December 1, 2020 – Further to their Plan of Reorganization and plan support agreement, the Debtors have now filed the proposed terms of a $200.0mn Exit Facility [Exhibit D to Docket No. 1337].

Key Terms of the Exit Facility:

• Borrower: CEC Entertainment, Inc.
• Administrative Agent: Administrative Agent: Lenders party hereto from time to time.
• Commitment: “Initial Term Loan Commitment” shall mean $200,000,000.
  • The financing also includes an "incremental Amount." According to the Exit Facility agreement, “Incremental Amount” shall mean the excess (if any) of (a) $75,000,000 over (b) the sum of (x) the aggregate amount of all Incremental Term Loan Commitments and Incremental Revolving Facility Commitments and (y) the aggregate principal amount of Indebtedness outstanding at closing; provided that, the amount of any Extended Term Loans or Extended Revolving Facility Commitments deemed to be Incremental Term Loans or Incremental Revolving Facility Commitments pursuant to Section 2.21(g) shall be excluded.
• Date and Location: Included in December 1, 2020 Plan Supplement [Docket No. 1337 Exhibit D]
• Interest and Applicable Margin: With respect to any Initial Term Loan, (i) in the case of any Eurocurrency Loan for any Interest Period for which the Cash Option is elected, LIBOR plus 9.25% per annum and for any Interest Period therefor for which the Cash/PIK Option is elected, LIBOR plus 10.25% per annum and (ii) in the case of any ABR Loan for any ABR Period for which the Cash Option is elected, the adjusted Base rate plus 8.25% per annum and for any ABR Period therefor for which the Cash/PIK Option, the adjusted Base rate plus 9.25% per annum. With respect to Other Term Loans and/or Incremental Revolving Loans, the “Applicable Margin” set forth in the Incremental Assumption Agreement relating thereto.
• Maturity/Termination: Not yet specified in Exit Facility agreement.
• Use of Proceeds: The Exit Financing will be used to fund Plan distributions, including repayment of DIP Facility claims, and to fund the liquidity requirements of the reorganized Debtors.

Plan Background

The Amended Disclosure Statement [Docket No. 1215] provides, “The Plan is the result of extensive good faith negotiations, overseen by the Debtors’ Restructuring Committee, among the Debtors and a number of their key economic stakeholders, that have agreed to support the Plan pursuant to that certain Plan Support Agreement dated as of September 4, 2020 (the ‘Original PSA’), as amended and restated on September 25, 2020 (the ‘Amended and Restated PSA’), and further amended and restated on October 21, 2020 (as further amended and restated, the ‘Second Amended and Restated PSA’). With the addition of the Initial Additional Consenting Creditors and Noteholder Additional Consenting Creditors…the Second Amended and Restated PSA now includes holders of in excess of 92% of the obligations outstanding under the First Lien Credit Agreement and holders of in excess of 80% of the obligations outstanding under the Senior Unsecured Notes Indenture.

The Plan provides for a comprehensive restructuring of the Company’s balance sheet and a significant investment of capital in the Debtors’ business. Specifically, the proposed restructuring contemplates, among other things:

• A debt-for-equity exchange transaction (or similar transaction)
• The following treatment of Claims and Equity Interests:

1. A holder of an Allowed First Lien Debt Claim will receive on the Effective Date, in full and final satisfaction of such Allowed First Lien Debt Claim, its Pro Rata Share of: (i) 100% of the New Equity Interests, subject to the dilution described herein, and and (ii) the Second-Out Term Loan Facility.
2. Each holder of an Allowed Senior Unsecured Notes Claim will receive, in full and final satisfaction of such Senior Unsecured Notes Claim, its Pro Rata Share of New Warrants, subject to dilution by the MIP Equity.
3. Each holder of an Allowed General Unsecured Claim will receive a GUC Trust Interest which shall entitle each holder of an Allowed General Unsecured Claim to receive, in full and final satisfaction of such Allowed General Unsecured Claim, its Pro Rata Share GUC Trust Assets after the GUC Trust Expenses have been paid in full or otherwise reserved for
4. Each holder of Existing Queso Interests will receive no recovery.

• A $200 million first lien first out term loan facility (the ‘Exit Facility’), which will be backstopped by the Initial Consenting Creditors, and which is subject to increase as necessary to repay claims under the DIP Facility and fund the liquidity requirements of the Reorganized Debtors.

The Debtors will fund distributions and satisfy applicable Claims under the Plan with Cash on hand, the Exit Facility, the New Second-Out Term Loan Facility, New Equity Interests, and New Warrants.

The Debtors believe that upon consummation of the Plan and the transactions contemplated thereby, the post-emergence enterprise will have the ability to withstand the challenges of operating in a pandemic and post-pandemic environment and be best positioned to fully reopen operations, as permitted.”

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