Document:

Exhibit 10.1

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

THIRD AMENDMENT TO CREDIT AGREEMENT (this “Third Amendment”), dated as of October 3, 2014, among Global Cash Access Holdings, Inc., a Delaware corporation (“Holdings”), Global Cash Access, Inc. (the “Borrower”), a Delaware corporation, the Lenders party hereto and Deutsche Bank Trust Company Americas, as Administrative Agent.  Unless otherwise indicated, all capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided to such terms in the Credit Agreement referred to below.

 

W I T N E S S E T H :

 

WHEREAS, Holdings, the Borrower, the Lenders and Deutsche Bank Trust Company Americas, as Administrative Agent have entered into to that certain Credit Agreement, dated as of March 1, 2011, as amended by that certain First Amendment, dated as of September 24, 2012, and as further amended by that certain Second Amendment, dated as of May 22, 2013 (as further amended, restated, modified and/or supplemented prior to, but not including, the date hereof, the “Credit Agreement”);

 

WHEREAS, Holdings entered into an Agreement and Plan of Merger, dated as of September 8, 2014, with Movie Merger Sub, Inc., a Texas corporation (“Merger Sub”), and Multimedia Games Holding Company, Inc. (“MGAM”) for the purpose of acquiring MGAM (the “MGAM Acquisition”);

 

WHEREAS, Holdings intends to create a new Wholly-Owned Subsidiary, Escrow Subsidiary (as defined below), for the purpose of incurring Indebtedness to finance the purchase price payable in connection with the MGAM Acquisition (such Indebtedness, the “MGAM Acquisition Debt”);

 

WHEREAS, the MGAM Acquisition Debt may be funded into escrow for the benefit of the Escrow Subsidiary;

 

WHEREAS, in connection with the MGAM Acquisition, Holdings has requested that the Administrative Agent and Lenders waive the Borrower’s and the new Subsidiary’s obligation to comply with Section 10.14 of the Credit Agreement; and

 

WHEREAS, Section 13.12 of the Credit Agreement provides that the Borrower may, with the consent of the Required Lenders, amend certain provisions of the Credit Agreement as herein provided;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, it is agreed as follows:

 

I.                                        Amendments to the Credit Agreement.

 

1.              Section 1.01 of the Credit Agreement is hereby amended by inserting the following new definitions in the appropriate alphabetical order:

 

“Escrow Account” means a deposit or securities account at a financial institution (such institution, the “Escrow Agent”) into which the proceeds of any portion of the MGAM Acquisition Debt is deposited.

 

 

“Escrow Subsidiary” means Movie Escrow, Inc., a Delaware corporation and Wholly-Owned Subsidiary of the Borrower.

 

“Merger Sub” means Movie Merger Sub, Inc., a Texas corporation.

 

“MGAM Acquisition” means the acquisition of Multimedia Games Holding Company, Inc. by Merger Sub pursuant to the MGAM Acquisition Agreement.

 

“MGAM Acquisition Agreement” means that certain Agreement and Plan of Merger, dated as of September 8, 2014, among Holdings, Merger Sub and Multimedia Games Holding Company, Inc.

 

“MGAM Acquisition Debt” shall have the meaning specified in Section 10.15.

 

“Third Amendment” means the Third Amendment to this Credit Agreement dated as of October 3, 2014, among Holdings, the Borrower, the Lenders party thereto and the Administrative Agent.

 

“Third Amendment Effective Date” shall have the meaning provided in the Third Amendment.

 

2.              Section 1.01 of the Credit Agreement is amended by deleting the “and” after clause (A)(iv) of the definition of “Consolidated EBITDA” and adding the below following clause (A)(v):

 

“and (vi) the amount of expenses incurred in connection with the MGAM Acquisition in such period, in an aggregate amount not to exceed $2.0 million for such period”

 

3.              Section 1.01 of the Credit Agreement is amended by adding the below to the end of the definition of “GAAP”:

 

“Notwithstanding the foregoing, to the extent GAAP would require, prior to the consummation of the MGAM Acquisition, any of the MGAM Acquisition Debt, or any expenses in connection therewith, to be attributed to Holdings or any of its Subsidiaries, such attribution shall be excluded for all purposes under this Agreement.”

 

4.              Section 1.01 of the Credit Agreement is amended by adding the below to the end of the definition of “Off-Balance Sheet Liabilities”:

 

“Notwithstanding the foregoing, prior to the consummation of the MGAM Acquisition, the MGAM Acquisition Debt shall not constitute Off-Balance Sheet Liabilities of Holdings or any of its Subsidiaries.”

 

5.              Section 1.01 of the Credit Agreement is amended by adding the below to the end of the definition of “Subsidiary”:

 

“Notwithstanding the foregoing, Escrow Subsidiary shall be deemed not to be a Subsidiary of Holdings or a Credit Party for purposes of this Agreement.”

 

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6.              Section 10.05 of the Credit Agreement is hereby amended by deleting the “and” after clause (xvi), renumbering clause (xvii) as clause (xviii) and adding the following as a new clause (xvii):

 

“(xvii)              Holdings and its Subsidiaries may make Investments in Escrow Subsidiary in an aggregate amount necessary (but only in an amount necessary) to pay the accrued interest on the MGAM Acquisition Debt through the termination date of the escrow agreement and fees and expenses in connection with the incurrence, maintenance and repayment of the MGAM Acquisition Debt; and”

 

7.              Section 10.14(a) of the Credit Agreement is hereby amended by adding the below immediately following the last sentence of Section 10.14(a):

 

“For the avoidance of doubt, Holdings shall be permitted to establish and create each of Merger Sub and the Escrow Subsidiary without satisfying the requirements of this clause (a).  In addition, notwithstanding anything to the contrary set forth herein or in the Pledge Agreement, Holdings shall not be required to pledge any of the equity interests in GCA India Private Limited.”

 

8.              The Credit Agreement is hereby amended by adding the following new Section 10.15:

 

“Section 10.15.             Escrow Subsidiary Business.  Prior to the consummation of the MGAM Acquisition, Holdings will not permit the Escrow Subsidiary to (i) engage in any trade or business other than the incurrence of Indebtedness into an Escrow Account or Escrow Accounts to finance the purchase price of the MGAM Acquisition (such Indebtedness, the “MGAM Acquisition Debt”), (ii) own any assets other than cash and cash equivalents to the extent resulting from the incurrence of the MGAM Acquisition Debt or (iii) use the proceeds of any cash or cash equivalents received from the incurrence of the MGAM Acquisition Debt for any purpose other than to pay the purchase price payable in connection with the MGAM Acquisition; provided that Escrow Subsidiary may pledge the proceeds of the MGAM Acquisition Debt and Investments in the Escrow Subsidiary for the payment of interest, fees and expenses in connection with the MGAM Acquisition Debt to the Escrow Agent for the benefit of the holders of the MGAM Acquisition Debt.”

 

II.                                   Miscellaneous Provisions.

 

1.              In order to induce the Lenders to enter into this Third Amendment, the Borrower hereby represents and warrants that:

 

(a)                                 no Default or Event of Default exists as of the Third Amendment Effective Date (as defined below), both before and immediately after giving effect to this Third Amendment; and

 

(b)                                 all of the representations and warranties contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects on the Third Amendment Effective Date, both before and after giving effect to this Third Amendment, with the same effect as though such representations and warranties had been made on and as of the Third Amendment Effective Date (it being understood and agreed that (x) any representation or warranty made as of a specific date or for a given period shall be true and correct in all material respects as of such specified date or such given period, as the case may be and (y) any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct in all respects on such date).

 

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2.              This Third Amendment is limited precisely as written and shall not be deemed to (i) be a waiver of or a consent to the modification of or deviation from any other term or condition of the Credit Agreement or the other Credit Documents or any of the other instruments or agreements referred to therein, or (ii) prejudice any right or rights which any of the Lenders or the Administrative Agent now have or may have in the future under or in connection with the Credit Agreement, the Credit Documents or any of the other instruments or agreements referred to therein.

 

3.              This Third Amendment may be executed in any number of counterparts (including by way of facsimile or other electronic transmission) and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  A complete set of counterparts shall be lodged with the Borrower and the Administrative Agent.

 

4.              THIS THIRD AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

 

5.              This Third Amendment shall become effective on the date (the “Third Amendment Effective Date”) when each of the following conditions shall have been satisfied:

 

(i)                                     Holdings, the Borrower, and the Required Lenders shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of electronic transmission) the same to Cahill Gordon & Reindel LLP, 80 Pine Street, New York, New York 10005 (e-mail address: GCAAmend@cahill.com);

 

(ii)                                  the Borrower shall have paid (x) to the Administrative Agent (or its applicable affiliate) all fees, costs and expenses (including, without limitation, reasonable legal fees and expenses) payable to the Administrative Agent (or its applicable affiliate) to the extent then due and (y) to the Administrative Agent for the account of each Lender that delivers to the Administrative Agent (or its counsel) an executed counterpart of this Third Amendment on or prior to 5:00 p.m., New York City time, on Tuesday, September 30, 2014 (the “Consent Deadline”), a payment (collectively, the “Consent Fee”) in an amount equal to 0.10% of the sum of the aggregate principal amount of such Lender’s Term Loans and the Revolving Loan Commitment of such Lender outstanding or in effect, as applicable, as of the Consent Deadline.  The Consent Fee shall be payable in Dollars and in immediately available funds and, once paid, such fees or any part thereof shall not be refundable.

 

6.              This Third Amendment shall constitute a “Credit Document” for purposes of the Credit Agreement and the other Credit Documents.

 

7.              From and after the Third Amendment Effective Date, all references in the Credit Agreement and each of the other Credit Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as modified hereby.

 

*      *      *

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Third Amendment to be duly executed and delivered as of the date first above written.

 

 

	
 
    	
GLOBAL CASH ACCESS HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Randy L. Taylor
    
	
 
    	
Name: Randy L. Taylor
    
	
 
    	
Title: Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
GLOBAL CASH ACCESS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Randy L. Taylor
    
	
 
    	
Name: Randy L. Taylor
    
	
 
    	
Title: Chief Financial Officer
    

 

Signature Page to Third Amendment

 

 

	
 
    	
DEUTSCHE BANK TRUST COMPANY AMERICAS, as   Administrative Agent and RL Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Peter Cucchiara
    
	
 
    	
Name: Peter Cucchiara
    
	
 
    	
Title: Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lisa Wong
    
	
 
    	
Name: Lisa Wong
    
	
 
    	
Title: Vice President
    

 

Signature Page to Third Amendment

 

 

[Lender signature pages on file with the Administrative Agent]

 

Signature Page to Third AmendmentHemisphere Energy Corporation: Exhibit 4.1 - Filed by newsfilecorp.com

October 2, 2014 

Hemisphere Energy Corporation 
570, 789 West Pender
St. 
Vancouver, British Columbia 
V6C 1H2 

	Attention: 	
      Reserves Review Committee of the Board of Directors of
      

	  	
      Hemisphere Energy Corporation 

	  	
      

	Re: 	
      McDaniel & Associates – Report of Third Party for
      the Evaluation of Oil and Gas Reserves attributed to selected
      Hemisphere Energy Corporation’s interests in Western Canada
    

Ladies and Gentlemen: 

Pursuant to your request, McDaniel & Associates Consultants
Ltd. (“McDaniel”) has conducted an evaluation of Hemisphere Energy Corporation
(“Hemisphere” or the “Company”) proved  crude oil, natural gas and
natural gas products reserves for selected Hemisphere interests in Western
Canada. The properties evaluated were indicated to include 100% of
the Company’s total proved interests in Canada. Reserve estimates provided herein were
prepared in support of the Company’s year-end reserve reporting requirements
under the US Securities Regulation S-K and for other internal business and
financial needs of the Company. Reserve volumes are estimated as at December 31,
2013. The completion date of our report is May 27, 2014. 

The following table sets forth the proved reserve
estimates using constant prices and costs. 

	  	Table 1: Company Net Reserves
    (1)
	  	  	  	  	  	  
	  	Light/Medium 	  	Natural 	Natural Gas 	Oil 
	  	Oil 	Heavy Oil 	Gas 	Liquids 	Equivalent (2)
	Canada 	Mbbl 	Mbbl 	MMcf 	Mbbl 	Mboe
	Proved Developed Reserves 	0 	448	406	1 	517
	Proved Non-Producing Reserves 	0 	21	2	0 	21
	Proved Undeveloped Reserves	0	523	145	0	547
	Total Proved  Reserves 	0 	992	554	1 	1,085

Notes: 

1) Net reserves include working interest after royalty deductions plus royalty
interest reserves

2) Natural gas is converted to oil equivalent
using a factor of 6,000 cubic feet of gas per one barrel of oil equivalent

 

2200, Bow Valley Square 3, 255 - 5 Avenue SW, Calgary AB T2P 3G6
Tel: (403) 262-5506 Fax: (403) 233-2744 www.mcdan.com 

	Hemisphere Energy Corporation 	October 2, 2014 
	Report of Third
      Party for Canadian Properties 	Page 2 

Our evaluation was carried out in accordance with standards set
out in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") with
the necessary modifications to reflect definitions and standards under the U.S.
Financial Accounting Standards Board policies (the “FASB Standards”) and the
legal requirements under the U.S. Securities and Exchange Commission (“SEC
requirements”). 

Estimates of crude oil, natural gas and natural gas products
should be regarded only as estimates that may change as further production
history and additional information become available. Moreover, the methods and
data used in estimating reserves are often necessarily indirect or analogical in
character rather than direct or deductive. Furthermore, the persons involved in
the preparation of reserves estimates and associated information are required,
in applying geosciences, petroleum engineering and evaluation principles, to
make numerous unbiased judgments based upon their educational background,
professional training, and professional experience. The extent and significance
of the judgments to be made are, in themselves, sufficient to render reserves
estimates inherently imprecise. Reserves estimates may change substantially as
additional data becomes available and as economic conditions impacting oil and
gas prices and costs change. Reserves estimates will also change over time due
to other factors such as knowledge and technology, fiscal and economic
conditions, contractual, statutory and regulatory provisions. 

Data used in this evaluation was obtained from reviews with
Hemisphere personnel, reviews of Hemisphere files, from records on file with the
appropriate regulatory agencies, and from public sources. In the preparation of
this report we have relied, without independent verification, upon such
information furnished by Hemisphere with respect to property interests,
production from such properties, current costs of operation and development,
prices for production, agreements relating to current and future operations and
sale of production, and various other information and data that were accepted as
represented. Furthermore, if in the course of our examination something came to
our attention, which brought into question the validity or sufficiency of any of
such information or data, we did not rely on such information or data until we
had satisfactorily resolved our questions relating thereto or had independently
verified such information or data. A field examination of the properties was not
considered necessary for the purposes of this report. 

Hemisphere has warranted in a representation letter to us that,
to the best of the Hemisphere’s knowledge and belief, all data furnished to us
was accurate in all material respects, and no material data relevant to our
evaluation was omitted. 

In our opinion, estimates provided in our report have, in all
material respects, been determined in accordance with the applicable industry
standards, and results provided in our report and summarized herein are
appropriate for inclusion in filings under Regulation S-K.

	Hemisphere Energy Corporation 	October 2, 2014 
	Report of Third
      Party for Canadian Properties 	Page 3 

Methodology and Procedures 

The process of estimating reserves requires complex judgments
and decision-making based on available geological, geophysical, engineering and
economic data. To estimate the economically recoverable crude oil, natural gas
and natural gas products reserves and related future net cash flows, we consider
many factors and make assumptions including: 

	
  expected reservoir characteristics based on geological, geophysical and
  engineering assessments;
  

	
  future production rates based on historical performance and expected
  future operating and investment activities;
  

	
  future product prices adjusted for quality and transportation
  differentials based on historical data;
  

	
  future operating costs based on historical data;
  

	
  assumed effects of regulation by governmental agencies; and
  

	
  future development capital costs. 

Our estimates are prepared using standard geological and
engineering methods generally accepted by the petroleum industry, and the
reserves definitions and standards required by the United States SEC. Generally
accepted methods for estimating reserves include volumetric calculations,
material balance techniques, production and pressure decline curve analysis,
analogy with similar reservoirs, and reservoir simulation. The methods used for
the evaluation of Hemisphere's reserves were production decline curve analysis
and analogy with similar reservoirs. The assumptions, data, methods and
procedures used are appropriate for the purpose served by this report. Estimates may change substantially as additional data from ongoing
development activities and production performance becomes available and as
economic conditions impacting oil and gas prices and costs change. McDaniel used
all procedures and methods we consider necessary under the circumstances to
prepare this report.

As required under SEC Regulation S-K, reserves are those
quantities of oil and gas that are estimated to be economically producible under
existing economic conditions. As specified, in determining economic production,
constant product reference prices have been based on a 12-month average price,
calculated as the unweighted arithmetic average of the first-day-of-the-month
price for each month within the 12-month period prior to the effective date of
our report. 

	Hemisphere Energy Corporation 	October 2, 2014 
	Report of Third
      Party for Canadian Properties 	Page 4 

A summary of the product and reference prices are outlined below:

	 	Table 2: Twelve month average SEC compliant
      constant pricing 	  
	 	Exchange Rate ($Cdn/$US) 	0.97 
	 	WTI ($US/bbl) 	96.94 
	 	Edmonton Light Crude ($Cdn/bbl) 	93.19 
	 	Propane Edmonton ($Cdn/bbl) 	32.97 
	 	Butane Edmonton ($Cdn/bbl) 	66.58 
	 	Natural Gas Price at Henry Hub ($US/MMBtu) 	3.67 
	 	AECO Spot Natural Gas Price ($Cdn/MMBtu) 	3.16 
	 	Average Realized Price by Hemisphere after location
    and quality differentials Oil ($Cdn/bbl)	71.00
	 	Average Realized Price by Hemisphere after location
    and quality differentials Gas ($Cdn/bbl)	2.97
	 	Average Realized Price by Hemisphere after location
    and quality differentials NGL ($Cdn/bbl)	66.58

The Average Realized Prices were calculated after removing location and
quality adjustments from the benchmark oil and gas prices.

Generally, operations are subject to various levels of
government controls and regulations. These laws and regulations may include
matters relating to land tenure, drilling, production practices, environmental
protection, marketing and pricing policies, royalties, various taxes and levies
including income tax, and foreign trade and investment, that are subject to
change from time to time. Current legislation is generally a matter of public
record, and additional legislation or amendments that will affect reserves or
when any such proposals, if enacted, might become effective generally cannot be
predicted. Changes in government regulations could affect reserves or related
economics. In the regions that are currently being evaluated we believe we have
applied existing regulations appropriately. 

The results of our third party study, presented in report form
herein, were prepared in accordance with the disclosure requirements set forth
in the SEC regulations and intended for public disclosure as an exhibit in
filings made with the SEC by Hemisphere. We hereby consent to the references to
our name and our third party report as well as the filing of our third party
report as an exhibit to Hemisphere’s registration statement on Form 20-F.

McDaniel is an independent petroleum engineering consulting
firm that has been providing petroleum consulting services throughout the world
for over 50 years. McDaniel is registered with the Association of Professional
Engineers and Geoscientists of Alberta (APEGA). All of the professionals
involved in the preparation of this report have in excess of 5 years of
experience in the evaluation of oil and gas properties. Mr. Chris Kowalski, Vice
President, supervised the preperation of this report. Mr. Kowalski is a
professional engineer registered with APEGA and has over 20 years of experience
in the evaluation of oil and gas properties.

	Hemisphere Energy Corporation 	October 2, 2014 
	Report of Third
      Party for Canadian Properties 	Page 5 

McDaniel does not have any financial interest, including stock
ownership, in Hemisphere. Our fees were not contingent on the results of our
evaluation. This letter report has been prepared at the request of Hemisphere
and should not be used for purposes other than those for which it is intended.
We reserve the right to revise any of the estimates provided herein if any
relevant data existing prior to preparation of this report was not made
available or if any data provided was found to be erroneous. 

If there are any questions, please contact the writer directly
at (403) 218-1383. 

Sincerely, 

McDANIEL & ASSOCIATES CONSULTANTS LTD. 
APEGA PERMIT
NUMBER: P3145 

/s/ C. B.
Kowalski                                       
 
C. B. Kowalski, P. Eng.

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