity's Directors and Executive Officers in the Merger; Potential Conflicts of Interest (page 66)

        In considering the recommendations of the Board, you should be aware that certain of Affinity's executive officers and directors have interests in the transaction that are different from, or are in addition to, the interests of Affinity's stockholders generally. These interests relate to or arise from, among other things:

    if the merger is completed, Affinity's common stock will be 100% beneficially owned, as of the closing, by Parent, an affiliate of Z Capital;

    the payment of monthly retainers to each member of the Special Committee;

    the fact that the executive officers of Affinity are anticipated to remain executive officers of the surviving corporation;

    certain payments and benefits to certain executive officers of Affinity in connection with a qualifying termination of employment on or following the merger and cash and unit awards to certain executive officers;

    the fact that Mr. Zenni will be the sole director of the surviving corporation immediately following the merger; and

    the right to continued indemnification and insurance coverage for directors and executive officers of Affinity following the completion of the merger, pursuant to the terms of the merger agreement.

        The Special Committee was aware of and considered the interests that existed at the time of its deliberations on the merits of the merger in evaluating and negotiating the merger agreement and the merger.

No Solicitation (page 90)

        Under the merger agreement, Affinity is precluded from soliciting or encouraging any alternative acquisition proposals or engaging in any discussions regarding alternative acquisition proposals, except in the event that, prior to Affinity stockholder approval, Affinity receives an unsolicited acquisition proposal and the Special Committee determines in good faith (after consultation with its financial advisor and outside legal counsel) that (i) failure to take action would reasonably be likely to be inconsistent with the directors' fiduciary duties under applicable law and (ii) the acquisition proposal either constitutes, or would reasonably be expected to result in, a superior proposal. Prior to Affinity stockholder approval, the Board, acting upon the recommendation of the Special Committee, may change its recommendation with respect to any unsolicited acquisition proposal that the Special Committee believes in good faith is a superior proposal, or make a change in recommendation in response to a material event, occurrence, development or state of facts or circumstances that is not known by the Board prior to the date of the merger agreement, if (i) the Special Committee determines in good faith (after consultation with outside legal counsel) that failure to do so would reasonably be likely to be inconsistent with its fiduciary obligations under applicable law, and (ii) a three business day period has elapsed during which Parent is given the opportunity to negotiate such adjustments in the terms and conditions of the merger agreement in response to such superior proposal.

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Conditions to the Merger (page 85)

        The respective obligations of the Purchaser Parties and Affinity to effect the merger are subject to the satisfaction or valid waiver of certain customary conditions, including adoption of the merger agreement by the affirmative vote of the holders of at least a majority of all outstanding shares of Affinity's common stock; the absence of any order, injunction, judgment or law that prohibits or makes illegal the consummation of the merger; the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), which condition was satisfied on September 13, 2016 (see "—Regulatory Approvals," below); and the issuance by applicable governmental authorities, including but not limited to gaming regulators in the states in which Affinity operates, of all licenses, permits, authorizations, and other similar approvals or actions necessary for or relating to the conduct of gaming operations, the sale of alcoholic beverages and related activities including the ownership, operation, management and development of Affinity's business and the financing thereof. In addition, each of Affinity's and the Purchaser Parties' obligation to consummate the merger is subject to certain additional conditions that include the other party's representations and warranties contained in the merger agreement being true and correct (subject to certain materiality qualifiers) and the other party's performance in all material respects of its obligations under the merger agreement. The Purchaser Parties' obligation to consummate the merger is also subject to there not having occurred a material adverse effect on Affinity.

Termination (page 97)

        The merger agreement contains certain termination rights for both Affinity and Parent, including, without limitation, if the merger is not consummated on or before April 22, 2017, if the approval of the stockholders of Affinity is not obtained and by either party if the other party has materially breached or failed to perform under the merger agreement.

        The merger agreement further provides that, upon termination of the merger agreement by Affinity or Parent under specified circumstances, including, among others, a change in recommendation by the Board for a Superior Proposal or a material, uncured breach of the merger agreement by Affinity, Affinity may be required to pay Parent a termination fee of $12.4 million.

Parent Termination Fee (page 100)

        Upon termination of the merger agreement by Affinity or Parent under specified circumstances, Parent may be required to pay Affinity a termination fee of either $7.1 million, in connection with a failure to obtain applicable gaming approvals relating to Affinity's business under certain circumstances as provided in the merger agreement and for the sole benefit of Affinity's stockholders that are not controlled affiliates of Z Capital, or $17.7 million, in connection with a material, uncured breach of the merger agreement by Parent or failing to obtain financing, in each case, under certain circumstances as provided in the merger agreement.

Specific Performance (page 101)

        Subject to certain limitations, the merger agreement provides that the parties will be entitled to specific performance, including injunctive relief, to enforce the merger agreement against a non-performing party, in addition to any other rights the parties have against the non-performing party, although neither Parent nor Affinity will be entitled to receive both a grant of specific performance and any money damages. In addition, Affinity will be entitled to specific performance of various obligations of Z Capital, Parent and certain of Z Capital's other affiliates in certain circumstances and subject to certain limitations, in addition to Parent's obligation to cause the funding of the equity financing described below if certain conditions are met, including the funding of the debt financing described below.

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Limited Guarantee (page 102)

        In connection with the merger, Z Capital Partners II, L.P., Z Capital Partners II-A, L.P. and Z Capital Partners II-B, L.P. (collectively, the "Z Capital Funds") entered into a limited guarantee in favor of Affinity, referred to as the "Limited Guarantee," pursuant to which the Z Capital Funds, severally (and not jointly and severally), agreed to guarantee to Affinity the due and punctual performance and discharge of certain payment obligations of the Purchaser Parties to Affinity in the merger agreement, including to:

    pay certain fees and expenses in connection with any amendment to Affinity's credit agreement proposed by Parent, including fees and expenses of the agent and/or lenders for the credit agreement and reasonable and documented out-of-pocket fees and expenses of Affinity in assisting Parent in connection with any such amendment;

    reimburse costs and expenses associated with Affinity's reasonable cooperation in connection with the debt financing and indemnify and hold harmless Affinity in connection with the debt financing, except in connection with the willful misconduct, gross negligence or material breach by Affinity or any of its representatives;

    pay the Parent termination fee; and

    pay to Affinity the cost and expenses of any suit to enforce the Parent termination fee provisions that results in a judgment against Parent for the Parent termination fee,

in each case if, as and when such obligation becomes payable under the terms and conditions of the merger agreement. However, the maximum liability for each of the Z Capital Funds will not exceed such fund's participation percentage of the guaranteed obligations set forth in the Limited Guarantee less any portion of such guaranteed obligations that is indefeasibly paid to Affinity by Parent, Merger Sub or any other person.

        Purposes and Reasons of the Purchaser Parties and the Z Capital Filing Persons for the Merger (page 52)

        The purpose of the transactions contemplated by the merger agreement is for certain affiliates of Z Capital to acquire all of the outstanding shares of Affinity common stock not already owned by the Z Capital Rollover Investors. The merger will allow affiliates of Z Capital, through Parent and Merger Sub, to acquire Affinity's business and operate it as a private company.

Opinion of Financial Advisor to the Special Committee (page 42)

        Deutsche Bank Securities Inc. ("Deutsche Bank") has acted as financial advisor to the Special Committee of the Board of Directors in connection with the merger. At the August 22, 2016 meeting of the Special Committee, Deutsche Bank rendered its oral opinion to the Special Committee, subsequently confirmed by delivery of a written opinion dated August 22, 2016, to the effect that, as of the date of such opinion, and based upon and subject to the assumptions, limitations, qualifications and conditions described in Deutsche Bank's opinion, the Merger Consideration was fair, from a financial point of view, to the holders of the outstanding Affinity common stock (other than the Z Capital Rollover Investors).

        The full text of Deutsche Bank's written opinion, dated August 22, 2016, which sets forth the assumptions made, procedures followed, matters considered and limitations, qualifications and conditions on the review undertaken in connection with the opinion, is included as Appendix B to this proxy statement and is incorporated herein by reference. The summary of Deutsche Bank's opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of the opinion. Deutsche Bank's opinion was addressed to, and for the use and benefit of, the Special Committee (in its capacity as such) in connection with its evaluation of the merger. Deutsche Bank's opinion does not

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constitute a recommendation as to how any holder of Affinity common stock should vote in respect to the merger or any other matter. Deutsche Bank's opinion was limited to the fairness of the Merger Consideration, from a financial point of view, to the holders of Affinity common stock (other than the Z Capital Rollover Investors) as of the date of the opinion and Deutsche Bank did not express any opinion as to the underlying decision by Affinity to engage in the merger or the relative merits of the merger as compared to any alternative transactions or business strategies.

        For a description of the opinion that the Special Committee received from Deutsche Bank, see the section entitled "Special Factors—Opinion of Financial Advisor to the Special Committee."

Fairness Determination by the Board of Directors and the Special Committee (page 35)

        The Special Committee determined, by unanimous decision of all directors present and voting, in good faith that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Affinity and its stockholders (other than Z Capital and its affiliates), and, by unanimous decision of all directors present and voting, approved and recommended that the Board approve and adopt the merger agreement and the transactions contemplated thereby, including the merger. Based on the Special Committee's recommendation, the Board, by unanimous decision of all directors present and voting, approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and determined that the terms of the merger agreement are just and reasonable as to Affinity, and that the merger agreement and the transactions contemplated thereby, including the merger and the Merger Consideration, are fair to and in the best interests of Affinity and its stockholders (other than Z Capital and its affiliates). See "Special Factors—Background of the Merger and Special Committee Proceedings" and "Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger."

Fairness Determination by Purchaser Parties and Z Capital Filing Persons (page 48)

        Each of the Purchaser Parties and the Z Capital Filing Persons believes that the merger is substantively and procedurally fair to Affinity's stockholders other than the Z Capital Rollover Investors. The Purchaser Parties and Z Capital Filing Persons based this determination on their knowledge and analysis of available information regarding Affinity and discussions with Affinity's senior management regarding Affinity and its business and the factors considered by, and the analysis and resulting conclusions of, the Board and the Special Committee discussed under "Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger."

Certain Effects of the Merger (page 55)

        The proposed merger is a "going private" transaction under the Securities and Exchange Commission ("SEC") rules. If the merger is completed, Affinity will become a private company wholly owned by Parent (which is controlled by affiliates of Z Capital), and Affinity's stockholders (other than shares held in treasury of Affinity or owned, directly or indirectly, by the Purchaser Parties, the Z Capital Rollover Investors, the Management Rollover Investors or shares for which dissenters' rights are properly demanded and perfected pursuant to Nevada Revised Statute 92A.300 through 92A.500) will no longer have an equity interest in Affinity, will not participate in any of the future earnings growth of Affinity and instead will only have the right to receive the Merger Consideration. See "Special Factors—Payment of the Merger Consideration and Surrender of Stock Certificates."

        After the merger, Affinity will deregister its common stock under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the "Exchange Act").

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Merger Financing (page 62)

        The Purchaser Parties estimate that approximately $209 million in cash will be required to pay the aggregate Merger Consideration and to pay the cash amounts payable to holders of outstanding Affinity stock options and restricted stock awards (see "The Merger Agreement—Treatment of Stock Options and Restricted Stock"). The Purchaser Parties anticipate that such funds will be obtained from debt and equity financings and from the unrestricted cash of Affinity and its subsidiaries. In addition, certain affiliates of Z Capital have committed, subject to the satisfaction or waiver of certain conditions, to contribute and deliver to Holdings immediately prior to the closing of the merger $62.5 million of cash in exchange for 11,946,776 Class A units of Holdings, provided that the amount of such cash contribution by affiliates of Z Capital may be adjusted based on the actual costs, fees and expenses required in connection with the merger at the closing.

        On September 30, 2016, Affinity's existing credit agreement was amended to, among other things, permit the merger, the proposed second-lien financing, as described below, and Affinity to borrow $30.0 million of additional first lien term loans under Affinity's existing credit agreement. Among other customary conditions, the consummation of the merger is a condition precedent to the effectiveness of such amendment and the extension of additional first lien term loans thereunder. Merger Sub has obtained a binding debt financing commitment from Citizens Bank, N.A. ("Citizens"), Credit Suisse Securities (USA) LLC ("CS Securities"), Credit Suisse AG ("CS") and Fifth Third Bank ("Fifth Third" and, together with Citizens, CS Securities and CS, collectively, the "debt financing sources"), which have committed on a several, but not joint, basis to provide a second lien term facility in the amount of $95 million. In addition, Parent has obtained a binding commitment letter from Z Capital Partners II, L.P., Z Capital Partners II-A, L.P. and Z Capital Partners II-B, L.P. (together, the "Z Capital Funds"), which have each committed on a several, and not joint and several, basis to, subject to the terms and conditions set forth in the commitment letter, contribute cash in the amount of $23.4 million, $27.0 million and $12.1 million (collectively, the "equity commitment amount"), respectively, in exchange for certain equity interests and/or debt securities of Parent, the proceeds of which will be used to fund the obligations of the Purchaser Parties under the merger agreement. The amount to be funded may be reduced in the manner designated by the Z Capital Funds to the extent (but only to the extent) Parent and Merger Sub do not require the full equity commitment amount. The aggregate proceeds of such financing commitments, together with the additional first lien term loans under Affinity's existing credit agreement and unrestricted cash of Affinity and its subsidiaries, will be used to complete the merger, pay fees and expenses in connection therewith and in connection with the financing thereof, and the other transactions contemplated by the merger agreement. Parent's obtaining all or any of the financing or any alternative financing is not a condition to the closing of the merger.

Appraisal and Dissenters' Rights (page 74)

        Holders of Affinity's common stock are entitled to assert dissenter's rights under Nevada Revised Statutes, or NRS, 92A.300 to 92A.500, inclusive. In the event of certain extraordinary corporate transactions, such as a merger, stockholders may exercise dissenter's rights by "demanding payment" for their shares at a price equal to its fair value immediately before the corporate action. If Affinity and a stockholder that properly asserts dissenter's rights cannot agree on a fair value, Affinity must then commence an appraisal process in state court to determine the fair value, which may be more than, equal to, or less than the Merger Consideration. To exercise dissenter's rights, a holder of Affinity common stock must deliver to Affinity a notice of the holder's intent to demand payment for his or her shares before the stockholder vote on the merger agreement is taken at the special meeting, must not vote any shares in favor of the proposal to adopt the merger agreement, and must strictly comply with all of the procedures required by Nevada law.

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        A copy of the full text of NRS 92A.300 to 92A.500 is included as Appendix D to this proxy statement. Failure to follow the procedures set forth in NRS 92A.300 to 92A.500 will result in the forfeiture of dissenter's rights.

Regulatory Approvals (page 79)

        Under the HSR Act, the merger may not be completed until notifications have been given and information furnished to the United States Department of Justice and the Federal Trade Commission and all statutory waiting period requirements have been terminated or expired. On September 1, 2016, the Purchaser Parties and Affinity filed Notification and Report Forms with respect to the merger under the HSR Act. Early termination of the waiting period under the HSR Act was granted on September 13, 2016.

        The closing of the merger is conditioned upon all gaming approvals being duly obtained and in full force and effect. The following is a summary of the applications that Parent and Affinity, as applicable, will need to file in various jurisdictions; however, each regulatory authority also has the discretion to require that Parent, Affinity, or their affiliates file additional applications or provide additional information in connection with the gaming and liquor regulatory approval process.

        On September 29, 2016, Affinity filed a change of ownership application with the Colorado Limited Gaming Control Commission, and Parent filed an associated business application with the Colorado Limited Gaming Control Commission. On September 21, 2016, the following applications were filed with the Nevada Gaming Commission: (i) Z Capital Group, L.L.C. filed an application for an acquisition of control of Affinity and for registration as an intermediary/holding company; (ii) Affinity filed an application for deregistration as a publicly traded company and for registration as a private investment company; (iii) Z Capital, Holdings and Parent (collectively with Z Capital Group, L.L.C., the "Z Capital Entities") filed applications for registration as intermediary/holding companies; and (iv) James J. Zenni, Jr. filed applications for findings of suitability as the sole officer and director of each of the Z Capital Entities. The Z Capital Entities will also provide and obtain approvals, if necessary, from the local government authorities in Clark County, the City of Sparks, and Washoe County. On September 20, 2016, Parent filed an asset/stock purchase form for commission approval with the Iowa Racing and Gaming Commission. On September 21, 2016, Parent filed a Petition for Change of Control with the Missouri Gaming Commission. On October 6, 2016, Parent, Affinity and HGI—St. Jo, LLC, doing business as St. Jo Frontier Casino, and HGI—Mark Twain, LLC, doing business as Mark Twain Casino (together, the "Missouri Class B subsidiaries"), filed a 60-day notice of the merger financing with the Missouri Gaming Commission together with a Transaction Sheet and a Compliance Affidavit and a 15-day notice of private incurrence of debt exceeding $1 million and the granting of guaranty of unsecured notes and other instruments by the Missouri Class B subsidiaries.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

        The following questions and answers address briefly some questions you may have regarding the special meeting, the merger agreement and the merger. These questions and answers may not address all questions that may be important to you as a stockholder of Affinity. Please refer to the more detailed information contained elsewhere in this proxy statement, the appendices attached to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

The Merger

Q:    What is the proposed transaction?

A:
The proposed transaction is the merger of Merger Sub with and into Affinity pursuant to the merger agreement, with Affinity continuing as the surviving corporation as a wholly owned subsidiary of Parent. Parent is an entity formed and controlled by investment funds affiliated with Z Capital Partners, L.L.C., a Delaware limited liability company ("Z Capital"). The Z Capital Rollover Investors own approximately 41.2% of Affinity's outstanding shares of common stock, $0.001 par value per share. Following the Effective Time of the merger, Affinity will be privately held and controlled by affiliates of Z Capital. See "The Merger Agreement."

Q:    What will I receive in the merger?

A:
If the merger is completed, you will be entitled to receive $17.35 in cash, without interest and subject to deduction for any required withholding tax, for each share of common stock that you own; provided that each share contributed by the Z Capital Rollover Investors to Parent immediately prior to the Effective Time will not be cancelled and will remain outstanding. For example, if you own 100 shares of common stock, you will be entitled to receive $1,735 in cash in exchange for your shares of common stock, less any required withholding taxes. You will not be entitled to receive shares in the surviving corporation.

Q:    What are the U.S. federal income tax consequences of the merger?

A:
The receipt of cash in exchange for shares of Affinity common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder who receives cash in exchange for shares of Affinity common stock in the merger will recognize capital gain or loss equal to the difference, if any, between the cash received and the U.S. holder's adjusted tax basis in the shares surrendered in the merger. Gain or loss will be determined separately for each block of shares of Affinity common stock (that is, shares acquired for the same cost in a single transaction). The determination of actual tax consequences of the merger to a holder of Affinity common stock will depend on the holder's specific situation. You should refer to the discussion in the section entitled "Special Factors—Material U.S. Federal Income Tax Consequences" and consult your tax advisor with respect to the U.S. federal, state and local and foreign tax consequences of the merger.

The Special Meeting

Q:    When and where is the special meeting?

A:
The special meeting of the stockholders of Affinity will be held on [-], 2016, [-], Eastern Daylight Time, at the New York City offices of Morrison & Foerster LLP, 250 West 55th Street, New York, NY 10019.

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Q:    What matters will be voted on at the Special Meeting?

A:
You will be asked to consider and vote on the following proposals:

approve a proposal to adopt the Agreement and Plan of Merger (including the principal terms thereof), dated as of August 22, 2016, among Parent, Merger Sub and Affinity, as amended from time to time (the "Merger Proposal"). The Agreement and Plan of Merger, as amended from time to time, and the proposed merger thereunder are referred to in this proxy statement as the "merger agreement" and the "merger," respectively (a copy of the merger agreement is included as Appendix A to this proxy statement);

approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to the named executive officers of Affinity in connection with the merger, as disclosed under "Special Factors—Potential Change of Control Payments to Named Executive Officers" (the "Merger-Related Compensation Proposal"); and

approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Merger Proposal (the "Adjournment Proposal").

Voting and Proxy Procedures

Q:    Who may vote at the special meeting?

A:
You are entitled to vote at the special meeting (or any adjournment or postponement thereof) in person or by proxy if you owned shares of Affinity common stock at the close of business on [-], 2016, which is the record date for the special meeting. As of the record date, there were [-] shares of Affinity common stock issued and outstanding. You will have one vote for each share of Affinity common stock you held on the record date. See "The Special Meeting—Voting Rights; Quorum."

Q:    What vote is required to approve the merger?

A:
Under Nevada law and as a condition to the consummation of the merger, the Merger Proposal requires the affirmative vote of stockholders holding at least a majority of the shares of Affinity common stock outstanding and entitled to vote at the special meeting. Approval of the holders of at least a majority of the shares of Affinity common stock not owned by affiliates of Z Capital is not required for Affinity to complete the merger.

Q:    What vote is required to approve the other matters to be voted upon at the special meeting?

A:
The Merger-Related Compensation Proposal and the Adjournment Proposal each require the affirmative vote of the holders of at least a majority of the shares of Affinity common stock present or represented by proxy and entitled to vote at the special meeting.

Q:
Why am I being asked to consider and vote on the compensation that may be paid or become payable to the named executive officers of Affinity in connection with the merger?

A:
The SEC rules require Affinity to seek stockholder approval on an advisory (non-binding) basis with respect to certain payments that will or may be made to Affinity's named executive officers in connection with the merger. Approval of the compensation that may be paid or become payable to the named executive officers of Affinity in connection with the merger is not a condition to the completion of the merger.

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Q:    Who is soliciting my proxy?

A:
The Board is soliciting proxies to be voted at the special meeting or any adjournment or postponement thereof. Affinity's directors, officers and employees, and employees of Z Capital, may assist Affinity in soliciting proxies, but will not be specifically compensated for their services. See "The Special Meeting—Proxy Solicitation."

Q:    How does the Board recommend I vote?

A:
The Board unanimously recommends that you vote:

"FOR" the Merger Proposal;

"FOR" the Merger-Related Compensation Proposal; and

"FOR" the Adjournment Proposal.

Q:    What do I need to do now and how should I vote?

A:
You should read this proxy statement carefully, including its appendices, and consider how the merger affects you. Then, mail your completed, dated and signed proxy card in the enclosed return envelope, or follow the instructions set forth on the voting instruction form provided by the record holder if your shares are held in the name of your broker, bank or other nominee, as soon as possible so that your shares can be voted at the special meeting or any adjournment or postponement thereof. You also may submit your proxy by using the toll-free telephone number or by accessing the Internet website specified on your proxy card. See "The Special Meeting—Voting and Revocation of Proxies."

Q:
What happens if I do not return a proxy card or otherwise provide proxy instructions or if I elect to abstain from voting?

A:
If you do not submit a proxy card or submit a proxy by telephone or via the Internet, or follow the instructions set forth on the voting instruction form provided by the record holder if your shares are held in the name of your broker, bank or other nominee, unless you attend the special meeting in person, your shares will not be counted as present for the purpose of determining the presence of a quorum, which is required to transact business at the special meeting, and your failure to take action will have the same effect as a vote "AGAINST" the Merger Proposal. However, such failure will not have any effect on the outcome of the Merger-Related Compensation Proposal or the Adjournment Proposal.

    If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be counted as present for the purpose of determining the presence of a quorum for the special meeting and all of your shares will be voted "FOR" the Merger Proposal, "FOR" the Merger-Related Compensation Proposal and "FOR" the Adjournment Proposal. However, if you submit a proxy card or provide proxy instructions by telephone or via the Internet or your bank, broker or other nominee and affirmatively elect to abstain from voting on one or more of the proposals, your proxy will be counted as present for the purpose of determining the presence of a quorum for the special meeting, but will not be voted on such proposals at the special meeting or at any adjournment or postponement thereof. As a result, your abstention(s) will have the same effect as voting "AGAINST" any proposals in respect of which you abstain.

Q:    May I vote in person?

A:
If your shares of Affinity common stock are registered directly in your name with Affinity's transfer agent, you are considered, with respect to those shares, to be the "stockholder of record,"

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    and the proxy materials and proxy card are being sent directly to you by Affinity. If you are a stockholder of record, you may attend the special meeting and vote your shares in person, rather than by signing and returning your proxy card.

    If your shares of Affinity common stock are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in "street name," and these proxy materials are being forwarded to you together with a voting instruction form. As the beneficial owner, you are also invited to attend the special meeting. However, since a beneficial owner is not the stockholder of record, you may not vote these shares in person at the special meeting unless you obtain a "legal proxy" from the broker, bank or other nominee that holds your shares giving you the right to vote the shares in person at the special meeting.

Q:    What constitutes a quorum?

A:
Stockholders who hold a majority of the shares of Affinity common stock outstanding as of the close of business on the record date for the special meeting must be present either in person or by proxy in order to constitute a quorum to conduct business at the special meeting or at any adjournment or postponement thereof. See "The Special Meeting—Voting Rights; Quorum."

Q:    What is a broker non-vote?

A:
Broker non-votes are shares held in "street name" by brokers, banks and other nominees that are present or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such broker, bank or nominee does not have discretionary voting power on such proposal. Because brokers, banks and other nominees holding shares in "street name" do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement, if a beneficial owner of shares of Affinity common stock held in "street name" does not give voting instructions to the broker, bank or other nominee, then those shares will not be counted as present in person or by proxy at the special meeting or at any adjournment or postponement thereof.

    The vote to approve the Merger Proposal is based on the total number of shares of Affinity common stock outstanding on the record date for purposes of satisfying the majority vote condition under Nevada law. As a result, if you fail to issue voting instructions to your broker, bank or other nominee, it will have the same effect as a vote "AGAINST" the Merger Proposal. The failure to issue voting instructions to your broker, bank or other nominee will have no effect on the outcome of the Merger-Related Compensation Proposal or the Adjournment Proposal.

Q:
Will my shares held in "street name" or another form of record ownership be combined for voting purposes with shares I hold of record?

A:
No. Because any shares you may hold in "street name" will be deemed to be held by a different stockholder than any shares you hold of record, any shares held in "street name" will not be combined for voting purposes with shares you hold of record. Similarly, if you own shares through various record holders, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and will need to sign and return, a separate proxy card for those shares because they are held in a different form of record ownership. Shares held by a corporation or business entity must be voted by an authorized officer of the entity. Shares held in an individual retirement account must be voted under the rules governing the account.

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Q:    May I change my vote after I have mailed my signed proxy card?

A:
Yes. You may change your vote at any time before your proxy card is voted at the special meeting. You can do this in one of three ways:

you can send a written notice to Affinity's corporate secretary, stating that you would like to revoke your proxy;

you can complete and submit a new proxy card; or

you can attend the special meeting and vote in person. Your attendance at the special meeting will not alone revoke your proxy—you must vote at the special meeting.

    If you have instructed a broker, bank or other nominee to vote your shares, you must follow directions received from your broker, bank or other nominee to change those instructions. See "The Special Meeting—Voting and Revocation of Proxies."

Q:    Should I send in my stock certificates now?

A:
No. After the merger is completed, you will receive written instructions for exchanging your shares of Affinity common stock for the Merger Consideration. If you hold your shares in street name, your broker, bank or other nominee will provide you with instructions on how to surrender your shares of Affinity common stock in exchange for the Merger Consideration. See "Special Factors—Payment of the Merger Consideration and Surrender of Stock Certificates."

Q:    Do I have any dissenter's or appraisal rights?

A:
Yes. Under the NRS, holders of Affinity common stock are entitled to assert dissenter's rights, but only if they comply with all requirements of Nevada law, which are summarized in this proxy statement. By exercising dissenter's rights, stockholders can "demand payment" for their shares at a price equal to its fair value immediately before the corporate action. If Affinity and any stockholder that properly asserts dissenter's rights cannot agree on a fair value, Affinity must then commence an appraisal process in state court to determine the fair value. This appraisal amount could be more than, the same as, or less than the amount that a stockholder will be entitled to receive under the merger agreement. Any holder of shares of Affinity common stock intending to exercise dissenter's rights must, among other things, submit a written demand for appraisal to Affinity prior to the vote on the adoption of the merger agreement and must not vote or otherwise submit a proxy in favor of the adoption of the merger agreement. Failure to follow exactly the procedures specified under Nevada law will result in the forfeiture of dissenter's rights. Because of the complexity of the Nevada law relating to dissenter's rights, if you are considering exercising your dissenter's rights, we encourage you to seek the advice of your own legal counsel. For more information, see "The Merger—Appraisal and Dissenters' Rights." In addition, a copy of the full text of NRS 92A.300 to 92A.500 is attached as Appendix D to this proxy statement.

Getting More Information

Q:
When will Affinity announce the voting results of the special meeting, and where can I find the voting results?

A:
Affinity intends to announce the preliminary voting results at the special meeting, and will report the final voting results of the special meeting in a Current Report on Form 8-K filed with the SEC as soon as is reasonably practicable after the special meeting. All reports that Affinity files with the SEC are publicly available without charge at www.sec.gov when filed.

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Q:    Who can help answer my questions?

A:
If you would like additional copies of this proxy statement (which copies will be provided to you without charge) or if you have questions about the merger, including the procedures for voting your shares, you should contact Marc H. Rubinstein, Senior Vice President, General Counsel & Secretary at Affinity Gaming, 3755 Breakthrough Way, Suite 300, Las Vegas, Nevada, 89135 or (702) 341-2400.

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SPECIAL FACTORS

Background of the Merger and Special Committee Proceedings

        On December 31, 2010, the predecessor to Affinity emerged from Chapter 11 bankruptcy proceedings, and on December 20, 2012, the predecessor to Affinity converted from a Nevada limited liability company into a Nevada corporation, becoming Affinity. In July 2014, Affinity entered into a settlement agreement (the "Settlement Agreement") with Z Capital and certain of Affinity's stockholders. As more fully described below in the section entitled "Information About Affinity—Related Party Transactions," the Settlement Agreement resolved and dismissed a complaint that had been filed by Z Capital in February 2013 relating to Affinity's conversion into a Nevada corporation. In addition, pursuant to the Settlement Agreement, Affinity reconstituted the Board to include seven members, consisting of Affinity's chief executive officer, two members designated by Z Capital, now James J. Zenni, Jr. and Andrei Scrivens, and four other members designated by SPH Manager and stockholders other than Z Capital, now including David Reganato, Affinity's Chairman of the Board, and James A. Cacioppo, Matthew A. Doheny and Eric Tanjeloff.

        Affinity now owns and operates 11 casinos, five of which are located in Nevada, three in Colorado, two in Missouri and one in Iowa. Affinity's common stock is not listed on a national securities exchange and there is not otherwise an active trading market for Affinity's common stock. The directors of Affinity from time to time consider potential alternatives for Affinity.

        On April 3, 2015, Z Capital delivered a letter to the Board outlining the following proposal (the "April 3 Proposal"):

    "Z Capital Partners, L.L.C., on behalf of itself and its affiliated funds ("Z Capital"), is pleased to submit a proposal to acquire all the outstanding common shares of Affinity Gaming, a Nevada corporation ("Affinity Gaming" or the "Company"), that are not already owned by Z Capital.

    As you know, as of the date of this letter, Z Capital is the largest stockholder of Affinity Gaming, owning 8,024,436 common shares, representing approximately 39.5% of the Company's issued and outstanding capital stock. We have demonstrated our continuing commitment to Affinity Gaming, its businesses and its employees on a long-standing basis. We believe, however, that a fundamental change in the Company's ownership structure is essential if it is to realize its full potential. We therefore submit this proposal to make that change and provide the exit that we believe many of our fellow stockholders are seeking.

    Given Affinity Gaming's size and configuration, and the challenges it faces, we believe that it needs a single owner with the resources and committed capital, and a willingness to put them to work, necessary to make the company grow. Despite successfully emerging from bankruptcy in December 2010, almost four and a half years ago, Affinity Gaming has failed to thrive and grow. With $100 million of cash on its balance sheet, the Company has failed to embrace the transformational initiatives needed to realize its full potential. We believe that in its current ownership configuration Affinity Gaming is not likely to pursue these initiatives in the foreseeable future.

    Not only is this situation unproductive for Affinity Gaming's stockholders in the long term, it is not good for them now. There is effectively no market for Affinity Gaming and no liquidity opportunity for its stockholders. Indeed there have been no reported transactions in Affinity Gaming stock, other than purchases by Z Capital, for almost a year and a half. And those purchases reflect a negative trend in the price per share for the Company's stock—not a favorable development for stockholders. Absent a transaction of the type we are now proposing, we think there is no meaningful opportunity for Affinity Gaming's stockholders to see meaningful appreciation in their equity value, or any opportunity to realize that value now or in the foreseeable future.

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    Purchase Price

    Z Capital is prepared to offer a purchase price of $9.75 per share in cash for all of the outstanding common shares of Affinity Gaming not already owned by Z Capital. This represents a 9.7x multiple to the Company's EBITDA during fiscal year 2014 and reflects our current assessment of the Company's business and prospects, our review of publicly available information and our experience in the gaming industry. The purchase price is subject to the satisfactory completion of limited confirmatory due diligence and the negotiation and execution of definitive documentation containing customary terms and conditions.

    We believe that the Company's stockholders will find our offer extremely attractive, particularly in light of the structural challenges and the challenging operating environment that Affinity Gaming continues to face, and the absence of a liquid market for its shares.

    Transaction Process and Timing

    Z Capital has in-depth knowledge of Affinity Gaming's history, business operations and management team. We are prepared to initiate and complete the required confirmatory due diligence on a rapid basis.

    In light of the service of employees of Z Capital on the Company's board of directors, we would expect that the board would appoint a special committee of independent directors to consider our offer. We would anticipate that definitive agreements containing customary terms and conditions could be expeditiously negotiated and finalized.

    Financing

    The transaction would be financed by equity capital provided by funds managed and advised by Z Capital, as well as debt financing from sources with which Z Capital has a long-standing relationship. We would expect to receive binding debt financing commitments in connection with the execution of definitive transaction documents.

    Necessary Approvals

    In addition to a stockholder vote and other customary closing conditions, closing of the transaction would be subject to receipt of customary antitrust and other required regulatory approvals, including approval by all the relevant gaming authorities. Given the existing approvals for our current ownership in all jurisdictions in which Affinity Gaming operates, we do not anticipate significant obstacles or lengthy delay in obtaining the approvals needed to consummate this transaction.

    Please understand that this letter is solely an indication of interest and does not constitute a binding offer on the part of Z Capital to submit a definitive agreement at any time. Moreover, our obligation with respect to our proposed acquisition of Affinity Gaming would exist only upon the negotiation, execution and delivery of mutually acceptable definitive agreements.

    We are available immediately to discuss the terms of our proposal and to negotiate a definitive agreement with you.

    We hope to receive a favorable response from you promptly."

        Messrs. Zenni and Scrivens, directors of Affinity, are the President and Chief Executive Officer of Z Capital and a Managing Director of Z Capital, respectively. Mr. Zenni founded Z Capital, and is the beneficial owner of approximately 41.2% of Affinity's common stock. On April 3, 2015, Z Capital filed an amendment to its Schedule 13D disclosing the April 3 Proposal.

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        On April 7, 2015, the Board met telephonically with representatives of Morrison & Foerster LLP ("Morrison & Foerster"), Affinity's outside corporate counsel, to discuss the April 3 Proposal. During that meeting, having determined that a review of the April 3 Proposal and other strategic alternatives available to Affinity was in the best interest of Affinity and its stockholders, and believing it appropriate to appoint a special committee of the Board comprised solely of independent directors who were not expected to participate in any potential acquisition proposal and were not otherwise conflicted with respect to the April 3 Proposal or expected to be conflicted with respect to any other such proposal or alternative transaction, the members of the Board present and voting designated Messrs. Doheny, Cacioppo and Tanjeloff and Richard S. Parisi (then Chairman of the Board of Affinity, and a member of the Special Committee, through May 13, 2015), as members of the Special Committee to act for and on behalf of the Board with respect to the consideration of any potential acquisition transaction, whether proposed by Z Capital or otherwise, and all related matters. The Board also resolved that it would not approve or authorize, or recommend to Affinity's stockholders, the April 3 Proposal or any other proposal to acquire Affinity that was not recommended by the Special Committee.

        The Special Committee met telephonically on April 8 and April 10, 2015 with representatives of Morrison & Foerster. At the April 8, 2015 meeting, the representatives of Morrison & Foerster discussed with the Special Committee Morrison & Foerster's independence with respect to advising the Special Committee in light of its representation of Affinity. In addition, the representatives of Morrison & Foerster provided the members of the Special Committee with an overview of their fiduciary duties, and the Special Committee discussed each member's independence, including any relationships that such member may have with Z Capital or Affinity's other stockholders. Each member confirmed his belief that such member did not have any relationships with Z Capital or other likely potential acquirors that would affect his independence in reviewing the April 3 Proposal, and the Special Committee agreed. The members of the Special Committee thereafter appointed Mr. Doheny as chairman of the Special Committee.

        At both the April 8 and April 10, 2015 meetings, the members of the Special Committee discussed the terms of the April 3 Proposal. Among other things, the Special Committee discussed the need to clarify with Z Capital certain aspects of the April 3 Proposal, including with respect to Z Capital's proposed financing and regulatory matters, including timing for relevant approvals. Following this discussion, the Special Committee directed Morrison & Foerster to prepare a letter that the Special Committee could send to Z Capital requesting clarification of the April 3 Proposal.

        At the April 10, 2015 meeting, the members of the Special Committee also discussed the potential engagement of a financial advisor. Following the meeting, at the Special Committee's direction, Mr. Parisi, as Chairman of the Board, informed Affinity's Chief Executive Officer, Michael Silberling, that as a result of the April 3 Proposal, except to the extent of communications and information sharing with the Board as a whole, communications by Affinity's management with Z Capital and its designated directors should be limited.

        On April 12, 2015, the Special Committee sent a letter to Z Capital seeking clarification regarding certain aspects of the April 3 Proposal. Z Capital responded on April 15, 2015 in a letter to the Special Committee in which it indicated, among other things, that its willingness to proceed with the April 3 Proposal on the proposed timetable was subject to Affinity's agreement to negotiate exclusively with Z Capital for 60 days after signing a confidentiality agreement.

        The Special Committee met telephonically with representatives of Morrison & Foerster on April 15 and April 17, 2015. On April 15, 2015, the Special Committee met and, following a discussion wherein Morrison & Foerster confirmed there had been no developments that would affect its independence since its discussion with the Board on April 8, 2015, approved the engagement of Morrison & Foerster as independent counsel to the Special Committee. The Special Committee also

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discussed the retention of Fennemore Craig, P.C. ("Fennemore Craig") as independent Nevada counsel to the Special Committee, which retention was confirmed at the April 17, 2015 meeting. At both the April 15 and April 17, 2015 meetings, the Special Committee discussed the process for obtaining proposals from prospective financial advisors, including a draft request for proposals prepared by Morrison & Foerster at the request of the Special Committee, as well as the additional information provided by Z Capital with respect to the April 3 Proposal. At the Special Committees' direction, Morrison & Foerster sent the request for proposals to several prospective financial advisors.

        On April 15, 2015, the Special Committee also discussed whether, and the extent to which, the Special Committee should discuss with Affinity's stockholders the views of such stockholders regarding the April 3 Proposal, and determined to conduct preliminary work related to the April 3 Proposal before conducting such discussions. On April 15 and April 17, 2015, the Special Committee also discussed the potential for publicly providing financial guidance for 2015. The Special Committee noted that Affinity had not historically provided guidance, but that, given Affinity's common stock is not listed on a national securities exchange and there is not otherwise an active trading market for Affinity's common stock, there was no clear market price for Affinity's stock that might otherwise be a factor in helping stockholders to evaluate the strength of Z Capital's proposed acquisition price, and accordingly, the release of guidance at this time would be helpful to investors in valuing Affinity and its stock and considering what steps they might wish to take with respect to their shares of Affinity stock.

        In addition, on April 15, 2015, the Special Committee resolved to limit any conversations between individual Special Committee members, on the one hand, and Z Capital and its designated directors, on the other, in order to maintain the independence of the Special Committee's process. The Special Committee also directed the representatives of Morrison & Foerster to prepare guidelines for Affinity's management with respect to communications with Z Capital and its representatives relating to the April 3 Proposal and a draft non-disclosure agreement with Z Capital, which were reviewed at the April 17, 2015 meeting. Based on the Special Committee's direction at the April 17, 2015 Special Committee meeting, shortly thereafter the representatives of Morrison & Foerster provided the communication guidelines to Affinity's management and sent a draft non-disclosure agreement, which contained a 12-month standstill provision, to Z Capital's outside counsel. Representatives of Morrison & Foerster had a telephone conference later that day with Z Capital's outside counsel to discuss the non-disclosure agreement. Morrison & Foerster sent the communication guidelines to Z Capital's outside counsel on April 20, 2015, asked such counsel to provide such guidelines to Z Capital, and requested that Z Capital abide by such guidelines. Z Capital, following discussion with its outside counsel, indicated that they had no objections to complying with the guidelines.

        The Special Committee met telephonically on April 22 and April 24, 2015 with representatives of Morrison & Foerster and Fennemore Craig. At the meetings, representatives of Fennemore Craig discussed with the members of the Special Committee their fiduciary duties under Nevada law. The Special Committee also discussed the proposed process for seeking input from Affinity's stockholders on their views of the April 3 Proposal and invited management to join the call to present the five-year strategic plan that they had prepared at the direction of the Special Committee and certain disposition transactions then contemplated by Affinity.

        On April 22, 2015, Z Capital sent to the Special Committee a revised draft of the non-disclosure agreement and a draft exclusivity agreement providing that Affinity would only discuss acquisition transactions exclusively with Z Capital, and proposed that the period for the standstill and such exclusivity both be 30 days. During the meeting on April 24, 2015, the Special Committee and representatives from Morrison & Foerster discussed Z Capital's revised draft non-disclosure agreement and request for exclusive negotiations. Later that day, at the direction of the Special Committee, Morrison & Foerster sent Z Capital's counsel a revised draft of the non-disclosure agreement and conveyed that the standstill period under the non-disclosure agreement should be nine months and the Special Committee was unwilling to enter into exclusivity at that time. Over the next week,

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representatives of Morrison & Foerster and Z Capital's outside counsel discussed the foregoing matters, including the terms of the non-disclosure agreement.

        On April 27, 2015, Z Capital sent the Special Committee a letter stating that Z Capital's April 3 Proposal would expire on May 19, 2015. Also on April 27, 2015, Z Capital filed an amendment to its Schedule 13D disclosing the letter, and Affinity issued a press release announcing that the Board of Directors had formed the Special Committee to, among other things, review the April 3 Proposal and other strategic alternatives.

        On April 29, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Fennemore Craig to discuss Z Capital's April 27 letter and potential dates for financial advisor presentations, and compensation for the directors' service on the Special Committee. Following this discussion, the Special Committee invited management to join the call to discuss management's five-year strategic plan and management's financial guidance for 2015 to be included in Affinity's earnings release for the first quarter of that year.

        On May 1, 2015 representatives from Morrison & Foerster had a call with representatives from Z Capital's outside counsel to discuss, among other things, the terms of the non-disclosure agreement and the standstill agreement. Z Capital's outside counsel indicated that Z Capital would only be willing to consider entering into a limited duration standstill agreement if the Special Committee would agree to Z Capital's proposed price of $9.75 per share as set forth in the April 3 Proposal.

        On May 5, 2015 the Special Committee met with prospective financial advisors to discuss their responses to the Special Committee's request for proposals. On May 6, 2016, the Special Committee held a telephonic meeting to discuss the various financial advisors, and had a follow-up call with Deutsche Bank Securities Inc. ("Deutsche Bank") to discuss the potential terms of their engagement, as well as their independence. After a discussion of the various financial advisors, the Special Committee unanimously determined to engage Deutsche Bank to act as the Special Committee's financial advisor based upon, among other things, Deutsche Bank's overall expertise in mergers and acquisitions and knowledge of the gaming industry and of Affinity. The Special Committee then directed Morrison & Foerster to work with Deutsche Bank to finalize the terms of its engagement.

        On May 8, 2015, representatives of Deutsche Bank met in person with Affinity's management team to discuss the financial projections and five-year plan prepared by management, conduct a property tour of Affinity's Silver Sevens Hotel & Casino property in Las Vegas, and commence its due diligence review of material provided by management. That day, Affinity also issued an earnings release for the first quarter of 2015, including guidance for Adjusted EBITDA (defined as earnings before interest expense, net; income tax; depreciation and amortization; share-based compensation expense; pre-opening costs; write downs, reserves and recoveries; loss on extinguishment or modification of debt; loss on impairment of assets; gains or losses on the disposition of assets; and restructuring and reorganization costs) for 2015 of between $62 million and $66 million.

        On May 14, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank. The representatives of Deutsche Bank delivered a presentation to the Special Committee regarding their views of the five-year strategic plan and financial projections prepared by management, which focused on improving margins through cost and expense reductions (rather than growth in revenues), the financial results of Affinity for the first quarter of 2015, and an illustrative analysis of the present value of projected future share prices, based on the financial projections provided by management. The representatives of Deutsche Bank also discussed potential difficulties Affinity might have in raising revenues through acquisitions as well as market trading information for companies and information on comparable transactions in the regional gaming industry. The Special Committee requested that the representatives of Deutsche Bank prepare a definitive presentation to discuss with the Special Committee on May 18, 2015. The representatives of Deutsche Bank then left the meeting and, following further discussion, the Special Committee determined that

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the representatives of Morrison & Foerster and Deutsche Bank should coordinate to set up meetings with Affinity stockholders to hear their views on the April 3 Proposal.

        Separate conference calls between the members of the Special Committee and representatives of SPH Manager and Spectrum Investment Partners, L.P. ("Spectrum") subsequently took place the morning of May 18, 2015, in each case with representatives of Morrison & Foerster and Deutsche Bank. On the calls, each of SPH Manager and Spectrum separately conveyed its view that it was not supportive of Z Capital's $9.75 per share proposal, indicating that it believed that $9.75 per share was substantially below what such stockholder would be willing to support.

        On the afternoon of May 18, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank to review the presentation by Deutsche Bank that the Special Committee had requested. The representatives of Deutsche Bank discussed with the Special Committee (i) the five-year strategic plan and financial projections prepared by management, noting that the strategic plan contemplated high compounded annual growth rate, largely driven by cost cutting initiatives and reductions in capital expenditures, and (ii) the illustrative valuation analysis prepared by Deutsche Bank based on trading comparables, transaction comparables, discounted cash flow and present value of future share price. The illustrative valuation reflected values ranging from $9.10 to $15.98 per share. The representatives of Deutsche Bank also discussed with the Special Committee several alternatives to the sale of Affinity, including potential acquisitions that Affinity might effect, which assumed funding through additional equity issuances by Affinity, a real estate income trust ("REIT") structure and potential sales of assets. Following further discussion regarding the foregoing matters, the Special Committee determined that the April 3 Proposal significantly undervalued Affinity and was not in the best interests of its stockholders. The next day, the Special Committee delivered a letter to Z Capital, noting the following:

    "After discussions and presentations with and from management and the Special Committee's legal and financial advisors, and consideration of other factors, the Special Committee believes that the [April 3 Proposal] significantly undervalues the Company and is not in the best interests of the Company or its shareholders. Z Capital would need to materially increase the per share price in the Proposal to make it attractive based on the Special Committee's evaluation.

    The Special Committee believes that under the management of both the Company's newly appointed CEO and CFO, the Company has the leadership the Company needs to advance its strategy and drive earnings power and growth. On this basis, the Special Committee believes that continuing to implement the Company's long-term corporate strategy, objectives and business plan is a better alternative than the [April 3 Proposal]. To the extent that Z Capital is interested, the Special Committee is open to sharing with you its perspectives on the Company's valuation. However, given the sensitivity of the information that would be discussed, Z Capital must first execute the non-disclosure agreement provided to your counsel on April 24, 2015 (the "NDA") (a copy of which is attached for your convenience).

    As a separate alternative, the Special Committee believes that there may also be opportunities to obtain value greater than the Proposal through a process that is designed to give all interested parties a meaningful opportunity to potentially acquire the Company."

        On May 19, 2015, SPH Manager and Spectrum each filed amendments to their respective Schedules 13D reporting that, as of May 15, 2015, such stockholders, among other things, planned to inform the Special Committee that such stockholders were not supportive of the April 3 Proposal at a price of $9.75 per share, and that the proposed price was substantially below the price at which they would be willing to consider a sale of their shares.

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        On May 20, 2015, Z Capital delivered a letter to the Special Committee, which Z Capital filed that day on an amendment to its Schedule 13D, indicating the following:

    "By its terms, our April 3, 2015 proposal (as amended on April 27, 2015) to purchase the outstanding shares of Affinity Gaming that we do not currently own has expired.

    We are disappointed by the Special Committee's response with respect to our proposal. Despite the fact that Affinity Gaming exited bankruptcy four and half years ago and has sat on $100 million of costly excess cash for three years, it has seen no meaningful board leadership or value creation for shareholders.

    To the contrary, the value of the Company's equity has declined more than 30% during the last two years. In addition, given the type of investors in the control group that now controls the board, it is not in a position to deliver value to Affinity Gaming's shareholders in the future.

    We believe our proposal addressed these systemic problems and delivered maximum value to Affinity Gaming's shareholders.

    The status quo has not delivered and will not deliver value to shareholders.

    Accordingly, unless fundamental changes are made we would strongly encourage an orderly process to sell the company as a whole or in its constituent parts."

        On May 21, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank to discuss Z Capital's May 20, 2015 letter, including Z Capital's strong encouragement of a sale process. The Special Committee, together with its advisors, discussed the potential of a process for exploring the potential interest of third parties in acquiring Affinity, particularly in light of the publicity around Z Capital's proposal to acquire Affinity, and Z Capital's large percentage ownership of Affinity. In light of these circumstances, and the potential impact to Affinity of running such a process, the Special Committee discussed reaching out to Affinity's stockholders to gauge their views on such a process. Following the meeting, representatives of Morrison & Foerster, at the Special Committee's direction, reached out to a number of Affinity's stockholders in effort to schedule calls for the Special Committee to discuss Z Capital's May 20, 2015 letter and the possibility of pursuing an auction process to sell Affinity. SPH Manager and Spectrum each agreed to speak with the Special Committee. Z Capital declined the invitation to speak with the Special Committee, but indicated through its counsel that it would respect the process that the Special Committee chooses to employ and would participate as a seller if the price was right. Over the next several weeks, the Special Committee had one or more discussions with each of SPH Manager and Spectrum. In the discussions, representatives of each stockholder expressed interest in the Special Committee conducting a sales process (given Z Capital's letter withdrawing its proposal and encouraging a sales process) and potential willingness to waive dissenters' rights (subject to other major stockholders doing the same).

        The Special Committee met telephonically on June 1, 2015 with representatives of Morrison & Foerster to discuss the foregoing and agreed that Mr. Doheny should call Mr. Scrivens to discuss Z Capital's potential willingness to waive dissenters' rights and to encourage Z Capital to be more communicative with respect to the sales process. Mr. Doheny did so on June 2, 2015, speaking to Mr. Zenni as well, and reported at a telephonic meeting of the Special Committee on June 4, 2015 that the representatives of Z Capital had indicated that Z Capital would not be willing to waive dissenters' rights with respect to a negotiated transaction with a third party, that Z Capital might be willing to raise its offer from $9.75, and that Z Capital was requesting the Special Committee to identify a price that the Special Committee thought was a fair price to sell Affinity.

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        At Special Committee meetings on June 12 and June 15, 2015, the Special Committee and representatives of Morrison & Foerster and Deutsche Bank discussed a potential sales process for Affinity, including variations on how the process could be structured.

        On June 18, 2015, Z Capital filed an amendment to its Schedule 13D, disclosing that it had purchased shares of Affinity for $11.00 per share.

        On June 20, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank. The representatives of Deutsche Bank discussed with the Special Committee a revised illustrative valuation of Affinity, based on updated financial projections from Affinity management that reflected Affinity management's recent internal guidance of an estimated $70 million in projected Adjusted EBITDA for 2015, which the Special Committee earlier in the week had directed Deutsche Bank to use in its revised illustrative valuation. The illustrative valuation implied a value for Affinity (without any synergies) in the range of approximately $10.96 to $17.88 per share. The Deutsche Bank representatives also discussed their assessment of potential interest of various third parties in acquiring Affinity. Following discussions regarding potential strategies for maximizing the price offered by Z Capital, the Special Committee determined, in light of the potential rewards, risks and uncertainties associated with the long-term outlook for Affinity and its strategic plan, that conducting a process to explore the potential for a sale of Affinity at an appropriate price could be an attractive alternative for Affinity's stockholders if Z Capital was not willing to increase its bid to at least $15.00 per share and allow for other potential bids. Accordingly, the Special Committee authorized Deutsche Bank to contact Z Capital regarding a $15.00 sale price subject to a go-shop process, and to advise Z Capital, in the event that Z Capital did not agree with those terms, that the Special Committee was prepared to commence an auction process for the potential sale of Affinity.

        On June 22 and 23, 2015, representatives of Deutsche Bank spoke with Mr. Zenni by telephone and relayed the Special Committee's decisions and proposals, including that the Special Committee would be willing to recommend a transaction with Z Capital, if Z Capital was to propose a purchase price of $15.00 per share and provide Affinity with a go-shop period, and that if Z Capital was not interested in these terms, then the Special Committee would explore the sale of Affinity pursuant to an auction process. Mr. Zenni responded that he thought $15.00 per share was too high, and that, he did not believe there would be support in the market for a $15.00 price per share.

        On June 24, 2015, SPH Manager filed an amendment to its Schedule 13D, disclosing that it had purchased shares of Affinity's common stock for $10.75 per share.

        On June 25, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank to discuss the prior conversations between representatives of Deutsche Bank and Mr. Zenni, and directed the representatives of Deutsche Bank to provide SPH Manager and Z Capital with a modified implied share price analysis based on $70 million in projected Adjusted EBITDA for 2015, without any synergies (given Z Capital's lack of other gaming operations), which they did. On June 25, 2015, representatives of Deutsche Bank and Mr. Zenni spoke by telephone, and Mr. Zenni indicated that he did not agree with Deutsche Bank's analysis and that Z Capital would be willing to raise its bid to around $11.00 per share and would come back to Deutsche Bank with an updated number. Mr. Zenni also sent the representatives a markup by Z Capital of the share price analysis, which reflected Z Capital's belief that any valuation of Affinity should be based on $65 million in projected Adjusted EBITDA for 2015, that the companies included in Deutsche Bank's materials were all much larger and more diverse than Affinity and that Z Capital believed that Adjusted EBITDA enterprise value multiples for Affinity should not exceed 8.0x.

        On June 29, 2015, Z Capital delivered to the Special Committee a letter outlining a proposal (the "June 29 Proposal") to acquire all of the shares of Affinity not owned by Z Capital for a price of $11.50 per share, which Z Capital noted represented a valuation of Affinity at 8.0x projected Adjusted EBITDA for 2015 consistent with Affinity's most recent internal guidance. The June 29 Proposal

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included terms for a 60-day standstill period, a 30-day exclusivity period and a 30-day go-shop period, subject to a termination fee equal to 4% of Affinity's equity value if Affinity was to terminate for a superior proposal. The June 29 Proposal also indicated that the proposal would expire on July 7, 2015. That day, Z Capital filed an amendment to its Schedule 13D disclosing the letter.

        On June 30, 2015, the Special Committee met with representatives of Morrison & Foerster and Deutsche Bank to discuss the June 29 Proposal, noting that, among other things, Z Capital's use of a lower projected Adjusted EBITDA number could account for the difference between Z Capital's price and the Special Committee's expectations. The Special Committee directed the representatives of Deutsche Bank to tell Z Capital that the $11.50 price per share was too low and that the price per share should be at least $14.00.

        On July 1 and 2, 2015, at the direction of the Special Committee, representatives of Deutsche Bank called Mr. Zenni to discuss the foregoing, and Mr. Zenni indicated that Z Capital was not a buyer at $14.00 per share. The representatives of Deutsche Bank discussed these calls with the Special Committee and the representatives of Morrison & Foerster on a conference call on July 3, 2015.

        On July 3, 2015, Z Capital delivered to the full Board a letter setting forth a valuation analysis supporting its proposed $11.50 price per share and requesting that the Board respond to the June 29 Proposal prior to its expiration on July 7, 2015.

        The Special Committee met telephonically on July 7, 2015 with representatives of Morrison & Foerster to discuss Z Capital's July 3, 2015 letter and the June 29 Proposal. Following the discussion, the Special Committee determined, based on its belief that commencing a sales process would either result in an increase in the valuation offered by Z Capital or the identification of one or more parties willing to acquire Affinity for greater than $11.50 per share, to move forward with a sales process.

        On July 8, 2015, Mr. Scrivens called representatives of Deutsche Bank to indicate that Z Capital continued to support its June 29 Proposal for $11.50 per share together with a go shop provision, but that Z Capital could also be a seller at certain prices.

        On July 9, 2015, Z Capital delivered to the Special Committee a letter indicating that the June 29 Proposal had expired by its terms and that Z Capital would consider a more realistic purchase price proposed by the Special Committee. On July 10, 2015, Z Capital filed an amendment to its Schedule 13D disclosing its July 9, 2015 letter.

        On July 13, 2015, an affiliate of SPH Manager filed a Form 4, disclosing that it had purchased shares of Affinity for $12.50 per share.

        Thereafter, the Special Committee met with representatives of Morrison & Foerster and Deutsche Bank telephonically 11 times between July 20, 2015 and October 1, 2015 regarding the process for exploring potential third party interest in acquiring Affinity commenced by the Special Committee and potential alternatives available for Affinity. These strategic alternatives included potential tax-efficient means of structuring a deal not involving certain assets, establishing a REIT structure and remaining independent and pursuing Affinity's strategic plan. In connection with this process, at the direction of the Special Committee, Deutsche Bank contacted 23 potential buyers, 13 of whom entered into nondisclosure agreements with Affinity and received its confidential information memorandum. During this period, Deutsche Bank provided feedback that it received from various potential bidders that participated in the process.

        On August 19, 2015, representatives of Deutsche Bank responded to outreach from Mr. Zenni, who had indicated his desire to discuss the Special Committee's process, noting to Mr. Zenni that he should reach out to the Special Committee and that he was welcome to submit a bid. Mr. Zenni responded by indicating to the representatives of Deutsche Bank that he wanted the process to move forward expeditiously and might be interested in submitting a bid, provided he would not be subject to

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a standstill or other restrictions. The Special Committee subsequently considered whether and at what time it would be appropriate to solicit a bid from Z Capital.

        On October 8, 2015, Party A, a private equity firm, submitted a written nonbinding indication of interest to acquire Affinity at a price per share of $14.00, provided that it could team up with a strategic party to assist in management of the acquired business. The Special Committee then met telephonically on each of October 12, October 21 and October 29, 2015 to discuss Party A's bid and the continuation of the Special Committee's process.

        On November 4, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank to discuss providing Affinity's new Chairman of the Board, David Reganato, an employee of an affiliate of SPH Manager, and the other members of the Board with an update on the Special Committee's process, during which the Special Committee determined to share the bid price from Party A with the other members of the Board and management's five-year plan with the full Board after reminding them of their fiduciary duties. On November 13, 2015, Party B, a publicly traded company, delivered a letter of its nonbinding indication of interest to acquire Affinity at a price per share of $14.00, which Party B indicated was based on a 10.0x multiple of projected EBITDA for 2015.

        On November 15, 2015, Z Capital delivered to the Special Committee a letter outlining a proposal (the "November 15 Proposal") to acquire all of the shares of Affinity not owned by Z Capital for a price of $13.00 per share, together with a draft merger agreement. The November 15 Proposal included a 60-day standstill period, a 30-day exclusivity period and a reverse termination fee equal to 4% of Affinity's equity value if the merger agreement is terminated due to a material breach by Z Capital or the failure by Z Capital to close the transaction when required under the merger agreement, but without the 30-day go-shop period included in the June 29 Proposal. The letter also indicated that the November 15 Proposal would expire on November 25, 2015. On November 16, 2015, Z Capital filed an amendment to its Schedule 13D disclosing the November 15 Proposal letter.

        On November 16, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank to discuss the November 15 Proposal and other aspects of the Special Committee's process. The representatives of Morrison & Foerster noted that aside from the increase in bid price to $13.00 per share, from $11.50 and $9.75 per share before that, the terms of the November 15 Proposal were materially similar to the prior offers, but that Z Capital was no longer offering a go-shop period. The Special Committee also discussed communications with Party A and Party B, and concluding that a deal with either of those parties did not seem likely, given Party A's need to team up with a strategic party in the industry and that such conversations had not yet begun, and that the Special Committee did not have confidence in Party B's bid given Party B's market position. The Special Committee then engaged in discussions regarding the minimum price at which the Special Committee might be willing authorize an exclusivity agreement with Z Capital and strategy to get Z Capital to that price.

        On November 19, 2015, representatives of Morrison & Foerster and Deutsche Bank spoke with Mr. Reganato, who confirmed that SPH Manager and its affiliates were not a potential bidder in the Special Committee's process and that in their view, $13.00 per share was too low to support a sale of the company. Later that day, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank to discuss the Special Committee's process, including discussions with Party A and Party B and with Z Capital's outside counsel. Representatives of Deutsche Bank also delivered an updated analysis based on a 7.0x multiple of $74.5 million Adjusted EBITDA then projected by management for 2016 as well as certain alternative assumptions.

        On November 21, 2015, Z Capital delivered a letter to the Special Committee explaining its belief that its November 15 Proposal offered maximum value to Affinity's stockholders based on the proposed $13.00 price per share, Z Capital's limited diligence requirements and Z Capital's existing licenses in

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jurisdictions in which Affinity operates and expressing its willingness to reduce the exclusivity period from 30 to 14 days.

        On November 23, 2015, representatives from Morrison & Foerster had a conversation with Z Capital's internal counsel and outside counsel, wherein Z Capital indicated that they likely had room to increase the bid from the $13.00 price per share reflected in the November 15 Proposal, and wanted to ensure that the Special Committee was intending to engage with Z Capital on the November 15 Proposal.

        On November 24, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank to discuss the status of the Special Committee's process, including an update on discussions with Party B, and the optimal strategy for maximizing the price Z Capital would be willing to pay. Later that day the Special Committee delivered to Z Capital a letter indicating that while the Special Committee appreciated that Z Capital had materially increased its bid, with the November 15 Proposal representing an approximate 33% increase in the price per share over the April 3 Proposal, based on discussions and presentations with and from management and the Special Committee's legal and financial advisors, and consideration of other factors, the Special Committee believed that the November 15 Proposal continued to undervalue Affinity and was not in the best interest of Affinity or its stockholders, and that, for Affinity to enter into exclusive negotiations with Z Capital, Z Capital would need to increase its proposal to $16.00 price per share.

        On the morning of November 25, 2015, Z Capital delivered a letter to the Special Committee amending the November 15 Proposal to increase the price per share from $13.00 to $14.50, extending the expiration of the proposal to November 27, 2015, and reducing the required exclusivity period from 30 days to 14 days. That day, Z Capital filed an amendment to its Schedule 13D disclosing the letter.

        Later on November 25, 2015, the Special Committee met telephonically with representatives of Morrison & Foerster and Deutsche Bank to discuss Z Capital's amended proposal, the potential risks and benefits of reverting to Z Capital with various proposed higher bids and the price at which the Special Committee might be willing to agree to enter into exclusive negotiations with Z Capital. Following this discussion, the Special Committee then authorized Mr. Doheny to engage with Z Capital to see if he could get them to increase their price per share, agreeing that the Special Committee would be willing to consider entering into exclusive negotiations with Z Capital if Z Capital increased their price per share to at least $15.00. In determining that $15.00 was an appropriate price per share at which to enter into exclusive negotiations with Z Capital, the Special Committee considered various factors, including (i) the Special Committee's discussions with Deutsche Bank regarding Deutsche Bank's preliminary analysis of potential valuations of Affinity, (ii) that Z Capital's interest in acquiring Affinity had been public since April 3, 2015, (iii) that Deutsche Bank had reached out to other potentially interested parties on behalf of the Special Committee, (iv) that the $15.00 price per share exceeded the prices offered by Party A and Party B, (v) that the Special Committee believed that the chances of successfully completing a transaction with either Party A or Party B were remote, given where such parties were in the process, (vi) the Special Committee's belief that Z Capital was already close to the highest price per share it likely would be prepared to offer, (vii) the risk that Z Capital would terminate its offer if the Special Committee took a more aggressive negotiating position at this stage on price, (viii) the risk that an alternative transaction with Party A, Party B or another bidder may not be successful if negotiations with Z Capital terminated, and (ix) the present state of Affinity, the financial markets and risk in the economy.

        The meeting then adjourned, and reconvened shortly thereafter following notice from Mr. Doheny that he had spoken with Mr. Scrivens. Mr. Doheny informed the Special Committee that on his call with Mr. Scrivens, Mr. Scrivens had advised him that $15.00 per share was Z Capital's best and final offer, and that Mr. Doheny had indicted to Mr. Scrivens that the Special Committee was prepared to enter into exclusive negotiations on that basis. The representatives of Morrison & Foerster and

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Deutsche Bank then discussed the proposed exclusivity agreement, process, timing and related matters with the Special Committee, and the Special Committee unanimously approved of entering into an exclusivity agreement with Z Capital.

        Later that afternoon, Z Capital delivered a letter to the Special Committee confirming the further amendment of its November 15 Proposal to increase the purchase price from $14.50 to $15.00 per share, and reducing the required exclusivity period to 14 days, and filed the letter shortly thereafter on an amendment to its Schedule 13D. During the afternoon of November 25, 2015, Morrison & Foerster and Sidley Austin LLP, counsel to Z Capital ("Sidley Austin"), negotiated the terms of an exclusivity agreement that provided for exclusive negotiations through December 14, 2015 and that did not include a standstill provision (given the Special Committee's views that a short, limited standstill provision was of little use given the circumstances). Affinity and Z Capital executed the exclusivity agreement later that evening, and Z Capital disclosed a copy of the exclusivity agreement in an amendment to its Schedule 13D on November 27, 2015. Affinity and Z Capital also executed the nondisclosure agreement on November 28, 2015.

        On November 28, 2015, Deutsche Bank provided Sidley Austin with the confidential information memorandum previously shared with the other bidders in the Special Committee's process. On November 29, 2015, Sidley Austin forwarded to Morrison & Foerster a confirmatory legal due diligence request list for Affinity and requested access to Affinity's data room, which was granted that afternoon. The parties continued to coordinate Z Capital's due diligence review over the subsequent weeks, including conducting meetings with Affinity management the week of December 14, 2015.

        On November 30, 2015, Sidley Austin forwarded to Morrison & Foerster drafts of a rollover commitment letter, equity commitment letter and limited guarantee, as well as a voting and support agreement to be entered into by certain stockholders of Affinity.

        On December 2, 2015, the Special Committee met with representatives of Morrison & Foerster, Fennemore Craig and Deutsche Bank to discuss a potential timeline for signing and closing a transaction with Z Capital and material issues relating to the draft merger agreement delivered by Z Capital on November 15, 2015 and the other documents delivered on November 30, 2015, including government, regulatory and gaming approvals, financing obligations, conditions to closing, and termination fees and other remedies relating to the foregoing, as well as indications from Sidley Austin that Z Capital would prefer to have written consents delivered promptly after signing rather than entering into the voting and support agreement provided.

        On December 3, 2015, Sidley Austin emailed Morrison & Foerster to note that Z Capital was in active negotiations with several debt financing sources, that Z Capital believed that the best approach for securing financing would be a consent solicitation under Affinity's indenture and secured credit agreement to permit the change of control and the use of Affinity's cash to fund a portion of the merger consideration, and that to increase deal certainty Z Capital intended to obtain a backstop debt commitment from a lender group at the signing of the transaction to refinance the abovementioned debt in the event that the consent solicitation did not succeed.

        On December 8, 2015, the Special Committee met with representatives of Morrison & Foerster, Fennemore Craig and Deutsche Bank to discuss a revised draft of the merger agreement prepared by Morrison & Foerster. In addition, representatives of Fennemore Craig delivered a presentation to the Special Committee on the requirements under Nevada law for approving an acquisition of Affinity by Z Capital and related dissenter's rights.

        Over the course of the next several days, representatives from Morrison & Foerster and Sidley Austin discussed material issues in the draft merger agreement. On December 9, 2015, Mr. Scrivens called Mr. Doheny to note that Z Capital was fully engaged on due diligence of Affinity and that Z Capital believed a transaction could be signed by the end of the month. However, Mr. Scrivens noted

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that Z Capital was having difficulty securing full financing for the transaction, and accordingly suggested, among other things, revising the terms of the merger agreement to permit a "best efforts" process for Z Capital to obtain debt financing for the transaction, pursuant to which Z Capital, instead of presenting committed debt financing at the signing of the proposed transaction, would agree at the signing of the transaction to thereafter use its best efforts to obtain such debt financing.

        On December 10, 2015, a Special Committee meeting was convened pursuant to which Mr. Doheny updated the Special Committee on his conversation with Mr. Scrivens. During the meeting, the Special Committee, together with representatives of Morrison & Foerster and Deutsche Bank, discussed Mr. Doheny's conversation with Mr. Scrivens and related options for Affinity, including the possibility of a "best efforts" debt financing, to extend exclusivity, so long as Z Capital continued to pursue financing, to investigate the potential for seller financing, or to let exclusivity expire and not sign a merger agreement unless debt financing was obtained, as well as options for Affinity if no transaction with Z Capital was to succeed, including pursuing a transaction with Party A or Party B or to continue as a stand-alone company. The Special Committee also discussed inviting representatives from Deutsche Bank's debt trading desk to join a call with the Special Committee so that the Special Committee could get their insights on the status of the debt markets. The Special Committee then adjourned the meeting, with a request to reconvene once the applicable representatives from Deutsche Bank's debt trading desk were available to speak with the Special Committee.

        Later on December 10, 2015, the Special Committee meeting was reconvened with representatives from Deutsche Bank's debt trading desk. The Special Committee and representatives from Morrison & Foerster and Deutsche Bank discussed Deutsche Bank's views on the current state of the debt markets, whether leveraged buyout transactions were currently getting financed, and the state of the second lien market. Following this conversation, the Special Committee considered the steps it should take with Z Capital, particularly in light of the conversation with Deutsche Bank and their assessment on how difficult it might be to get a leveraged buyout financed given the current state of the debt markets. Ultimately, the Special Committee decided that it would be willing to agree to allow Z Capital to use its best efforts to obtain debt financing, if Z Capital agreed to pay a significant termination fee if it was unable to obtain debt financing. The Special Committee then authorized Mr. Doheny to convey that information to Z Capital.

        Mr. Doheny subsequently called Mr. Scrivens to advise him that the Special Committee was willing to consider a merger agreement that contained terms permitting Z Capital to use its best efforts to obtain financing for the transaction, with a reverse termination fee of 6.5% of Affinity's equity value in the event that Z Capital was unable to obtain the debt financing, and requiring Z Capital to deliver debt commitment papers no later than February 15, 2016. Mr. Doheny spoke with Mr. Scrivens again on December 12, 2015, with Mr. Scrivens noting that Z Capital was not willing to agree to a reverse termination fee in the event debt financing could not be obtained, and that given that Z Capital did not believe it would obtain debt financing prior to the expiration of exclusivity on December 14, 2015, Z Capital wanted to keep working on the financing and wanted Affinity to extend exclusivity.

        The next morning, on December 13, 2015, Mr. Scrivens sent Mr. Doheny and Morrison & Foerster an issues list regarding the merger agreement. Later that morning, the Special Committee met with Morrison & Foerster and Deutsche Bank to discuss Mr. Doheny's conversations with Mr. Scrivens and potential next steps given Z Capital's refusal to consider a best efforts structure that contained any reverse termination fee if Z Capital was unable to obtain financing. After considering market conditions and the risks associated with the other alternatives available to the Special Committee, including the risk that no transaction would close if exclusivity with Z Capital expired and that Z Capital would walk away if the Special Committee insisted on signing a merger agreement with a substantial reverse termination fee for failure to obtain financing, the Special Committee agreed to extend exclusivity to January 29, 2016, provided that Z Capital continued to negotiate in good faith on the terms of the merger agreement, keep the Special Committee informed regarding its financing

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arrangements and diligently pursue obtaining financing. Morrison & Foerster then conveyed this proposal to Sidley Austin, and an amended exclusivity agreement was entered into on those terms on December 14, 2015, and reported by Z Capital on an amendment to its Schedule 13D filed the next day.

        Over the next several weeks, the Special Committee and Morrison & Foerster, at the direction of the Special Committee, and Sidley Austin on behalf of Z Capital continued to negotiate the terms of the merger agreement.

        During the same period, Mr. Scrivens provided Mr. Doheny with periodic updates regarding Z Capital's efforts to secure financing for the transaction, and the Special Committee met regularly with representatives of Morrison & Foerster and Deutsche Bank to discuss the negotiation of the merger agreement, Z Capital's financing status and the state of the debt markets and other related matters. At meetings held on January 20 and January 25, 2016, the Special Committee focused on Affinity's options in light of the potential withdrawal from negotiations by Z Capital upon the impending expiration of exclusivity and the absence of a clear path forward to financing the transaction, including allowing exclusivity to expire, proposing changes to the deal terms, agreeing to extend exclusivity or permitting Z Capital to use its "best efforts" to obtain debt financing for the transaction, without any reverse termination fee, discussing the potential benefits, detriments and risks with each option. In connection with considering potential next steps, the Special Committee wanted to get input from certain of Affinity's stockholders on their views. The Special Committee then directed Morrison & Foerster to reach out to certain of Affinity's stockholders to obtain an understanding of their views.

        At a Special Committee on January 29, 2016, Mr. Doheny and representatives from Morrison & Foerster updated the Special Committee with the discussions that had taken place with various of Affinity's stockholders, noting that none of the stockholders with whom Morrison & Foerster spoke with were interested in pursuing a transaction where Z Capital was permitted to use its "best efforts" to obtain financing without any reverse termination fee. The Special Committee then continued its prior discussion of potential next steps, including the potential benefits, detriments and risks with each option. Following this discussion, the Special Committee determined that the best approach to take was to allow Z Capital to continue its work with respect to financing and, if required by Z Capital, to extend exclusivity for up to an additional four weeks to see if Z Capital would be able to obtain committed financing for the transaction. The Special Committee authorized Mr. Doheny to communicate this decision to Z Capital.

        Between January 29, 2016 and January 31, 2016, Mr. Doheny and representatives of Morrison & Foerster had several calls with Z Capital and Sidley Austin regarding the Special Committee's decision that it was unwilling to agree to Z Capital's proposal to use "best efforts" without any reverse termination fee, and instead suggested the potential for allowing Z Capital to continue its work, and agreeing to extend exclusivity for up to four weeks if necessary. During such conversations, Z Capital conveyed that potential lenders were concerned about the $15.00 per share purchase price and that from Z Capital's perspective, the debt markets were not going to improve in the near term, and suggested that Z Capital was likely going to let its amended November 15 Proposal of $15.00 per share expire by its terms on January 31, 2016.

        On January 31, 2016, Z Capital delivered to the Special Committee a letter indicating that the amended November 15 Proposal had expired by its terms. On February 1, 2016, Z Capital filed an amendment to its Schedule 13D disclosing the letter.

        On February 1, 2016, the Special Committee met with representatives of Morrison & Foerster and Deutsche Bank to review Z Capital's letter and options remaining available to Affinity in light of the expiration of Z Capital's November 15 Proposal, including continuing to explore whether other companies might be interested in acquiring Affinity and continuing to operate Affinity as a stand-alone company. After a discussion, the Special Committee determined that although previously there had

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been parties potentially interested in a transaction, none of that interest had resulted in a firm proposal and, given the status of the debt markets, it was not advisable for the Special Committee to continue the Special Committee's process, and that the Special Committee should be disbanded immediately and terminate Deutsche Bank's engagement. The Special Committee then took a vote, and approved disbanding of the Special Committee and approving the termination of Deutsche Bank's engagement.

        The next day, on February 2, 2016, Affinity issued a press release announcing that the Special Committee was formally dissolved by a unanimous vote of the Special Committee and confirming that Z Capital's proposal and the exclusivity agreement had expired.

        On April 7, 2016, Z Capital filed a Form 4, disclosing that it had purchased shares of Affinity for $14.50 per share.

        On July 29, 2016, Z Capital sent a letter to the Board, by email to Mr. Reganato, submitting a proposal (the "July 29 Proposal") to acquire all of the outstanding shares of Affinity not owned by Z Capital for a price per share of $15.00 in cash. Z Capital included with the July 29 Proposal a draft merger agreement. Z Capital noted in its letter that the credit markets had improved since its prior proposal, and provided separately to the Board copies of debt commitment letters from two potential lenders. Z Capital stated that it expected that transaction agreements could be negotiated and finalized promptly after Affinity signed the exclusivity agreement that Z Capital provided separately to the Board. In its letter, Z Capital noted that it expected that the Board would appoint a special committee of independent directors to consider its offer, given the position of Messrs. Zenni and Scrivens on the Board. Z Capital disclosed the July 29 Proposal letter in an amendment to its Schedule 13D that also included a copy of Z Capital's draft merger agreement.

        On August 1, 2016, a special telephonic meeting of the Board was held to discuss receipt of Z Capital's July 29 Proposal (Messrs. Zenni and Scrivens did not attend the Board meeting). Representatives from Morrison & Foerster discussed the Board's fiduciary duties in connection with the proposal. Mr. Reganato then led a discussion by the Board regarding the July 29 Proposal. The non-employee Board members present all indicated their general belief that $15.00 price per share did not appear to adequately value Affinity, particularly given improvements in the business since February 2016, and that the Board needed additional information before it could formulate a definitive response to Z Capital, including receiving advice on the state of the market, understanding recent mergers and acquisitions in the gaming space and how they impacted the market, and preparing an updated 5-year plan and financial projections. The Board also discussed the potential for reconstituting a special committee, but determined that it was too early to do so and that a special committee could be formed at a later date to the extent it was needed After the meeting, at the direction of the independent directors, Mr. Reganato requested Affinity management to provide updated financial projections to the Board's independent directors, and to Deutsche Bank, for their review and contacted Deutsche Bank to discuss their possible engagement to assist in a response to the July 29 Proposal.

        On August 3, 2016, management delivered to Deutsche Bank five-year financial projections for Affinity (the "2016 5-Year Projections"), as more fully described under "Special Factors—Projected Financial Information" below.

        On August 5, 2016, the Board again met telephonically with representatives from Morrison & Foerster and members of Affinity management, with Messrs. Scrivens and Zenni recusing themselves from attendance. Walter Bogumil, Affinity's Chief Financial Officer, provided the members of the Board with an update on Affinity's financial position and an overview of the 2016 5-Year Projections, discussed other matters affecting Affinity's business and concluded by reviewing calculations of multiples of Affinity's last-twelve-months Adjusted EBITDA and projected 2016 Adjusted EBITDA implied by various price per shares. Management, including Mr. Silberling, then left the call. Morrison & Foerster then discussed with the members of the Board their fiduciary duties in considering the July 29 Proposal, noting among other things that the Board members acting on the

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proposal and the Board's advisors in this matter should be independent of Z Capital and not otherwise have interests in a potential acquisition of Affinity by Z Capital or other potential parties other than interests shared by stockholders generally. Mr. Reganato noted that Z Capital had reached out to SPH Manager with a conditional offer to buy SPH Manager's stake in Affinity for $16.50 per share. Mr. Reganato indicated that he was not involved in those conversations, but that he understood that representatives of SPH Manager had told Z Capital that SPH Manager was not interested in selling its Affinity shares to Z Capital on the terms Z Capital had proposed. Mr. Reganato indicated that he believed, and the Board agreed, that this proposal from Z Capital to SPH Manager did not affect Mr. Reganato's independence with respect to the Z Capital proposal. Mr. Reganato then updated the members of the Board on his discussions with Deutsche Bank, including updates that he received from Deutsche Bank on its outreach to certain parties who had participated in the prior process to explore a potential sale of Affinity, which outreach had been conducted by Deutsche Bank at Mr. Reganato's direction. Mr. Reganato advised that Deutsche Bank had heard back from various parties, including Party A and Party B, and, for a variety of reasons, including that such parties were occupied with other transactions, that Affinity's assets did not fit within their strategy, and structuring issues, none of such parties were interested in engaging in a transaction with Affinity at that time. The members of the Board present then discussed potential alternatives regarding the July 29 Proposal, including rejecting the proposal and continuing with Affinity's current strategic plan, negotiating with Z Capital to increase its proposal, or seeking an alternative transaction. The members of the Board present then discussed the foregoing matters and alternatives, concluding that further exploring whether other third parties might be interested in a potential acquisition of Affinity seemed unlikely to result in a transaction, as it was noted that, in addition to the likelihood that other third parties would face the same issues as those parties that Deutsche Bank already had contacted, as had been described by Mr. Reganato, Affinity had not received any in-bound acquisition indications of interest or other requests since the time that Z Capital's November 25 Proposal had expired, including after disclosure of Z Capital's July 29 Proposal. Several members of the Board also expressed their views that a deal with Z Capital based on the July 29 Proposal likely would not be acceptable if it was submitted to a vote of Affinity's stockholders. The members of the Board present also discussed whether it would be advisable to form a special committee to evaluate and negotiate the July 29 Proposal. The members of the Board present concluded by directing Mr. Reganato to discuss with Z Capital their request that the proposed price be significantly increased before Affinity would consider entering into exclusive negotiations with Z Capital, and for Mr. Reganato to keep the other directors not affiliated with Z Capital informed of his discussions with Z Capital, and noting that the Board could form a special committee at a later stage based on the direction of Z Capital's conversations with Mr. Reganato. The independent directors directed Mr. Reganato to push Z Capital to offer a price closer to $17.50 per share.

        Over the next several days, Mr. Reganato had several phone calls with Messrs. Scrivens and Zenni informing them that Affinity would not consider engaging in exclusive negotiations with Z Capital at the proposed $15.00 price per share. During the course of those conversations, Z Capital indicated that they would be willing to offer $17.35 per share if Affinity was to agree to exclusively negotiate with Z Capital.

        On the morning of August 9, 2016, Z Capital informed Mr. Reganato that they would increase their offer to $17.35 per share. Mr. Reganato thereafter informed the directors not affiliated with Z Capital of this news, and the directors agreed that a Board meeting should be called to reconstitute the Special Committee in order for the Special Committee to evaluate the increased offer.

        Later on August 9, 2016, the Board met telephonically with representatives of Morrison & Foerster, Mr. Bogumil and Marc H. Rubinstein, General Counsel to Affinity, with Mr. Silberling absent due to a prior commitment. During that meeting, Mr. Reganato confirmed that Z Capital had increased its proposal from $15.00 per share to $17.35 per share. The Board decided that the Special Committee should be reconstituted to evaluate Z Capital's increased offer and to consider other

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alternatives. After discussion, the Board designated Messrs. Reganato, Doheny, Cacioppo and Tanjeloff, as directors who were neither affiliated with Z Capital nor expected to participate in any potential alternative acquisition proposal, as members of a reconstituted Special Committee to review and evaluate the July 29 Proposal, including any revisions by Z Capital pursuant to discussions with the Special Committee or otherwise, and any other strategic alternatives available to Affinity, including the alternative to remain as a stand-alone company, and to negotiate and make recommendations to the full Board with respect to any such proposals or other alternatives. The Board also resolved that it would not approve or authorize, or recommend to Affinity's stockholders, the July 29 Proposal or any other proposal to acquire Affinity that was not recommended by the Special Committee.

        The Special Committee met telephonically immediately following the conclusion of the Board meeting on August 9, 2016, with representatives of Morrison & Foerster. At the meeting, the representatives of Morrison & Foerster discussed their belief that, although Morrison & Foerster continued to be the general outside corporate counsel for Affinity, the firm did not work for Z Capital, and the firm remained independent in its advising the reconstituted Special Committee. The representatives of Morrison & Foerster also requested that each member of the Special Committee advise if there had been any developments since the August 5, 2016 meeting of the Board that would change such member's independence or interests with respect to the July 29 Proposal, and each member of the Special Committee confirmed there had been no such developments. The Special Committee designated Mr. Reganato as its chairman. The Special Committee discussed whether to retain Deutsche Bank or another investment bank as its financial advisor, and, after determining to retain Deutsche Bank, discussed the potential terms for retention of Deutsche Bank, and requested that Mr. Reganato negotiate with Deutsche Bank regarding re-engagement with a reduced tail period.

        Representatives of Deutsche Bank then joined the meeting and delivered a presentation regarding the July 29 Proposal. The representatives of Deutsche Bank noted that there had been no developments with respect to themselves individually that would result in any material conflict of interest in Deutsche Bank's advising the Committee, and that they were not aware of any transactions by Deutsche Bank with Z Capital or otherwise that would result in any such material conflict on the part of Deutsche Bank, and would confirm separately prior to a formal engagement. Deutsche Bank discussed the July 29 Proposal, reviewed updates in Affinity's business and industry, including with respect to companies that might be interested in acquiring Affinity, and discussed Deutsche Bank's views with respect to the 2016 5-Year Projections. Deutsche Bank then reviewed an illustrative valuation analysis based on the 2016 5-Year Projections and various methodologies, noting that Z Capital's $17.35 bid was within the range of each valuation method utilized in the illustrative analysis. Deutsche Bank then discussed potential returns to Z Capital as a result of the transaction. Deutsche Bank also reviewed an evaluation of the potential value to Affinity's stockholders were Affinity to pursue a sale or a REIT transaction with a potential alternate buyer, noting, however, that the natural buyers in an such a transaction, including Party B and certain other potential buyers that Deutsche Bank had spoken with originally in 2015, did not appear to be interested in a transaction with Affinity for various reasons. The representatives of Deutsche Bank further noted that, based on current market conditions, it likely would be difficult to enter into a transaction with another major casino company as an alternative to a transaction with Z Capital at the $17.35 per share price, and instead Affinity could continue its operations with its present management team.

        The members of Deutsche Bank then left the meeting, and the Special Committee continued to discuss the foregoing matters. After discussing further the terms proposed by Z Capital, including the terms contained in the draft merger agreement provided by Z Capital with its proposal letter, and whether doing a transaction with Z Capital was preferable to continuing as a standalone company or commencing another sales process or considering another alternative, the Special Committee then, in part on the basis of Z Capital's increased offer to $17.35 per share, unanimously approved of moving forward to enter into an exclusivity agreement with Z Capital on similar terms to Affinity's prior

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exclusivity agreement with Z Capital. The Special Committee also directed Mr. Reganato and Morrison & Foerster to negotiate with Z Capital to reduce the exclusivity period to shorter than 30 days if possible. That afternoon, Morrison & Foerster and Sidley Austin negotiated the final terms of an exclusivity agreement that would extend through August 24, 2016, which was executed early that evening. On August 10, 2016, Z Capital disclosed the increase of its July 29 Proposal to $17.35 per share and the entry into the exclusivity agreement in an amendment to its Schedule 13D. Shortly thereafter, Affinity filed a Form 8-K reporting the formation of the Special Committee with Deutsche Bank as its financial advisor. Later that day, Z Capital and Sidley Austin were granted access to Affinity's data room.

        Between August 11 and August 22, 2016, Morrison & Foerster and Sidley Austin negotiated the terms of the merger agreement and ancillary agreements, including issues related to Z Capital's debt and equity financing and termination fees and other issues that remained unresolved following termination of the prior discussions with Z Capital. During that period, Z Capital and its potential lending sources conducted their due diligence investigation of Affinity. The working group also continued to discuss the terms of Z Capital's debt and equity financing, with the representatives of the Special Committee seeking to increase the certainty of the financing commitments before entering into any definitive agreement with Z Capital. During this period, Morrison & Foerster had conversations with, and received direction from, Mr. Reganato and the Special Committee regarding the open issues in the merger agreement, as well as Z Capital's debt and equity financing. Among other things, the parties discussed the covenants applicable to Z Capital's pursuit of required gaming regulatory approvals and the consequences of the termination of any definitive agreement without a consummation of the transaction due to the inability of Z Capital to obtain regulatory approvals. Also during this period, SPH Manager and its counsel negotiated directly with Z Capital and its outside counsel regarding the Z Capital's request for, and the terms of, SPH Manager's entry into a voting and support agreement regarding the merger.

        On August 22, 2016, the Special Committee met several times with representatives of Morrison & Foerster and Deutsche Bank. During these meetings, Mr. Reganato first updated the Special Committee on the status of negotiations around the merger agreement, noting that the working groups had agreed on the terms of a proposed merger agreement and that the debt financing commitments Z Capital had secured were expiring that night. Representatives of Morrison & Foerster then reviewed with the Special Committee the material terms of the merger agreement and Z Capital's debt and equity financing. At the request of the Special Committee, representatives of Deutsche Bank then reviewed with the Special Committee a presentation detailing Deutsche Bank's valuation analyses (a copy of which presentation is filed as an exhibit to the transaction statement on Schedule 13E-3 filed in connection with the merger and is incorporated herein by reference). Following discussion of the presentation, Deutsche Bank delivered to the Special Committee its oral opinion, confirmed by delivery of a written opinion dated August 22, 2016 (the full text of which is attached as Appendix B), that, as of that date and based upon and subject to assumptions, limitations, qualifications and conditions described in its opinion, the $17.35 per share Merger Consideration in the merger was fair, from a financial point of view, to the holders of outstanding shares of Affinity common stock (other than the Z Capital Rollover Investors). After further discussion and consideration of the factors summarized below in "—Recommendation of the Special Committee," the Special Committee determined, by unanimous decision of all directors present and voting, in good faith that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Affinity and its stockholders (other than the Z Capital Rollover Investors), and, by unanimous decision of all directors present and voting, approved and recommended that the Board approve and adopt the merger agreement and voting agreements and the transactions contemplated thereby, including the merger.

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        The Special Committee meeting then adjourned and a meeting of the Board was convened, including Mr. Zenni, Mr. Scrivens and Mr. Silberling. The representatives of Morrison & Foerster then discussed the process undertaken by the Special Committee and the analyses and opinion of Deutsche Bank that had been orally delivered to the Special Committee, and the recommendation of the Special Committee. The members of the Board in attendance present and voting (with Mr. Silberling, as an employee director, abstaining) then unanimously (i) approved and declared advisable the merger agreement and the voting agreements and the transactions contemplated thereby, including the merger, (ii) determined that the terms of the merger agreement are just and reasonable as to Affinity, (iii) determined that the merger agreement and the transactions contemplated thereby, including the merger and the Merger Consideration, are fair to and in the best interests of Affinity and its stockholders (other than the Z Capital Rollover Investors) and (iv) resolved to recommend that Affinity's stockholders adopt and approve the merger agreement and the transactions contemplated thereby.

        On the evening of August 22, 2016, following the Special Committee and Board meetings, the parties executed the merger agreement and related agreements. On August 23, 2016, Affinity and Z Capital issued a joint press release announcing the transaction. Also on August 23, 2016, Z Capital filed an amendment to its Schedule 13D with the SEC reflecting its entry into definitive agreements for the transaction and attaching a copy of the merger agreement and related agreements.

        On October 13, 2016, Holdings and Michael Silberling, Walter Bogumil and Jeffrey Solomon agreed to compensation arrangements for each such executive, to take effect as of the closing of the merger. Pursuant to such arrangements, the existing employment agreement for each of Messrs. Silberling, Bogumil and Solomon, as amended on October 13, 2016, will remain in effect following the Effective Time. In exchange for waiving their rights to all existing equity awards and commitments with respect to ongoing equity awards, Messrs. Silberling, Bogumil and Solomon will receive consideration, including Class A and Class B units of Holdings and options to purchase Class A units of Holdings, as described in "Special FactorsTreatment of Stock Options and Restricted Stock."

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger

Recommendation of the Special Committee

        The Special Committee, acting with the advice and assistance of its legal and financial advisors, evaluated and negotiated the merger, including the terms and conditions of the merger agreement, and:

    determined, by unanimous decision of all directors present and voting, in good faith that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Affinity and its stockholders (other than the Z Capital Rollover Investors); and

    by unanimous decision of all directors present and voting, approved and recommended that the Board approve and adopt the merger agreement and voting agreements and the transactions contemplated thereby, including the merger.

        The Special Committee, as initially formed an April 2015 and reconstituted in August 2016, was comprised solely of independent directors who were not expected to participate in any potential acquisition proposal and were not otherwise conflicted with respect to Z Capital's proposals or expected to be conflicted with respect to any other such proposal or alternative transaction. The Special Committee, as initially formed and later reconstituted, held 63 meetings following receipt of the April 3 Proposal from Z Capital in April 2015. In determining to give Affinity's stockholders the opportunity to accept Z Capital's offer, the Special Committee considered the value proposition to stockholders of Z Capital's offer in comparison to Affinity's remaining a stand-alone company, and the amount of the

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offer in relation to the nonbinding indications of interest received from other parties in the sales process conducted by the Special Committee, and their belief that an alternative transaction was unlikely. The Special Committee also received input from certain of Affinity's stockholders with respect to their perspective on the offer and the risks and uncertainties facing Affinity.

        In the course of reaching its determination and recommendation, the members of the Special Committee considered the following factors and potential benefits of the merger, each of which the Special Committee believed supported its decision:

    the per share cash Merger Consideration and the merger were likely to be more favorable to Affinity's stockholders (other than the Z Capital Rollover Investors) than the value likely to be realized from other alternatives available to Affinity, including remaining a stand-alone company and pursuing the current strategic plan, in light of the potential rewards, risks and uncertainties associated with those alternatives;

    none of Affinity's common stock is traded on a national securities exchange and there is not otherwise an active trading market for Affinity's common stock, and it is unlikely that a market will ever develop, and the merger therefore provides Affinity's stockholders with a significant opportunity for recognizing value for illiquid shares with limited market demand;

    that the per share cash Merger Consideration was significantly higher than the price at which Affinity's investors, including Z Capital, had purchased shares of Affinity's common stock in recent periods;

    the negotiations that took place between the parties, which resulted in a price per share of $17.35, which is an 80% increase in the per share consideration from the $9.75 price per share stated in Z Capital's April 3 Proposal and a 16% increase in the per share consideration from the $15.00 price per share stated in Z Capital's July 29 Proposal;

    the Special Committee's belief that the $17.35 per share cash price represented the highest per share consideration that could be obtained from Z Capital and that Z Capital likely would have withdrawn its offer if the Special Committee had waited longer to evaluate Z Capital's proposal;

    subsequent to Z Capital's announcement of its April 3 Proposal, despite multiple public statements by Z Capital and Affinity regarding Z Capital's acquisition proposals and the potential for Affinity to enter into a strategic transaction, no third party approached Affinity, any member of the Special Committee or the Special Committee's advisors regarding a potential transaction, other than parties who were first contacted by Deutsche Bank in the fall of 2015;

    that following the Special Committee's decision to explore other strategic alternatives, including the potential interest of third parties in an acquisition of Affinity, in the fall of 2015, although Deutsche Bank, at the direction of the Special Committee, contacted 23 parties, including those viewed as the most likely potentially interested parties, to solicit and encourage competing proposals to acquire Affinity, only Party A and Party B submitted nonbinding indications of interest, in each case at a $14.00 per share purchase price;

    the Special Committee's belief following Z Capital's announcement of its July 29 Proposal that commencing another sales process would not be in the best interest of stockholders, given that, among other things, the natural buyers in such a transaction and other potential buyers that Deutsche Bank had spoken with in 2015, including Party A and Party B, did not appear to be interested in a transaction with Affinity, and Z Capital's indication that it would not participate in such a process;

    the Special Committee's knowledge of the strategic alternatives available to Affinity as a result of the Special Committee's and the Board's ongoing strategic review;

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    the Special Committee's understanding of the business, operations, financial condition, strategy and prospects of Affinity (including the risks involved in achieving those prospects), as well as Affinity's historical and projected financial performance, and the Special Committee's and management's views and opinions on the current industry environment for gaming and casinos in Nevada, Colorado, Missouri and Iowa;

    the various analyses undertaken by Deutsche Bank, each of which is described below under "Special Factors—Opinion of Financial Advisor to the Special Committee";

    the opinion of Deutsche Bank, dated August 22, 2016, that as of that date and based on and subject to various assumptions, limitations, qualifications and conditions described in its opinion, the $17.35 per share Merger Consideration in the merger was fair, from a financial point of view, to the holders of outstanding shares of Affinity common stock (other than the Z Capital Rollover Investors);

    all of the other terms and conditions of the merger agreement, including, among other things, the representations, warranties, covenants and agreements of the parties, the conditions to the closing of the merger, the "fiduciary out" provision and parties' termination rights, including that:

    the merger agreement permits Affinity, prior to the time that Affinity's stockholders vote to adopt the merger agreement, to discuss and negotiate, under specified circumstances, an unsolicited proposal if the Board determines in good faith (after consultation with its financial advisor and outside legal counsel) that failure to take action would reasonably be likely to be inconsistent with the directors' fiduciary duties under applicable law and (after consultation with its financial advisor and outside legal counsel) that the acquisition proposal either constitutes, or would reasonably be expected to result in, a superior proposal as defined in the merger agreement and to terminate the merger agreement in order to enter into a definitive agreement for that superior proposal, subject to a match right of Parent and paying Parent a $12,425,750 termination fee; and

    the merger agreement allows the Board to change or withdraw its recommendation of the merger agreement if there is an intervening event (which is any material event, occurrence, development or state of facts or circumstances that is not known by the Board prior to August 22, 2016), if the Special Committee determines in good faith (after consultation with outside legal counsel) that failure to do so would reasonably be likely to be inconsistent with its fiduciary obligations under applicable law.

    the likelihood that the merger would be completed based on, among other things (not necessarily in order of relative importance):

    the absence of a financing condition in the merger agreement;

    the requirement that, in the event of a failure of the merger to be consummated under certain circumstances, Parent pay Affinity a termination fee of $7.1 million (in connection with a failure to obtain applicable gaming approvals relating to Affinity's business under certain circumstances as provided in the merger agreement and for the sole benefit of Affinity's stockholders that are not controlled affiliates of Z Capital) or $17.7 million (in connection with the Purchaser Parties materially breaching the merger agreement or failing to obtain financing, in each case, under certain circumstances as provided in the merger agreement);

    that Z Capital has agreed in the merger agreement to guarantee to Affinity the full and timely performance of certain obligations of Parent and Merger Sub under the merger agreement subject to certain limitations;

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      that Z Capital has in place committed debt financing and the level of effort that Parent and Merger Sub must use under the merger agreement to obtain the proceeds of the debt financing on the terms and conditions described in Z Capital's debt commitment letter, as well as the limited number and nature of the conditions to the debt financing and the reputation of the debt financing sources;

      Affinity's ability to seek specific performance to prevent breaches of the merger agreement by the Purchaser Parties and, under circumstances specified in the merger agreement, to specifically enforce Parent's obligation to cause the funding of the financing on the terms and subject to the conditions contemplated in the merger agreement, the equity commitment letter and the rollover commitment letter;

      the absence of any material risk that any governmental authority would prevent or materially delay the merger under any antitrust law;

      that given the existing approvals for Z Capital's current ownership in all jurisdictions in which Affinity operates, Z Capital did not anticipate significant obstacles or lengthy delay in obtaining the gaming approvals needed to consummate the merger;

      that the termination date under the merger agreement allows for sufficient time to complete the merger; and

      the voting and support agreement entered into with Affinity by the Z Capital stockholders, which hold approximately 41.2% of the outstanding shares of Affinity common stock, and the voting and support agreements entered into with Z Capital by each of SPH Manager and One East, which together hold an additional approximately 28.6% of the outstanding shares of Affinity common stock, in which each party to such agreements has agreed to, among other things, vote all shares of common stock of Affinity held by them in favor of the adoption of the merger agreement and approval of the terms thereof, the merger and each of the other actions contemplated by the merger agreement and to vote against, among other things, any other acquisition proposal or other proposal, action or agreement that would impede, delay or interfere with the applicable voting and support agreement or the merger agreement, including that each of the voting and support agreements terminates upon the termination of the merger agreement, and that pursuant to each voting and support agreement, so long as there is in effect a change in recommendation, as defined in the merger agreement, resulting from an alternative acquisition proposal, certain provisions regarding agreements to vote shall not apply, and the stockholders party to the voting and support agreements shall be permitted to engage in discussions with the third party making the relevant acquisition proposal; and

    the Special Committee's belief that it was fully informed about the extent to which the interests of Z Capital in the merger differed from those of Affinity's other stockholders.

        The Special Committee also considered a variety of risks and potentially negative factors concerning the merger and the merger agreement, including the following:

    Affinity's stockholders, with the exception of the Z Capital Rollover Investors, will have no ongoing equity participation in Affinity following the merger and those stockholders will cease to participate in Affinity's future earnings or growth, if any, and will not benefit from increases, if any, in the value of the shares of Affinity common stock;

    the risk of incurring substantial expenses related to the merger, including in connection with any future litigation;

    the significant costs involved in connection with negotiating the merger agreement and completing the merger (including certain costs and expenses if the merger is not consummated),

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      the substantial management time and effort required to effectuate the merger and the related disruption to Affinity's day-to-day operations during the pendency of the merger;

    the terms of the merger agreement place restrictions on the conduct of Affinity's business prior to completion of the merger, which may delay or prevent Affinity from undertaking business opportunities that may arise pending completion of the merger, and the resultant risk if the merger is not consummated;

    the possibility that Z Capital will be unable to fund the transaction, including by not obtaining the debt financing proceeds from the debt financing sources;

    the risk that the required gaming and other regulatory approvals may not be obtained;

    the risk that the merger will be delayed or will not be completed, as well as the potential loss of value to Affinity's stockholders and the potential negative impact on the operations and prospects of Affinity if the merger is delayed or is not completed for any reason;

    the risk, if the merger is not consummated, that the pendency of the merger could affect adversely the relationship of Affinity and its subsidiaries with their respective customers, employees, suppliers, agents and others with whom they have business dealings;

    Parent and Merger Sub are newly formed entities with essentially no assets and Affinity's remedy in the event of a termination of the merger agreement due to a material breach of the merger agreement by any of the Purchaser Parties may be limited to receipt of a $17.7 million termination fee payable by Parent;

    the possibility that, under certain circumstances under the merger agreement, Affinity may be required to pay a termination fee to Parent;

    the absence of a "go-shop" provision in the merger agreement that would permit Affinity to actively solicit a superior proposal for a period after execution of the merger agreement, and to terminate the merger agreement to enter into an agreement with respect to any such superior proposal for a reduced termination fee;

    the participation in the merger by Z Capital and the fact that Z Capital's interests in the transaction differ from those of Affinity's stockholders that are not Z Capital Rollover Investors, including the public disclosures by Z Capital, prior to and during the process conducted by the Special Committee for exploring the potential interest of third parties in acquiring Affinity, of Z Capital's proposals to acquire the remaining shares of Affinity, and the impact such disclosures and such participation and interest might have had or might have on the potential interest of third parties in considering an acquisition of Affinity;

    that the transaction is not structured to require approval of at least a majority of Affinity's stockholders that are not Z Capital Rollover Investors;

    the receipt of cash in exchange for the shares of Affinity common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes; and

    Affinity's officers and directors may have interests in the merger that are different from, or in addition to, the interests of Affinity's stockholders, and the interests of Affinity's directors and officers in continued indemnification, advancement of expenses and insurance coverage from the surviving corporation under the merger agreement.

        The Special Committee also considered a number of factors relating to the procedural safeguards involved in the negotiation of the merger, including those discussed below, each of which it believed

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supported its determination and recommendation and provided assurance of the fairness of the merger to Affinity's stockholders that are not Z Capital Rollover Investors:

    the Special Committee consists solely of independent and disinterested directors who are not officers or employees or affiliated with the Purchaser Parties or their affiliates, including Z Capital, and who do not otherwise have a conflict of interest or lack independence with respect to the merger;

    the Special Committee was delegated the exclusive power and authority to review and evaluate, and did so review and evaluate, the advisability of Z Capital's proposal and other strategic alternatives available to Affinity;

    although the Special Committee did not retain an unaffiliated representative to act solely on behalf of stockholders who were unaffiliated with Z Capital for purposes of negotiating the transaction with Z Capital or preparing a report concerning the fairness of the transaction with Z Capital, the Special Committee was comprised solely of independent and disinterested directors and received financial advice from Deutsche Bank, an independent and nationally recognized financial advisor;

    the process that the Special Committee conducted in the fall of 2015 to explore Affinity's potential strategic alternatives, including a sale of Affinity;

    the members of the Special Committee were adequately compensated for their services and their compensation was in no way contingent on their approving the merger agreement and taking the other actions described in this proxy statement;

    each of the Special Committee and the Board was aware that it had no obligation to recommend any transaction and that the Special Committee had the authority to "say no" to any proposals made by Z Capital or other potential acquirors;

    the Special Committee received the advice and assistance of Deutsche Bank, as its financial advisor, and Morrison & Foerster LLP and Fennemore Craig, P.C., as its legal advisors, and requested and received from Deutsche Bank an opinion, dated August 22, 2016, that as of that date and based on and subject to various assumptions, limitations, qualifications and conditions described in its opinion, the $17.35 per share Merger Consideration in the merger was fair, from a financial point of view, to the holders of outstanding shares of Affinity common stock (other than the Z Capital Rollover Investors);

    the Special Committee was involved in deliberations over a period of over 11 months regarding Z Capital's proposals to acquire Affinity since April 3, 2015 (not including the time period in which the Special Committee was not in existence); and

    the financial and other terms and conditions of the merger agreement were the product of negotiations between the Special Committee and its independent advisors, on the one hand, and Z Capital and its representatives, on the other hand.

        The above discussion of the information and factors considered by the Special Committee is not intended to be exhaustive, but indicates the material matters considered. In reaching its determination and recommendation, the Special Committee did not quantify, rank or assign any relative or specific weight to any of the foregoing factors, and individual members of the Special Committee may have considered various factors differently. The Special Committee did not undertake to make any specific determination as to whether any specific factor, or any particular aspect of any factor, supported or did not support its ultimate recommendation. Moreover, in considering the information and factors described above, individual members of the Special Committee may have given differing weights to differing factors. The Special Committee based its recommendation on the totality of the information presented.

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        The Special Committee did not consider the liquidation value of Affinity in determining the fairness of the merger to Affinity's stockholders that are not Z Capital Rollover Investors, because of its belief that liquidation value does not present a meaningful valuation for Affinity and its business, as Affinity's value is derived from the cash flows generated from its continuing operations rather than from the value of assets that might be realized in a liquidation. Accordingly, the valuation analyses presented by Deutsche Bank to the Special Committee (as described under "Special Factors—Opinion of Financial Advisor to the Special Committee") were based on the operation of Affinity as a continuing business, and, to that extent, such analyses could be characterized collectively as forms of going concern valuations.

        The Special Committee also did not consider net book value, which is an historical accounting measure, in determining the fairness of the merger to Affinity's stockholders that are not Z Capital Rollover Investors, because of its belief that net book value is not a material indicator of the value of Affinity as a going concern but rather is indicative of historical acquisition costs, and does not take into account the prospects of Affinity, market conditions, trends in the industries in which Affinity operates or the business risks and uncertainties inherent in those industries. Further, the Special Committee did not believe that net book value accurately reflects Affinity's present market value. Affinity's net book value per share as of June 30, 2016 was approximately $8.59 (calculated based on 20.5 million shares of common stock outstanding), which is lower than the $17.35 per share Merger Consideration.

Recommendation of the Board

        At a meeting held on August 22, 2016, the members of the Board present and voting (with Mr. Silberling, as an employee director, abstaining), in accordance with the unanimous recommendation of the members of the Special Committee present and voting, unanimously (i) approved and declared advisable the merger agreement and the voting agreements and the transactions contemplated thereby, including the merger, (ii) determined that the terms of the merger agreement are just and reasonable as to Affinity, (iii) determined that the merger agreement and the transactions contemplated thereby, including the merger and the Merger Consideration, are fair to and in the best interests of Affinity and its stockholders (other than affiliates of Z Capital) and (iv) resolved to recommend that Affinity's stockholders adopt and approve the merger agreement and the transactions contemplated thereby.

        In the course of making such determinations, the Board considered the following factors, which are not intended to be exhaustive and are not in any relative order of importance:

    the Special Committee's analyses, as described in more detail above, conclusions and determination, by unanimous decision of all directors present and voting, in good faith that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Affinity and its stockholders (other than the Z Capital Rollover Investors), and the Special Committee's recommendation that the Board approve and adopt the merger agreement and voting agreements and the transactions contemplated thereby, including the merger;

    the procedural fairness of the transaction, including the fact that the transaction was negotiated by the Special Committee consisting solely of independent and disinterested members of the Board who are not affiliated with the Purchaser Parties, are not officers or employees of Affinity and have no financial interest in the merger different from, or in addition to, the interests of, Affinity's unaffiliated stockholders (other than the interests described under "Special Factors—Interests of Affinity's Directors and Executive Officers in the Merger; Potential Conflicts of Interest"); and

    the financial analyses of Deutsche Bank, financial advisor to the Special Committee, and the opinion of Deutsche Bank that, as of August 22, 2016 and based upon and subject to various assumptions, limitations, qualifications and conditions described in its opinion, the $17.35 per

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      share Merger Consideration in the merger was fair, from a financial point of view, to the holders of outstanding shares of Affinity common stock (other than the Z Capital Rollover Investors) as more fully described below in the section entitled "Special Factors—Opinion of Financial Advisor to the Special Committee."

        The foregoing discussion of the information and factors considered by the Board, is not intended to be exhaustive but includes the material factors considered by the Board. In light of the variety of factors considered in connection with its evaluation of the merger, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Board made its recommendation based upon the totality of the information it considered.

Opinion of Financial Advisor to the Special Committee

        Deutsche Bank has acted as financial advisor to the Special Committee of the Board of Directors in connection with the merger. At the August 22, 2016 meeting of the Special Committee, Deutsche Bank rendered its oral opinion to the Special Committee, subsequently confirmed by delivery of a written opinion dated August 22, 2016, to the effect that, as of the date of such opinion, and based upon and subject to the assumptions, limitations, qualifications and conditions described in Deutsche Bank's opinion, the Merger Consideration was fair, from a financial point of view, to the holders of the outstanding Affinity common stock (other than the Z Capital Rollover Investors).

        The full text of Deutsche Bank's written opinion, dated August 22, 2016, which sets forth the assumptions made, procedures followed, matters considered and limitations, qualifications and conditions on the review undertaken by Deutsche Bank in connection with the opinion, is included as Appendix B to this proxy statement and is incorporated herein by reference. The summary of Deutsche Bank's opinion in this proxy statement is qualified in its entirety by reference to the full text of the opinion. Deutsche Bank's opinion was approved and authorized for issuance by a Deutsche Bank fairness opinion review committee and was addressed to, and was for the use and benefit of, the Special Committee (in its capacity as such) in connection with and for the purpose of its evaluation of the merger. Deutsche Bank's opinion was limited to the fairness of the Merger Consideration, from a financial point of view, to the holders of Affinity common stock (other than the Z Capital Rollover Investors) as of the date of the opinion. Deutsche Bank's opinion did not address any other terms of the merger or the merger agreement, nor did it address the terms of any other agreement entered into in connection with the merger. The Special Committee did not ask Deutsche Bank to, and Deutsche Bank's opinion did not, address the fairness of the merger, or any consideration received in connection therewith, to the holders of any other class of securities, creditors or other constituencies of Affinity, nor did it address the fairness of the contemplated benefits of the merger. Deutsche Bank expressed no opinion as to the merits of the underlying decision by Affinity to engage in the merger or the relative merits of the merger as compared to any alternative transactions or business strategies. Nor did Deutsche Bank express any opinion, and Deutsche Bank's opinion does not constitute a recommendation, as to how any holder of shares of Affinity common stock should vote on the merger. In addition, Deutsche Bank did not express any view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable to or to be received by any of the officers, directors, or employees of Affinity, or any class of such persons, in connection with the merger relative to the Merger Consideration to be received by the holders of Affinity common stock (other than the Z Capital Rollover Investors).

        In connection with its role as financial advisor to the Special Committee, and in arriving at its opinion, Deutsche Bank reviewed certain publicly available financial and other information concerning Affinity, and certain internal analyses, financial forecasts and other information relating to Affinity

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prepared by Affinity's management. Deutsche Bank also held discussions with certain senior officers of Affinity on the businesses and prospects of Affinity. In addition, Deutsche Bank:

    reviewed the reported prices and trading activity for shares of Affinity common stock;

    to the extent publicly available, compared certain financial and stock market information for Affinity with, to the extent publicly available, similar information for certain other companies Deutsche Bank considered relevant whose securities are publicly traded;

    reviewed, to the extent publicly available, the financial terms of certain recent business combinations which Deutsche Bank deemed relevant;

    reviewed a draft dated August 21, 2016 of the merger agreement and certain related documents; and

    performed such other studies and analyses and considered such other factors as Deutsche Bank deemed appropriate.

        Deutsche Bank did not assume responsibility for independent verification of, and did not independently verify, any information, whether publicly available or furnished to it, concerning Affinity, including, without limitation, any financial information considered in connection with the rendering of its opinion. Accordingly, for purposes of its opinion, Deutsche Bank has, with the knowledge and permission of the Special Committee, assumed and relied upon the accuracy and completeness of all such information. Deutsche Bank did not conduct a physical inspection of any of the properties or assets, and did not prepare, obtain or review any independent evaluation or appraisal of any of the assets or liabilities (including any contingent, derivative or off-balance-sheet assets or liabilities), of Affinity or any of its subsidiaries, nor did Deutsche Bank evaluate the solvency or fair value of Affinity under any law relating to bankruptcy, insolvency or similar matters. With respect to the financial forecasts made available to Deutsche Bank and used in its analyses, Deutsche Bank assumed, with the knowledge and permission of the Special Committee, that such forecasts had been reasonably prepared on bases reflecting the best currently available estimates and judgments of Affinity's management as to the matters covered thereby. In rendering its opinion, Deutsche Bank expressed no view as to the reasonableness of such forecasts and projections or the assumptions on which they are based. Deutsche Bank's opinion was necessarily based upon economic, market and other conditions as in effect on, and the information made available to it as of, the date of its opinion. Deutsche Bank expressly disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting its opinion of which it becomes aware after the date of its opinion.

        For purposes of rendering its opinion, Deutsche Bank assumed with the knowledge and permission of the Special Committee that, in all respects material to its analysis, the merger would be consummated in accordance with the terms of the merger agreement, without any waiver, modification or amendment of any term, condition or agreement that would be material to its analysis. Deutsche Bank also assumed, with the knowledge and permission of the Special Committee, that all material governmental, regulatory or other approvals and consents required in connection with the consummation of the merger will be obtained and that, in connection with obtaining any necessary governmental, regulatory or other approvals and consents, no restrictions, terms or conditions will be imposed that would be material to its analysis. Deutsche Bank is not a legal, regulatory, tax or accounting expert and has relied on the assessments made by Affinity and its other advisors on such issues. Deutsche Bank was informed by representatives of Affinity, and assumed with the knowledge and permission of the Special Committee, that the final terms of the merger agreement and related documents would not differ materially from the terms set forth in the draft Deutsche Bank reviewed.

        The Special Committee selected Deutsche Bank as its financial advisor in connection with the merger based on Deutsche Bank's qualifications, expertise, reputation and experience in mergers and acquisitions. Under an engagement letter between the Special Committee and Deutsche Bank, the

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Special Committee of the Board of Directors has agreed to cause Affinity to pay Deutsche Bank a transaction services fee equal to 0.5% of (i) the total amount of cash and the fair market value on the date which is five days prior to the closing of the merger of all other property paid or payable directly or indirectly to Affinity or any of its securityholders for or in respect of their securities or interests in Affinity in connection with the merger, reduced by (ii) the total amount of any cash or cash equivalents or short-term investments held by Affinity and its subsidiaries as of the closing of the merger, for its services as financial advisor to the Special Committee, of which $250,000 became payable in connection with the May 18, 2015 delivery of a written report setting forth findings and evaluations relating to financial and strategic alternatives available to Affinity (the "Strategic Review Fee"), and of which $850,000 became payable upon delivery of its opinion (or would have become payable if Deutsche Bank had advised the Special Committee that it was unable to render its opinion) on August 22, 2016, and the remainder of which is payable upon closing of the merger. The Special Committee has also agreed to cause Affinity to reimburse Deutsche Bank for the reasonable fees, expenses and disbursements of its outside counsel and its reasonable travel and other out-of-pocket expenses, and to indemnify Deutsche Bank against certain liabilities, in connection with its engagement.

        Deutsche Bank is an internationally recognized investment banking firm experienced in providing advice in connection with mergers and acquisitions and related transactions. Deutsche Bank is an affiliate of Deutsche Bank AG (together with its affiliates, the "DB Group"). One or more members of the DB Group have, from time to time, provided, and are currently providing, financial services to Parent or its affiliates for which the DB Group has received compensation, and in the future may receive, compensation, including compensation of approximately $375,619 received during the two year period prior to August 22, 2016. In addition, one or more members of the DB Group have, from time to time, provided, and are currently providing, financial services to Affinity or its affiliates for which the DB Group has received compensation, and in the future may receive, compensation, including compensation of approximately $270,575 received during the two year period prior to August 22, 2016 (which amount includes the Strategic Review Fee). The DB Group may also provide investment and commercial banking services to Parent and Affinity in the future, for which the DB Group would expect to receive compensation. In the ordinary course of business, members of the DB Group may actively trade in the securities and other instruments and obligations of Parent, Affinity and their respective affiliates for their own accounts and for the accounts of their customers. Accordingly, the DB Group may at any time hold a long or short position in such securities, instruments and obligations.

Summary of Material Financial Analyses

        The following is a summary of the material financial analyses presented by Deutsche Bank to the Special Committee at its meeting held on August 22, 2016, and that were used in connection with rendering its opinion described above.

        The following summary, however, does not purport to be a complete description of the financial analyses performed by Deutsche Bank, nor does the order in which the analyses are described represent the relative importance or weight given to the analyses by Deutsche Bank. Some of the summaries of financial analyses below include information presented in tabular format. In order to fully understand the analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of Deutsche Bank's analyses. Considering the data described below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before August 19, 2016, and is not necessarily indicative of current market conditions.

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Selected Public Companies Analysis

        Deutsche Bank reviewed and compared certain financial information and commonly used valuation measurements for Affinity with corresponding financial information and valuation measurements for the following four publicly traded companies in the gaming industry:

    Isle of Capri Casinos, Inc.

    Eldorado Resorts, Inc.

    Monarch Casino & Resort, Inc.

    Full House Resorts, Inc.

        Although none of the above selected companies is directly comparable to Affinity, the companies included were chosen because they are publicly traded companies with financial and operating characteristics that, for purposes of analysis, may be considered similar to those of Affinity. Accordingly, the analysis of publicly traded companies was not simply mathematical. Rather, it involved complex considerations and qualitative judgments, reflected in the opinion of Deutsche Bank, concerning differences in financial and operating characteristics of the selected companies and other factors that could affect the public trading value of such companies.

        Based on the closing prices of the common stock of the selected companies on August 19, 2016 and information contained in the most recent public filings of the selected companies, Deutsche Bank calculated for each of the selected companies the total enterprise value ("TEV") (defined as equity value plus net indebtedness) as a multiple of estimated 2016 EBITDA (defined as earnings before interest, taxes, depreciation and amortization), which is referred to in this section of this proxy statement as TEV/2016E EBITDA, and the total enterprise value as a multiple of estimated 2017 EBITDA, which is referred to in this section of this proxy statement as TEV/2017E EBITDA.

        The following table presents the TEV/2016E EBITDA and TEV/2017E EBITDA multiples for the selected companies and the mean and median of such multiples for the selected companies:

Selected Companies
  TEV/2016E
EBITDA
  TEV/2017E
EBITDA
 

Isle of Capri Casinos, Inc. 

    7.3x     7.1x  

Eldorado Resorts Inc

    8.6x     7.8x  

Monarch Casino & Resort, Inc. 

    8.3x     7.7x  

Full House Resorts, Inc. 

    5.2x     4.3x  

Mean

    7.3x     6.7x  

Median

    7.8x     7.4x  

        Based in part upon the TEV/2016E EBITDA trading multiples of the selected companies described above, and taking into account its professional judgment and experience, Deutsche Bank calculated a range of implied values per share of Affinity common stock by applying TEV/2016E EBITDA multiples of 6.75x to 8.00x to Affinity's management estimate of Affinity's 2016 Covenant EBITDA, resulting in a range of implied values of approximately $15.49 to $20.40 per share of Affinity common stock, which Deutsche Bank compared to the Merger Consideration of $17.35 per share of Affinity common stock.

        Based in part upon the TEV/2017E EBITDA trading multiples of the selected companies described above, and taking into account its professional judgment and experience, Deutsche Bank calculated a range of implied values per share of Affinity common stock by applying TEV/2017E EBITDA multiples of 6.00x to 7.25x to Affinity's management estimate of Affinity's 2017 Covenant EBITDA, resulting in a range of implied values of approximately $15.54 to $21.08 per share of Affinity

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common stock, which Deutsche Bank compared to the Merger Consideration of $17.35 per share of Affinity common stock.

Selected Transactions Analysis

        Deutsche Bank reviewed publicly available information relating to the transactions described in the table below involving publicly traded companies in the gaming industry announced since May 2012. Although none of the selected transactions is directly comparable to the merger, the companies that participated in the selected transactions are such that, for purposes of analysis, the selected transactions may be considered similar to the merger.

        For each selected transaction and based on publicly available information, Deutsche Bank calculated the multiples of the target's total enterprise value to its one-year forward estimated EBITDA after the announcement of the transaction, which is referred to herein as TEV/FY+1 EBITDA. The following table presents the TEV/FY+1 EBITDA multiples for the selected transactions, and the mean and median of such multiples for the selected transactions:

Date Announced
  Target   Acquirer   TEV/FY+1
EBITDA
 

April 25, 2016

  Cannery Casino Resorts   Boyd Gaming Corp     7.2x  

September 9, 2013

  MTR Gaming   Eldorado Resorts, LLC     5.2x  

December 20, 2012

  Ameristar Casinos   Pinnacle Gaming     6.8x  

May 16, 2012

  Peninsula Gaming, LLC   Boyd Gaming     6.6x  

Mean

            6.5x  

Median

            6.7x  

        Based in part upon the multiples of the selected transactions described above, and taking into account its professional judgment and experience, Deutsche Bank calculated a range of implied values per share of Affinity common stock by applying TEV/FY+1 EBITDA multiples of 6.00x to 7.25x to the Affinity's one-year forward estimated Covenant EBITDA following the announcement of the merger (calculated as the sum of 50% of Affinity's management estimate of Affinity's 2016 Covenant EBITDA and 50% of Affinity's management estimate of Affinity's 2017 Covenant EBITDA), resulting in a range of implied values of approximately $14.04 to $19.26 per share of Affinity common stock, which Deutsche Bank compared to the Merger Consideration of $17.35 per share of Affinity common stock.

Discounted Cash Flow Analysis

        Deutsche Bank performed a discounted cash flow analysis of Affinity using financial forecasts and data provided by Affinity's management and publicly available information to calculate a range of implied equity values per share of Affinity common stock as of June 30, 2016.

        In performing the discounted cash flow analysis, Deutsche Bank applied a range of discount rates of 9.0% to 12.0% to the sum of (i) Affinity's management estimates of its after-tax free cash flows for the period from July 1, 2016 through December 31, 2020 and (ii) a range of terminal values of Affinity at the end of such period.

        The discount rate ranges were selected based upon Deutsche Bank's professional judgment and experience after performing a weighted average cost of capital analysis of Affinity. The range of estimated terminal values was calculated by applying terminal value multiples ranging from 6.00x to 7.25x to an estimate of Affinity's Covenant EBITDA for calendar year 2021 (calculated by applying a 1.5% growth rate to Affinity's management estimate of Affinity's Covenant EBITDA for calendar year 2020).

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        This analysis resulted in a range of implied present values of approximately $16.92 to $24.23 per share of Affinity common stock, which Deutsche Bank compared to the Merger Consideration of $17.35 per share of Affinity common stock.

Illustrative Present Value of Future Share Price Analysis

        Deutsche Bank calculated an illustrative range of the implied present value per share of Affinity common stock as of June 30, 2016 based on theoretical future values for the Affinity common stock as of December 31 of calendar years 2016 through 2019. This analysis was designed to provide an indication of the present value of a theoretical future value of a share of Affinity common stock as of December 31 of each applicable year based on Affinity's management estimates of Affinity's Covenant EBITDA for the following year. Deutsche Bank derived a range of theoretical future values for the shares of Affinity common stock as of December 31 of calendar years 2016 through 2019, by:

    applying, with respect to each applicable calendar year, TEV/FY+1 EBITDA multiples of 6.00x to 7.25x to Affinity's management estimate of Affinity's Covenant EBITDA for the following calendar year, to derive a range of implied enterprise values for Affinity as of December 31 of such calendar year;

    subtracting projected net debt as of such December 31 of such calendar year from the resulting range of implied enterprise values to yield a range of implied equity values for Affinity as of December 31 of such calendar year; and

    dividing the resulting range of implied equity values by the estimated fully-diluted number of shares of Affinity common stock outstanding as of December 31 of such calendar year.

        By applying discount rates ranging from 12.0% to 14.0%, reflecting an estimate of Affinity's cost of equity, Deutsche Bank discounted to present value as of December 31, 2016 the range of theoretical future values for the Affinity common stock it derived as of December 31 of calendar years 2016 through 2019 to yield illustrative present values of approximately $15.54 to $24.30 per share of Affinity common stock, which Deutsche Bank compared to the Merger Consideration of $17.35 per share of Affinity common stock.

Miscellaneous

        This summary is not a complete description of Deutsche Bank's opinion or the underlying analyses and factors considered in connection with Deutsche Bank's opinion. The preparation of a fairness opinion is a complex process involving the application of subjective business and financial judgment in determining the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, is not readily susceptible to partial analysis or summary description. Deutsche Bank believes that its analyses described above must be considered as a whole and that considering any portion of such analyses and of the factors considered without considering all analyses and factors could create a misleading view of the process underlying its opinion. Selecting portions of the analyses or summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying the Deutsche Bank opinion. In arriving at its fairness determination, Deutsche Bank considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis. Rather, it made its fairness determination on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction in the analyses described above is identical to Affinity, Parent or the merger.

        In conducting its analyses and arriving at its opinion, Deutsche Bank utilized a variety of generally accepted valuation methods. The analyses were prepared solely for the purpose of enabling Deutsche Bank to provide its opinion to the Special Committee as to the fairness of the merger consideration,

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from a financial point of view, to the holders of outstanding Affinity common stock (other than the Z Capital Rollover Investors) as of the date of the opinion and do not purport to be an appraisal or necessarily reflect the prices at which businesses or securities actually may be sold, which are inherently subject to uncertainty. As described above, in connection with its analyses, Deutsche Bank made, and was provided by Affinity's management with, numerous assumptions about industry performance, general business, economic, market and other conditions and other matters, many of which are beyond the control of Deutsche Bank, Affinity or Parent. Analyses based on estimates or forecasts of future results are not necessarily indicative of actual past or future values or results, which may be significantly more or less favorable than suggested by such analyses. Because such analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of Affinity, Parent or their respective advisors, Deutsche Bank does not assume responsibility if future results or actual values are materially different from these forecasts or assumptions.

        The terms of the merger, including the Merger Consideration, were determined through arm's-length negotiations between Affinity and Parent and were approved by the Special Committee. Although Deutsche Bank provided advice to the Special Committee during the course of these negotiations, the decision to enter into the merger agreement was solely that of the Special Committee. Deutsche Bank did not recommend any specific consideration to Affinity or the Special Committee, or that any specific amount or type of consideration constituted the only appropriate consideration for the merger. As described above, the opinion of Deutsche Bank and its presentation to the Special Committee were among a number of factors taken into consideration by the Special Committee in making its determination to approve the merger agreement and the merger.

Position of the Purchaser Parties and the Z Capital Filing Persons as to the Fairness of the Merger to Affinity's Stockholders that are not Z Capital Rollover Investors

        Under the SEC rules governing "going private" transactions, each of the Purchaser Parties and the Z Capital Filing Persons may be deemed to be an affiliate of Affinity and, therefore, is required to express its beliefs as to the fairness of the merger to Affinity's "unaffiliated security holders," as defined under Rule 13e-3 of the Exchange Act. Each of the Purchaser Parties and the Z Capital Filing Persons are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the Purchaser Parties and of the Z Capital Filing Persons should not be construed as a recommendation to any Affinity stockholder as to how that stockholder should vote on the Merger Proposal. As described below, each of the Purchaser Parties and the Z Capital Filing Persons believe that the merger is fair to Affinity's stockholders that are not Z Capital Rollover Investors on the basis of the factors described under "Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger," "Special Factors—Opinion of Financial Advisor to the Special Committee," "Special Factors—Purposes and Reasons of the Purchaser Parties and the Z Capital Filing Persons for the Merger."

        The Purchaser Parties and the Z Capital Filing Persons attempted to negotiate with the Special Committee the terms of a transaction that would be most favorable to the Purchaser Parties, and not necessarily to Affinity's stockholders that are not Z Capital Rollover Investors, and, accordingly, did not negotiate the merger agreement with a goal of obtaining terms that were fair to Affinity's stockholders that are not Z Capital Rollover Investors. The Special Committee consists solely of independent and disinterested members of the Board who are not affiliated with the Purchaser Parties or the Z Capital Filing Persons, are not officers or employees of Affinity or any of its subsidiaries and have no financial interest in the merger different from, or in addition to, the interests of Affinity's stockholders that are not Z Capital Rollover Investors (other than the interests described under "Special Factors—Interests of Affinity's Directors and Executive Officers in the Merger; Potential Conflicts of Interest").

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        None of the Purchaser Parties or the Z Capital Filing Persons, and neither James J. Zenni, Jr. nor Andrei Scrivens (such individuals, collectively, the "Z Capital Directors") participated in the deliberations of the Special Committee, or received advice from Affinity's legal or financial advisors, regarding the substantive or procedural fairness of the merger to Affinity's stockholders that are not Z Capital Rollover Investors. None of the Purchaser Parties, the Z Capital Filing Persons, or the Z Capital Directors has performed, or engaged a financial advisor to perform, any valuation or other analysis for the purposes of assessing the fairness of the merger to Affinity's stockholders that are not Z Capital Rollover Investors.

        As disclosed under "Special Factors—Purposes and Reasons of the Purchaser Parties and the Z Capital Filing Persons for the Merger," the Z Capital Filing Persons have interests in the merger that are different from those of the stockholders that are not Z Capital Rollover Investors, by virtue of the fact that the Z Capital Rollover Investors' common stock of Affinity will be exchanged in the merger for membership interests in Holdings. While the Z Capital Directors are employees of Z Capital (and Mr. Zenni indirectly controls Z Capital) and may be deemed to have an indirect interest in the Affinity common stock held by Z Capital as described under the section captioned "Special Factors—Interests of Affinity's Directors and Executive Officers in the Merger; Potential Conflicts of Interest—Ownership Interests of the Z Capital Directors," the Z Capital Directors were not members of and did not participate in the deliberations of the Special Committee. As a result, the Z Capital Directors do not believe that their or the Purchaser Parties' or the Z Capital Filing Persons' interests in the merger influenced the decision of the Special Committee with respect to the merger agreement or the Merger Proposal.

        Based on the knowledge and analysis of the Purchaser Parties and the Z Capital Filing Persons of available information regarding Affinity, and discussions with Affinity's senior management regarding Affinity and its business and on substantially the same factors considered, and not considered, by, and the analysis and resulting conclusions of, the Board and the Special Committee discussed under "Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger" (which analysis and resulting conclusions each of the Purchaser Parties and the Z Capital Filing Persons adopt), each of the Purchaser Parties and the Z Capital Filing Persons believes that the merger is substantively and procedurally fair to Affinity's stockholders that are not Z Capital Rollover Investors. In particular, each of the Purchaser Parties and the Z Capital Filing Persons believes that the merger is substantively and procedurally fair to Affinity's stockholders that are not Z Capital Rollover Investors, based on its consideration of the following factors, among others:

Substantive Factors

    the fact that the merger consideration of $17.35 per share of Affinity common stock in cash represents approximately a 20% premium over the most recent publicly reported transaction in Affinity common stock of $14.50 per share, acquired by affiliates of Z Capital on April 7, 2016, and an 80% increase in the per share consideration from the $9.75 price per share stated in Z Capital's April 3 Proposal and a 16% increase in the per share consideration from the $15.00 price per share stated in Z Capital's July 29 Proposal, as well as a valuation of Affinity's TEV at a 7.2x multiple to Affinity's estimated EBITDA for fiscal year 2016 and at a 6.4x multiple to Affinity's estimated EBITDA for fiscal year 2017;

    the fact that the merger consideration is all cash, allowing Affinity's stockholders that are not Z Capital Rollover Investors to immediately realize a certain value for all of their shares of common stock (without incurring brokerage or other costs typically associated with market sales) and, as a result, to no longer be exposed to risks and uncertainties relating to the performance and prospects of Affinity;

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    the fact that the merger agreement permits Affinity, subject to specific limitations and requirements set forth therein, to consider and respond to an unsolicited acquisition proposal, and to furnish confidential information to, and engage in discussions or negotiations with, the person or parties making such acquisition proposal prior to the time Affinity's stockholders approve the proposal to adopt the merger agreement;

    the fact that the merger agreement permits the Special Committee, subject to specific limitations and requirements set forth therein, to withdraw or change its recommendation that Affinity's stockholders vote in favor of the proposal to adopt the merger agreement and to terminate the merger agreement and accept a superior proposal, in each case prior to the time Affinity's stockholders approve the proposal to adopt the merger agreement, and subject in each case to Affinity paying a termination fee of approximately $12.4 million;

    notwithstanding that the opinion of Deutsche Bank was provided solely for the benefit of the Special Committee and that the Purchaser Parties and the Z Capital Filing Persons are not entitled to, and did not, rely on such opinion, the fact that the Special Committee received an oral opinion, dated as of August 22, 2016, subsequently confirmed by delivery of a written opinion, also dated as of August 22, 2016, from Deutsche Bank to the effect that, as of the date of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications set forth in such opinion, the merger consideration consisting of $17.35 per share of common stock to be received in the merger by holders of outstanding shares of Affinity common stock, other than the Z Capital Rollover Investors, was fair, from a financial point of view, to such holders;

    the fact that the Purchaser Parties obtained debt and equity financing commitments for the transaction, the limited number and nature of the conditions to the debt and equity financing, the absence of a financing condition in the merger agreement and the obligation of the Purchaser Parties to use their reasonable best efforts to consummate the debt financing; and

    the fact that two large stockholders not affiliated with Z Capital, which collectively own approximately 28.7% of the outstanding shares of Affinity common stock, entered into voting and support agreements with the Purchaser Parties pursuant to which they have agreed to vote in favor of adoption of the merger agreement.

Procedural Factors

    the fact that the merger agreement and the transactions contemplated thereby, including the merger, were negotiated and were approved, determined to be fair to and in the best interests of Affinity and its stockholders that are not Z Capital Rollover Investors, and declared advisable by the Special Committee (where the Z Capital Directors, the Purchaser Parties and the Z Capital Filing Persons did not participate in the foregoing deliberations);

    the fact that the merger consideration of $17.35 per share of Affinity common stock in cash and the other terms and conditions of the merger agreement resulted from arm's-length negotiations between the Special Committee and each of the Purchaser Parties and the Z Capital Filing Persons;

    the fact that entry by Affinity into the merger agreement followed a series of efforts by Affinity to explore a full range of strategic alternatives with the goal of enhancing value for all of Affinity's stockholders, which process included the contacting of over 23 potential strategic and financial acquirers, and 13 entered into nondisclosure agreements with Affinity and received its confidential information memorandum;

    the fact that following such process only the Purchaser Parties submitted a final proposal not subject to material due diligence or financing contingencies, and the Special Committee and its

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      advisors negotiated the terms of the Purchaser Parties' bid for a period of three weeks prior to the signing of the merger agreement;

    the fact that the Special Committee retained and received advice from Deutsche Bank, as financial advisor, and Morrison & Foerster LLP, as legal advisor, each of which has extensive experience in transactions similar to the merger; and

    the fact that Affinity's stockholders have the ability to exercise appraisal rights under NRS 92A.300 to 92A.500, inclusive, which provides such stockholders with the right to "demand payment" for their shares at a price equal to its fair value immediately before the corporate action, and if Affinity and the stockholder cannot agree on a fair value, the stockholder will have an opportunity to have the Nevada state court determine the fair value of their shares of common stock (which may be more than, less than or the same as the amount such stockholders would have received under the merger agreement) and to receive payment based on that valuation in lieu of receiving the merger consideration. See "Special Factors—Appraisal and Dissenters' Rights."

        In their consideration of the fairness of the merger, the Purchaser Parties and the Z Capital Filing Persons did not find it practicable to, and did not, appraise the assets of Affinity to determine the liquidation value for Affinity's stockholders that are not Z Capital Rollover Investors because (i) of their belief that liquidation sales generally result in proceeds substantially less than the sales of a going concern, (ii) of the impracticability of determining a liquidation value given (a) the fact that a significant portion of Affinity's assets are not freely transferrable and (b) the significant execution risk involved in any breakup, (iii) they considered Affinity to be a viable going concern and (iv) Affinity will continue to operate its business following the merger. The Purchaser Parties and the Z Capital Filing Persons did not consider net book value, which is an accounting concept, for purposes of determining the fairness of the merger consideration to Affinity's stockholders that are not Z Capital Rollover Investors because, in their view, net book value is not indicative of Affinity's market value but rather is an indicator of historical costs. The Purchaser Parties and the Z Capital Filing Persons note, however, that the merger consideration of $17.35 per share of common stock is higher than the net book value of Affinity of approximately $8.59 per share of common stock as of June 30, 2016 (calculated based on 20.5 million shares of common stock outstanding). The Purchaser Parties and the Z Capital Filing Persons did not seek to establish a pre-merger going concern value for the common stock to determine the fairness of the merger consideration to Affinity's stockholders that are not Z Capital Rollover Investors, because following the merger Affinity will have a significantly different capital structure. However, to the extent the pre-merger going concern value was reflected in the price of Affinity's common stock immediately prior to the announcement of the merger, the merger consideration of $17.35 per share of common stock represented a premium to the going concern value of Affinity.

        The foregoing discussion of the factors considered by the Purchaser Parties and the Z Capital Filing Persons in connection with the fairness of the merger is not intended to be exhaustive, but is believed to include all material factors considered by each of them. The Purchaser Parties and the Z Capital Filing Persons did not find it practicable to, and therefore did not, quantify or otherwise attach relative weights to the foregoing factors in reaching their position as to the fairness of the merger. Rather, the Purchaser Parties and the Z Capital Filing Persons made their fairness determination after considering all of the foregoing factors as a whole. The Purchaser Parties and the Z Capital Filing Persons believe these factors provide a reasonable basis upon which to form their belief that the merger is fair to Affinity's stockholders that are not Z Capital Rollover Investors. This belief should not, however, be construed as a recommendation to any Affinity stockholder to vote in favor of the Merger Proposal. The Purchaser Parties and the Z Capital Filing Persons make no recommendation as to how Affinity's stockholders should vote their shares of Affinity common stock on the Merger Proposal.

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Purposes and Reasons of Affinity for the Merger

        Affinity's purpose in engaging in the merger is to enable its stockholders to receive $17.35 per share in cash, without interest and subject to deduction for any required withholding tax, which $17.35 price represents a premium of 20% over the most recent publicly reported transaction prior to the public announcement of Z Capital's initial proposal of $14.50 per share, acquired by affiliates of Z Capital on April 7, 2016, and an 80% increase in the per share consideration from the $9.75 price per share stated in Z Capital's April 3 Proposal and a 16% increase in the per share consideration from the $15.00 price per share stated in Z Capital's July 29 Proposal, as well as a valuation of Affinity's TEV at a 7.2x multiple to Affinity's estimated EBITDA for fiscal year 2016 and at a 6.4x multiple to Affinity's estimated EBITDA for fiscal year 2017; provided that each share contributed by the Z Capital Rollover Investors to Parent immediately prior to the Effective Time will not be cancelled and will remain outstanding. Affinity has determined to undertake the merger at this time based on the recommendation of the Special Committee and the Board described in detail above under "Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger."

Purposes and Reasons of the Purchaser Parties and the Z Capital Filing Persons for the Merger

        Under the SEC rules governing "going-private" transactions, each of the Purchaser Parties and the Z Capital Filing Persons may be deemed to be affiliates of Affinity, and, therefore, they are required to express their purposes and reasons for the merger to Affinity's "unaffiliated security holders," as defined under Rule 13e-3 of the Exchange Act. The Purchaser Parties and the Z Capital Filing Persons are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and the related rules under the Exchange Act. The views of each of the Purchaser Parties and the Z Capital Filing Persons should not be construed as a recommendation to any Affinity stockholder as to how that stockholder should vote on the Merger Proposal.

        For the Purchaser Parties and the Z Capital Filing Persons, the primary purpose of the merger is to allow the Purchaser Parties to directly or indirectly own substantially all of the equity interests in Affinity and to bear the rewards and risks of such ownership after the merger is completed. The Purchaser Parties and the Z Capital Filing Persons believe that structuring the transaction in such manner is preferable to other transaction structures because it (i) will enable the Purchaser Parties and the Z Capital Filing Persons to directly or indirectly acquire substantially all of the outstanding common stock at the same time, (ii) will allow Affinity to cease to be a publicly registered and reporting company, (iii) represents an opportunity for Affinity's stockholders that are not Z Capital Rollover Investors or Management Rollover Investors to receive $17.35 per share in cash for their common stock and (iv) allows the Z Capital Rollover Investors to maintain their investment in Affinity through direct ownership in Holdings. In addition, the Purchaser Parties and the Z Capital Filing Persons believe that the merger will provide Affinity with the flexibility to pursue certain strategic alternatives that it would not be practicable to pursue as a public company, including the ability to pursue business initiatives without focusing on the short-term reaction of Affinity's public stockholders with respect to such initiatives or the collective risk tolerance of such public stockholders as it relates to such initiatives.

Treatment of Stock Options and Restricted Stock

Stock Options and Restricted Stock Cash-Out and Rollover Contribution by Michael Silberling, Walter Bogumil and Jeffrey Solomon

        On October 13, 2016, Holdings and Michael Silberling, Walter Bogumil and Jeffrey Solomon (the "Management Rollover Investors") agreed that each of their previously owned shares, options to purchase common stock of Affinity, whether vested or unvested, each of their outstanding shares of

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restricted stock that are unvested and outstanding immediately prior to the Effective Time, and commitments of Affinity and any of its subsidiaries to issue equity or equity-based awards will be treated as follows: Mr. Silberling's previously owned shares, outstanding options, outstanding shares of restricted stock, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards will be cancelled and, in exchange therefor, Holdings will provide Mr. Silberling $1,901,647 in cash, vested options to purchase 269,232 Class A units of Holdings and 854,586 profits interest awards in the form of restricted Class B units of Holdings, subject to the terms and conditions described below. Mr. Bogumil's previously owned shares, outstanding options, outstanding shares of restricted stock, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards, will be cancelled and, in exchange therefor, Holdings will provide Mr. Bogumil $52,050 in cash, 28,804 Class A units of Holdings, vested options to purchase 135,547 Class A units of Holdings and 421,440 profits interest awards in the form of restricted Class B units of Holdings, subject to the terms and conditions described below. Mr. Solomon's outstanding options, outstanding shares of restricted stock, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards, will be cancelled and, in exchange therefor, Holdings shall provide to Mr. Solomon options to purchase 135,547 Class A units of Holdings (67,774 of which will be subject to time-based vesting, fifty percent (50%) of which will vest on December 31, 2017 and fifty percent (50%) of which will vest on December 31, 2018, and 67,773 of which will be fully vested at the Effective Time) and 374,705 profits interest awards in the form restricted Class B units of Holdings, subject to the terms and conditions described below.

Details of Class A and Class B Units of Holdings

        Immediately prior to the closing of the merger, the Management Rollover Investors will enter into a limited liability company agreement (the "LLC Agreement"), option award agreements and profits interest award agreements with Holdings. These agreements will govern the Class A units, options to purchase Class A units and the Class B units described above. The Class A units and the Class B units generally will not have any voting rights. The Management Rollover Investors' entitlement to allocations, distributions and other rights with respect to the Class A and Class B units, as applicable (including, without limitation, drag-along rights, tag-along rights, put rights, call rights, and participation rights), will be set forth in the LLC Agreement.

        The LLC Agreement will also provide for the establishment of a management long-term incentive plan (the "MIP"). The MIP will provide for the issuance of a number of options to purchase Class A units of Holdings and Class B units of Holdings equal to 12% of the total Class A units and Class B units of Holdings on a fully diluted basis (assuming cashless exercise of outstanding options to purchase Class A units of Holdings immediately following the Effective Time) outstanding immediately following the Effective Time, or the issuance of cash awards in lieu of Class B units. No more than 77.1% of the MIP value (representing approximately 9.25% of the total Class A units and Class B units of Holdings outstanding immediately following the Effective Time, assuming cashless exercise of outstanding options to purchase Class A units of Holdings) will be allocated at the closing of the merger (which amount will include the Class B units of Holdings issued to the Management Rollover Investors). The remaining amount available under the MIP will be held in reserve and distributed on a discretionary basis, by Z Capital Group L.L.C. (which will be the manager of Holdings after the Effective Time (the "Manager")), to reward management performance and for long-term incentives for any new executives. As of the date hereof, no commitments with respect to grants of awards under the MIP have been made to any directors or executive officers of Affinity other than the Management Rollover Investors.

        The options to purchase Class A units that will be issued to the Management Rollover Investors under the MIP will be subject to substantially similar terms as the Management Rollover Investors' options to purchase common stock of Affinity subject to the vesting schedules described above. The total spread (the excess of the aggregate fair market value of the Class A units subject to the option

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over the aggregate option exercise price) of the option to purchase Class A units of Holdings will not exceed the total spread of the option to purchase common stock of Affinity, the ratio of the option exercise price to the fair market value of the Class A units subject to the option will not be greater than the ratio of the option exercise price to the fair market value of the shares of Affinity common stock subject to the current option and the options to purchase Class A units of Holdings may only be exercised on a cashless basis (where Holdings delivers a net number of Class A units having a value equal to the option's intrinsic value at the time of exercise, rather than the full number of Class A units subject to the option) based on the fair market value of a Class A unit of Holdings at the time of exercise.

        The Class B units of Holdings that will be issued to the Management Rollover Investors under the MIP entitle each such holder to a pro rata share, together with the Class A units, in the profits and losses of, and distributions from, Holdings after the holders of the Class A units of Holdings have received aggregate distributions equal to the aggregate cash contributions (or deemed contributions) with respect to their Class A units. One-half of the Class B units will vest in equal installments over four years (the "time vesting units") on December 31 of each of 2017, 2018, 2019 and 2020, and one-half of the Class B units will vest based on the performance of Affinity (the "performance vesting units") with 25% of the performance vesting units vesting upon the successful achievement of an annual consolidated EBITDA performance threshold in each of the four calendar years after the closing of the merger (with a catch-up provision for each year). Vesting of the awards is subject to the continued service of the Management Rollover Investor, provided that if employment is terminated without cause, for good reason, or due to death or disability, the time vesting units scheduled to vest during the calendar year of termination will vest in full and the performance vesting units that would otherwise be tested for vesting during the calendar year of termination will automatically vest. Any remaining units will be forfeited.

        In the event of a change in control (as defined in the LLC Agreement), any unvested time vesting units will automatically vest, and performance vesting units which are scheduled to vest in the calendar year of the change in control will vest if at the closing of the change in control Affinity would achieve the stated performance threshold for such calendar year as a result of assumed performance during such calendar year based on pro-rated performance through the closing of the change of control; provided that if the change in control occurs during the first calendar month of such calendar year, such performance vesting units will vest in the discretion of the Manager or will otherwise be treated as if such units were scheduled to vest in the calendar years after the calendar year of the change in control (as such treatment is described in the following sentence). Performance vesting units which are scheduled to vest in the calendar years after the calendar year of the change in control will vest at the closing of the change in control on a pro rata basis based on the percentage of performance vesting units scheduled to vest in the calendar years prior to the change in control that actually vested.

Treatment of Stock Options and Restricted Stock Held By Non-Management Rollover Investors

        The merger constitutes a change in control as defined in Affinity's Amended and Restated 2011 Long Term Incentive Plan (the "2011 LTIP") and, therefore, for any awards outstanding under the 2011 LTIP and held by non-Management Rollover Investors: (1) each option to purchase common stock of Affinity, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall become fully vested (to the extent unvested) and be converted into the right to receive an amount in cash equal to the product of (i) the excess, if any, of $17.35 over the exercise price per share under such stock option by (ii) the number of shares of Affinity common stock subject to the option, and (2) each outstanding share of restricted stock subject to time-based vesting restrictions that is unvested and outstanding immediately prior to the Effective Time shall become fully vested and be converted into the right to receive an amount in cash equal to the product of (i) $17.35 and (ii) the number of shares of Affinity common stock subject to the restricted stock award.

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Certain Effects of the Merger

        Parent does not currently own any interest in Affinity. The Z Capital Rollover Investors own approximately 41.2% of the outstanding shares of Affinity common stock and have agreed to contribute, or cause to be contributed, all such shares to Parent immediately prior to the Effective Time of the merger. Investment funds affiliated with Z Capital indirectly own 100% of the outstanding membership interests of Parent, and, following consummation of the merger, Parent will own 100% of the outstanding shares of Affinity common stock and will have a corresponding interest in Affinity's net book value, net earnings and tax attributes (the use of such tax attributes may be subject to certain limitations). The table below sets forth the direct and indirect interests in Affinity's net book value and net earnings of the Purchaser Parties, the Z Capital Filing Persons and the Management Rollover Investors prior to and immediately after the merger, based on the net book value at December 31, 2015 and June 30, 2016 and net earnings for the year ended December 31, 2015 and the six months ended June 30, 2016:

 
  Ownership of Affinity Prior to the Merger(1)   Ownership of Affinity After the Merger(2)(3)  
 
  %
Ownership
  Net
book
value at
12/31/15
  Net
book
value at
6/30/16
  Net
earnings
for year
ended
12/31/15
  Net
earnings
for the
six months
ended
6/30/16
  %
Ownership
  Net
book
value at
12/31/15
  Net
book
value at
6/30/16
  Net
earnings
for year
ended
12/31/15
  Net
earnings
for the
six months
ended
6/30/16
 
 
  ($ in thousands)
  ($ in thousands)
 

James J. Zenni Jr. 

    41.2 %   70,129     72,377     (5,394 )   2,016     98.9 %   168,436     173,838     (12,956 )   4,842  

Zenni Holdings, L.L.C. 

    41.2 %   70,129     72,377     (5,394 )   2,016     98.9 %   168,436     173,838     (12,956 )   4,842  

Z Capital Group, L.L.C. 

    41.2 %   70,129     72,377     (5,394 )   2,016     98.9 %   168,436     173,838     (12,956 )   4,842  

Z Capital Partners, L.L.C. 

    41.2 %   70,129     72,377     (5,394 )   2,016     98.9 %   168,436     173,838     (12,956 )   4,842  

Z Capital Partners UGP, L.L.C. 

    41.2 %   70,129     72,377     (5,394 )   2,016     98.9 %   168,436     173,838     (12,956 )   4,842  

Z Capital Partners GP I, L.P. 

    27.3 %   46,550     48,043     (3,581 )   1,338     27.1 %   46,218     47,700     (3,555 )   1,329  

Z Capital Partners Fund Holdings I, L.L.C. 

    14.7 %   24,996     25,766     (1,920 )   718     14.6 %   24,787     25,582     (1,907 )   713  

Z Capital Partners I, L.P. 

    14.7 %   24,996     25,766     (1,920 )   718     14.6 %   24,787     25,582     (1,907 )   713  

Z Capital Partners GP II, L.P. 

    13.8 %   23,578     24,334     (1,814 )   678     71.8 %   122,218     126,138     (9,401 )   3,513  

Z Capital HG, L.L.C. 

    8.6 %   14,718     15,190     (1,132 )   423     8.6 %   14,612     15,081     (1,124 )   420  

Z Capital Partners II-A, L.P. 

    6.0 %   10,182     10,509     (783 )   293     31.0 %   52,795     54,488     (4,061 )   1,518  

Z Capital Partners II, L.P. 

    5.2 %   8,827     9,110     (679 )   254     26.9 %   45,719     47,185     (3,517 )   1,314  

Z Capital Partners II-B, L.P. 

    2.7 %   4,569     4,715     (351 )   131     13.9 %   23,705     24,465     (1,823 )   681  

Z Capital CUAL Co-Invest, L.L.C. 

    2.0 %   3,485     3,597     (268 )   100     2.0 %   3,460     3,571     (266 )   99  

Z Capital HG-C, L.L.C. 

    1.9 %   3,238     3,341     (249 )   93     1.9 %   3,215     3,318     (247 )   92  

Holdings

                        98.9 %   168,436     173,838     (12,956 )   4,842  

Parent

                        98.9 %   168,436     173,838     (12,956 )   4,842  

Michael Silberling(4)

    0.6 %   1,022     1,054     (79 )   11     0.6 %   975     1,007     (75 )   28  

Walter Bogumil(4)

    0.1 %   170     176     (13 )   2     0.4 %   675     696     (52 )   19  

Jeffrey Solomon(4)

    0.1 %   170     176     (13 )   2     0.1 %   173     178     (13 )   5  

(1)
Reflects beneficial ownership based upon 20,438,831 shares of common stock outstanding as of September 30, 2016. Includes 8,333 shares of unvested time-based restricted stock that were part of an issuance of restricted stock to non-executive members of the Board. Pursuant to certain agreements governing investment funds affiliated with Z Capital, any shares issued to James J. Zenni Jr. and Andrei Scrivens, each a member of the Board, automatically revert to Z Capital. Accordingly, the Board's Compensation Committee awarded the shares of time-based restricted stock directly to Z Capital Partners GP I, L.P. ("Partners GP I"). Also includes shares held directly by Z Capital Partners Fund Holdings I, L.L.C. ("Partners Fund Holdings I"), Z Capital Partners II, L.P. ("Partners II"), Z Capital Partners II-A, L.P. ("Partners II-A"), Z Capital HG, L.L.C. ("Z Capital HG"), Z Capital Partners II-B, L.P. ("Partners II-B"), Z Capital CUAL Co-Invest, L.L.C. ("Z Capital CUAL Co-Invest"), and Z Capital HG-C, L.L.C. ("Z Capital HG-C"). Also includes shares of Affinity common stock which may be deemed to be indirectly beneficially owned by Z Capital Partners I, L.P. ("Partners I"), as the sole member and managing member of Partners Fund Holdings I; Partners GP I, as the general partner of Partners I and as the managing member of each of Z Capital HG, Z Capital HG-C, and Z Capital CUAL Co-Invest; Z Capital Partners GP II, L.P. ("Partners GP II"), as the general partner of each of Partners II, Partners II-A, and Partners II-B; Z Capital Partners UGP, L.L.C. ("Partners UGP"), as the general partner of each of Partners GP I and Partners GP II; Z Capital, as the sole member and managing member of Partners UGP; Z Capital Group, L.L.C. ("Z Capital Group"), as the sole member and managing member of Z Capital; Zenni Holdings, as the sole member and managing member of Z Capital Group; and James J. Zenni, Jr., as the Founder, President and Chief Executive Officer of Z Capital and the sole member and managing member of Zenni Holdings. Each of Z Capital, Zenni Holdings, Mr. Zenni, Z Capital Group, Partners UGP, Partners GP I, Partners GP II, Partners I, Partners II, Partners II-A, Partners II-B, Partners Fund Holdings I, Z Capital HG, Z Capital HG-C, and Z Capital CUAL Co-Invest declares that neither the filing of this statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Exchange Act or any other purpose, (i) acting (or has agreed or is agreeing to act) with any other person as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of Affinity's securities or otherwise with respect to Affinity or any of Affinity's securities, or (ii) a member of any syndicate or group with respect to Affinity or any of Affinity's securities.

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(2)
Reflects (i) beneficial ownership of Holdings, which will indirectly own all of the outstanding common stock of Affinity, based on the relative value of the anticipated contributions of Affinity common stock to Parent by the Z Capital Rollover Investors and the Management Rollover Investors, plus the cash equity contribution to be made by investment funds affiliated with Z Capital, and excluding any equity incentives that may be issued after the merger and (ii) Affinity's net book value at December 31, 2015 and June 30, 2016 and net earnings for the year ended December 31, 2015 and the six months ended June 30, 2016, without giving effect to any additional indebtedness to be incurred in connection with the merger. Includes shares of Affinity common stock which may be deemed to be beneficially owned by Partners Fund Holdings I, Partners II, Partners II-A, Z Capital HG, Partners II-B, Z Capital CUAL Co-Invest, and Z Capital HG-C. Also includes shares of Affinity common stock which may be deemed to be indirectly beneficially owned by Partners I, as the sole member and managing member of Partners Fund Holdings I; Partners GP I, as the general partner of Partners I and as the managing member of each of Z Capital HG, Z Capital HG-C, and Z Capital CUAL Co-Invest; Partners GP II, as the general partner of each of Partners II, Partners II-A, and Partners II-B; Partners UGP, as the general partner of each of Partners GP I and Partners GP II; Z Capital, as the sole member and managing member of Partners UGP; Z Capital Group, as the sole member and managing member of Z Capital, and as the manager of Holdings as of the Effective Time; Zenni Holdings, as the sole member and managing member of Z Capital Group; and James J. Zenni, Jr., as the Founder, President and Chief Executive Officer of Z Capital and the sole member and managing member of Zenni Holdings. Each of Z Capital, Zenni Holdings, Mr. Zenni, Z Capital Group, Partners UGP, Partners GP I, Partners GP II, Partners I, Partners II, Partners II-A, Partners II-B, Partners Fund Holdings I, Z Capital HG, Z Capital HG-C, and Z Capital CUAL Co-Invest declares that neither the filing of this statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Exchange Act or any other purpose, (i) acting (or has agreed or is agreeing to act) with any other person as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of Affinity's securities or otherwise with respect to Affinity or any of Affinity's securities, or (ii) a member of any syndicate or group with respect to Affinity or any of Affinity's securities.

(3)
Class A unit amounts may be adjusted based on the final Class A unit value at the closing. The amount of the cash contribution at the closing by affiliates of Z Capital may also be adjusted based on the actual costs, fees and expenses required in connection with the merger at closing. A portion of the Class A units contemplated to be issued to Z Capital Partners II, LP, Z Capital Partners II-A, LP, and Z Capital Partners II-B, LP may be allocated to the Z Capital Rollover Investors at the closing of the merger.

(4)
Post-merger ownership includes options to purchase 52,783, 117,934 and 20,898 Class A units of Holdings for Michael Silberling, Walter Bogumil and Jeffrey Solomon, respectively, based on a cashless exercise assuming a value per Class A Unit of $10.24. Excludes options to purchase 20,898 Class A units of Holdings for Mr. Solomon (subject to time-based vesting, ratably each year, over two years) which will not vest within 60 days of the date hereof. Also excludes 854,586, 421,440 and 374,705 unvested Class B units of Holdings for Mr. Silberling, Mr. Bogumil and Mr. Solomon, respectively, subject to time vesting and performance vesting, none of which will vest within 60 days of the date hereof. The Class B units represent profits interests and have no voting rights.

        After the merger, the surviving corporation will be a privately held corporation, there will be no public market for Affinity common stock, and registration of Affinity's common stock under the Exchange Act will be terminated. This termination will make certain provisions of Section 16(b) of the Exchange Act, such as the short swing profit recovery provisions and the requirement of furnishing a proxy or information statement in connection with stockholders' meetings, no longer applicable.

        At the Effective Time, the articles of incorporation of Affinity will be amended as set forth in the merger agreement and the bylaws of Merger Sub will be the bylaws of the surviving corporation, and the name of the surviving corporation will continue to be Affinity Gaming.

        If the merger is completed, Affinity's stockholders that are not Z Capital Rollover Investors or Management Rollover Investors will no longer have an equity interest in Affinity, will not participate in any of the future earnings or growth of Affinity and instead will have only the right to receive the Merger Consideration. See "Special Factors—Payment of the Merger Consideration and Surrender of Stock Certificates." However, the former stockholders of Affinity will no longer bear the risk of any decrease in the value of Affinity after the merger. This will eliminate the former Affinity stockholders' exposure to fluctuations in the market value of the shares. In addition, it will allow former Affinity stockholders to pursue other investment alternatives.

        If the merger is completed, each holder of Affinity common stock (other than shares held in treasury of Affinity or owned, directly or indirectly, by the Purchaser Parties or the Management Rollover Investors or shares for which dissenters' rights are properly demanded and perfected pursuant to Nevada Revised Statute 92A.300 through 92A.500) will receive $17.35 per share in cash; provided that each share contributed by the Z Capital Rollover Investors to Parent immediately prior to the Effective Time will not be cancelled and will remain outstanding. The receipt of the Merger Consideration will generally be a taxable sale transaction for U.S. federal income tax purposes to Affinity's stockholders who surrender shares of Affinity common stock in the merger.

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        The merger constitutes a change in control as defined in the 2011 LTIP and, therefore, for any awards outstanding under the 2011 LTIP (other than awards held by Management Rollover Investors): (1) each option to purchase common stock of Affinity, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall become fully vested (to the extent unvested) and be converted into the right to receive an amount in cash equal to the product of (i) the excess, if any, of $17.35 over the exercise price per share under such stock option by (ii) the number of shares of Affinity common stock subject to the option, and (2) each outstanding share of restricted stock subject to time-based vesting restrictions that is unvested and outstanding immediately prior to the Effective Time shall become fully vested and be converted into the right to receive an amount in cash equal to the product of (i) $17.35 and (ii) the number of shares of Affinity common stock subject to the restricted stock award. See "The Merger Agreement—Treatment of Stock Options and Restricted Stock" and "Special Factors—Potential Change of Control Payments to Named Executive Officers."

        In connection with the merger, certain of Affinity's executive officers and directors have interests in the transaction that are different from, or are in addition to, the interests of Affinity's stockholders generally. These incremental benefits include, but are not limited to, the fact that the executive officers of Affinity will remain executive officers of the surviving corporation, certain payments and benefits to certain executive officers of Affinity in connection with a qualifying termination of employment on or following the merger, cash and unit awards to certain executive officers, and the fact that Mr. Zenni will be the sole director of the surviving corporation immediately following the merger. See "Special Factors—Interests of Affinity's Directors and Executive Officers in the Merger; Potential Conflicts of Interest."

        As a result of the merger, the Purchaser Parties and the Z Capital Filing Persons will benefit in that Affinity will no longer have to bear the expense and regulatory burdens associated with being a public company, estimated to be approximately $1.3 million per year, which should improve Affinity's operating cash flow and net income. A detriment to the Purchaser Parties and the Z Capital Filing Persons is that their equity interests in Affinity will not initially be and may not subsequently be registered under the federal securities laws and that such equity interests will be illiquid without an active public trading market for such securities.

        If the merger is completed, the Purchaser Parties and the Z Capital Filing Persons will be the primary beneficiaries of Affinity's future earnings and growth and they will be the only ones entitled to vote on corporate matters affecting Affinity following the merger. Similarly, the Purchaser Parties will also bear the risks of ongoing operations, including the risks of any decrease in value of Affinity after the merger and other risks related to the incurrence by the surviving corporation of debt as described below under "—Merger Financing."

Plans for Affinity after the Merger

        If the merger is consummated, the Purchaser Parties and the Z Capital Filing Persons currently anticipate that Affinity's operations initially will be conducted following the closing substantially as they are currently being conducted (except that Affinity will be an indirect wholly owned subsidiary of Holdings). The Purchaser Parties and the Z Capital Filing Persons are currently conducting a review of Affinity and its business and operations with a view towards determining how to integrate Affinity's operations with those of Z Capital and to improve Affinity's long-term earnings potential as a private company (including by investing capital across certain assets currently owned by Affinity to generate improved performance and continuing to grow Affinity's and Z Capital's combined core management platform), and expect to complete such review following consummation of the merger. Further, following consummation of the merger, Z Capital will continue to assess Affinity's assets, corporate and capital structure, capitalization, operations, business, properties and personnel to determine what additional changes, if any, would be desirable following the merger to enhance the business and operations of Affinity.

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Projected Financial Information

Management Projections

        In August 2016, Affinity's management prepared the 2016 5-Year Projections. Affinity does not make public projections as to future performance or earnings beyond giving current fiscal year guidance from time to time, and is especially cautious of making projections for extended periods due to the unpredictability and volatility of the casino and gaming business. However, financial projections prepared by Affinity's management were made available to Deutsche Bank, the Purchaser Parties, the Z Capital Filing Persons and their advisors.

        Summaries of these financial projections are being included in this proxy statement not to influence your decision whether to vote for or against the Merger Proposal, but because these financial projections were made available to Deutsche Bank, the Purchaser Parties, the Z Capital Filing Persons and their advisors. The inclusion of this information in this proxy statement should not be regarded as an indication that Affinity or its management, the Board, the Special Committee, the Special Committee's advisors, Deutsche Bank, the Purchaser Parties or the Z Capital Filing Persons considered, or now considers, such financial projections to be a reliable prediction of future results.

        Although presented with numerical specificity, these financial projections are based upon a variety of estimates and numerous assumptions believed by Affinity's management to be reasonable and based on the best then-currently available information with respect to, among other matters, industry performance, general business, economic, market and financial conditions, competition, governmental and regulatory actions and other matters, including the factors described under "Cautionary Statement Concerning Forward-Looking Information," many of which are difficult to predict, are subject to significant economic and competitive uncertainties, and are beyond Affinity's control. In addition, because the financial projections cover multiple years, such information by its nature becomes less reliable with each successive year. Affinity's operations are cyclical and highly sensitive to changes in general and local economic and other conditions, and Affinity's earnings can be volatile and unpredictable. The variability and unpredictability of these conditions makes it difficult to project results of operations with any degree of certainty. As a result, there can be no assurance that the estimates and assumptions made in preparing the financial projections will prove accurate, that the projected results will be realized or that actual results will not be significantly higher or lower than projected.

        The financial projections do not take into account any circumstances or events occurring after the date they were prepared, and, except as may be required in order to comply with applicable securities laws, none of Affinity, the Special Committee or any of their respective representatives intend to update, or otherwise revise, the financial projections to reflect circumstances existing after the date when they were made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error. In addition, the financial projections assume that Affinity will remain a publicly traded company and do not reflect the impact of the merger, nor do they take into account the effect of any failure of the merger to occur.

        The financial projections were not prepared with a view toward public disclosure or with a view toward complying with the published guidelines of the SEC regarding financial projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial projections. Neither Ernst & Young LLP, Affinity's independent registered public accounting firm, nor any other independent registered public accounting firm has examined, compiled or performed any procedures with respect to the accompanying financial projections, and, accordingly, neither Ernst & Young nor any other public accounting firm expresses an opinion or provides any other form of assurance with respect to such projections. Ernst & Young assumes no responsibility for, and disclaims any association with, such projections. The Ernst & Young reports

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incorporated by reference into this proxy statement relate to Affinity's historical financial information. They do not extend to the financial projections and should not be read to do so.

        The financial projections included financial measures prepared other than in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP financial measures were presented because management believed they could be useful indicators of Affinity's projected future operating performance and cash flow. The financial projections included in this proxy statement should not be considered in isolation or in lieu of Affinity's operating and other financial information determined in accordance with GAAP. In addition, because non-GAAP financial measures are not determined consistently by all companies, the non-GAAP measures presented in these financial projections may not be comparable to similarly titled measures of other companies.

        For the foregoing reasons, as well as the bases and assumptions on which the financial projections were compiled, the inclusion of specific portions of the financial projections in this proxy statement should not be regarded as an indication that Affinity considers such financial projections to be an accurate prediction of future events, and the projections should not be relied on as such an indication. No one has made or makes any representation to any stockholder of Affinity or anyone else regarding the information included in the financial projections discussed below.

        The 2016 5-Year Projections are summarized below (amounts shown in thousands). These projections should be read together with the information contained in the consolidated financial statements of Affinity available in its filings with the SEC, and the information set forth above.

        Management used the following key assumptions in preparing the 2016 5-Year Projections:

    Inflationary revenue growth in 2018 and beyond;

    Completion of a cost reduction plan currently in place at Affinity;

    A stable regulatory and economic environment;

    No new competition; and

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    Completion of deferred capital expenditure projects at Primm Valley Resorts.

 
  Fiscal Year
2016
  Fiscal Year
2017
  Fiscal Year
2018
  Fiscal Year
2019
  Fiscal Year
2020
 

Net Revenue

                               

Primm Valley Resorts

  $ 152,769   $ 152,769   $ 154,297   $ 155,840   $ 157,398  

Silver Sevens

    41,944     41,944     42,363     42,787     43,215  

Rail City Casino

    27,913     27,913     28,192     28,474     28,758  

Lakeside Iowa

    47,657     47,657     48,134     48,615     49,101  

Mark Twain

    34,113     34,113     34,454     34,799     35,147  

St. Jo Frontier

    39,219     39,219     39,611     40,007     40,407  

Colorado

    35,312     35,312     35,665     36,022     36,382  

Total Net Revenue

    378,927     378,927     382,716     386,543     390,408  

EBITDA

   
 
   
 
   
 
   
 
   
 
 

Primm Valley Resorts

    29,056     37,428     42,432     43,635     45,645  

Silver Sevens

    12,377     13,422     14,403     14,548     14,693  

Rail City Casino

    8,863     9,211     9,585     9,681     9,778  

Lakeside Iowa

    12,489     12,489     13,959     14,098     14,239  

Mark Twain

    13,474     13,645     14,126     14,267     14,410  

St. Jo Frontier

    14,417     15,295     16,241     16,403     16,567  

Colorado

    5,670     7,062     8,560     8,645     8,732  

Property Level EBITDA

    96,345     108,554     119,305     121,278     124,064  

Corporate Expense

    (18,683 )   (19,617 )   (20,598 )   (21,628 )   (22,709 )

EBITDA

    77,662     88,936     98,707     99,650     101,355  

Equity Compensation

    1,332     1,332     1,332     1,332     1,332  

Adjusted EBITDA

    78,994     90,268     100,039     100,982     102,687  

Non-Recurring Corporate Expense

    1,087                  

Covenant EBITDA

    80,081     90,268     100,039     100,982     102,687  

Maintenance Capital Expenditures

   
14,500
   
16,014
   
14,700
   
14,700
   
14,700
 

Project Capital Expenditures

    6,500     8,000     1,500          

Total Capital Expenditures

    21,000     24,014     16,200     14,700     14,700  

        Set forth below is the calculation of free cash flow (amounts shown in millions) for 2017 through 2020.

 
  Fiscal Year
2017
  Fiscal Year
2018
  Fiscal Year
2019
  Fiscal Year
2020
 

Covenant EBITDA

    90     100     101     103  

Total Capital Expenditures

    (24 )   (16 )   (15 )   (15 )

Taxes (Unlevered)(1)

    (20 )   (27 )   (28 )   (28 )

Free Cash Flow (Unlevered)(2)

    46     57     59     60  

(1)
Taxes (unlevered) are calculated as Covenant EBITDA minus depreciation and amortization multiplied by a cash tax rate of 38.2% (with $34 million of net operating losses utilized in 2016 and 2017).

(2)
Free cash flow (unlevered) is defined as Covenant EBITDA minus total capital expenditures and taxes (unlevered), as derived by Deutsche Bank from the 2016 5-Year Projections.

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        Set forth below is a reconciliation of net income to EBITDA (amounts shown in thousands). Net income is the GAAP financial measure that is most closely comparable to EBITDA.

 
  Fiscal Year
2016
  Fiscal Year
2017
  Fiscal Year
2018
  Fiscal Year
2019
  Fiscal Year
2020
 

Net Income

    11,720     26,689     32,879     33,418     46,210  

Federal Taxes

    6,593     15,013     18,494     18,798     25,993  

Loss & Other

    500     500     500     500     500  

Interest Expense

    30,198     18,083     18,182     18,282      

Depreciation

    28,652     28,652     28,642     28,652     28,652  

EBITDA

    77,662     88,936     98,707     99,650     101,355  

Structure of the Merger

        The proposed acquisition of Affinity has been structured as a merger of Merger Sub with and into Affinity, with Affinity surviving as a wholly owned subsidiary of Parent. The transaction was structured as a cash merger to provide the stockholders of Affinity that are not Z Capital Rollover Investors or Management Rollover Investors with a cash payment for all of the shares they hold and to provide a prompt and orderly transfer of ownership to the Purchaser Parties with reduced transaction costs.

Effective Time of the Merger

        The merger will become effective at the time that an articles of merger is duly filed with the Secretary of State of the State of Nevada, or at such later time as may be agreed by Affinity and the Purchaser Parties and specified in the articles of merger. Assuming the requisite stockholders vote to adopt the merger agreement and all other conditions to the merger are satisfied or, to the extent permitted, waived, Affinity expects to complete the merger as soon as practicable after the special meeting.

Payment of the Merger Consideration and Surrender of Stock Certificates

        At or prior to the Effective Time, Parent will deposit the cash necessary to pay the Merger Consideration with the paying agent, American Stock Transfer & Trust Company, LLC. The paying agent will use these funds solely to pay the Merger Consideration to those stockholders entitled to receive such payment. The paying agent will deliver the Merger Consideration according to the procedures summarized below.

        Promptly after the Effective Time, the paying agent will mail to all stockholders a letter of transmittal and instructions advising stockholders how to surrender their stock certificates in exchange for the Merger Consideration. If you hold your shares in street name, your broker, bank or other nominee will provide you with instructions on how to surrender your shares of Affinity common stock in exchange for the Merger Consideration. Upon surrender of your stock certificates, together with a properly completed letter of transmittal and any other items specified by the letter of transmittal, the paying agent will pay you the Merger Consideration and your stock certificates will be canceled.

        If your stock certificates have been lost, mutilated or destroyed, you may deliver to the paying agent an affidavit and indemnity bond (in form and substance, and with surety, reasonably satisfactory to Parent) instead of your stock certificates. At the Effective Time, Affinity's stock ledger with respect to shares of Affinity common stock that were outstanding prior to the merger will be closed and no further registration of transfers of these shares will be made.

        Please do not forward your stock certificates to the paying agent without a letter of transmittal, and do not return your stock certificates with the enclosed proxy.

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        At and after the Effective Time, you will cease to have any rights as a stockholder of Affinity, except for the right to surrender your stock certificates, according to the procedures described in this section and the letter of transmittal, in exchange for the Merger Consideration.

        The paying agent will, on demand, return to Parent or its designee all cash that has not yet been distributed in payment of the Merger Consideration as of 12 months following the merger, plus any accrued interest, and the paying agent's duties will terminate. Thereafter, stockholders may surrender stock certificates directly to Affinity and receive the Merger Consideration, without interest and net of applicable withholding taxes. However, stockholders will in no event have any greater rights against the surviving corporation than those of general creditors of Affinity under applicable law, and none of the Purchaser Parties, the Z Capital Filing Persons or Affinity will be liable to you for any Merger Consideration delivered to a public official under any applicable abandoned property, escheat or similar law.

Merger Financing

        Parent and Merger Sub have obtained binding financing commitments from the debt financing sources and investment funds affiliated with Z Capital for the transactions contemplated by the merger agreement, the aggregate proceeds of which, together with the unrestricted cash of Affinity and its subsidiaries and the proceeds of additional first lien term loans under Affinity's existing credit agreement, will be used to complete the merger and the other transactions contemplated by the merger agreement, including the payment of the aggregate Merger Consideration and to pay any other amounts required to be paid in connection with the consummation of the transactions contemplated by the merger agreement, including the financing thereof. On September 30, 2016, Affinity's existing credit agreement was amended to, among other things, permit the merger, the proposed second-lien financing and Affinity to borrow $30.0 million of additional first lien term loans under Affinity's existing credit agreement. See "The Merger Agreement—Financing—Amendment of Existing Credit Agreement."

        Subject to the terms and conditions of the merger agreement, Parent has agreed to:

    use its reasonable best efforts to arrange and obtain the debt financing on the terms and conditions (including the flex provisions) described in the debt commitment letter (taking into account the anticipated timing of the Marketing Period, as defined below), including using its reasonable best efforts to (x) negotiate definitive agreements on the terms and conditions contained in the debt commitment letter, (y) satisfy, or cause the satisfaction of, on a timely basis all conditions in the debt commitment letter and the definitive agreements for the debt financing, and (z) consummate the debt financing on or prior to the date on which the closing is required to occur under the merger agreement (including by using its reasonable best efforts to enforce its rights under the debt commitment letter and the definitive agreements for the debt financing (including through litigation pursued in good faith) and to cause the debt financing sources to provide the debt financing on or prior to the date on which the closing is required to occur under the merger agreement);

    maintain in effect the equity financing and take or cause to be taken, and do, or cause to be done, all things necessary, proper or advisable to arrange and obtain the equity financing on the terms and conditions described in the equity commitment letter and to consummate the equity financing on or prior to the date on which the closing is required to occur under the merger agreement; and

    maintain in effect the rollover commitment letter and cause the contribution to Parent of Affinity common stock beneficially owned by Z Capital and its affiliates (the "Rollover Investment"), on the terms and conditions described in the rollover commitment letter, to be consummated at the closing.

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        In the event any portion of the financing becomes unavailable on the terms and conditions and from the sources contemplated in the applicable letters, Parent will promptly notify Affinity and will use its reasonable best efforts to obtain alternative financing in a like amount and on like terms as promptly as practicable. Neither Parent's obtaining all or any of the financing or any alternative financing, nor the closing of the Rollover Investment, is a condition to the closing of the merger.

Z Capital Rollover Investment and Cash Contribution

        On August 22, 2016, each of the Z Capital Rollover Investors entered into a rollover commitment letter with Parent (the "rollover commitment letter"). Pursuant to the rollover commitment letter, the Z Capital Rollover Investors have committed on a several (and not joint and several) basis, subject to the terms and conditions therein, to transfer, contribute and deliver to Parent immediately prior to the Effective Time the Affinity common stock owned by the Z Capital Rollover Investors in exchange for membership interests in Parent or Parent's sole member, to be agreed by each Z Capital Rollover Investor and Parent based on the value of such Rollover Investment (taking into account the cost of shares of Affinity common stock underlying the Rollover Investment and other relevant factors). In addition, certain affiliates of Z Capital have committed, subject to the satisfaction or waiver of certain conditions, to contribute and deliver to Holdings immediately prior to the closing of the merger $62.5 million of cash in exchange for 11,946,776 Class A units of Holdings, provided that the amount of such cash contribution by affiliates of Z Capital may be adjusted based on the actual costs, fees and expenses required in connection with the merger at the closing.

Equity Financing

        On August 22, 2016, Parent received a binding commitment letter (the "equity commitment letter") from Z Capital Partners II, L.P., Z Capital Partners II-A, L.P. and Z Capital Partners II-B, L.P. (the "Z Capital Funds") pursuant to which the Z Capital Funds each committed on a several, and not joint and several, basis to contribute, on the terms and subject to the conditions set forth in the equity commitment letter, cash in the amount of $23.4 million, $27.0 million and $12.1 million (collectively, the "equity commitment amount"), respectively, in exchange for certain equity interests and/or debt securities of Parent, the proceeds of which will be used to fund the obligations of Parent or Merger Sub under the merger agreement. The amount to be funded may be reduced in the manner designated by the Z Capital Funds to the extent (but only to the extent) Parent and Merger Sub do not require the full equity commitment amount.

        The equity commitment of the Z Capital Funds is generally subject to the following conditions:

    satisfaction or waiver of the conditions to Parent's and Merger Sub's obligations to complete the transactions contemplated by the merger agreement;

    prior or substantially contemporaneous funding of the financing transactions contemplated under the debt commitment letter (as defined below) or any alternative financing; and

    substantially contemporaneous consummation of the merger.

        Affinity is an express third-party beneficiary of specified provisions of the equity commitment letter and, subject to the terms and conditions specified in the equity commitment letter and the merger agreement, is entitled to seek specific performance of each Z Capital Fund's obligation to fund the contributions contemplated by the equity commitment letter.

Debt Financing

        On September 6, 2016, Merger Sub received a binding commitment letter (the "debt commitment letter" and, together with the equity commitment letter, the "commitment letters") from Citizens Bank, N.A. ("Citizens"), Credit Suisse Securities (USA) LLC ("CS Securities"), Credit Suisse AG ("CS") and Fifth Third Bank ("Fifth Third" and together with Citizens, CS Securities and CS collectively the "debt

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financing sources"), to provide on a several but not joint basis, on the terms and subject to the conditions set forth in the debt commitment letter: (i) if an amendment to Affinity's existing credit agreement (the "credit agreement amendment') is obtained to, among other things, permit the merger and borrowing of additional term loans under Affinity's existing credit agreement in an aggregate amount of $30 million, (ii) if the credit agreement amendment is not obtained, a first lien credit facility in the amount of $370 million, consisting of a $330 million first lien term loan facility and a $40 million first lien revolving loan facility, and (iii) regardless of whether a credit agreement amendment is obtained, a second lien term facility (the "second lien term loan facility") in the amount of $95 million. On September 30, 2016, the credit agreement amendment was obtained, pursuant to which Affinity's existing credit agreement was amended to, among other things, permit the merger and proposed second-lien financing, as described below, and borrow additional first lien term loans under Affinity's existing credit agreement.

        The debt financing is conditioned on the consummation of the merger in accordance with the merger agreement, as well as other conditions (subject to certain customary "certain funds" provisions), including, but not limited to:

    Affinity and each guarantor shall have executed and delivered the definitive documentation, consistent with the debt commitment letter;

    Affinity shall have executed and delivered customary closing certificates (including attachments with corporate documents and resolutions or other evidence of authority), borrowing notices, legal opinions and lien searches for Affinity and the guarantors;

    Affinity shall have executed and delivered a solvency certificate;

    the accuracy in all material respects of the representations and warranties in the merger agreement as are material to the interests of the financing sources, but only to the extent that Merger Sub or its applicable affiliate have the right to terminate its obligations under the merger agreement or to decline to consummate the merger as a result of a breach of the merger agreement;

    the accuracy in all material respects of certain specified representations and warranties made by Parent, Merger Sub, Affinity and the guarantors in the definitive documentation for the debt financing;

    prior or substantially concurrently with the funding of the financing transactions, the consummation of the equity financing in a specified amount as contemplated under the equity commitment letter;

    subject to certain limitations, since January 1, 2016, there will not have occurred any material adverse effect on the business, financial condition, properties, liabilities, assets, or results of operations of Affinity and its subsidiaries, taken as a whole that would excuse Merger Sub from performing its obligations under the merger agreement or consummating the transactions contemplated by the merger agreement;

    delivery by Affinity of certain audited, unaudited and pro forma financial statements and projections;

    delivery of necessary documents to establish and perfect the debt financing sources' security interest in certain collateral;

    payment of required fees and expenses;

    receipt by the debt financing sources of documentation and other information required by regulatory authorities with respect to Parent, Merger Sub, Affinity and the guarantors under applicable "know your customer" and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act; and

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    the debt financing sources having been afforded a marketing period of at least 15 business days (ending no later than the business day immediately prior to the closing date of the debt financing and subject to certain blackout dates) following receipt of customary marketing materials.

        The effectiveness of the amendment to Affinity's existing credit agreement, and the extension of additional first lien term loans thereunder, is conditioned on the consummations of the merger in accordance with the merger agreement, as well as other conditions, including, but not limited to:

    receipt of executed joinder agreements from each lender who will extend the additional first lien term loans under Affinity's existing credit agreement;

    the accuracy in all material respects of certain specified representation and warranties made by Affinity and the guarantors in Affinity's existing credit agreement;

    the accuracy in all material respects of certain specified representation and warranties made by Affinity in the merger agreement;

    subject to certain limitations, since January 1, 2016, there will not have occurred any material adverse effect on the business, financial condition, properties, liabilities, assets, or results of operations of Affinity and its subsidiaries, taken as a whole, that would excuse Parent from its obligation to consummate the acquisition under the merger agreement;

    Affinity shall not have incurred additional incremental facilities under its existing credit agreement in excess of $50.0 million;

    Affinity shall have capacity in an amount not less than $40.0 million under a specified restricted payment basket in its existing credit agreement;

    if requested, Affinity shall have executed and delivered customary closing certificates (including attachments with corporate documents and resolutions or other evidence of authority) and legal opinions;

    payment of required fees and expenses; and

    all necessary gaming permits shall have been obtained and remain in full force and effect.

Second Lien Term Loan Facility

        Interest under the second lien term loan facility will be payable, at the option of Affinity, either at a base rate plus a margin or a LIBOR-based rate plus a margin. Affinity currently believes the margin payable on second lien term loans bearing interest at the base rate will be 7.25% and the margin payable on second lien term loans bearing interest at the LIBOR rate will be 8.25%. However, the margin payable on second lien term loans may change during the syndication of the second lien term loan facility. Interest will be payable, in the case of second lien term loans bearing interest based on LIBOR, in arrears at the end of the applicable interest period (and, for interest periods longer than three months, every three months) and, in the case of second lien term loans bearing interest based on the base rate, quarterly in arrears. The second lien term loan facility will mature eight years from the date of the closing of the merger and will not amortize. Subject to exceptions and following repayment of the first lien term loan facility, the second lien term loan facility shall be mandatorily prepaid with net cash proceeds of certain debt incurrences and assets sales, and annually with a specified percentage of excess cash flow. Optional and certain mandatory prepayments of the second lien term loan facility will require Affinity to pay a prepayment fee of 2% during the first year following the merger and 1% during the second year following the merger (although such prepayment fees may increase during the syndication period).

        The second lien term loan facility will be guaranteed by Parent and, subject to certain agreed exceptions, each direct and indirect wholly owned U.S. restricted subsidiary of Affinity. The second lien

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term facility will be secured, subject to certain agreed exceptions, by a second priority security interest in substantially all the assets and property of Affinity and the guarantors.

        The second lien term loan facility will benefit from the same affirmative, negative and financial covenants as the first lien term loan facility, with customary and appropriate modifications, "step-downs," "cushions" and other changes to reflect the second lien nature of the second lien term loan facility.

Interests of Affinity's Directors and Executive Officers in the Merger; Potential Conflicts of Interest

        In considering the recommendations of the Board, you should be aware that certain of Affinity's executive officers and directors have interests in the transaction that are different from, or are in addition to, the interests of Affinity's stockholders generally. These interests relate to or arise from, among other things:

    if the merger is completed, Affinity's common stock will be 100% beneficially owned, as of the closing, by Parent, an affiliate of Z Capital;

    the payment of monthly retainers to each member of the Special Committee;

    the fact that the executive officers of Affinity are anticipated to remain executive officers of the surviving corporation;

    certain payments and benefits to certain executive officers of Affinity in connection with a qualifying termination of employment on or following the merger and cash and unit awards to certain executive officers;

    the fact that Mr. Zenni will be the sole director of the surviving corporation immediately following the merger; and

    the right to continued indemnification and insurance coverage for directors and executive officers of Affinity following the completion of the merger, pursuant to the terms of the merger agreement.

        The Special Committee was aware of and considered the interests that existed at the time of its deliberations on the merits of the merger in evaluating and negotiating the merger agreement and the merger.

Ownership Interests of the Z Capital Directors

        As of [-], 2016, neither Mr. Zenni nor Mr. Scrivens, who we also refer to in this proxy statement as the "Z Capital Directors," directly own any Affinity common stock. However, due to their relationship with Z Capital, Mr. Zenni and Mr. Scrivens could each be deemed to have an indirect interest in the Affinity common stock held by the Z Capital Rollover Investors. Specifically, Mr. Zenni is the Founder, President and Chief Executive Officer of Z Capital, and Mr. Scrivens is an employee of Z Capital. Mr. Zenni also has an economic and equity interest in the investment funds affiliated with Z Capital, and Mr. Scrivens has an economic interest. The Z Capital Rollover Investors own, in the aggregate, approximately 41.2% of the total number of outstanding shares of Affinity common stock, or approximately 8,418,616 shares of Affinity common stock, including 8,333 shares of unvested restricted stock. The Z Capital Rollover Investors have agreed to contribute, or cause to be contributed, all of such shares to Parent immediately prior to the Effective Time of the merger.

Arrangements with Parent

        As of the date of this proxy statement, none of our executive officers have entered into any agreement with Parent or any of its affiliates regarding employment with the surviving corporation except as set forth below. Michael Silberling, Walter Bogumil and Jeff Solomon each entered into amendments to their existing employment agreements with the Company October 13, 2016, which become effective as of the Effective Time, to reflect the issuance of Class A Units and Class B Units

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described in "Special FactorsTreatment of Stock Options and Restricted Stock" above. Under the amendment to Mr. Silberling's employment agreement, Mr. Silberling is eligible for an annual cash bonus of up to 150% of his base salary and, following the term of the employment agreement, permitted to be employed by certain additional hospitality or gaming businesses. Each of Mr. Silberling's, Mr. Bogumil's, and Mr. Solomon's employment agreements are otherwise expected to remain outstanding as of the Effective Time.

Treatment of Executive Officer and Director Common Stock

        On October 13, 2016, Holdings and the Management Rollover Investors agreed that each share of Affinity common stock that they own at the Effective Time will be cancelled in exchange for cash, Class A units of Holdings and profits interest awards in the form of Class B units of Holdings. As is the case for other Affinity stockholders, Affinity's directors and executive officers who are not Management Rollover Investors will receive $17.35 in cash, without interest and subject to deduction for any required withholding tax, for each share of Affinity common stock that they own at the Effective Time. For further information regarding the beneficial ownership of Affinity common stock by each of Affinity's current directors and certain executive officers and all directors and executive officers as a group, see "Information about Affinity—Security Ownership of Certain Beneficial Owners and Management."

        The following table sets forth information as of September 30, 2016 regarding the cash-out value of each executive officer's and each director's previously owned common stock and the number of Class A units of Holdings issued in exchange for each Management Rollover Investor's previously owned common stock.

Name
  Number of
Previously
Owned
Shares(1)
  Cash-Out
Payment
for
Previously
Owned
Shares ($)
  Class A
Units
 

Executive Officers

                   

Michael Silberling

    26,666     462,655      

Walter Bogumil

    6,666     52,050     6,213  

Marc H. Rubinstein

    20,471     355,172      

Jeffrey Solomon

             

Non-Employee Board Members

   
 
   
 
   
 
 

David Reganato

             

James Cacioppo

    351,515 (2)   6,098,785      

Matthew A. Doheny

    23,894     414,561      

Andrei Scrivens

             

Eric V. Tanjeloff

    23,894     414,561      

James J. Zenni, Jr. 

             

(1)
Includes all shares beneficially owned as of September 30, 2016 (for further information, see "Information about Affinity—Security Ownership of Certain Beneficial Owners and Management"), other than shares underlying stock options or restricted stock awards, which are reflected in the tables below.

(2)
Includes 100,000 shares held by OEP Opportunities, L.P. and 234,940 shares held by One East Partners Master, L.P. As the Managing Member of One East Partners Capital Management LLC, which is the General Partner of each of OEP Opportunities, L.P. and One East Partners Master, L.P. (together, "One East"), Mr. Cacioppo holds voting control and investment power over the securities held by One East. However, Mr. Cacioppo disclaims beneficial ownership of the shares of common stock owned by One East, except to the extent of his pecuniary interest therein. See "Information about Affinity—Security Ownership of Certain Beneficial Owners and Management."

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        On October 13, 2016, Holdings and Michael Silberling, Walter Bogumil and Jeffrey Solomon (the "Management Rollover Investors") agreed that each of their previously owned shares, options to purchase common stock of Affinity, whether vested or unvested, each of their outstanding shares of restricted stock that are unvested and outstanding immediately prior to the Effective Time, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards will be treated as follows: Mr. Silberling's previously owned shares, outstanding options, outstanding shares of restricted stock, and commitments of Affinity to issue equity or equity-based awards will be cancelled and, in exchange therefor, Holdings will provide Mr. Silberling $1,901,647 in cash, vested options to purchase 269,232 Class A units of Holdings and 854,586 profits interest awards in the form of restricted Class B units of Holdings, subject to the terms and conditions described below. Mr. Bogumil's previously owned shares, outstanding options, outstanding shares of restricted stock, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards, will be cancelled and, in exchange therefor, Holdings will provide Mr. Bogumil $52,050 in cash, 28,804 Class A units of Holdings, vested options to purchase 135,547 Class A units of Holdings and 421,440 profits interest awards in the form of restricted Class B units of Holdings, subject to the terms and conditions described below. Mr. Solomon's outstanding options, outstanding shares of restricted stock, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards, will be cancelled and, in exchange therefor, Holdings shall provide to Mr. Solomon options to purchase 135,547 Class A units of Holdings (67,774 of which will be subject to time-based vesting, fifty percent (50%) of which will vest on December 31, 2017 and fifty percent (50%) of which will vest on December 31, 2018, and 67,773 of which will be fully vested at the Effective Time) and 374,705 profits interest awards in the form restricted Class B units of Holdings, subject to the terms and conditions described below.

        The merger constitutes a change in control as defined in the 2011 LTIP and, therefore, for any awards outstanding under the 2011 LTIP and held by non-Management Rollover Investors: (1) each option to purchase common stock of Affinity, whether vested or unvested, that is outstanding immediately prior to the Effective Time shall become fully vested (to the extent unvested) and be converted into the right to receive an amount in cash equal to the product of (i) the excess, if any, of $17.35 over the exercise price per share under such stock option by (ii) the number of shares of Affinity common stock subject to the option, and (2) each outstanding share of restricted stock subject to time-based vesting restrictions that is unvested and outstanding immediately prior to the Effective Time shall become fully vested and be converted into the right to receive an amount in cash equal to the product of (i) $17.35 and (ii) the number of shares of Affinity common stock subject to the restricted stock award.

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        The table below sets forth, as of September 30, 2016, information with respect to Affinity stock options and, as applicable, the cash and options to purchase Class A units that will be received in exchange for Affinity stock options, held by each of the directors and executive officers of Affinity:

Name
  Number
of Shares
Subject
to Vested
Options
  Cash-Out
Payment
for
Vested
Options
($)
  Number
of Shares
Subject to
Unvested
Options
(#)
  Cash-Out
Payment
for
Unvested
Options
($)
  Options
to
Purchase
Class A
Units
 

Executive Officers

                               

Michael Silberling

    90,277     207,272     288,890     1,000,375     269,932  

Walter Bogumil

    10,000         70,000         135,547  

Marc H. Rubinstein

    18,382     105,513     9,192     52,762      

Jeffrey Solomon

            80,000         135,547  

Non-Employee Board Members

   
 
   
 
   
 
   
 
   
 
 

David Reganato

                     

James Cacioppo

                     

Matthew A. Doheny

                     

Andrei Scrivens

                     

Eric V. Tanjeloff

                     

James J. Zenni, Jr. 

                     

        The table below sets forth, as of September 30, 2016, information with respect to Affinity restricted stock awards subject to vesting and, as applicable, the Class A units and cash that will be received in exchange for Affinity restricted stock awards, held by each of the directors and executive officers of Affinity:

Name
  Restricted
Stock
Awards
(#)
  Cash
Value of
Restricted
Stock
Awards
($)
  Class A
Units
 

Executive Officers

                   

Michael Silberling

    13,334     231,345      

Walter Bogumil

    13,334         22,591  

Marc H. Rubinstein

             

Jeffrey Solomon

    33,000                   

Non-Employee Board Members

   
 
   
 
   
 
 

David Reganato

             

James Cacioppo

    4,167     72,297      

Matthew A. Doheny

    4,167     72,297      

Andrei Scrivens

             

Eric V. Tanjeloff

    4,167     72,297      

James J. Zenni, Jr. 

             

Director and Officer Indemnification and Insurance

        Affinity's bylaws provide that it will indemnify its directors and officers to the fullest extent permitted by Nevada law and will advance expenses to its directors and officers, subject to the terms and conditions set forth in the bylaws. Affinity also maintains directors' and officers' liability insurance for the benefit of such persons. In the merger agreement, Affinity, as the surviving entity in the merger, has agreed to continue such indemnification and expense advancement rights and to purchase an additional six years of coverage under Affinity's existing directors' and officers' liability insurance policy; provided that it will not be required to maintain more coverage than can be obtained for 300% of the annual premium paid for such insurance in effect on the date of the merger agreement. See "The Merger Agreement—Director and Officer Indemnification and Insurance."

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Compensation of the Special Committee

        The Special Committee consists solely of independent and disinterested members of the Board: David Reganato, Matthew Doheny, James Cacioppo and Eric Tanjeloff. On May 6, 2015, the Board adopted resolutions providing that members of the then existing Special Committee, other than the chair, receive a one-time retainer of $40,000 for their service on the Special Committee, and that the chair receive a one-time retainer of $60,000 for his service on the Special Committee. On August 3, 2015, in light of the additional time and effort spent by the Special Committee compared to initial expectations and based on an updated comparative analysis of precedent compensation structures, the Board adopted resolutions providing for the following compensation structure for the Special Committee, effective as of August 1, 2015:

    the payment to the chairman of the Special Committee of a monthly retainer fee of $9,000 per month; and

    the payment to each other member of the Special Committee of a monthly retainer fee of $6,000 per month.

        At a meeting of the Board held on August 9, 2016, the Board approved of compensation for the members of the Special Committee, as reconstituted (see "Special Factors—Background of the Merger and Special Committee Proceedings"), equivalent to the compensation structure in place as of August 2015.

        In recommending and approving this compensation structure, the Special Committee and the Board considered, among other things, precedent compensation structures for special committees formed for purposes comparable to those for which the Special Committee was formed.

Potential Change of Control Payments to Named Executive Officers

Change in Control Agreements

Michael Silberling

        On October 5, 2015, Mr. Silberling and Affinity entered into a change-in-control agreement (the "Silberling CIC Agreement") pursuant to which he will receive certain benefits if a definitive agreement for a change in control transaction is signed within 12 months of October 5, 2015 and, following the signing of such definitive agreement and at any time within 12 months following the closing of the change in control transaction, Affinity terminates the Mr. Silberling's employment without cause or Mr. Silberling resigns with good reason. In such case, Mr. Silberling will receive cash severance in an amount equal to the product of (a) a multiple of 2.3375, and (b) the sum of Mr. Silberling's base salary and his target bonus for the calendar year in which the termination occurs, subject to the execution of a customary release of claims. The Silberling CIC Agreement further provides that the Silberling Employment Agreement will remain effective and shall apply with respect to any other benefits, but that the foregoing cash payment would be made in solely in lieu of, not in addition to, any severance amounts payable under the Silberling Employment Agreement on account of Mr. Silberling's termination from employment, except to the extent that the Silberling Employment Agreement provides greater benefits than the foregoing severance payment.

        If any payments under the Silberling CIC Agreement are subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments will be reduced to the extent that such reduction would result in a greater benefit to Mr. Silberling after payment of all taxes by Mr. Silberling (including any excise taxes on "excess parachute payments" under Section 4999 of the Internal Revenue Code).

        The table below provides an estimate of the value of the compensation and benefits due to our Chief Executive Officer in the event of: (i) a termination by Affinity for cause or by Mr. Silberling

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without good reason; (ii) death or disability; (iii) a change in control; or (iv) a termination by Affinity without cause or by Mr. Silberling for good reason. The amounts shown assume that the specified event was effective as of September 30, 2016, and are the maximum payable amounts under the Silberling Employment Agreement and the Silberling CIC Agreement. The actual amounts to be paid can only be determined at the time of the termination of employment or change in control, as applicable.

 
  Involuntary
Termination for
Cause/
Voluntary
Termination by
Employee
Without Good
Reason
  Involuntary
Termination
Without
Cause/
Voluntary
Termination by
Employee for
Good Reason
  Involuntary
Termination
Without Cause
Following a
Change in
Control
  Death or
Disability
 

Cash severance

      $ 700,000   $ 2,863,438      

Medical Benefits(1)

        20,400     20,400      

Total

      $ 720,400   $ 2,883,838      

(1)
Calculated assuming $1,700 of COBRA payable per month for 12 months.

Walter Bogumil

        On October 5, 2015, Mr. Bogumil and Affinity entered into a change-in-control agreement (the "Bogumil CIC Agreement") pursuant to which he will receive certain benefits if a definitive agreement for a change in control transaction is signed within 12 months of October 5, 2015 and, following the signing of such definitive agreement and at any time within 12 months following the closing of the change in control transaction, Affinity terminates the Mr. Bogumil's employment without cause or Mr. Bogumil resigns with good reason. In such case, Mr. Bogumil will receive cash severance in an amount equal to the product of (a) a multiple of 2.3375 and (b) the sum of Mr. Bogumil's base salary and his target bonus for the calendar year in which the termination occurs, subject to the execution of a customary release of claims. The Bogumil CIC Agreement further provides that the Bogumil Employment Agreement will remain effective and shall apply with respect to any other benefits, but that the foregoing cash payment would be made in solely in lieu of, not in addition to, any severance amounts payable under the Bogumil Employment Agreement on account of Mr. Bogumil's termination from employment, except to the extent that the Bogumil Employment Agreement provides greater benefits than the foregoing severance payment.

        If any payments under the Bogumil CIC Agreement are subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments will be reduced to the extent that such reduction would result in a greater benefit to Mr. Bogumil after payment of all taxes by Mr. Bogumil (including any excise taxes on "excess parachute payments" under Section 4999 of the Internal Revenue Code).

        The table below provides an estimate of the value of the compensation and benefits due to our Chief Financial Officer in the event of: (i) a termination by Affinity for cause or by Mr. Bogumil without good reason; (ii) death or disability; (iii) a change in control; or (iv) a termination by Affinity without cause or by Mr. Bogumil for good reason. The amounts shown assume that the specified event was effective as of September 30, 2016, and are the maximum payable amounts under the Bogumil

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Employment Agreement and the Bogumil CIC Agreement. The actual amounts to be paid can only be determined at the time of the termination of employment or change in control, as applicable.

 
  Involuntary
Termination for
Cause/Voluntary
Termination by
Employee
Without Good
Reason
  Involuntary
Termination
Without
Cause/Voluntary
Termination by
Employee for
Good Reason
  Involuntary
Termination
Without Cause
Following a
Change in
Control
  Death or
Disability
 

Cash severance

      $ 425,000   $ 1,490,156   $  

Medical Benefits(1)

        20,400     20,400      

Total

  $   $ 445,400   $ 1,510,556   $  

(1)
Calculated assuming $1,700 of COBRA payable per month for 12 months.

        The following tables and related footnotes present information about the amounts of the payments and benefits that each named executive officer would receive in connection with the merger, after giving effect to the merger as if it had occurred on September 30, 2016, the latest practicable date prior to the filing of this proxy statement. As explained in further detail in the footnotes below, other than the acceleration of Mr. Rubinstein's equity, the cash payments in the table below are double trigger and accordingly would only become payable upon the occurrence of both a change of control and a qualifying termination of employment. We do not expect a payout of such double trigger amounts in connection with the merger as we expect that each of Affinity's current executive officers other than Mr. Rubinstein will continue as an executive officer of the surviving corporation.


Golden Parachute Compensation

Named Executive Officer
  Cash
($)(1)
  Equity
($)(2)
  Pension/
Non-Qualified
Deferred
Compensation ($)
  Perquisites/
Benefits
($)(3)
  Tax
Reimbursement ($)
  Total ($)  

Michael Silberling

    2,863,438     2,646,639         20,400         5,530,477  

Walter Bogumil

    1,490,156     771,828         20,400         2,282,384  

Marc H. Rubinstein

        158,275                 158,275  

(1)
The cash amount payable to the named executive officers consists of a lump-sum (or partial installments if a qualifying termination were to occur prior to the Effective Time) severance payment equal to 2.3375 times the sum of each executive officers base salary and target annual bonus opportunity. These cash amounts are "double trigger" (i.e., they are contingent upon a termination of employment without cause or resignation for good reason after August 22, 2016 and the date that is 12 months following the closing of the merger. As a condition of receiving such compensation, each named executive officer must execute a release of claims. The estimated amount of each component of the cash payment is set forth in the table below:

 
Named Executive Officer
  Base
Salary ($)
  Bonus ($)  
 

Michael Silberling

    1,636,250     1,227,188  
 

Walter Bogumil

    993,437     496,719  
(2)
Represents (1) the cash payments and the fair value of the Class A units, options to purchase Class A units and Class B units of Holdings received in exchange for Mr. Silberling's and Mr. Bogumil's outstanding and unvested options, restricted stock, and commitments of Affinity and any of its affiliates to issue equity or equity-based awards and (2) the "single trigger" acceleration of 100% of Mr. Rubinstein's outstanding and unvested options as of the Effective Time (as a condition of receiving such acceleration, Mr. Rubinstein must execute a release of claims), as described in more detail in "Treatment of Stock Options and Restricted Stock."

(3)
Calculated assuming $1,700 of COBRA payable per month for 12 months.

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Intent to Vote

        To Affinity's knowledge, each of Affinity's directors and executive officers intends to vote all shares of Affinity common stock he or she beneficially owns in favor of adoption of the merger agreement and each of the other proposals. Affinity's directors and executive officers have the power to vote 190,335 shares of Affinity common stock as of September 30, 2016 (such amount excluding the shares to be voted by One East pursuant to the voting agreement as described below), representing approximately 0.93% of Affinity's outstanding common stock. Subject to the terms of voting and support agreements, Z Capital, an affiliate of Affinity director James J. Zenni, Jr. and the employer of Affinity director Andrei Scrivens, SPH Manager, LLC ("SPH Manager"), an affiliate of Affinity director David Reganato, and One East Partners Master, L.P., One East Partners Opportunities, L.P., One East Capital Advisors, L.P. and One East Partners Capital Management LLC (collectively, "One East"), an affiliate of Affinity director James Cacioppo, each have agreed to vote all shares of Affinity common stock they beneficially own in favor of adopting the merger agreement and approving the terms thereof. See "Agreements Involving Common Stock—Voting Agreements."

Estimated Fees and Expenses of the Merger

        Whether or not the merger is completed, all fees and expenses incurred in connection with the merger will generally be paid by the party incurring those fees and expenses. The estimated total fees and expenses to be incurred by Affinity and by the Purchaser Parties in connection with the merger are as follows:

Description
  Amount   Responsible
Party
  Notes

Advisory fees and expenses

  $ [-]   Affinity   Includes the estimated fees of Deutsche Bank

Legal fees and expenses

 
$

[-]
 

Affinity

 

Includes the estimated legal fees of counsel to Affinity and to the Special Committee

Legal fees and expenses

 
$

[-]
 

Parent

 

Includes the estimated legal fees of counsel to the Purchaser Parties and the Z Capital Filing Persons

Antitrust approval filing fees

 
$

[-]
 

Parent

   

Gaming approval filing fees

  $ [-]   Parent    

Paying agent fees and expenses

  $ [-]   Parent    

SEC filing fee

  $ [-]   Affinity    

Printing and mailing costs

  $ [-]   Affinity    

Fees and expenses associated with financing

  $ [-]   Parent    

Miscellaneous expenses

  $ [-]   Affinity    

TOTAL

  $ [-]        

        Neither Affinity nor any of the Purchaser Parties will pay any fees or commissions to any broker, dealer or other person for soliciting proxies pursuant to the merger. Parent intends to retain American Stock Transfer & Trust Company, LLC ("AST") to act as paying agent in connection with the merger. The paying agent will receive reasonable and customary compensation for its services in connection with the merger, plus reimbursement for certain reasonable and documented out-of-pocket expenses.

        Except as provided in the merger agreement, legal fees and expenses incurred by or on behalf of Affinity, the Purchaser Parties and their respective affiliates in connection with the merger will be paid by the party incurring the expense.

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        The expense of soliciting proxies from stockholders, as well as preparing and mailing the notice of special meeting, the proxy statement and the proxy card(s), will be paid by Affinity. Parent intends to pay AST a fee of $9,000 plus certain reasonable and documented out-of-pocket expenses and to indemnify AST against certain liabilities and expenses, including liabilities under the federal securities laws.

Appraisal and Dissenters' Rights

        Under Nevada Revised Statues, or NRS, 92A.300 to 92A.500, holders of Affinity common stock are entitled to assert dissenter's rights under NRS 92A.300 to 92A.500. By exercising dissenter's rights, stockholders can "demand payment" for their shares at a price equal to its fair value immediately before the corporate action. If Affinity and any stockholder that properly exercises dissenter's rights cannot agree on a fair value, Affinity must then commence an appraisal process in state court to determine the fair value.

        NRS 92A.300 through 92A.500 describe the appraisal process and the procedure stockholders must follow to exercise their right to dissent and demand payment. The full text of NRS 92A.300 to 92A.500 is attached to this proxy statement as Appendix D. All references in NRS 92A.300 to 92A.500 to a "stockholder" or "dissenter" and in this summary to a "stockholder" are to the record holders of the shares of Affinity common stock. The following discussion is a summary of the law pertaining to dissenter's rights under the NRS:

    When a corporate action subject to dissenter's rights is submitted to a vote at stockholders' meeting, the corporation must provide notice of dissenter's rights in the proxy materials, along with a copy of the statute describing these rights (NRS 92A.300 through 92A.500). A corporation only needs to notify stockholders of record who are entitled to dissenter's rights, not all beneficial owners.

    If the corporate action is submitted to a vote at a stockholders' meeting, any stockholders wishing to dissent must first deliver written notice, before the vote is taken, of their intent to demand payment for their shares if the proposed action is carried out. Second, these stockholders must not vote any of their shares in favor of the proposed action.

    If the corporation receives requisite stockholder approval for the proposed action, it must then deliver a written dissenter's notice to all stockholders of record who are entitled to assert their dissenter's rights within 10 days of the effective date of the corporate action. The dissenter's notice must:

    State where the demand for payment must be sent and where and when share certificates, if any, must be deposited;

    Inform the holders of shares not represented by certificates the extent to which the transfer of the shares will be restricted after the corporation receives the demand for payment;

    Supply a form for demanding payment that includes the date of the first announcement to the news media or to the stockholders of the terms of the proposed action and requires that the person asserting dissenters' rights certify whether or not they acquired beneficial ownership of the shares before that date;

    Set a date by which the corporation must receive the demand for payment, which must be no earlier than 30 days nor later than 60 days after the date the notice is delivered;

    State that the stockholder shall be deemed to have waived the right to demand payment with respect to the shares unless the form is received by the corporation by the specified date; and

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      Be accompanied by a copy of NRS 92A.300 to 92A.500.

    Stockholders who receive a dissenter's notice and who wishes to continue with the appraisal process must then:

    Demand payment;

    Certify that they were beneficial owners prior to the date specified in the dissenter's notice; and

    Deposit the stockholder's certificates, if any, in accordance with the terms of the notice.

    Alternatively, stockholders may withdraw from the appraisal process by notifying the corporation in writing by the date specified in the dissenter's notice. After this date, dissenters may withdraw only with the written consent of the corporation.

    Once dissenting stockholders deposit the stockholder's certificates (or, in the case of uncertified shares, makes a demand for payment), they lose all rights as a stockholder, unless they later withdraw from the appraisal process. The corporation may restrict the transfer of uncertified shares from the date the corporation receives the dissenters' demand for payment.

    Within 30 days of receiving demand for payment, the corporation must pay dissenters an amount the corporation estimates to be the fair value of the dissenter's share, plus accrued interest. This payment must be accompanied by:

    The corporation's balance sheet as of the end of a fiscal year ending not more than 16 months before the date of payment, a statement of income for that year, a statement of changes in the stockholders' equity for that year or, whether such financial statements are not reasonably available, then such reasonably equivalent financial information and the latest available quarterly financial statements, if not reasonably available, then such reasonably equivalent financial information and the latest available quarterly financial statements, if any;

    A statement of the corporation's estimate of the fair value of the shares; and

    A statement of the dissenter's rights to contest the corporation's estimate of fair value.

    If dissenting stockholders wish to contest the corporation's estimate of fair value, they must notify the corporation in writing within 30 days of receiving the corporation's initial payment. Dissenters must provide their own estimate of fair value plus interest and demand that the corporation pay the difference between this estimate and the corporation's estimate.

    The corporation must either pay the additional amount or commence judicial proceedings within 60 days of receiving the demand and petition the court to determine the fair value of the shares and accrued interest.

Material U.S. Federal Income Tax Consequences

        The following summary is a general discussion of the material U.S. federal income tax consequences of the merger to "U.S. holders" and "non-U.S. holders" (in each case, as defined below) of Affinity common stock whose shares of common stock are converted into the right to receive cash in the merger. This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), applicable treasury regulations, judicial authority, and administrative rulings, all as in effect as of the date of this proxy statement and all of which are subject to change, possibly with retroactive effect. Any such change could alter the tax consequences to the holders as described herein. We have not sought, and do not intend to seek, any ruling from the Internal Revenue Service (the "IRS") with respect to the statements made in the following summary. No assurance can be given that the IRS will agree with

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the views expressed in this summary, or that a court will not sustain any challenge by the IRS in the event of litigation. This summary is for the general information of Affinity's stockholders only and does not purport to be a complete analysis of all potential tax effects of the merger to beneficial owners of Affinity common stock. For example, it does not consider the effect of any applicable state, local or foreign income tax laws, or of any non-income tax laws (including estate and gift tax). In addition, this discussion does not address the tax consequences of transactions effectuated prior to or after the completion of the merger (whether or not such transactions occur in connection with the merger), including, without limitation, the acquisition or disposition of shares of common stock other than pursuant to the merger, or the tax consequences to holders of stock options or other equity incentive awards issued by Affinity which are canceled or converted, as the case may be, in connection with the merger. Furthermore, this summary applies only to holders that hold their Affinity common stock as a "capital asset" within the meaning of Section 1221 of the Code (generally, property held for investment). In addition, this discussion does not address all aspects of U.S. federal income tax consequences that may be relevant to a holder in light of the holder's particular circumstances or to holders subject to special rules, such as:

    brokers or dealers in securities, commodities or currencies;

    traders in securities that elect mark-to-market treatment;

    persons holding Affinity common stock as part of a straddle, hedging transaction, conversion transaction, integrated transaction or constructive sale transaction;

    U.S. holders whose functional currency is not the U.S. dollar;

    persons who acquired Affinity common stock through the exercise of employee stock options, through a tax qualified retirement plan or otherwise as compensation;

    banks, insurance companies, or other financial institutions;

    regulated investment companies;

    real estate investment trusts;

    certain former citizens or residents of the United States;

    tax-exempt entities;

    "individual retirement accounts," "Roth IRA;" retirement plans or other tax-deferred accounts;

    persons subject to the United States alternative minimum tax;

    entities or arrangements treated for U.S. federal income tax purposes as partnerships, S corporations or other pass-through entities (or investors in such entities or arrangements);

    mutual funds;

    "personal holding companies;" or

    "passive foreign investment corporations," or corporations that accumulate earnings to avoid U.S. federal income tax

        If an entity that is classified as a partnership for U.S. federal income tax purposes holds Affinity common stock, the U.S. federal income tax treatment of person treated as a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding Affinity common stock and partners in such partnerships should consult their tax advisors as to the particular U.S. federal income tax consequences of the merger to them.

        THIS DISCUSSION IS INTENDED ONLY AS A GENERAL SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO A HOLDER OF SHARES OF

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AFFINITY COMMON STOCK. WE URGE BENEFICIAL OWNERS OF SHARES TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, INCLUDING U.S. FEDERAL ESTATE, GIFT AND OTHER NON-INCOME TAX CONSEQUENCES, AND TAX CONSEQUENCES UNDER STATE, LOCAL OR FOREIGN TAX LAWS, INCLUDING POSSIBLE CHANGES IN SUCH LAWS.

U.S. Holders

        For purposes of this discussion, the term "U.S. holder" means a beneficial owner of Affinity common stock that is for federal income tax purposes:

    a citizen or resident of the United States;

    a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States, any state thereof or the District of Columbia;

    an estate, the income of which is includable in gross income for U.S. federal income tax purposes regardless of its source; or

    a trust (i) the administration of which is subject to the primary supervision of a U.S. court and all substantial decisions of which are controlled by one or more U.S. persons, or (ii) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

        The exchange of Affinity common stock for cash in the merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder whose shares of Affinity common stock are converted into the right to receive cash in the merger will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder's adjusted tax basis in such shares. A U.S. holder's adjusted tax basis generally will equal the price the U.S. holder paid for such shares. Gain or loss will be determined separately for each block of shares of Affinity common stock (i.e., shares of Affinity common stock acquired at the same cost in a single transaction). Such gain or loss generally will be treated as long-term capital gain or loss if the U.S. holder's holding period in the shares of Affinity common stock exceeds one year at the time of the completion of the merger. Long-term capital gains of non-corporate U.S. holders generally are subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations.

        A 3.8% tax generally is imposed on all or a portion of the "net investment income" (within the meaning of the Code) of certain individuals and on the undistributed net investment income of certain estates and trusts. For individuals, the additional 3.8% tax generally is imposed on all or a portion of the net investment income of individuals with a modified adjusted gross income of over $200,000 ($250,000 in the case of joint filers). For these purposes, "net investment income" generally will include any gain recognized on the receipt of cash in exchange for shares of Affinity common stock pursuant to the merger.

Non-U.S. Holders

        A "non-U.S. holder" is a beneficial owner of Affinity common stock that is not a U.S. holder or a partnership (or any other entity or arrangement classified as a partnership for U.S. federal income tax purposes). If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) beneficially owns shares of Affinity common stock, the tax treatment of the partnership and its partners generally will depend on the status of the partners and the activities of the partnership. A partner in a partnership holding shares of Affinity common stock should consult such

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partner's tax advisor. Payments made to a non-U.S. holder in exchange for shares of Affinity common stock pursuant to the merger generally will not be subject to U.S. federal income tax unless:

    the gain, if any, on such shares is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if required by an applicable income tax treaty, is attributable to the non-U.S. holder's permanent establishment in the United States);

    the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the exchange of shares of Affinity common stock for cash pursuant to the merger and certain other conditions are met; or

    the non-U.S. holder owned, directly or under certain constructive ownership rules of the Code, more than 5% of the outstanding shares of Affinity common stock at any time during the five-year period preceding the merger, and Affinity is or has been a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Code for U.S. federal income tax purposes at any time during the shorter of the five-year period preceding the merger or the period that the non-U.S. holder held Affinity common stock.

        A non-U.S. holder described in the first bullet immediately above will be subject to U.S. federal income tax on a net income bases on any gain realized as if the non-U.S. holder were a U.S. holder, subject to an applicable income tax treaty providing otherwise. If such non-U.S. holder is a foreign corporation, it may also be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits (or a lower treaty rate). A non-U.S. holder described in the second bullet immediately above will be subject to tax at a rate of 30% (or a lower treaty rate) on any gain realized, which may be offset by U.S.-source capital losses recognized in the same taxable year, even though the individual is not considered a resident of the United States. Non-U.S. holders are urged to consult their tax advisors as to any applicable tax treaties that might provide for different rules.

        With respect to the third bullet above, the determination whether Affinity is a "United States real property holding corporation" depends on the fair market value of its United States real property interests relative to the fair market value of its other trade or business assets and its United States and foreign real property interests. Affinity believes it has not been a "United States real property holding corporation" for U.S. federal income tax purposes at any time during the five-year period preceding the merger.

Information Reporting and Backup Withholding

        Payments made in exchange for shares of Affinity common stock generally will be subject to information reporting unless the holder is an "exempt recipient" and may also be subject to backup withholding at a rate of 28%. To avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should complete and return IRS Form W-9, certifying under penalty of perjury that (1) such U.S. holder is a U.S. person, (2) the taxpayer identification number provided is correct, and (3) such U.S. holder is not subject to backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. If a U.S. holder does not provide a correct TIN, such U.S. holder may be subject to backup withholding and penalties imposed by the IRS.

        Information reporting and backup withholding will generally apply to payments made pursuant to the merger to a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Dispositions effected through a non-U.S. office of a U.S. broker or a non-U.S. broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. A non-U.S. holder generally must submit an IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable IRS Form W-8) attesting to its exempt foreign status in order to qualify as an exempt recipient. Notwithstanding the foregoing,

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backup withholding and information reporting may apply if either Affinity or its paying agent has actual knowledge, or reason to know, that a non-U.S. holder is a U.S. person.

        Amounts withheld under the backup withholding rules are not additional taxes and may be refunded or credited against a holder's U.S. federal income tax liability, provided the relevant information is timely furnished to the IRS. If backup withholding results in an overpayment of tax, a holder may obtain a refund by filing a U.S. federal income tax return in a timely manner.

        Holders of Affinity common stock are urged to consult their tax advisors as to qualifications for exemption from backup withholding and the procedure for obtaining the exemption.

Consequences to the Filing Persons

        The Purchaser Parties and the Z Capital Filing Persons are all acquiring parties and are not receiving any Merger Consideration in the merger. They are not expected to realize any gain or loss for U.S. federal income tax purposes as a result of the merger.

        Affinity will not realize any gain or loss as a result of the merger. Affinity may experience an ownership change as a result of the merger for U.S. federal income tax purposes, and accordingly, its ability to use any net operating losses and other tax attributes post-merger to offset future taxable income or otherwise reduce its tax liability may be limited or eliminated.

        The filing persons should consult their own tax advisors regarding the U.S. federal income tax consequences of the merger.

        THIS SUMMARY OF MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE AND DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR HOLDERS OF SHARES OF AFFINITY COMMON STOCK. AFFINITY URGES YOU TO CONSULT WITH YOUR TAX ADVISOR WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION, AS WELL AS ANY TAX CONSEQUENCES OF THE MERGER ARISING UNDER THE FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

Anticipated Accounting Treatment of the Merger

        Affinity, as the surviving corporation in the merger, will account for the merger as a business combination using the acquisition method of accounting for financial accounting purposes, whereby the fair value of Affinity will be allocated to the individual assets and liabilities of Affinity in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations.

Certain Legal Matters

        General.    Except as described in this section, none of Affinity or the Purchaser Parties is aware of any license or regulatory permit that appears to be material to the business of Affinity that might be adversely affected by the merger, nor are they aware of any approval or other action by a domestic or foreign governmental, administrative or regulatory agency or authority required for the merger to be completed that is not described in this proxy statement. Should any such approval or other action be required, the Purchaser Parties presently contemplate that such approval or other action will be sought. While the Purchaser Parties do not presently intend to delay the merger pending the outcome of any such matter (unless otherwise described in this proxy statement), there can be no assurance:

    that any such approval or other action, if needed, would be obtained;

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    that failure to obtain the approval or other action might not result in consequences adverse to Affinity's business; or

    that there might not be conditions to obtaining a required approval or action, including, without limitation, the divestiture of certain parts of Affinity's business.

        See "The Merger Agreement—Conditions to the Merger," below, for certain conditions to the merger, including conditions with respect to governmental actions.

        State Anti-Takeover Statutes.    None of the requirements or restrictions of (a) the Nevada "combinations with interested stockholders" statutes, NRS 78.411 through 78.444, inclusive, or (b) the Nevada "acquisition of controlling interest" statutes, NRS 78.378 through 78.3793, inclusive (each, a "Takeover Statute" and together, the "Takeover Statutes") would apply to prevent the consummation of any of the transactions contemplated by the merger agreement, including the merger.

        United States Antitrust Approval.    The merger is subject to the HSR Act, which provides that acquisition transactions meeting the filing threshold may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice and the Federal Trade Commission, and certain waiting period requirements have been terminated or expired. On September 1, 2016, the Purchaser Parties and Affinity filed Notification and Report Forms with respect to the merger under the HSR Act. Early termination of the waiting period under the HSR Act was granted on September 13, 2016.

        Gaming Approvals.    The closing of the merger is conditioned upon all gaming approvals being duly obtained and in full force and effect. The following is a summary of the applications that Parent and Affinity, as applicable, will need to file in various jurisdictions; however, each regulatory authority also has the discretion to require that Parent, Affinity, or their affiliates file additional applications or provide additional information in connection with the gaming and liquor regulatory approval process. A comprehensive discussion of the various state gaming laws and regulations applicable to Affinity's business is available in Affinity's most recent Form 10-K filed with the SEC. See "Other Matters—Available Information."

        On September 29, 2016, Affinity filed a change of ownership application with the Colorado Limited Gaming Control Commission, and Parent filed an associated business application with the Colorado Limited Gaming Control Commission. On September 21, 2016, the following applications were filed with the Nevada Gaming Commission: (i) Z Capital Group, L.L.C. filed an application for an acquisition of control of Affinity and for registration as an intermediary/holding company; (ii) Affinity filed an application for deregistration as a publicly traded company and for registration as a private investment company; (iii) Z Capital, Holdings and Parent (collectively with Z Capital Group, L.L.C., the "Z Capital Entities") filed applications for registration as intermediary/holding companies; and (iv) James J. Zenni, Jr. filed applications for findings of suitability as the sole officer and director of each of the Z Capital Entities. The Z Capital Entities will also provide and obtain approvals, if necessary, from the local government authorities in Clark County, the City of Sparks, and Washoe County. On September 20, 2016, Parent filed an asset/stock purchase form for commission approval with the Iowa Racing and Gaming Commission. On September 21, 2016, Parent filed a Petition for Change of Control with the Missouri Gaming Commission. On October 6, 2016, Parent, Affinity and HGI—St. Jo, LLC, doing business as St. Jo Frontier Casino, and HGI—Mark Twain, LLC, doing business as Mark Twain Casino (together, the "Missouri Class B subsidiaries"), filed a 60-day notice of the merger financing with the Missouri Gaming Commission together with a Transaction Sheet and a Compliance Affidavit and a 15-day notice of private incurrence of debt exceeding $1 million and the granting of guaranty of unsecured notes and other instruments by the Missouri Class B subsidiaries.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

        This proxy statement and the other documents referred to or incorporated by reference into this proxy statement contain forward-looking statements within the meaning of the U.S. federal securities laws. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. Statements that include words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "projects," "may," "will" or "should," or the negative or other variation of these or similar words, or discussions of strategy or risks and uncertainties, and similar references to future periods, may identify forward-looking statements. These forward-looking statements are found at various places throughout this proxy statement and the other documents referred to or incorporated by reference and relate to a variety of matters, including but not limited to, (i) the timing and anticipated completion of the merger, (ii) Affinity's current views as to future events and financial performance with respect to Affinity's operations, (iii) the projected financial information and related statements in the "Special Factors—Projected Financial Information" section, (iv) the Purchaser Parties' and the Z Capital Filing Persons' plans for Affinity after the merger, and (v) other statements that are not purely statements of historical fact. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of Affinity's management, the Purchaser Parties and the Z Capital Filing Persons, are not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in this proxy statement and those that are referred to or incorporated by reference into this proxy statement. Additional factors that could cause actual results to differ materially from those described in forward-looking statements contained herein include, but are not limited to:

    risks arising from the merger's diversion of management's attention from Affinity's ongoing business operations;

    potential adverse reactions or changes to business or employee relationships resulting from the announcement or completion of the merger;

    litigation or adverse judgments relating to the merger;

    risks relating to the consummation of the merger, including the risk that the required stockholder approval might not be obtained in a timely manner or at all or that other closing conditions will not be satisfied;

    any difficulties associated with requests or directions from governmental authorities resulting from their review of the merger;

    the possibility that competing offers for the businesses will be made;

    the amount of the costs, fees, expenses and charges related to the merger agreement or merger;

    the failure to obtain the necessary financing for the transaction;

    risks that Affinity's stock price may decline significantly if the merger is not completed;

    any changes in general economic and/or industry-specific conditions; and

    the possibility that Affinity stockholders may exercise dissenters' rights under the NRS in connection with the merger, which would require Affinity to pay such stockholders cash for the fair value of their Affinity shares.

        Any forward-looking statement in this proxy statement and the other documents referred to or incorporated by reference into this proxy statement are made only as of the date of this proxy statement or such other documents referred to or incorporated by reference into this proxy statement. Factors or events that could cause actual results to differ may emerge from time to time, and it is not possible to predict all of them. Affinity, the Purchaser Parties and the Z Capital Filing Persons undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

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THE MERGER AGREEMENT

        The following is a summary of certain provisions of the merger agreement. The summary is qualified in its entirety by reference to the complete text of the merger agreement, a copy of which is attached as Appendix A hereto and is incorporated herein by this reference. This summary may not contain all of the information about the merger agreement that is important to you. We encourage you to read carefully the merger agreement in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

Explanatory Note Regarding the Merger Agreement

        The following summary of the merger agreement, and the copy of the merger agreement attached as Appendix A to this proxy statement, are intended to provide information regarding the terms of the merger agreement and are not intended to modify or supplement any factual disclosures about Affinity in its public reports filed with the SEC. The representations and warranties contained in the merger agreement were made only for the purposes of the merger agreement as of the specific dates therein, and were solely for the benefit of the parties to the merger agreement. The representations and warranties contained in the merger agreement may be subject to limitations agreed upon by the parties to the merger agreement and are qualified by information in confidential disclosure schedules provided in connection with the signing of the merger agreement. These confidential disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the merger agreement. Moreover, certain representations and warranties in the merger agreement may be subject to a standard of materiality provided for in the merger agreement and have been used for the purpose of allocating risk among the parties, rather than establishing matters of fact. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Affinity or any of its subsidiaries or affiliates. Information concerning the subject matter of the representations and warranties may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in Affinity's public disclosures. Moreover, the description of the merger agreement below does not purport to describe all of the terms of such agreement, and is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Appendix A and is incorporated herein by reference. Any material change to the terms of the merger agreement will be disclosed in subsequent filings by Affinity with the SEC.

        Additional information about Affinity may be found elsewhere in this proxy statement and Affinity's other public filings. With respect to other documents incorporated by reference into this proxy statement, see the section entitled "Other Matters—Information Incorporated by Reference."

The Merger

        Subject to the terms and conditions of the merger agreement and in accordance with Nevada law, Merger Sub will merge with and into Affinity and Affinity will survive the merger as a wholly owned subsidiary of Parent.

Closing and Effectiveness of the Merger

        The closing of the merger will take place on the second business day after the date on which the conditions to its completion have been satisfied or waived; provided that, if the marketing period (as defined below) has not ended prior to the time that the closing would have otherwise occurred, then the closing will occur on the earlier to occur of (i) a date during the marketing period specified by Parent with three business days' notice to Affinity and (ii) the second business day following the final day of the marketing period.

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        The parties will file an articles of merger with the Secretary of State of the State of Nevada, and the merger will become effective at such time as the articles of merger is duly filed with the Nevada Secretary of State or at such other time as may be agreed by Affinity and the Purchaser Parties and specified in the articles of merger.

Representations and Warranties

        In the merger agreement, Affinity has made customary representations and warranties with respect to, among other things:

    corporate organization, existence and good standing;

    the capital stock, restricted stock and options of Affinity or other rights to acquire securities of Affinity;

    corporate power and authority to enter into the merger agreement and to consummate the transactions contemplated thereby;

    non-contravention of certain laws, agreements and Affinity's charter documents;

    corporate and governmental authorizations;

    Affinity's filings with the SEC and financial statements included in the SEC filings;

    the absence of certain undisclosed liabilities;

    the absence of certain events or changes since January 1, 2016;

    litigation matters;

    compliance with gaming and other laws;

    Affinity's employee benefit plans;

    labor matters;

    environmental matters and compliance with environmental laws;

    the filing of tax returns, the payment of taxes and other tax matters;

    Affinity's material contracts;

    insurance policies;

    Affinity's real property;

    rights to intellectual property held by Affinity;

    the applicability of state anti-takeover law;

    affiliate transactions;

    brokers;

    the receipt by the Special Committee of an opinion of its financial advisor; and

    the accuracy of information supplied to the SEC in connection with the merger.

        Each of the Purchaser Parties has made customary representations and warranties with respect to, among other things:

    corporate organization, existence and good standing;

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    corporate power and authority to enter into the merger agreement and to consummate the transactions contemplated thereby;

    non-contravention of certain laws, agreements and the Purchaser Parties' charter documents;

    corporate and governmental authorizations;

    litigation matters;

    the ownership and absence of past conduct unrelated to the merger of Parent and Merger Sub;

    financing commitments and arrangements to fund the merger;

    the vote of Parent's or Merger Sub's securities required to approve the merger;

    ownership of Affinity common stock;

    solvency, including solvency after giving effect to the transactions contemplated by the merger agreement;

    brokers;

    the limited guarantee;

    gaming law matters;

    the accuracy of information supplied to the SEC in connection with the merger;

    access to information;

    the limitation of Affinity's representations and warranties to those set forth in the merger agreement; and

    the uncertainties inherent in Affinity estimates, projections and forecasts regarding Affinity, it subsidiaries and their business and operations.

        Some of the representations and warranties in the merger agreement are qualified by materiality qualifications or a "material adverse effect" clause.

        For purposes of the merger agreement, a "Company Material Adverse Effect" with respect to Affinity and its subsidiaries means any effect that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on (i) the business, financial condition, properties, liabilities, assets, or results of operations of Affinity and its subsidiaries, taken as a whole, or (ii) the ability of Affinity to timely perform its obligations under the merger agreement; provided, however, that none of the following shall constitute or be taken into account in determining whether a material adverse effect has occurred or would occur under clause (i) above: (1) changes in global, national or regional general economic, financial market, business or geopolitical conditions, (2) general changes or developments in any of the industries or markets in which Affinity or its subsidiaries operate, (3) changes in any applicable laws or applicable accounting regulations, (4) any change in the price or trading volume of Affinity's stock or in the credit ratings of Affinity or any of its subsidiaries, in and of itself (provided, however, that the facts or occurrences giving rise to or contributing to such change that are not otherwise excluded from the definition of material adverse effect may be taken into account in determining whether there has been a material adverse effect), (5) any failure by Affinity to meet any published analyst estimates or expectations of Affinity's revenue, earnings or other financial performance or results of operations for any period, in and of itself (provided, that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of material adverse effect may be taken into account in determining whether there has been a material adverse effect), (6) any failure by Affinity to meet its internal or published projections, budgets, plans or forecasts of its revenues, earnings or other financial performance or results of

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operations, in and of itself (provided, that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of material adverse effect may be taken into account in determining whether there has been a material adverse effect), (7) any outbreak or escalation of hostilities or war, sabotage, military actions or any act of terrorism, (8) the announcement of the merger agreement, (9) any action taken by Affinity which is required by the merger agreement, (10) any actions taken (or omitted to be taken) at the request of Parent, (11) the execution and delivery of the merger agreement or the public announcement or pendency of the merger, (12) any transaction litigation or other proceeding threatened, made or brought by any stockholder of Affinity arising out of the merger, (13) any change resulting from or arising out of a hurricane, earthquake, flood or other natural disaster, or (14) any change resulting or arising from the identity of, or any facts or circumstances relating to, the Purchaser Parties, Z Capital or any of their respective affiliates or the availability or cost of equity, debt or other financing to the Purchaser Parties; provided, that the facts, circumstances, events, changes, occurrences or effects set forth in clauses (1), (2), (3), (7) and/or (13) above shall be taken into account in determining whether a material adverse effect has occurred to the extent such facts, circumstances, events, changes, occurrences or effects have a disproportionate adverse impact on Affinity.

        For purposes of the merger agreement, a "Parent Material Adverse Effect" means any event, change, occurrence or effect that would prevent, materially delay, materially impair or materially impede the performance by Parent or Merger Sub of its obligations under the merger agreement or the ability to consummate the merger.

Conditions to the Merger

        The respective obligations of the Purchaser Parties, on the one hand, and Affinity, on the other hand, to effect the merger are subject to the satisfaction or valid waiver of each of the following conditions:

    the affirmative vote of the holders of at least a majority of the issued and outstanding Affinity common stock;

    there is no temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction prohibiting the merger;

    any applicable waiting period (and any extension thereof) under the HSR Act relating to the merger has expired or been terminated; and

    all gaming approvals have been duly obtained and are in full force and effect.

        The obligation of Affinity to effect the merger is subject to the satisfaction or valid waiver of the following conditions:

    the representations and warranties of the Purchaser Parties (without giving effect to any materiality qualifiers) will be true and correct as of the closing date of the merger (except to the extent such representations and warranties relate to an earlier date, in which case as of such date), unless the failure of any such representations and warranties to be true and correct would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect;

    the Purchaser Parties have performed in all material respects the obligations required to be performed by such parties prior to the merger; and

    Affinity shall have received a certificate signed by an executive officer of Parent certifying as to the matters set forth in the two preceding bullets.

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        The obligation of the Purchaser Parties to effect the merger is subject to the satisfaction or valid waiver of the following conditions:

    the representations and warranties of Affinity (i) regarding corporate organization, existence and good standing, the capital stock, restricted stock and options of Affinity or other rights to acquire securities of Affinity, corporate power and authority to enter into the merger agreement and to consummate the transactions contemplated thereby, the applicability of state anti-takeover law and brokers shall be true and correct in all material respects as of the closing date of the merger as though made on and as of such date (except to the extent such representations and warranties relate to an earlier date, in which case as of such date); provided, however, that any inaccuracy in the capital stock, restricted stock and options of Affinity or other rights to acquire securities of Affinity that results in additional costs (including the aggregate Merger Consideration) in excess of $1,000,000 shall be deemed to be material, and (ii) regarding all other representations and warranties (without giving effect to any materiality qualifiers) shall be true and correct as of the closing date of the merger as though made on and as of such date (except to the extent such representations and warranties relate to an earlier date, in which case as of such date), except where such failures to be true and correct would not have a Company Material Adverse Effect;

    Affinity has performed in all material respects the obligations required to be performed by it at or prior to the merger;

    since January 1, 2016, there will not have occurred or be continuing a Company Material Adverse Effect; and

    Parent shall have received a certificate signed by an executive officer of Affinity certifying as to the matters set forth in the three preceding bullets.

Effect of the Merger on the Common Stock

        At the Effective Time, by virtue of the Merger and without any action on the part of Affinity, the Purchaser Parties or the holders of any Affinity common stock:

    Each share of common stock of Affinity issued and outstanding immediately prior to the Effective Time (other than (i) shares to be cancelled or contributed pursuant to the bullet below, (ii) restricted stock to be treated in accordance with the "The Merger Agreement—Treatment of Stock Options and Restricted Stock—Restricted Stock" section below, and (iii) any dissenting shares (see the "The Merger Agreement—Dissenting Shares" section below)) will be converted automatically into and will represent the right to receive $17.35 in cash, without interest and subject to withholding tax. Each such share will no longer be outstanding and will automatically be cancelled and cease to exist. Immediately following the Effective Time, an equivalent amount of such shares shall be issued by Affinity to Parent.

    Each share held in treasury or owned, directly or indirectly, by the Purchaser Parties immediately prior to the Effective Time (other than shares of Affinity common stock beneficially owned by Z Capital and its affiliates contributed to Parent (the "Rollover Investment")) immediately prior to the Effective Time) will automatically be cancelled and cease to exist, and no consideration will be paid for such shares.

    Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time will be cancelled as of the Effective Time.

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Treatment of Stock Options and Restricted Stock

Stock Options

        At the Effective Time, each option to purchase shares, whether vested or unvested, that is outstanding immediately prior to the Effective Time will be treated in accordance with the terms and conditions applicable to such stock option immediately prior to the Effective Time under any employee or director stock option, stock purchase or equity compensation plan, arrangement or agreement of Affinity, including Affinity's Amended and Restated 2011 Long Term Incentive Plan (the "Company Stock Plans"), or any other contract except as otherwise agreed by Parent and the holder of such stock option.

Restricted Stock

        At the Effective Time, each outstanding share of restricted stock granted under any Company Stock Plan subject to time-based vesting restrictions ("Company Time-Based Restricted Stock") that is vested and outstanding immediately prior to the Effective Time (excluding shares subject to the Rollover Investment) will be cancelled and converted into the right to receive from Affinity as soon as practicable following (and in no event later than three business days following) the Effective Time an amount in cash (without interest, and subject withholding tax) equal to the product of (i) $17.35 and (ii) the number of shares subject to such Company Time-Based Restricted Stock. Immediately following the Effective Time, an equivalent amount of such shares of Company Time-Based Restricted Stock will be issued by Affinity to Parent. At the Effective Time, each outstanding share of Company Time-Based Restricted Stock that is unvested and outstanding immediately prior to the Effective Time (excluding shares subject to the Rollover Investment) shall be treated in accordance with the same terms and conditions applicable to such Company Time-Based Restricted Stock immediately prior to the Effective Time under the Company Stock Plans or any other contract except as otherwise agreed by Parent and the holder of such Company Time-Based Restricted Stock.

        At the Effective Time, each outstanding share of restricted stock granted under any Company Stock Plan subject to performance-based vesting restrictions ("Company Performance-Based Restricted Stock") that is vested and outstanding immediately prior to the Effective Time (excluding shares subject to the Rollover Investment) shall be cancelled and converted into the right to receive from Affinity as soon as practicable following (and in no event later than three business days following) the Effective Time an amount in cash (without interest, and subject to withholding tax) equal to the product of (i) $17.35 and (ii) the number of shares subject to such Company Performance-Based Restricted Stock. Immediately following the Effective Time, an equivalent amount of such shares of Company Performance-Based Restricted Stock will be issued by Affinity to Parent. At the Effective Time, each outstanding share of Company Performance-Based Restricted Stock that is unvested and outstanding immediately prior to the Effective Time (excluding shares subject to the Rollover Investment) shall be treated in accordance with the same terms and conditions applicable to such Company Performance-Based Restricted Stock immediately prior to the Effective Time under the Company Stock Plans or any other contract except as otherwise agreed by Affinity and the holder of such Company Performance-Based Restricted Stock.

Dissenting Shares

        Shares issued and outstanding immediately prior to the Effective Time held by any holder who has not voted such shares in favor of the merger and who has properly demanded and perfected dissenter's rights under Nevada Revised Statute, or NRS, 92A.300 through 92A.500 will not be converted into the right to receive $17.35 in cash but will instead be entitled to receive such payment from Affinity as determined pursuant to the NRS. Any shares held by any holder that fails to perfect such holder's right to dissent and demand payment of fair value under the NRS will be deemed to have been converted

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into, as of the Effective Time, the right to receive, without any interest thereon, $17.35 in cash and such share shall no longer be a dissenting share. Affinity will give prompt notice to Parent of any written demands received by Affinity for payment of the fair value for any shares and any attempted withdrawals of such demands, and Parent shall have the right to participate in all negotiations and proceedings with respect to such demands.

Interim Operations

        Pursuant to the merger agreement, except as provided in the merger agreement, as required by law or with the written consent of Parent, during the period from the date of the merger agreement to the Effective Time, Affinity has agreed that it will, and will cause its subsidiaries to, conduct its business in the ordinary course in compliance in all material respects with all applicable laws, use its commercially reasonable efforts to preserve intact its business organization and assets in all material respects, keep available the services of (and preserve its relationship with) its officers and employees, and preserve in all material respects its present relationships and goodwill with governmental entities, customers, suppliers, lenders, licensors, licensees, distributors, creditors, lessors and other persons with which it has material business relations. During such period, Affinity has agreed not to, and not to permit any of its subsidiaries to, take any of the following actions without the prior consent of Parent, not to be unreasonably withheld, except in certain circumstances:

    adopt or propose changes to its organizational documents;

    issue, sell, pledge, grant or otherwise encumber any shares of its capital stock or other securities subject to certain exemptions;

    declare, set aside, make or pay any dividend or other distribution with respect to any of its capital stock;

    adjust, split, combine, reclassify, redeem or otherwise acquire any of its capital stock;

    merge or consolidate with any other person;

    acquire any entity, property or assets (other than in the ordinary course of business or pursuant to existing contracts) in excess of $250,000;

    sell, lease, license, pledge, incur any lien on or otherwise dispose of any entity, property or asset in excess of $250,000 (other than in the ordinary course of business or pursuant to existing contracts);

    enter into, materially amend, cancel or terminate any material contract, adversely modify or fail to maintain any material permit or enter into any amendment or other modification to the terms of any indebtedness of Affinity or its subsidiaries (other than the planned amendment to Affinity's existing credit agreement);

    authorize any new capital expenditures which are, in the aggregate, in excess of Affinity's specified capital expenditure budget, other than any capital expenditures not in excess of $250,000 in the aggregate in order to address exigent circumstances;

    in excess of $250,000 in the aggregate, (i) make any loans, advances or capital contributions to, or investments in, any other person, subject to certain exemptions, (ii) incur any indebtedness or issue or sell any debt securities (other than extensions of credit under Affinity's existing credit agreement in the ordinary course of business), or (iii) assume, guarantee, or otherwise become liable for the indebtedness of another person;

    materially increase the salary, wages, bonuses, compensation or benefits of any current or former director, executive officer or consultant; grant or increase any severance, termination or retention payment or other similar payment to any director, executive officer or consultant; enter

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      into any employment, consulting, change in control, deferred compensation or other similar agreement with any director, officer, employee or consultant (except that Affinity may in the ordinary course of business enter into offer letters or employment agreements with new hires to fill a vacancy that provide for "at will" employment and annual compensation of less than $100,000, without severance or similar obligation); amend or adopt any compensation or benefit plan including any pension, retirement, profit-sharing, bonus, severance or other employee benefit or welfare benefit plan with or for the benefit of any current or former director, officer, consultant or employee; accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation; or enter into any collective bargaining agreement or similar agreement;

    implement or adopt any material change in its financial accounting principles, policies or practices, except to conform to changes in accounting rules or GAAP;

    make or change any material tax election; adopt or change any accounting method with respect to taxes; file any material amendment to any tax return with respect to any material taxes; enter into any closing agreement, tax sharing agreement or tax indemnity agreement relating to material taxes; settle, consent to or compromise any proceeding with respect to any material tax claim or assessment or seek any material tax ruling from any governmental authority; surrender any right to claim a refund of material taxes; consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment; file any material tax return inconsistent with past practice; or change any tax accounting period;

    adopt or enter into a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation or other reorganization (other than the merger);

    other than in the ordinary course of business, terminate or cancel existing insurance policies without obtaining comparable replacement policies to the extent available for a similar reasonable cost;

    compromise, settle or agree to settle any legal action (including relating to the merger), or consent to the same, other than compromises, settlements or agreements that involve only the payment of money damages not in excess of $100,000 in the aggregate, after taking into account any insurance proceeds;

    enter into any new line of business material to Affinity and its subsidiaries, taken as a whole;

    effectuate or permit a "plant closing" or "mass layoff," as those terms are defined in the U.S. Worker Adjustment and Retraining Notification Act of 1988, or the WARN Act, affecting in whole or in part any site of employment, facility, operating unit or employee of Affinity or any of its subsidiaries;

    alienate, encumber, transfer, option, lease, assign, sell or convey its interest or any material portion thereof in any material leased real property or owned real property, or enter into any agreement or understanding, or entertain any offers or solicitations, to do so; or enter into or record any easement, right-of-way, covenant, condition, restriction, license, permit, agreement, lease, mortgage, deed of trust, lien or other instrument against any material owned real property or leased real property or any material portion thereof, except for permitted liens as defined in the merger agreement or as may be required to enable Affinity to perform its obligations under the merger agreement; or

    agree to take any of the actions described in the foregoing bullets.

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Employee Benefits

        Parent and Merger Sub have agreed to maintain employee benefit plans and arrangements at levels substantially comparable to those in effect prior to the merger for a period of 12 months following the merger.

Consents and Filings

        Each of the parties to the merger agreement will, subject to certain exceptions, use its reasonable best efforts to take, or to cause to be taken, all action to do, or cause to be done, all things necessary, proper or advisable under applicable laws (other than under any applicable gaming law) to consummate the merger at the earliest practicable date, including:

    prepare and file all forms, registrations and notices required to consummate the merger (other than gaming approvals), including the necessary filings under the HSR Act;

    defend all legal actions by or before any governmental entity (other than any gaming authority) relating to the merger; and

    provide all necessary notices and/or obtain all necessary waivers, consents and/or approvals from all third parties other than governmental entities.

        The Purchaser Parties agree to prepare and submit to the gaming authorities all applications and supporting documents necessary to obtain all required gaming approvals.

No Solicitation

        Affinity and its subsidiaries and their officers and directors will, and Affinity will use its reasonable best efforts to instruct and direct its and its subsidiaries' other representatives to, immediately cease and terminate any and all existing activities, discussions or negotiations with any persons that may be ongoing with respect to an Acquisition Proposal (as defined below). Affinity and its subsidiaries and their officers and directors will, and Affinity will use its reasonable best efforts to instruct and direct its and its subsidiaries' other representatives to, not:

    initiate, solicit or knowingly encourage any inquiries or the making of any proposal or offer that constitutes an Acquisition Proposal;

    engage in, enter into, continue or otherwise participate in any discussions (other than to request clarification of an Acquisition Proposal that has already been made for purposes of assessing whether such Acquisition Proposal is or could reasonably be expected to lead to a Superior Proposal (as defined below)) or negotiations regarding, or provide any non-public information or data concerning Affinity or its subsidiaries to any person relating to, any Acquisition Proposal, or

    otherwise knowingly facilitate any such inquiries, proposals, discussions or negotiations or any effort or attempt by any person to make an Acquisition Proposal, or publicly propose to do any of the foregoing.

        However, prior to the time stockholder approval is obtained for the merger, if Affinity receives a written Acquisition Proposal (that did not result from a breach of the paragraph above) from any person, Affinity and its representatives may contact such person to clarify the terms and conditions thereof, and:

    Affinity and its representatives may provide nonpublic information and data concerning Affinity and its subsidiaries in response to a request therefor by such person if Affinity receives from such person an executed Acceptable Confidentiality Agreement (as defined below) or has a confidentiality agreement with such person containing terms that are not materially less

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      favorable to Affinity in the aggregate (provided, that Affinity shall promptly make available to the Purchaser Parties any material nonpublic information or data concerning Affinity or its subsidiaries that Affinity made available to any person given such access which was not previously made available to the Purchaser Parties); and

    Affinity and its representatives may engage or participate in any discussions or negotiations with such person with respect to such Acquisition Proposal,

if, prior to taking any action described in the two bullets above, (i) the Special Committee determines in good faith (after the Special Committee's consultation with outside legal counsel) that failure to take such action would reasonably be likely to be inconsistent with the directors' fiduciary duties under applicable law and (ii) the Special Committee determines in good faith (after the Special Committee's consultation with its financial advisor and outside legal counsel) that such Acquisition Proposal either constitutes a Superior Proposal or could reasonably be expected to result in a Superior Proposal.

        Furthermore, prior to the time stockholder approval is obtained for the merger, and after compliance with the Match Right (as defined below), the Board, acting upon the recommendation of the Special Committee, with respect to any Acquisition Proposal that the Special Committee believes in good faith (after consultation with its financial advisor and outside legal counsel) is a Superior Proposal, may:

    withhold, withdraw, qualify or modify (or publicly propose or resolve to withhold, withdraw, qualify or modify), in a manner adverse to Parent, the Company Recommendation (as defined below) or fail to include the Company Recommendation in this proxy statement; or authorize, adopt, approve, recommend or otherwise declare advisable, or publicly propose to authorize, adopt, approve, recommend or declare advisable, an Acquisition Proposal (any of the foregoing, a "Change of Recommendation"); and/or

    terminate the merger agreement and authorize Affinity to enter into an agreement with respect to a Superior Proposal if, concurrently with or immediately following such termination, Affinity enters into an agreement with respect to such Superior Proposal and, prior to or concurrently with such termination, Affinity pays to Parent $12,425,750.

        Additionally, prior to the time stockholder approval is obtained for the merger, and after compliance with the Match Right (as defined below), the Board, acting upon the recommendation of the Special Committee, in response to a material event, occurrence, development or state of facts or circumstances that is not known by the Board prior to August 22, 2016, may make a Change in Recommendation if the Special Committee determines in good faith (after consultation with outside legal counsel) that failure to do so would reasonably be likely to be inconsistent with its fiduciary obligations under applicable law.

        Nothing in the merger agreement will prohibit Affinity, the Board or any committee thereof from complying with securities laws in respect of any Acquisition Proposal, including making any disclosure to the stockholders of Affinity. However, any public disclosure by Affinity relating to an Acquisition Proposal (other than a "stop look and listen" statement) shall be deemed to be a Change of Recommendation unless the Board of Directors expressly and publicly reaffirms the Company Recommendation within three business days following any request by Parent for such reaffirmation. Other than as otherwise provided in the merger agreement, as described in this "The Merger Agreement—No Solicitation" section, neither the Board of Directors nor any committee thereof, including the Special Committee, will make or resolve to make a Change of Recommendation.

        If any Acquisition Proposal (or inquiry that would reasonably be expected to lead to an Acquisition Proposal) is received by, any nonpublic information or access to Affinity's properties, assets, books or records is requested from, or any discussions or negotiations are sought to be initiated or continued with, Affinity or any of its representatives, Affinity will notify Parent (specifying the material terms and

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conditions of any such proposals or offers) within forty-eight hours and will thereafter keep Parent reasonably informed of the status and terms of any such proposals, offers, discussions or negotiations.

        The Board will not make a Change of Recommendation and/or terminate the merger agreement pursuant to the second bullet under the third paragraph of this "The Merger Agreement—No Solicitation" section until it has first taken the following actions (the "Match Right"):

    the Acquisition Proposal (if any) did not result from a breach of the first paragraph of this "The Merger Agreement—No Solicitation" section;

    if applicable, Affinity will comply in all material respects with its obligations under the second paragraph of this "The Merger Agreement—No Solicitation" section with respect to such Acquisition Proposal;

    if applicable, the Board will determine in good faith (after consultation with its financial advisor and outside legal counsel) that such Acquisition Proposal (if any) is a Superior Proposal;

    Affinity will provide written notice to Parent that Affinity intends to take such action and specifying in reasonable detail the circumstances giving rise to such action, including in the case such action is proposed to be taken in connection with a Superior Proposal, the information specified in the immediately preceding paragraph of this "The Merger Agreement—No Solicitation" section;

    during the three business day period following Parent's receipt of the notice pursuant to the bullet above, Affinity will, and will cause its financial and legal advisors and other representatives, to negotiate with Parent (to the extent Parent desires to negotiate) to make such adjustments in the terms and conditions of the merger agreement and any other agreements related to the merger such that such Superior Proposal ceases to constitute a Superior Proposal (if applicable) or the failure to take such action would no longer reasonably be likely to be inconsistent with the Board's fiduciary obligations under applicable law; and

    following the end of such three business day period, the Board will determine in good faith, taking into account any changes to the terms of the merger agreement and any other agreements related to the merger proposed Parent pursuant to the immediately preceding bullet or otherwise, that the Superior Proposal continues to constitute a Superior Proposal (if applicable) or that the failure to take such action would reasonably be likely to continue to be inconsistent with the Board's fiduciary obligations under applicable law.

Certain amendments of such Superior Proposal shall require a new notice to Parent, and Affinity will be required to comply again with the requirements of this paragraph of "The Merger Agreement—No Solicitation" section, except that the three business day period will be reduced to two business days.

        An "Acceptable Confidentiality Agreement" means a confidentiality agreement containing terms that are not less favorable to Affinity in the aggregate than the terms contained in the confidentiality agreement between Affinity and Z Capital.

        An "Acquisition Proposal" means any proposal or offer from any person or group of persons, other than Parent or one of its subsidiaries or any of their affiliates, for (i) a merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving an acquisition of Affinity (or any subsidiary or subsidiaries of Affinity whose business constitutes 20% or more of the revenues or assets of Affinity and its subsidiaries, taken as a whole) or (ii) the acquisition in any manner, directly or indirectly, of over 20% of the equity securities or consolidated total assets of Affinity and its subsidiaries, in each case other than the merger.

        A "Superior Proposal" means a bona fide Acquisition Proposal (that did not result from a breach by Affinity of the first paragraph above under "—No Solicitation") (with the percentages set forth in

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the definition of such term changed from 20% to 50%), that the Special Committee has determined in its good faith judgment (after consultation with its financial advisor and outside legal counsel) (i) is reasonably likely to be consummated in accordance with its terms, taking into account all legal, financial and regulatory aspects of such proposal and the person making the proposal (including the expected timing and likelihood of consummation, taking into account any governmental and other approval requirements and any required third party financing and financing commitments with respect thereto), and (ii) if consummated, would result in a transaction more favorable to Affinity's stockholders than the transaction contemplated by the merger agreement (including any revisions to the terms of the merger agreement proposed by Parent pursuant to its Match Right).

        The "Company Recommendation" means a recommendation where the Board, at a meeting held on August 22, 2016, and upon the unanimous recommendation of the Special Committee, adopted resolutions approving and declaring advisable the merger agreement and the transactions contemplated thereby and, subject to the "The Merger Agreement—No Solicitation" section below, resolved to recommend that Affinity's stockholders adopt and approve the merger agreement and the transactions contemplated thereby.

Access to Information

        During normal business hours throughout the period prior to the Effective Time, upon reasonable notice, Affinity will provide Parent and Parent's representative, including its financing sources, reasonable access to Affinity's officers, employees, properties, offices, other facilities, books, contracts and records and furnish financial, operating and other data as reasonably requested. All information obtained by Parent pursuant to the merger agreement shall continue to be governed by the confidentiality agreement entered into between Affinity and Z Capital.

Director and Officer Indemnification and Insurance

        The merger agreement provides that, for a period of six years after the merger, Affinity will indemnify all present and former directors, officers or employees of Affinity and its subsidiaries against all claims, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses (including attorneys' fees) incurred in connection with any civil, criminal, administrative or investigative claim, action, suit, proceeding or investigation arising out of or pertaining to matters existing or occurring at or prior to the merger, to the fullest extent permitted by law. Affinity also has agreed to advance expenses incurred in the defense of any such action to the fullest extent permitted under applicable law, provided, that any person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification.

        The merger agreement also provides that Affinity will maintain its current directors' and officers' insurance and fiduciary liability insurance coverage or cause to be provided substitute polices on such basis or cause to be purchased a "tail policy" for at least six years after the merger; provided that the surviving corporation will not be required to pay with respect to such insurance policies in respect of any one policy year annual premiums in excess of 300% of the annual premium paid for such insurance in effect on the date of the merger agreement. In addition, Affinity has agreed to maintain in effect for a period of six years after the Effective Time provisions in its articles of incorporation and bylaws relating to indemnification and exculpation from liabilities and advancement of expenses that are no less favorable than those in effect on the date of the merger agreement.

Agreements Concerning the Purchaser Parties

        Until after the Effective Time, neither Parent nor Merger Sub will engage in any activity except for activities related to the merger and the other transactions contemplated by the merger agreement, or

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take any action that is reasonably likely to prevent or delay the consummation of the merger or any other transaction contemplated by the merger agreement.

        Under the merger agreement, Parent guarantees the due, prompt and faithful payment, performance and discharge by Merger Sub and the surviving corporation of, and the compliance by Merger Sub and the surviving corporation with, all of their respective covenants, agreements, obligations and undertakings under the merger agreement, and covenants and agrees to take all actions necessary or advisable to cause and ensure such payment, performance and discharge by Merger Sub and the surviving corporation under the merger agreement.

        Neither Parent nor Merger Sub nor any of their affiliates will enter into any contract, undertaking, commitment, agreement, obligation or understanding with any holder or beneficial owner of any Affinity shares (other than any such holder or owner that is an affiliate of Parent), or any director, officer or employee of Affinity or any of its subsidiaries (other than any director affiliated with Parent or any of its affiliates (other than Affinity or any of its subsidiaries) outside his or her capacity as a director of Affinity or any of its subsidiaries), relating in any way to any of the transactions contemplated by the merger agreement or the operations of Affinity at any time prior to the stockholder meeting.

Financing

        Subject to the terms and conditions of the merger agreement, Parent has agreed (i) to use its reasonable best efforts to arrange and obtain the debt financing on the terms and conditions described in the debt commitment letter (see "Special Factors—Merger Financing") and to cause the debt financing to be provided on or prior to the closing of the merger, (ii) to maintain in effect the equity financing on the terms and conditions described in the equity commitment letters and to consummate the equity financing on or prior to the closing of the merger, and (iii) to cause the Rollover Investment to be consummated at the closing on the terms and conditions described in the rollover commitment letter. In the event any portion of the financing becomes unavailable on the terms and conditions and from the sources contemplated in the applicable letters, Parent will promptly notify Affinity and will use its reasonable best efforts to obtain alternative financing in a like amount and on like terms as promptly as practicable; provided, however, that in no event shall Parent be required to obtain alternative financing on terms less favorable to Parent in any material respect. Neither Parent's obtaining all or any of the financing or any alternative financing, nor the closing of the contribution to Parent of Affinity common stock beneficially owned by Z Capital and its affiliates, is a condition to the closing of the merger.

Debt and Equity Commitments

        The merger agreement requires that Parent use its reasonable best efforts to obtain the debt financing contemplated by the debt commitment letter on the terms and conditions described therein, and to use its reasonable best efforts to enforce its rights under the debt commitment letter and the definitive agreements with respect to the debt financing. In addition, in the event any portion of the debt financing or the equity financing becomes unavailable on the terms and conditions and from the sources contemplated in the respective commitment letters, Parent will promptly notify Affinity and will use its reasonable best efforts to obtain alternative financing and will deliver to Affinity copies of all agreements pursuant to which any such alternative source has committed to provide any portion of the debt financing; provided, however, that in no event shall Parent be required to obtain alternative financing on terms less favorable to Parent in any material respect.

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        Parent must not, without the prior written consent of Affinity, amend, replace, supplement or otherwise modify, or waive any of its rights under, the debt financing, the equity financing or the Rollover Investment, if such action would:

    reduce the aggregate amount of the financing and the Rollover Investment below the amount that would be sufficient for Parent to consummate the transactions contemplated by the merger agreement, including the payment of all related fees and expenses;

    modify or expand upon any of the conditions precedent to the financing or the Rollover Investment in a manner that would prevent, impede or materially delay the closing or make funding or the Rollover Investment materially less likely to occur (including any agreement, amendment, modification or waiver of the date in the debt financing that would permit or cause the amendment of Affinity's existing credit agreement to occur later than September 30, 2016);

    be reasonably expected to prevent, impede or materially delay the availability of the Rollover Investment, adversely affect the obligations of Affinity with respect to the financing in any material respect, prevent, impede or materially delay the availability of the financing or the Rollover Investment or otherwise make funding or the Rollover Investment materially less likely to occur;

    adversely impact the ability of Parent or Merger Sub to enforce their respective rights under the financing commitment letters or the rollover commitment letter; or

    amend or modify flex provisions (including successful syndication levels).

        Parent shall keep Affinity reasonably informed on a timely basis and in reasonable detail of the status of Parent's efforts to obtain the debt financing, the equity financing and the Rollover Investment (including providing Affinity with copies of all definitive financing documents related to the debt financing and equity financing) and to satisfy the conditions thereof, including advising and updating Affinity, in a reasonable level of detail, with respect to status and the proposed closing date, and giving Affinity prompt notice of any material adverse change with respect to the debt financing, the equity financing and the Rollover Investment. Without limiting the foregoing, Parent shall notify Affinity promptly (and in any event within two business days) if at any time prior to the closing:

    any commitment letter relating to the debt financing, equity financing or Rollover Investment expires or is terminated for any reason;

    Parent obtains knowledge of any material breach or default or any threatened material breach or default (or any event or circumstance that, with or without due notice, lapse of time or both, would reasonably be expected to give rise to any material breach or default) by any party to any commitment letter relating to the debt financing, equity financing or Rollover Investment;

    Parent receives any communication with respect to any (A) actual or threatened material breach, default, termination or repudiation by any party to the commitment letter relating to the debt financing, equity financing or Rollover Investment or (B) material dispute or disagreement between or among any parties to the commitment letter relating to the debt financing, equity financing or Rollover Investment;

    any financing source or party to the Rollover Investment refuses to provide or expresses to Parent an intent to refuse to provide all or any material portion of the debt financing, the equity financing or the Rollover Investment; or

    Parent, for any reason, no longer believes in good faith that it will be able to obtain all or any material portion of the debt financing, the equity financing or the Rollover Investment.

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        Pursuant to the merger agreement and the respective terms of the commitment letters, the aggregate proceeds of the debt and equity financings, when taken together with the unrestricted cash of Affinity and its subsidiaries, are to be used to pay the aggregate Merger Consideration, certain fees and expenses in connection with any amendment to Affinity's credit agreement and the anticipated fees and expenses related to the merger, the financing thereof and the other transactions contemplated by the merger agreement.

Cooperation

        Affinity has agreed to use its reasonable best efforts to provide, and to cause its subsidiaries and representatives to use their reasonable best efforts to provide, at the sole cost and expense of Parent, all cooperation reasonably requested by Parent in connection with obtaining the debt financing and the equity financing (to the extent not unreasonably interfering with the business or operation of Affinity), including by using its reasonable best efforts to:

    make Affinity's senior officers reasonably available to participate in a reasonable number of meetings, presentations, road shows, due diligence sessions, drafting sessions and sessions with rating agencies;

    reasonably cooperate with the financing sources' evaluation of Affinity's and its subsidiaries' assets for the purpose of establishing collateral arrangements, including agreeing to pledge, grant security interests in, and otherwise grant liens on, Affinity's and its subsidiaries' assets pursuant to such documents as may be reasonably requested, provided that any obligations contained in any such documents will be subject to and not effective prior to the closing;

    reasonably cooperate with the marketing and due diligence efforts of Parent and the financing sources, including providing such financial and other information to the extent available as may be reasonably requested and using commercially reasonable efforts to assist in permitting the syndication efforts to benefit from existing banking relationships;

    furnish Parent and the financing sources with Affinity's audited financial statements for the fiscal year ending December 31, 2015, unaudited financial statements for any fiscal quarter after December 31, 2015 that has ended at least 45 days prior to the closing and other customary business, financial and other information regarding Affinity and its subsidiaries;

    as reasonably requested by Parent, obtain surveys, title insurance, and consents customary for financings similar to the debt financing and equity financing and assist Parent with obtaining customary legal opinions;

    execute and deliver such documents or information as may be reasonably requested in connection with the debt financing, including documents relating to the repayment of Affinity's existing indebtedness and the release of related liens, all documentation and other information required by bank regulatory authorities under applicable "know-your-customer" and anti-money laundering rules and regulations and all such officer's certificates as are customary in financings of such type;

    as reasonably requested by Parent, take all corporate actions reasonably necessary to permit the consummation of the debt financing, the equity financing and the Rollover Investment; and

    as reasonably requested by Parent, assist in the preparation and execution of one or more commitment letters, underwriting or placement agreements, registration statements, credit agreements and indentures.

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Marketing Period

        Under the merger agreement, Affinity has agreed to allow Parent and its financing sources a period of 15 consecutive business days to market the debt financing (the "marketing period"). Such 15 consecutive business day period will begin on either (x) the earliest of (i) the first business day following September 30, 2016, unless such date is extended pursuant to the mutual agreement of Merger Sub and the debt financing sources, then the first business day following such later date as was so agreed, (ii) a date on or prior to September 30, 2016 on which Affinity's credit agreement has been amended pursuant to the terms of the debt commitment letter, and (iii) such earlier date as is mutually agreed among the parties to the debt commitment letter or, (y) if later than any date specified in the immediately preceding clause (x), the date upon which the debt financing sources has received the required bank information pursuant to the debt commitment letter; provided that (a) if the marketing period has not been completed on or prior to December 16, 2016, the marketing period shall commence no earlier than January 3, 2017, and (b) November 25-26, 2016 shall be excluded from the determination of such 15 consecutive business day period.

Amendment of Existing Credit Agreement

        Following the written request of Parent, Affinity shall use its reasonable best efforts to assist Parent in obtaining an amendment to Affinity's existing credit agreement (agented by Credit Suisse AG, Cayman Islands Branch), which amendment will only be effective from and after closing, to increase the outstanding amount under such credit agreement, permit additional indebtedness, permit the consummation of the merger and the payment of the amounts payable under the merger agreement and effectuate such other modifications as Parent may request, in form and substance satisfactory to Parent in Parent's sole and absolute discretion, as promptly as practicable. Any fees and expenses of the agent and/or lenders payable for the credit agreement amendment, and any reasonable and documented out-of-pocket costs, fees and expenses of Affinity in assisting Parent, shall be paid by the Purchaser Parties or (after closing) the surviving corporation.

Director Resignations

        Affinity shall use its reasonable best efforts to obtain and deliver to Parent at the closing evidence reasonably satisfactory to Parent of the resignation, effective as of the Effective Time, of the directors of Affinity or any subsidiary of Affinity designated by Parent in writing at least three business days prior to the closing.

Standstill

        The Purchaser Parties agree that, until the earlier of the Effective Time and the date of termination of the merger agreement pursuant the "The Merger Agreement—Termination" section below, unless specifically consented to in writing by the Special Committee, neither Parent, Merger Sub nor any of their affiliates (including Z Capital), nor any other person acting at their direction or on their behalf, shall in any manner directly or indirectly initiate, effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in, any acquisition of any equity securities (or beneficial ownership thereof, and including any derivative, swap or other transaction the purpose of which is to give or provide economic or financial exposure similar to the ownership of any such securities), or voting control of any equity securities, any of Affinity or any of its subsidiaries.

Termination

        The merger agreement may be terminated and the merger may be abandoned at any time prior to the Effective Time, whether before or after the stockholders have adopted the merger agreement:

    by mutual written consent of Parent and Affinity;

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    by either Parent or Affinity:

    (i)
    if the merger shall not have been consummated on or before April 22, 2017 (the "termination date"), unless the delay is the result of the material breach of or failure to perform in any material respect any agreement set forth in the merger agreement by the party seeking termination (and further, if the marketing period will be completed by April 22, 2017, but it has not been completed prior to the third business day before April 22, 2017, then the termination date will automatically be extended by four business days);

    (ii)
    if any court of competent jurisdiction or any state or federal governing body has issued a final and non-appealable order, decree or ruling or taken any other action restraining or otherwise prohibiting the merger (provided, that the party seeking to terminate the merger agreement pursuant to this bullet shall have complied with its obligations as described in "The Merger Agreement—Consents and Filings" section above); or

    (iii)
    if the merger agreement is not adopted by the holders of at least a majority of the outstanding shares of Affinity common stock; or

    by Affinity:

    (i)
    if the Purchaser Parties breach or fail to perform any of their representations, warranties, covenants or agreements under the merger agreement, which breach or failure to perform (A) would result in a failure of any condition to effect the merger as described in the first six bullets of the "The Merger Agreement—Conditions to the Merger" section above, and (B) cannot be cured by April 22, 2017 or, if curable, is not cured prior to the earlier of (i) 30 days following receipt by Parent of written notice of such breach or failure and (ii) April 22, 2017; provided, however that a failure by Parent to file the Schedule 13E-3 by the date specified in the merger agreement (assuming that Affinity is prepared to file this proxy statement) shall be deemed such a breach or failure if (i) Parent failed to procure the applicable signatures from its affiliates required by Schedule 13E-3, or (ii) only to the extent that such failure to file the Schedule 13E-3 was primarily due to an act, failure to act, or omission by Parent (without regard to any other person), and only subject to a cure period of ten days following receipt by Parent of written notice of such breach or failure by Affinity; provided, further, that Affinity's right to terminate the merger agreement pursuant to this bullet expires on the fifteenth day following (x) if such breach cannot be cured, the date on which Affinity notifies Parent in writing of such breach or Parent notifies Affinity in writing of such breach, or (y) if such breach is curable, the expiration of a 30-day cure period; provided, further, that Affinity shall not have the right to terminate the merger agreement pursuant to this bullet if it is then in material breach of any of its representations, warranties, covenants or agreements under the merger agreement;

    (ii)
    prior to the time stockholder approval is obtained for the merger, if (A) the Board, after complying with the provisions of the "The Merger Agreement—No Solicitation" section above, authorizes Affinity to enter into an alternative acquisition agreement with respect to a Superior Proposal, (B) concurrently with or immediately following termination of the merger agreement, Affinity enters into an alternative acquisition agreement with respect to such Superior Proposal and (C) prior to or concurrently with such termination, Affinity pays to Parent $12,425,750; or

    (iii)
    if (A) all of the conditions set forth in the first four and last four bullets of the "The Merger Agreement—Conditions to the Merger" section above (other than those conditions that by their terms are to be satisfied at the closing, but subject to the

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        satisfaction or waiver of those conditions or unless the failure to be so satisfied is due to any material breach or inaccuracy of any representation or warranty contained in the merger agreement on the part of Parent or Merger Sub or the failure of Parent or Merger Sub to perform or comply with any of its respective material covenants or agreements contained in the merger agreement) have been satisfied or waived in accordance with the merger agreement, (B) Affinity is ready, willing and able to consummate the closing and (C) the Purchaser Parties shall have failed to consummate the closing on the day that is three business days following the day closing is required to occur under the merger agreement and would have otherwise occurred; or

    by Parent:

    (i)
    if Affinity shall have breached or failed to perform any of its representations, warranties, covenants or agreements set forth in the merger agreement, which breach or failure to perform (A) would result in the failure of a condition set forth in the first four and last four bullets of the "The Merger Agreement—Conditions to the Merger" section above and (B) cannot be cured by April 22, 2017 or, if curable, is not cured prior to the earlier of (i) 30 days following receipt by Parent of written notice of such breach or failure and (ii) April 22, 2017; provided, however, that a failure by Affinity to file this proxy statement by the date specified in the merger agreement (assuming that Parent is prepared to file Schedule 13E-3) shall be deemed such a breach or failure only to the extent that such failure to file this proxy statement was primarily due to an act, failure to act, or omission by Affinity (without regard to any other person), and only subject to a cure period of ten days following receipt by Affinity of written notice of such breach or failure by Parent; provided, further, that Parent's right to terminate the merger agreement pursuant to this bullet expires on the fifteenth day following (x) if such breach cannot be cured, the date on which Parent notifies Affinity in writing of such breach or Affinity notifies Parent in writing of such breach, or (y) if such breach is curable, the expiration of a 30-day cure period; provided, further, that Parent shall not have the right to terminate the merger agreement pursuant to this bullet if Parent or Merger Sub is then in material breach of any of its representations, warranties, covenants or agreements under the merger agreement; or

    (ii)
    if (A) the Board or the Special Committee shall have effected a Change of Recommendation, (B) Affinity shall have committed a breach in any material respect of any of its obligations under the first paragraph of the "The Merger Agreement—No Solicitation" section above, (C) Affinity shall have failed to include in this proxy statement, or shall have amended this proxy statement to exclude, the Company Recommendation or (D) Affinity shall have approved or entered into an alternative acquisition agreement.

Company Termination Fee

        Affinity shall pay Parent $12,425,750 if the merger agreement is terminated by:

    either Parent or Affinity pursuant to clause (i) or (iii) under the second bullet the "The Merger Agreement—Termination" section above and (A) in the case of termination pursuant to clause (iii) under the second bullet the "The Merger Agreement—Termination" section above, at the time of the stockholder meeting contemplated by this proxy statement, neither Parent nor Merger Sub is in material breach of any of its representations, warranties or covenants in the merger agreement, (B) in the case of termination pursuant to clause (i) under the second bullet the "The Merger Agreement—Termination" section above, (1) at the time of such termination, Parent has not been notified by any gaming authority that such gaming authority will not grant

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      any approval required as a condition to closing, and (2) at the time of such termination, neither Parent nor Merger Sub is in material breach of any of its representations, warranties or covenants in the merger agreement, (C) at any time after the date of the merger agreement and prior to the date of such termination, a bona fide Acquisition Proposal shall have been communicated to the senior management of Affinity or the Board or shall have been publicly announced or publicly made known to Affinity's stockholders, and not withdrawn prior to such date, and (D) within twelve months after such termination, Affinity shall have entered into a definitive agreement with respect to, or shall have consummated, a bona fide Acquisition Proposal, which need not be the same Acquisition Proposal as set forth in subclause (C) above (for purposes of this bullet, references to "20% or more" in the definition of Acquisition Proposal will be "more than 50%");

    Affinity pursuant to clause (ii) under the third bullet the "The Merger Agreement—Termination" section above; or

    Parent pursuant to clause (i) or (ii) under the fourth bullet the "The Merger Agreement—Termination" section above.

Parent Termination Fee

        If the merger agreement is terminated by:

    Affinity or Parent pursuant to clause (i) or (ii) under the second bullet the "The Merger Agreement—Termination" section above and, at the time of such termination, (x) all of the conditions to closing set forth in the first and third bullets and the last four bullets of the "The Merger Agreement—Conditions to the Merger" section above (other than such conditions that by their nature are to be satisfied at the closing) have been satisfied or waived, and (y) the condition set forth in the second bullet of the "The Merger Agreement—Conditions to the Merger" section above has not been satisfied or waived in connection with a law or injunction, order, or decree issued pursuant to or otherwise relating to gaming laws or the condition the fourth bullet of the "The Merger Agreement—Conditions to the Merger" section above has not been satisfied or waived, in each case except where such failure to be satisfied was primarily caused by the actions or inactions by Affinity in breach of the merger agreement, then Parent shall pay Affinity (for the sole benefit of Affinity stockholders that are not controlled affiliates of Z Capital) $7,100,428; or

    Affinity pursuant to clause (i) or (iii) under the third bullet the "The Merger Agreement—Termination" section above (in each case in this bullet, other than in circumstances where the Parent termination fee is payable pursuant to the preceding bullet), then Parent shall pay Affinity $17,751,070.

Amendments; Waiver

        The merger agreement may be amended, modified or supplemented by the parties at any time, except that, after the stockholders have adopted the merger agreement, no amendment may be made that requires further approval or adoption by Affinity stockholders without such further approval or adoption. The parties may, at any time, waive any inaccuracies in the representations and warranties or waive compliance with any of the agreements or conditions of the other parties under the merger agreement, except that, after the stockholders have adopted the merger agreement, no waiver may be granted that requires further approval or adoption by Affinity stockholders without such further approval or adoption.

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Governing Law and Venue

        The merger agreement will be governed by Nevada law. Each party has irrevocably submitted to the jurisdiction of the courts of the State of Nevada located in Clark County, Nevada. Notwithstanding the foregoing, each party has agreed that any claim or suit against the debt financing sources will be governed by New York law and that any New York state court or any federal court, in either case, sitting in the Borough of Manhattan, City of New York, New York shall have exclusive jurisdiction over any such action.

Specific Performance

        The merger agreement provides that, subject to the following paragraph, the parties will be entitled to seek specific performance, including injunctive relief, to enforce the merger agreement against a non-performing party, in addition to any other rights the parties have against the non-performing party, except that Affinity will not be entitled to receive both equitable remedies and monetary damages.

        Notwithstanding the foregoing, Affinity will be entitled to specific performance of Parent's obligation to cause full funding of the equity financing pursuant to the terms and conditions of the equity commitment letter, to cause the Rollover Investment and to effect the closing of the merger if and only if: (i) the second business day after the Marketing Period has ended; (ii) all of the conditions set forth in the first and third paragraphs of "The Merger Agreement—Conditions to the Merger" section above (other than those conditions are to be satisfied by actions taken at closing, but subject to the satisfaction or waiver of those conditions) have been or will have been satisfied or waived at the time when the closing would be required to occur; (iii) the debt financing has been funded or will be funded on the closing date upon delivery of a drawdown or other notice by Parent or Merger Sub and/or notice from Parent that the equity financing will be funded at such date; (iv) Parent and Merger Sub fail to complete the closing by the date the closing is required to have occurred; and (v) Affinity has irrevocably confirmed in writing to Parent that all conditions in second paragraph of "The Merger Agreement—Conditions to the Merger" section above have been satisfied (or that it would waive any unsatisfied conditions) for purposes of consummating the merger, and that if specific performance is granted and the equity financing, debt financing and Rollover Investment are funded, then it would take such actions required of it under the merger agreement to cause the closing to occur.

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THE LIMITED GUARANTEE

        The following is a summary of the material provisions of the Limited Guarantee, a copy of which is attached to this proxy statement as Appendix C, and which we incorporate by reference into this proxy statement. This summary may not contain all of the information about the Limited Guarantee that is important to you and is qualified in its entirety by reference to the full text of such agreement. We encourage you to read carefully the Limited Guarantee in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the Limited Guarantee and not by this summary or any other information contained in this proxy statement.

        Simultaneously to the execution of the merger agreement, Z Capital Partners II, L.P., Z Capital Partners II-A, L.P. and Z Capital Partners II-B, L.P. (collectively, the "Z Capital Funds") entered into a limited guarantee in favor of Affinity, referred to as the "Limited Guarantee," pursuant to which the Z Capital Funds, severally (and not jointly and severally), agreed to guarantee to Affinity the due and punctual performance and discharge of certain payment obligations of the Purchaser Parties to Affinity in the merger agreement, including: (i) certain fees and expenses in connection with the amendment to Affinity's credit agreement, including fees and expense of the agent and/or lenders for the credit agreement and reasonable fees and expenses of Affinity; (ii) costs and expenses associated with Affinity's reasonable cooperation in connection with the debt financing and to indemnify and hold harmless Affinity in connection with the debt financing; (iii) the $7,100,428 or $17,751,070 Parent termination fee; and (iv) the cost and expenses incurred by Affinity for any suit to enforce the Parent termination fee provisions, in each case if, as and when such obligation becomes payable under the terms and conditions of the merger agreement. However, the maximum liability for each of the Z Capital Funds will not exceed such fund's participation percentage of the guaranteed obligations set forth in the Limited Guarantee plus reimbursement for certain expenses.

        The Limited Guarantee will remain binding until the first to occur of: (a) the Effective Time; (b) the merger agreement terminating under circumstances in which none of (i), (iii) or (iv) above is payable; (c) the payment by any combination of Parent, Merger Sub or the Z Capital Funds or any other persons of the full amount of the guaranteed obligations and (d) three months after the merger agreement terminating under circumstances in which Parent or Merger Sub would be obligated to pay the guaranteed obligations if Affinity has not presented Parent or Merger Sub with a written claim for such payment.

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AGREEMENTS INVOLVING COMMON STOCK

Voting Agreements

        On August 22, 2016, Z Capital and each Z Capital Rollover Investor entered into a Voting and Support Agreement with Affinity (the "Z Capital Voting Agreement"), pursuant to which, subject to the terms and conditions set forth in the Z Capital Voting Agreement, such stockholders have agreed to, among other things, vote all shares of common stock of Affinity held by them in favor of the adoption of the merger agreement and approval of the terms thereof, the merger and each of the other actions contemplated by the merger agreement and to vote against, among other things, any other acquisition proposal or other proposal, action or agreement that would impede, delay or interfere with the Z Capital Voting Agreement or the merger agreement. The Z Capital Voting Agreement also restricts the Z Capital Rollover Investors, among other things, from transferring or agreeing to transfer any of the common stock owned by such Z Capital Rollover Investors during its term, except to an affiliate of such Z Capital Rollover Investors who agrees to be bound by the terms and conditions of the Z Capital Voting Agreement. The Z Capital Rollover Investors are also restricted from initiating or engaging in discussions or solicitations, or encouraging inquiries, with respect to alternate transactions involving Affinity. The Z Capital Rollover Investors, collectively, currently hold an aggregate of 8,418,616 shares of Affinity common stock, comprising approximately 41.2% of the outstanding shares of Affinity common stock, which are subject to the Z Capital Voting Agreement.

        In addition, on August 22, 2016, SPH Manager, LLC ("SPH Manager"), an affiliate of Affinity director David Reganato, entered into a Voting and Support Agreement with Parent and Merger Sub (the "Silver Point Voting Agreement"), and each affiliate of One East Partners Capital Management LLC, an affiliate of Affinity director James Cacioppo, that is the beneficial owner of shares of Affinity's common stock (collectively, "One East") entered into a Voting and Support Agreement with Parent and Merger Sub (the "One East Voting Agreement" and, together with the Z Capital Voting Agreement and the Silver Point Voting Agreement, the "Voting Agreements"). Pursuant to the Silver Point Voting Agreement and the One East Voting Agreement, subject to the terms and conditions set forth in the applicable Voting Agreement, Silver Point and One East, respectively, have agreed to, among other things, vote all shares of common stock of Affinity held by them in favor of the adoption of the merger agreement and approval of the terms thereof, the merger and each of the other actions contemplated by the merger agreement, and to vote against, among other things, any other acquisition proposal or other proposal, action or agreement that would impede, delay or interfere with the Silver Point Voting Agreement or One East Voting Agreement, respectively, or the merger agreement. The Silver Point Voting Agreement and the One East Voting Agreement also restrict SPH Manager and One East, respectively, among other things, from transferring or agreeing to transfer any of the common stock owned by them during the respective agreement's term, except to an affiliate of SPH Manager or One East, respectively, who agrees to be bound by the terms and conditions of the applicable Voting Agreement. SPH Manager and One East are also restricted from initiating or engaging in discussions or solicitations, or encouraging inquiries, with respect to alternate transactions involving Affinity. SPH Manager currently holds an aggregate of 5,544,092 shares of Affinity common stock, comprising approximately 27.1% of the outstanding shares of Affinity common stock, which are subject to such Silver Point Voting Agreement, and One East, collectively, currently hold an aggregate of 334,940 shares of Affinity common stock, comprising approximately 1.6% of the outstanding shares of Affinity common stock, which are subject to such One East Voting Agreement.

        The Voting Agreements each terminate upon the earlier to occur of the mutual agreement of Affinity and each of the stockholders party to the respective agreement, the completion of the merger, or the termination of the merger agreement in accordance with its terms. In addition, so long as there is in effect a change in recommendation, as defined in the merger agreement, resulting from an alternative acquisition proposal, certain provisions in the Voting Agreements regarding agreements to

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vote shall not apply, and the stockholders party to the Voting Agreements shall be permitted to engage in discussions with the third party making the relevant acquisition proposal.

Joinder Agreement

        Concurrently with the execution and delivery of the merger agreement, Z Capital delivered an Acknowledgement and Joinder to the Merger Agreement pursuant to which it has become party to the merger agreement with respect to certain provisions of the merger agreement, including a prohibition on acquiring Affinity's equity securities until the earlier of the completion of the merger or the termination of the merger agreement.

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THE SPECIAL MEETING

Date, Time and Place

        The special meeting of the stockholders of Affinity will be held on [-], 2016, at [-], Eastern Daylight Time, at the New York City offices of Morrison & Foerster LLP, 250 West 55th Street, New York, NY 10019.

Purpose of the Special Meeting

        The special meeting is being held for the following purposes:

    to approve the Merger Proposal;

    to approve the Merger-Related Compensation Proposal; and

    to approve the Adjournment Proposal.

        The votes on the Merger-Related Compensation Proposal and the Adjournment Proposal are separate and apart from the vote on the Merger Proposal. Accordingly, a stockholder may vote in favor of the Merger Proposal and vote not to approve the Merger-Related Compensation Proposal and/or the Adjournment Proposal (and vice versa).

        A copy of the merger agreement is attached to this proxy statement as Appendix A. This proxy statement and the enclosed form of proxy are first being mailed to Affinity's stockholders on or about [-], 2016.

Recommendations of the Board and the Special Committee

        The Special Committee determined, by unanimous decision of all directors present and voting, in good faith that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Affinity and its stockholders (other than the Z Capital Rollover Investors), and, by unanimous decision of all directors present and voting, approved and recommended that the Board approve and adopt the merger agreement and the transactions contemplated thereby, including the merger. Based on the Special Committee's recommendation, the Board, by unanimous decision of all directors present and voting, approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and determined that the terms of the merger agreement are just and reasonable as to Affinity, and that the merger agreement and the transactions contemplated thereby, including the merger and the Merger Consideration, are fair to and in the best interests of Affinity and its stockholders (other than the Z Capital Rollover Investors). The Board recommends that you vote "FOR" the Merger Proposal. See "Special Factors—Background of the Merger and Special Committee Proceedings" and "Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger."

        The Board also recommends that you vote "FOR" the Merger-Related Compensation Proposal and "FOR" the Adjournment Proposal.

Voting Rights; Quorum

        Stockholders of record at the close of business on [-], 2016, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting. On the record date, there were approximately [-] holders of record of Affinity common stock and [-] shares of Affinity common stock outstanding. Each share of Affinity common stock entitles the holder to cast one vote at the special meeting. There are no other voting securities of Affinity.

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        No matter may be considered at the special meeting unless a quorum is present. Stockholders who hold a majority of the shares of Affinity common stock outstanding as of the close of business on the record date for the special meeting must be present either in person or by proxy in order to constitute a quorum to conduct business at the special meeting. Shares of Affinity common stock represented by proxies reflecting abstentions and properly executed broker non-votes (if any) will be counted as present and entitled to vote for purposes of determining a quorum. A broker non-vote occurs when a broker, bank or other nominee does not vote on a particular matter because such broker, bank, or other nominee does not have the discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner. Brokers, banks and other nominees will not have discretionary voting power with respect to the Merger Proposal, the Merger-Related Compensation Proposal or the Adjournment Proposal. If a quorum is not present, the stockholders who are present or represented by proxy may adjourn or postpone the meeting until a quorum is present.

Voting and Revocation of Proxies

        If you are a stockholder of record, you may provide voting instructions by proxy by completing, signing, dating and returning the enclosed proxy card. You may alternatively follow the instructions on the enclosed proxy card for Internet or telephone submissions. If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted "FOR" the Merger Proposal, "FOR" the Merger-Related Compensation Proposal and "FOR" the Adjournment Proposal, and in accordance with the recommendation of the Board on any other matters properly brought before the stockholders at the special meeting for a vote.

        If your shares are held by a broker, bank or other nominee on your behalf in "street name," your broker, bank, or other nominee will send you instructions as to how to provide voting instructions for your shares by proxy. Many banks and brokerage firms have a process for their customers to provide voting instructions by telephone or via the Internet, in addition to providing voting instructions by proxy card.

        You may revoke a proxy:

    by delivering to Marc H. Rubinstein, Senior Vice President, General Counsel & Secretary (at Affinity Gaming, 3755 Breakthrough Way, Suite 300, Las Vegas, Nevada, 89135), a later-dated signed proxy card or a written revocation prior to the vote at the special meeting;

    by attending the special meeting and voting in person; or

    if your shares are held in "street name" by a broker, bank or other nominee and you have instructed such broker, bank or other nominee to vote your shares, by following the directions received from your broker, bank or other nominee in order to change those voting instructions.

        Attending the special meeting in person will not revoke a proxy. You must take one of the actions specified above prior to the vote at the special meeting to validly revoke a proxy.

Abstentions and Broker Non-Votes

        An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting. Abstentions will be included in the calculation of the number of shares of Affinity common stock represented at the special meeting for purposes of determining whether a quorum has been achieved. Abstaining from voting will have the same effect as a vote "AGAINST" the Merger Proposal, "AGAINST" the Merger-Related Compensation Proposal and "AGAINST" the Adjournment Proposal.

        Broker non-votes occur when shares held in "street name" by brokers, banks and other nominees are present or represented by proxy at the special meeting, but with respect to which the broker, bank

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or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such broker, bank or nominee does not have discretionary voting power on such proposal. Because brokers, banks and other nominees holding shares in "street name" do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement, if a beneficial owner of shares of Affinity common stock held in "street name" does not give voting instructions to the broker, bank or other nominee, then those shares will not be counted as present in person or by proxy at the special meeting. If you fail to issue voting instructions to your broker, bank or other nominee, it will have the same effect as a vote "AGAINST" the Merger Proposal. The failure to issue voting instructions to your broker, bank or other nominee will have no effect on the outcome of the Merger-Related Compensation Proposal or the Adjournment Proposal, assuming a quorum is present.

Failure to Vote

        If no instruction as to how to vote is given (including no instruction to abstain from voting) in an executed, duly returned and not revoked proxy, the proxy will be voted "FOR" the Merger Proposal, "FOR" the Merger-Related Compensation Proposal and "FOR" the Adjournment Proposal.

        If you fail to return your proxy card, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting (unless you are a record holder as of the record date and attend the special meeting in person) and will have the same effect as a vote "AGAINST" the Merger Proposal. Failure to return your proxy card will not affect the outcome of the Merger-Related Compensation Proposal or the Adjournment Proposal, assuming a quorum is present.

Other Matters at the Special Meeting

        As of the date of this proxy statement, Affinity does not know of any matters that will be presented for consideration at the special meeting other than those matters described in this proxy statement. If any other matters properly come before the special meeting, the proxies solicited hereby will be voted on such matters in accordance with the discretion of the proxy holders named therein.

Adjournments and Postponements

        Although it is not currently expected, the special meeting may be adjourned or postponed for the purpose of soliciting additional proxies. Affinity does not anticipate that it will adjourn or postpone the special meeting unless necessary or appropriate to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Merger Proposal or it is advised by counsel that such adjournment or postponement is necessary under applicable law. Any signed proxies received by Affinity in which no voting instructions are provided on such matter will be voted in favor of an adjournment or postponement in these circumstances. The time and place of the adjourned or postponed meeting will be announced at the time the adjournment or postponement is taken, and no other notice need be given, unless the adjournment or postponement is for more than 60 days. Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow Affinity's stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting, as adjourned or postponed.

Appraisal and Dissenters' Rights

        Affinity stockholders are entitled to appraisal rights and payment for the fair value of their shares in connection with the merger if they properly exercise their dissenters' rights under the provisions of Sections 92A.300—92A.500 of the Nevada Revised Statutes, attached to this document as Appendix D. If you want to exercise these rights, you must deliver to Affinity written notice of your intent to

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demand payment for your shares before the vote is taken on the merger and you must not vote any of your shares in favor of the merger. You must also comply with the other requirements set forth in Appendix D. Strict adherence to all of the requirements set forth in Appendix D must be followed by dissenting stockholders and the failure to do so will result in forfeiture of their rights to payment, and cause such stockholders to be bound by the terms of the merger, including receipt of the merger consideration. Please read the attached Appendix D carefully if you are considering dissenting.

Proxy Solicitation

        Proxies may be solicited by directors, officers and employees of Affinity, who may be assisted by Z Capital and/or its affiliates (none of the employees or other directors of Affinity or Z Capital or any of its affiliates will receive any additional compensation for such services) in person, by mail, telephone or telegraph, via the Internet or by facsimile. Affinity anticipates that banks, brokers, nominees, custodians and fiduciaries will forward proxy soliciting material to beneficial owners of Affinity common stock and that such persons will be reimbursed by Affinity for the expenses incurred in doing so.

Additional Assistance

        If you have more questions about the merger, or require assistance in submitting your proxy or voting your shares or need additional copies of the proxy statement or the enclosed proxy card, you should contact Marc H. Rubinstein, Senior Vice President, General Counsel & Secretary at Affinity Gaming, 3755 Breakthrough Way, Suite 300, Las Vegas, Nevada, 89135 or (702) 341-2400.

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APPROVAL OF THE MERGER PROPOSAL (PROPOSAL 1)

The Proposal

        The stockholders of Affinity are being asked to approve a proposal to adopt the merger agreement (referred to elsewhere in this proxy statement as the "Merger Proposal"). For a detailed discussion of the terms and conditions of the merger agreement, see the section entitled "The Merger Agreement." A copy of the merger agreement is attached to this proxy statement as Appendix A.

Vote Required and Board Recommendation

        As discussed in the section entitled "Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger," the Special Committee determined, by unanimous decision of all directors present and voting, in good faith that the merger agreement and the transactions contemplated thereby, including the merger, are advisable, fair to and in the best interests of Affinity and its stockholders (other than the Z Capital Rollover Investors), and, by unanimous decision of all directors present and voting, approved and recommended that the Board approve and adopt the merger agreement and the transactions contemplated thereby, including the merger. Based on the Special Committee's recommendation, the Board, by unanimous decision of all directors present and voting, approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger, and determined that the terms of the merger agreement are just and reasonable as to Affinity, and that the merger agreement and the transactions contemplated thereby, including the merger and the Merger Consideration, are fair to and in the best interests of Affinity and its stockholders (other than the Z Capital Rollover Investors). The Board recommends that you vote "FOR" the Merger Proposal.

        Approval of the Merger Proposal requires the affirmative vote of at least a majority of the shares of Affinity common stock outstanding and entitled to vote at the special meeting. Abstentions and broker non-votes will have the same effect as a vote "AGAINST" the proposal.

The Board recommends that the stockholders of Affinity vote "FOR" the Merger Proposal.

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ADVISORY VOTE ON MERGER-RELATED COMPENSATION (PROPOSAL 2)

The Proposal

        In accordance with Section 14A of the Exchange Act, Affinity is providing its stockholders with the opportunity to cast an advisory (non-binding) vote on the compensation that may be paid or become payable to the named executive officers of Affinity in connection with the merger, including the agreements and understandings pursuant to which such compensation may be paid or become payable, the value of which is set forth under "Special Factors—Potential Change of Control Payments to Named Executive Officers." As required by Section 14A of the Exchange Act, Affinity is asking its stockholders to vote on the adoption of the following resolution:

        "RESOLVED, that the compensation that may be paid or become payable to Affinity's named executive officers in connection with the merger, including the agreements and understandings pursuant to which such compensation may be paid or become payable, as disclosed under "Special Factors—Potential Change of Control Payments to Named Executive Officers," is hereby APPROVED."

Vote Required and Board Recommendation

        Approval of the compensation that may be paid or become payable to Affinity's named executive officers in connection with the merger, including the agreements and understandings pursuant to which such compensation may be paid or become payable, requires the affirmative vote of the holders of at least a majority of the shares of Affinity common stock present and entitled to vote at the special meeting. Abstentions will have the same effect as a vote "AGAINST" the proposal. Broker non-votes will have no effect on the outcome of the proposal, assuming a quorum is present.

The Board recommends that the stockholders of Affinity vote "FOR" the Merger-Related Compensation Proposal.

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APPROVAL OF THE ADJOURNMENT PROPOSAL (PROPOSAL 3)

The Proposal

        The stockholders of Affinity are being asked to approve a proposal that will give Affinity the authority, if necessary or appropriate, to adjourn or postpone the special meeting for the purpose of soliciting additional proxies in favor of the Merger Proposal if there are not sufficient votes at the time of the special meeting to approve the Merger Proposal. If this Adjournment Proposal is approved, the special meeting could be adjourned or postponed by the Board.

        Affinity does not anticipate that it will adjourn or postpone the special meeting unless necessary or appropriate to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Merger Proposal, or it is advised by counsel that such adjournment or postponement is necessary under applicable law. Any signed proxies received by Affinity in which no voting instructions are provided on such matter will be voted in favor of an adjournment or postponement in these circumstances. Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow Affinity's stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting, as adjourned or postponed.

Vote Required and Board Recommendation

        Approval of the Adjournment Proposal requires the affirmative vote of the holders of at least a majority of the shares of Affinity common stock present and entitled to vote at the special meeting. Abstentions will have the same effect as a vote "AGAINST" the proposal. Broker non-votes will have no effect on the outcome of the proposal, assuming a quorum is present.

The Board recommends that the stockholders of Affinity vote "FOR" the Adjournment Proposal.

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INFORMATION ABOUT AFFINITY

Background

        Affinity is a Nevada corporation, headquartered in Las Vegas, Nevada, which owns and operates 11 casinos in four states—five in Nevada, three in Colorado, two in Missouri and one in Iowa. In addition to its diverse, multi-jurisdictional casino operations, Affinity provided consulting services to the operator of the Rampart Casino at the JW Marriott Resort in Las Vegas, Nevada until that consulting arrangement expired on April 1, 2015. On December 31, 2010, Affinity emerged from Chapter 11 bankruptcy proceedings, and on December 20, 2012, Affinity converted Affinity Gaming, LLC from a Nevada limited liability company into a Nevada corporation.

        Affinity focuses on providing an enticing entertainment option for value-oriented, high frequency customers. Affinity also caters to drive-in tourist patrons whom Affinity can entice to repeat their visits. Generating customer satisfaction and loyalty is critical to maintaining these high frequency patrons.

        Local patrons typically are gaming customers who seek convenient locations that offer affordable dining and a pleasant atmosphere. Proximity and value initially attracts a customer to Affinity's casino properties. Affinity seeks to provide attentive customer service in a friendly, casual atmosphere with a clean, safe environment offering a wide selection of gaming options including slot machines and table games.

        The address and telephone number of the principal executive offices of Affinity are 3755 Breakthrough Way, Suite 300, Las Vegas, NV 89135, (702) 341-2400.

        Other than as required by applicable law, in connection with the merger, Affinity has made no provisions to grant unaffiliated security holders access to the corporate files of Affinity or to obtain counsel or appraisal services at the expense of Affinity.

        During the past five years, neither Affinity nor any of the Affinity directors or executive officers listed below has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). In addition, during the past five years, neither Affinity nor any of the Affinity directors or executive officers listed below has been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. Each of the individuals listed below is a citizen of the United States.

Directors and Executive Officers

Directors

        The Board presently consists of seven members. The persons listed below are the members of the Board as of the date of this proxy statement. The telephone number of each member of the Board is (702) 341-2400.

        David Reganato, age 36, has served as Affinity's Chairman of the Board since September 15, 2015. Mr. Reganato is a Senior Investment Analyst with Silver Point Capital, L.P., an investment advisor ("Silver Point"), which he joined in November 2002. Prior to Silver Point, Mr. Reganato worked in the investment banking division of Morgan Stanley. Mr. Reganato earned his B.S. in Finance and Accounting from the Stern School of Business at New York University. In addition to serving as Chairman of the Affinity Board, he currently serves on the boards of Granite Broadcasting Corporation, Studio City International Holdings Limited, and Rotech Healthcare, Inc. The business address of Mr. Reganato is c/o Silver Point Capital, L.P., 2 Greenwich Plaza, First Floor, Greenwich, CT 06380.

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        Michael Silberling, age 50, has served as Affinity's Chief Executive Officer and as a Director of Affinity since August 26, 2014, bringing more than 20 years of casino industry management experience to those positions. Prior to joining Affinity, from 2008 to 2014, he served as President of Caesars Entertainment Corporation's International Operations, overseeing casinos in England, Scotland, Egypt, Uruguay, Canada, and South Africa. Previously, Mr. Silberling held senior operating executive positions throughout Northern and Southern Nevada, as well as the Midwest, with Caesars Entertainment's predecessor entities, the Promus Companies and Harrah's Entertainment, for which he served as Regional President and as a General Manager. He has also held positions in Australia and New Zealand with SKYCITY Entertainment Group as General Manager of Australian Operations. A native of Palo Alto, California, Mr. Silberling graduated with a Bachelor of Arts in Economics from Dartmouth College and a Masters in Business Administration from UCLA's Anderson School of Management. The business address of Mr. Silberling c/o Affinity Gaming, 3755 Breakthrough Way, Suite 300, Las Vegas, NV 89135.

        James A. Cacioppo, age 54, has served as Director of Affinity since October 14, 2014. Mr. Cacioppo is Co-Founder, Managing Partner and Portfolio Manager of One East Capital Advisors, L.P., an investment advisor, positions he has held since March 2006. Prior to joining One East Capital Advisors, he held senior management and research positions at Sandell Asset Management Corp. from 2000 to 2006, reaching the level of President and Co-Portfolio Manager of Castlerigg Master Investments. From 1995 to 2000, he held senior management and research positions at Halcyon Management, reaching the position of Senior VP and Co-Head of Distressed Debt Investments. Mr. Cacioppo also served as an investment banker at Smith Barney, Banker's Trust and Wasserstein Perella, and as a Senior Auditor at Dun and Bradstreet. He was a member of the Board of Directors of Texas Petrochemicals, Inc. from 2008 to 2012. Mr. Cacioppo is a graduate of Colgate University and Harvard Business School. The business address of Mr. Cacioppo is c/o One East Capital Advisors, L.P., 225 NE Mizner Blvd., Suite 720, Boca Raton, FL 33432.

        Matthew A. Doheny, age 46, has served as Director of Affinity since May 14, 2013. Mr. Doheny is President of North Country Capital LLC, a private investment firm, a position he has held since March 2011. Prior to that, Mr. Doheny was the portfolio manager for North American, event-driven investing at Fintech Advisory Inc., a hedge fund, from June 2008 to October 2010. Prior to Fintech, Mr. Doheny was a Managing Director at Deutsche Bank Securities in the Distressed Products Group from June 2000 to March 2008, where during his time he oversaw the research effort for proprietary investing and was a member of the leadership team for the global group running $5 billion in assets. Prior to joining Deutsche Bank in 2000, Mr. Doheny began his career as a corporate attorney at Orrick, Herrington & Sutcliffe LLP and Kelly Drye & Warren LLP. Mr. Doheny has been a director of YRC Worldwide, Inc. since July 2011. In addition, he has been a director of Eastman Kodak Inc. since 2013, of Rescap since 2013 and of RA Holdings (Arcapita) since 2013. Mr. Doheny graduated cum laude from Allegheny College and also received a Juris Doctor from Cornell Law School. Mr. Doheny was a candidate for the U.S. House of Representatives in the 21st Congressional District of New York in 2010, 2012 and 2014. The business address of Mr. Doheny is 215 Washington St., Watertown, NY 13601.

        Andrei Scrivens, age 45, has served as Director of Affinity since September 18, 2014. Mr. Scrivens is a Managing Director of Z Capital, a private investment firm, and leads its investment activities in gaming, hospitality and leisure. He has over twenty years of experience as an investor, operator and advisor to companies requiring turnaround or transformation across a broad range of industries. Prior to Z Capital, Mr. Scrivens was a Director with Chilmark Partners, for which he was responsible for leading financial advisory and mergers and acquisitions, as well as providing interim financial management to portfolio companies, and he also served as a senior manager with Arthur Andersen in its Restructuring Group. Mr. Scrivens has been a member of the board of the Carillon Hotel & Spa since May 2015, and has been a member of the board of directors for Waldhaus Flims Mountain Resort & Spa since August 4, 2016. Mr. Scrivens graduated from the University of Illinois with a

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Bachelor of Science degree in Accountancy, and is a certified public accountant. The business address of Mr. Scrivens is c/o Z Capital Partners, L.L.C., Two Conway Park, 150 Field Drive, Suite 300, Lake Forest, IL 60045.

        Eric V. Tanjeloff, age 41, has served as a Director of Affinity since May 14, 2013. Mr. Tanjeloff is Managing Director and Head of Real Estate Investments of Melody Capital Partners, L.P. an investment fund based in New York, which he joined in September 2014. Prior to that, Mr. Tanjeloff served from October 2009 to September 2014 as a Senior Managing Director of CBRE Capital Advisors, Inc., the investment banking and advisory affiliate of CBRE, Inc., a global, Fortune 500, real estate services company. Prior to CBRE Capital Advisors, Mr. Tanjeloff was employed by J.P. Morgan Securities Inc. and its predecessors from June 1997 to April 2009, serving in a variety of capacities including most recently as an Executive Director in the firm's Real Estate and Lodging Investment Banking Group from February 2006 to February 2009. Prior to his role as Executive Director, Mr. Tanjeloff held the titles of Vice President, Associate and Analyst at J.P. Morgan and its predecessors, from June 1997 to February 2006. Mr. Tanjeloff received his B.S. from Cornell University and M.B.A. from Columbia Business School. The business address of Mr. Tanjeloff is c/o Melody Capital Partners, 717 Fifth Avenue, 12th Floor, New York, NY 10022.

        James J. Zenni, Jr., age 61, has served as Director of Affinity since August 25, 2014. Mr. Zenni is the Founder, President and Chief Executive Officer of Z Capital, a private investment firm founded by him in November 2006, and is responsible for all portfolio management and business operations. Prior to Z Capital, Mr. Zenni was Managing Principal and co-founder of Black Diamond Capital Management, L.L.C. He also served as a Managing Director at Kidder Peabody & Co. Inc. Mr. Zenni is currently Chairman of the board of directors of Mrs. Fields Famous Brands, LLC, Real Mex Restaurants, Twin-Star International, and Waldhaus Flims Mountain Resort & Spa, and is a member of the board of directors of Modere, Inc. and Carillon Miami Beach, all of which are private companies, and he was previously a member of the board of directors of Automotive Aftermarket Group, LLC, Bayou Steel Corporation, Smarte Carte Corporation and Sun World International, LLC, all of which were or are portfolio companies of Z Capital. He graduated from Xavier University with a Bachelor of Science degree in economics and attended Xavier University Graduate School of Business and University of Vienna School of Economics and Business Administration. The business address of Mr. Zenni is c/o Z Capital Partners, L.L.C., Two Conway Park, 150 Field Drive, Suite 300, Lake Forest, IL 60045.

Executive Officers

        The persons listed below are the executive officers of Affinity as of the date of this proxy statement. The business address and telephone number of each executive officer is: 3755 Breakthrough Way, Suite 300, Las Vegas, NV 89135, telephone number (702) 341-2400.

        Michael Silberling, Chief Executive Officer and Director. See "—Directors" above for biographical information regarding Mr. Silberling.

        Jeffrey Solomon, age 47, joined Affinity in February 2016 as Senior Vice President, Chief Operating Officer. Prior to joining Affinity, Mr. Solomon served in various capacities at Caesars Entertainment (formerly Harrah's Entertainment) since November 2001, most recently as Senior Vice President of Marketing Strategy/Regional CMO. Prior to that, he led operations at various Las Vegas casinos, including at Imperial Palace Hotel & Casino and Rio All-Suite Hotel and Casino. Mr. Solomon earned his MBA from the UCLA Anderson School of Management and a Bachelor's Degree in History from Dartmouth College.

        Walter Bogumil, age 45, joined Affinity in March 2015 and has served as Senior Vice President, Chief Financial Officer and Treasurer since April 1, 2015. Prior to joining Affinity, Mr. Bogumil served in various capacities at Penn National Gaming since April 2002, most recently as Vice President of

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Financial Analysis. Prior to that, he served as a Business Manager at Microsoft, from 2000 through 2002, as a Finance Manager for Sun International Resorts from 1998 through 2000, and as a Financial Analyst for Walt Disney World from 1996 through 1998. Mr. Bogumil earned his MBA from the Crummer Graduate School of Business at Rollins College and a B.S. in finance from the University of Central Florida.

        Marc H. Rubinstein, age 55, has served as Senior Vice President, General Counsel and Secretary of Affinity since February 16, 2011. He also is a partner, through his professional corporation, Marc H. Rubinstein, P.C., in the Las Vegas law firm of Reid, Rubinstein & Bogatz, which he joined March 1, 2015. Prior to joining Affinity, and from July 2008, Mr. Rubinstein served as Senior Vice President, Law and Administration, and Secretary of Tropicana Entertainment, Inc. Prior to joining Tropicana Entertainment, Mr. Rubinstein held similar positions with other casino gaming companies, including as Senior Vice President and General Counsel for the Cosmopolitan Resort & Casino, Las Vegas, from 2006 through 2008, Wynn Resorts, Limited, from 2000 through 2006, and the Nevada properties of Caesars World, Inc., from 1992 through 2000, including Caesars Palace, Caesars Tahoe, and the Desert Inn, during which time he oversaw the legal and regulatory affairs of the companies. Mr. Rubinstein began his career with the Las Vegas law firm of Lionel Sawyer & Collins after graduating magna cum laude with a Bachelor of Science from Duke University and receiving a J.D. from New York University School of Law.

Selected Historical Consolidated Financial Data

        Set forth below is certain selected historical consolidated financial information with respect to Affinity, excerpted or derived from the audited financial statements of Affinity in its Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and from the unaudited interim condensed consolidated financial statements of Affinity in its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016, which were previously filed by Affinity with the SEC on March 23, 2016 and August 15, 2016, respectively.

        Additional financial information is included in the reports and other documents filed by Affinity with the SEC. The following summary information is qualified in its entirety by reference to such reports and other documents and all of the financial information (including any related notes) contained therein. The financial information (including any related notes) contained in certain of such reports and other documents is incorporated herein by reference as described in more detail in "Other Matters—Information Incorporated by Reference" below. Such reports and other documents may be inspected and copies may be obtained without charge as described in "Other Matters—Available Information" below.

        None of the Purchaser Parties or Z Capital Filing Persons assumes responsibility for the accuracy or completeness of information concerning Affinity contained in such reports and other documents filed by Affinity or for any failure by Affinity to disclose events unknown to the Purchaser Parties or Z Capital Filing Persons which may have occurred or may affect the significance or accuracy of any such information.

 
  Six Months Ended    
   
   
   
   
 
 
  Year Ended December 31,  
 
  June 30,
2016
  June 30,
2015
 
 
  2015   2014   2013   2012   2011  

Net revenue

  $ 190,408   $ 198,489   $ 393,300   $ 385,902   $ 389,774   $ 402,376   $ 377,867  

Income (loss) from continuing operations

  $ 4,894   $ 557   $ (13,096 ) $ (23,677 ) $ (991 ) $ 4,634   $ 7,872  

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  December 31,  
 
  June 30,
2016
 
 
  2015   2014   2013   2012   2011  

Cash and cash equivalents

  $ 74,678   $ 157,779   $ 135,175   $ 140,857   $ 126,873   $ 45,956  

Total assets

    604,574     602,264     612,097     635,460     642,475     602,443  

Total debt(1)

    374,261     375,587     372,620     381,515     387,269     347,103  

Owners' equity

  $ 175,719   $ 170,259   $ 182,455   $ 204,519   $ 207,130   $ 206,235  

(1)
Net of original issue discount and unamortized debt issuance costs incurred with lenders.

        Affinity is not providing any pro forma data giving effect to the merger because Affinity does not believe such information is material to Affinity's stockholders in evaluating the Merger Proposal, since the Merger Consideration is all cash and Affinity common stock would cease to be registered if the merger is completed.

        No separate financial information has been provided for Parent or Merger Sub since each is a newly formed entity formed in connection with the merger and has no independent operations.

Ratio of Earnings to Fixed Charges

        The following table presents Affinity's ratio of earnings to fixed charges for the fiscal periods indicated, in thousands, except for ratio data:

 
  Six Months Ended    
   
 
 
  Year Ended December 31,  
 
  June 30,
2016
  June 30,
2015
 
 
  2015   2014  

Income (loss) from continuing operations before extraordinary items and income taxes(1)

  $ 8,900   $ 5,589   $ (15,831 ) $ (8,131 )

Fixed charges

    15,858     15,733     31,615     30,774  

Capitalized interest

                 

Total earnings

  $ 24,758   $ 21,322   $ 15,784   $ 22,643  

Interest expense, including amortization of debt issuance costs

 
$

15,476
 
$

15,348
 
$

30,850
 
$

30,010
 

Capitalized interest expense

                 

Interest element of rentals

    382     385     765     764  

Total fixed charges

  $ 15,858   $ 15,733   $ 31,615   $ 30,744  

Ratio of earnings to fixed charges

    1.56X     1.36X     0.50X     0.74X  

(1)
For the year ended December 31, 2015, the loss from continuing operations includes a $20.2 million impairment charge on goodwill.

Book Value Per Share

        Our net book value per share as of June 30, 2016 was approximately $8.59 (calculated by dividing the total equity as of June 30, 2016 by the total shares outstanding of 20,462,329 as of such date).

Market Price of Affinity Common Stock and Dividend Information

        Affinity's outstanding common stock is not listed on a national securities exchange, and no established public trading market exists for Affinity's common stock.

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        Affinity has never declared or paid dividends or distributions on its common equity. Restrictions imposed by Affinity's debt instruments significantly restrict Affinity from making dividends or distributions.

        The merger agreement provides that Affinity will not declare, set aside, establish a record date for, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary to Affinity or to its other subsidiaries), without the prior written consent of Parent. See "The Merger Agreement—Interim Operations" above.

Security Ownership of Certain Beneficial Owners and Management

        The following table sets forth certain information as of September 30, 2016 regarding the beneficial ownership of Affinity common stock by:

    each person known to beneficially own more than 5% of Affinity's common stock;

    each non-employee member of the Board;

    each named executive officer of Affinity; and

    all of the members of the Board and executive officers as a group.

        Unless otherwise indicated, each such person listed in the table has sole voting and dispositive power with respect to the common stock it beneficially owns. Securities which may be beneficially acquired within 60 days of September 30, 2016 are considered beneficially owned b