NOTE

LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

	March 31, 2020			December 31, 2019
First Lien Credit Facilities:
Term loans, interest at LIBOR or base rate plus 3.50% (5.10% at March 31, 2020), net of unamortized discount and deferred loan costs of $8.5 million and $9.0 million at March 31, 2020 and December 31, 2019, respectively.	$	522,135		$	522,989
Revolving credit facility, interest at LIBOR or base rate plus 3.50% (4.50% at March 31, 2020)		30,000			-
Finance leases		1,780			1,737
Total debt		553,915			524,727
Less: Current portion		(6,071	)		(6,038	)
Long-term debt	$	547,844		$	518,689

First Lien Credit Facilities

June 6, 2017 (

the “Closing Date”), AP Gaming I, LLC (the “Borrower”), a wholly owned indirect subsidiary of the Company, entered into a

first

lien credit agreement (“the First Lien Credit Agreement”), providing for

$450.0

million in term loans and a

$30.0

million revolving credit facility. The proceeds of the term loans were used primarily to repay the Company's then existing term loans, other indebtedness, to pay for the fees and expenses incurred in connection with the foregoing and otherwise for general corporate purposes. The full amount of the revolving credit facility was drawn on

March 19, 2020

as a precautionary measure in order to increase the Company’s cash position and facilitate financial flexibility in light of current uncertainty in the global markets resulting from the COVID-

outbreak. The proceeds from the borrowings under the revolving credit facility are currently being held on the Company’s consolidated balance sheet. The term loans will mature on

February 15, 2024,

and the revolving credit facility will mature on

June 6, 2022.

The term loans require scheduled quarterly payments in amounts equal to

0.25%

of the original aggregate principal amount of the term loans, with the balance due at maturity. Borrowings under the term loans and revolving credit facility bear interest at a rate equal to, at the Borrower’s option, either LIBOR or the base rate, subject to an interest rate floor plus an applicable margin rate. In addition, on a quarterly basis, the Borrower is required to pay each lender under the revolving credit facility a commitment fee in respect of any unused commitments thereunder at a rate of

0.50%

per annum.

December 6, 2017,

the Borrower entered into incremental facilities for

$65.0

million in term loans (the

“December

Incremental Term Loans”). The net proceeds of the

December

Incremental Term Loans were used to finance the acquisition of electronic gaming machines and related assets operated by Rocket Gaming Systems (“Rocket”) and to pay fees and expenses in connection therewith and for general corporate purposes.

An additional

$1.0

million in loan costs were incurred related to the issuance of the

December

Incremental Term Loans. Given the composition of the lender group, the transaction was accounted for as a debt modification and, as such,

$0.9

million in

third

-party costs were expensed and included in the loss on extinguishment and modification of debt. The remaining amount was capitalized and will be amortized over the term of the agreement.

February 8, 2018,

the Borrower completed the repricing of its existing

$513.0

million term loans under its First Lien Credit Agreement (the “Term Loans”). The Term Loans were repriced from

550

basis points to

425

basis points over LIBOR. The LIBOR floor remained at

100

basis points.

February 8, 2018,

in connection with the repricing of the Term Loans,

third

-party costs of

$1.2

million were expensed and included in the loss and modification of debt. Existing debt issuance costs of

$0.4

million were written-off and also included in the loss on extinguishment and modification of debt.

October 5, 2018,

the Borrower entered into an Incremental Assumption and Amendment Agreement

No.

(the “Incremental Agreement

No.

2”

) with certain of the Borrower’s subsidiaries, the lenders party thereto from time to time and the Administrative Agent. The Incremental Agreement

No.

amended and restated that certain First Lien Credit Agreement, dated as of

June 6, 2017,

as amended on

December 6, 2017

and as amended and restated on

February 8, 2018 (

the “Existing Credit Agreement”), among the Borrower, the lenders party thereto, the Administrative Agent and other parties named therein (the “Amended and Restated Credit Agreement”), to (a) reduce the applicable interest rate margin for the Term B Loans (as repriced, the “Repriced Term B Loans”) under the Credit Agreement by

0.75%

(which shall increase by an additional

0.25%

if at any time the Borrower receives a corporate credit rating of at least

from Moody’s, regardless of any future rating) and (b) provide for the incurrence by the Borrower of incremental term loans in an aggregate principal amount of

$30.0

million (the “Incremental Term Loans” and together with the Repriced Term B Loans, the “Term B Loans”).

October 5, 2018,

in connection with the repricing of the Term Loans,

third

-party costs of

$1.5

million were expensed and included in the loss on extinguishment and modification of debt.

August 30, 2019,

the Borrower entered into Amendment

No.

(the "Repricing Amendment") to the credit agreement. The Repricing Amendment reduced the interest rate margin on the revolving credit facility to the same interest rate margin as the term loans issued under the credit agreement.

May 1, 2020,

the Borrower entered into Amendment

No.

to the First Lien Credit Agreement that provided for covenant relief (as described in Note

) as well as

$95.0

million in incremental term loans of which the net proceeds received by the Company were

$83.5

million after original issue discount and related fees. The incremental term loans are subject to an interest rate of LIBOR plus

13%

and the agreement also provides that any refinancing of the term loans through the issuance of certain debt or any repricing amendment resulting in a lower yield occurring at any time during the

first

two

years after

May 1, 2020

will be accompanied by a Make-Whole Premium as defined in the agreement that includes a premium or fee as well as the required payment of any unpaid interest that would have been paid through

May 1, 2022.

For

six

months following this

two

year period, a prepayment of the loans will be accompanied by a

1.00%

payment premium or fee. Other than described above, the incremental term loans continue to have the same terms as provided under the Existing Credit Agreement.

As of

March 31, 2020

, we were in compliance with the required covenants of our debt instruments. See Note

“Liquidity and Financing” for a description of a change to our financial covenants for future periods.

Finance Leases

The Company has entered into leases for vehicles and equipment that are accounted for as finance leases.

Table of Contents

PLAYAGS, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)