Form 8-K CAESARS ENTERTAINMENT For: Oct 07

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

October 7, 2016

Date of Report (Date of Earliest Event Reported)

 

 

Caesars Entertainment Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-10410		62-1411755
(State of Incorporation)		(Commission File Number)		(IRS Employer Identification Number)

One Caesars Palace Drive

Las Vegas, Nevada 89109

(Address of principal executive offices) (Zip Code)

(702) 407-6000

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☒		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 1.01 Entry into Material Definitive Agreement.

Amendment to CIE Proceeds and Reservation of Rights Agreement

On October 7, 2016, Caesars Entertainment Corporation (“CEC”), Caesars Acquisition Company (“CAC”), Caesars Interactive Entertainment, LLC (formerly known as Caesars Interactive Entertainment, Inc.), an indirect subsidiary of CAC (“CIE”), and Caesars Entertainment Operating Company, Inc., a majority owned subsidiary of CEC (“CEOC”), entered into an amendment (the “CIE Proceeds Amendment”) to the CIE Proceeds and Reservation of Rights Agreement, dated as of September 9, 2016, by and among CEC, CAC, CIE and CEOC (the “CIE Proceeds Agreement”).

The CIE Proceeds Amendment provides that the maximum amount to be paid pursuant to the CIE Proceeds Agreement to CEC for payment of (a) certain professional fees and disbursements and (b) other amounts in accordance with the Second Lien Bond RSA (as defined below) (the “CEC Expense Amounts”) will be increased to $235 million and allows CEC to use the CEC Expense Amounts to pay certain fees pursuant to the Restructuring Support, Forbearance, and Settlement Agreement, dated as of October 4, 2016, by and among CEC, CEOC, CAC (solely with respect to certain sections therein), the holders of claims in respect of CEOC’s second lien notes and the Official Committee of Second Priority Noteholders (the “Second Lien Bond RSA”). The CIE Proceeds Amendment also modifies the time periods in which certain funds may be released to CEC from the escrow.

The foregoing description of the CIE Proceeds Amendment does not purport to be complete and is qualified in its entirety by reference to the CIE Proceeds Amendment, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

Amendment to the CGP Operating Agreement

On October 7, 2016, CEC, CAC and certain subsidiaries of CEC (the “CEC Members”) entered into a second amendment (the “CGP Operating Agreement Amendment”) to the Amended and Restated Limited Liability Company Agreement of Caesars Growth Partners, LLC (“CGP”), to, among other things, (a) increase the maximum amount of special distributions from CGP to the CEC Members to $235 million and (b) permit the use of such distributions to satisfy certain payment obligations set forth in the CIE Proceeds Agreement, as amended, and the Second Lien Bond RSA.

The foregoing description of the CGP Operating Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the CGP Operating Agreement Amendment, which is filed as Exhibit 10.2 hereto and incorporated herein by reference.

Important Additional Information

Pursuant to the Amended and Restated Agreement and Plan of Merger, dated as of July 9, 2016, between CEC and CAC, among other things, CAC will merge with and into CEC, with CEC as the surviving company (the “Merger”). In connection with the Merger, CEC and CAC will file with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 that will include a joint proxy statement/prospectus, as well as other relevant documents concerning the proposed transaction. Stockholders are urged to read the Registration Statement and joint proxy statement/prospectus regarding the Merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. You will be able to obtain a free copy of such joint proxy statement/prospectus, as well as other filings containing information about CEC and CAC, at the SEC’s website (www.sec.gov), from CEC Investor Relations (investor.caesars.com) or from CAC Investor Relations (investor.caesarsacquisitioncompany.com).

 

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Item 9.01 Financial Statements and Exhibits.

 

(d)		Exhibits. The following exhibits are being filed herewith:

 

Exhibit No.		Description
10.1		Amendment No. 1 to CIE Proceeds and Reservation of Rights Agreement, dated as of October 7, 2016, by and among Caesars Interactive Entertainment, LLC (formerly known as Caesars Interactive Entertainment, Inc.), Caesars Acquisition Company, on behalf of itself and each of its direct and indirect subsidiaries, Caesars Entertainment Corporation, on behalf of itself and each of its direct and indirect subsidiaries, other than Caesars Entertainment Operating Company, Inc., and Caesars Entertainment Operating Company, Inc. on behalf of itself and each of the debtors in the Chapter 11 Cases.
10.2		Second Amendment to the Amended and Restated Limited Liability Company Agreement of Caesars Growth Partners, LLC, dated as of October 21, 2013, dated as of October 7, 2016, entered into by and among Caesars Acquisition Company, in its capacity as Caesars Growth Partners, LLC’s managing member and as a member of Caesars Growth Partners, LLC, HIE Holdings, Inc., Harrah’s BC, Inc. and Caesars Entertainment Corporation.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				CAESARS ENTERTAINMENT CORPORATION
Date: October 7, 2016				By:		/s/ Scott E. Wiegand
						Name:		Scott E. Wiegand
						Title:		Senior Vice President, Deputy General Counsel and Corporate Secretary

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EXHIBIT INDEX

 

Exhibit No.		Description
10.1		Amendment No. 1 to CIE Proceeds and Reservation of Rights Agreement, dated as of October 7, 2016, by and among Caesars Interactive Entertainment, LLC (formerly known as Caesars Interactive Entertainment, Inc.), Caesars Acquisition Company, on behalf of itself and each of its direct and indirect subsidiaries, Caesars Entertainment Corporation, on behalf of itself and each of its direct and indirect subsidiaries, other than Caesars Entertainment Operating Company, Inc., and Caesars Entertainment Operating Company, Inc. on behalf of itself and each of the debtors in the Chapter 11 Cases.
10.2		Second Amendment to the Amended and Restated Limited Liability Company Agreement of Caesars Growth Partners, LLC, dated as of October 21, 2013, dated as of October 7, 2016, entered into by and among Caesars Acquisition Company, in its capacity as Caesars Growth Partners, LLC’s managing member and as a member of Caesars Growth Partners, LLC, HIE Holdings, Inc., Harrah’s BC, Inc. and Caesars Entertainment Corporation.

Exhibit 10.1

Execution Copy

AMENDMENT NO. 1 TO CIE PROCEEDS AND RESERVATION OF RIGHTS AGREEMENT

THIS AMENDMENT NO. 1 TO CIE PROCEEDS AND RESERVATION OF RIGHTS AGREEMENT (this “Amendment”), dated as of October 7, 2016, is made by and among (i) Caesars Interactive Entertainment, LLC (formerly known as Caesars Interactive Entertainment, Inc.) (“CIE”), (ii) Caesars Acquisition Company, on behalf of itself and each of its direct and indirect Subsidiaries (collectively, “CAC”), (iii) Caesars Entertainment Corporation, on behalf of itself and each of its direct and indirect Subsidiaries, other than the Company (collectively, “CEC”), and (iv) Caesars Entertainment Operating Company, on behalf of itself and each of the debtors in the Chapter 11 Cases (collectively, the “Company” and together with CIE, CAC and CEC, the “Parties”).

Capitalized terms not defined herein have the meanings assigned to such terms in that certain CIE Proceeds and Reservation of Rights Agreement, dated as of September 9, 2016, by and among the Parties (the “Agreement”).

WHEREAS, the Parties desire to amend the Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing preamble and recital, which shall constitute a part of this Amendment, and the mutual promises contained in this Amendment, and intending to be legally bound thereby, the Parties agree as follows.

1. Amendments to Agreement. Annex A to the Agreement is hereby amended by:

(a) amending and restating the row of Annex A to the Agreement entitled “CEC Expense Amount” as follows.

 

CEC Expense Amounts		Set forth on the “Sources and Uses” Exhibit attached hereto, and in any event capped at $235,000,000. “CEC Expense Amounts” means amounts to be paid to CEC with certification from CEC within 5 business days after payment to CEC that all such amounts have been paid to payees permitted by this paragraph, pursuant to invoices from such payees (which may be summary invoices or “cover page” invoices, indicating only the service provider, the period covered thereby, the amount invoiced, the date payable and the wire instructions for payment), for the payment of (i) reasonable and documented third party professional fees (actually incurred or required to be paid in advance pursuant to existing contractual relationships) of advisors to CEC or special committee(s) of the board of directors of CEC for services rendered to CEC or such special committee(s), (ii) amounts, if any, payable pursuant to clause (B) or clause (C) of the third paragraph under this “CEC Expense Amount” heading and (iii) such other reasonable fees and expenses as may be consented to from time to time by CEOC in its sole discretion.   For the avoidance of doubt, CEC Expense Amounts shall in no event include any professional fees of advisors of any Plan Sponsor or any of its affiliates (other than CEC or its Subsidiaries) or any other advisor in respect of services rendered to any Plan Sponsor or any of its affiliates (other than CEC or its Subsidiaries) or relating to any lobbying efforts with respect to the Trust Indenture Act.

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		No CEC Expense Amounts shall be paid (i) until at least 60 days after the Closing, (ii) in excess of $15,000,000 during any thirty day period or (iii) following the commencement of a chapter 11 case with respect to CEC and/or its Subsidiaries (other than CEOC and its Subsidiaries) unless CEOC otherwise agrees in its sole discretion or there has occurred a CEC Bankruptcy Release Event; provided that CEC shall be permitted to receive (A) within 30 days after the Closing, CEC Expense Amounts that were due and payable as of the Closing, subject to the other terms and conditions herein up to $20,000,000 to account for such outstanding accrued and unpaid expenses (the “Accrued and Unpaid Amount”); (B) within five (5) business days of the date of the Restructuring Support, Forbearance, and Settlement Agreement among CEOC, CEC, CAC, the Official Committee of Second Priority Noteholders, and certain holders of senior secured second priority notes issued by CEOC (the “Second Lien RSA”), one half (1/2) of the 1L RSA Forbearance Fees (as defined in the Second Lien RSA) that shall be paid in accordance with the Second Lien RSA; and (C) within 30 days after the date of the Second Lien RSA, the amount necessary to satisfy CEC’s obligations under Section 5(a)(ix)(a) of the Second Lien RSA. For the avoidance of doubt, CEC may only use the amounts under clauses (B) and (C) in this paragraph to satisfy CEC’s obligations under the Second Lien RSA.   In the event that the Debtors confirm a standalone plan of reorganization, then CEC shall promptly repay all previously paid CEC Expense Amounts to the CIE Escrow (and no further CEC Expense Amounts will be paid). Further, if the Plan has not been confirmed by the Bankruptcy Court (as defined in the Plan) pursuant to a Final Order (as defined in the Plan) prior to February 1, 2017, no CEC Expense Amounts shall be paid after February 1, 2017 unless and until (x) the Plan has been confirmed by the Bankruptcy Court pursuant to a Final Order or (y) CEOC and CEC have entered into mutually agreeable arrangements pursuant to which CEC provides satisfactory security for (i) the foregoing repayment obligation and (ii) CEC’s obligation to pay CEOC for Tax Attributes (as defined in, and pursuant to, the CIE Proceeds Agreement).

(b) amending and restating clause (vi) of the row of Annex A to the Agreement entitled under the heading “Permitted CIE Escrow Uses” as follows.

“(vi) as requested by CIE, from time to time (A) on or after the 60th day after the Closing (subject to satisfaction of the conditions set forth in this Term Sheet), CEC Expense Amounts or (B) within the times set forth under the “CEC Expense Amounts” heading, to satisfy CEC’s obligations under the Second Lien RSA;”

 

2.

Ratification. Except as set forth herein, all provisions of the Agreement remain in full force and effect as originally written.

 

3.

Miscellaneous. This Amendment shall be governed by and construed in accordance with the applicable terms of Section 5 of the Agreement, which are hereby incorporated by reference and shall apply mutatis mutandis as if set forth herein.

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IN WITNESS WHEREOF, the Parties have executed this Amendment as of the day and year first above written.

 

 

 

 

[Signature page to Amendment No. 1 to CIE Proceeds and Reservation of Rights Agreement]

Exhibit 10.2

Execution Version

SECOND AMENDMENT

TO THE

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

CAESARS GROWTH PARTNERS, LLC

This Second Amendment (this “Amendment”) to the Amended and Restated Limited Liability Company Agreement of Caesars Growth Partners, LLC, a Delaware limited liability company (the “Company”), dated as of October 21, 2013, as amended by the First Amendment to the Amended and Restated Limited Liability Company Agreement of the Company, dated as of September 23, 2016, entered into by and among the parties hereto (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “CGP Operating Agreement”), is dated and effective as of October 7, 2016, is being entered into by and among Caesars Acquisition Company, a Delaware corporation (“CAC”), in its capacity as the Company’s managing member and as a Member (as defined below), HIE Holdings, Inc., a Delaware corporation and Harrah’s BC, Inc., a Delaware corporation (each, a “CEC Member”, and together, the “CEC Members”, and collectively with CAC, the “Members”), and Caesars Entertainment Corporation, a Delaware corporation (“CEC”). Capitalized terms used in this Amendment but not otherwise defined herein shall have the meanings given to such terms in the CGP Operating Agreement.

WHEREAS, in accordance with Section 15.5 of the CGP Operating Agreement, the Managing Member, CEC and the Members wish to amend the CGP Operating Agreement to increase the distributions to the CEC Members and permit its use for additional purposes as set forth herein.

NOW, THEREFORE, in consideration of the promises and the mutual agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE I.

AMENDMENTS

Section 1.1 Section 6.9 of the CGP Operating Agreement. Section 6.9 of the CGP Operating Agreement is hereby amended to read in its entirety as follows (bold, underlined text indicates an addition):

“6.9. Special Distributions. Following the consummation of the CIE Sale Transaction, notwithstanding anything to the contrary in this Agreement (including, without limitation, Sections 6.2, 6.3, 6.4, 6.5 and 12.2), the Company shall make special distributions to the Members from the proceeds of the CIE Sale Transaction, as follows:

(a) from time to time, upon the reasonable request of CEC and to the extent (i) permitted by that certain CIE Proceeds and Reservation of Rights

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Agreement, dated as of September 9, 2016, by and among CIE, CAC, CEC and CEOC, as amended by the Amendment No. 1 to the CIE Proceeds and Reservation of Rights Agreement, dated as of October 7, 2016, entered into by the parties thereto (the “CIE Proceeds Agreement”), and (ii) that there is no action, suit or proceeding preventing such distribution, to the CEC Members, an aggregate cash amount not to exceed the sum of: (x) $235 million for the payment of professional fees and certain other payments as provided in the CIE Proceeds Agreement and that certain Restructuring Support, Forbearance, and Settlement Agreement, dated as of October 4, 2016, entered into by and among CEOC, CEC, CAC and the other parties thereto, and (y) $50 million to replenish a deposit previously made by CEC for the support or advancement of a proposed casino project in South Korea (collectively, the “CEC Special Distributions”); and

(b) from time to time, when and as determined by the Managing Member, to CAC, an aggregate cash amount not to exceed the CAC Tax Liability Amount (the “CAC Special Distributions”).

In addition, notwithstanding anything to the contrary in this Agreement, the parties hereto agree that (i) the Special Distributions shall not be taken into account for purposes of determining the amounts that any Member is entitled to receive under Sections 6.3 or 12.2, except to the extent provided in Section 12.2(c); (ii) without limiting the Special Distributions, no other distribution that constitutes a Tax Distribution shall be made to any Member as a result of any income or gains arising out of the CIE Sale Transaction; (iii) the proceeds of the CIE Sale Transaction used to pay the Special Distributions shall not be deemed proceeds of a Liquidation Event or a Partial Liquidation for purposes of this Agreement and the remaining proceeds of the CIE Sale Transaction shall be distributed at such time as the Managing Member shall determine as a Partial Liquidation in accordance with this Agreement; and (iv) for purposes of Section 6.2 (Allocations), Net Profits (and to the extent necessary, individual items of income or gain) attributable to the CIE Sale Transaction shall be allocated among the Members on a pro rata basis in accordance with their relative Company Percentage Interests.”

ARTICLE II.

MISCELLANEOUS

Section 2.1 Effect on Agreement. Except as expressly amended by this Amendment, the CGP Operating Agreement shall remain in full force and effect in accordance with its terms. As amended hereby, the CGP Operating Agreement is hereby ratified and confirmed in all respects.

Section 2.2 Binding Effect. This Amendment shall be binding upon and shall inure to the benefit of CAC, as the Company’s managing member, CEC and each Member and their respective heirs, permitted successors, permitted assigns, permitted distributees, and legal representatives; and by their signatures hereto, CAC, as the Company’s managing member, CEC

 

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and each Member intends to and does hereby become bound. Nothing expressed or mentioned in this Amendment is intended or shall be construed to give any Person other than the parties hereto and their respective permitted successors and assigns any legal or equitable right, remedy or claim under, in or in respect of this Amendment or any provision herein contained. For purposes of this Amendment, “Person” means any natural person, corporation, limited partnership, general partnership, limited liability company, joint stock company, joint venture, association, company, estate, trust, bank trust company, land trust, business trust, or other organization, whether or not a legal entity, custodian, trustee-executor, administrator, nominee or entity in a representative capacity and any government or agency or political subdivision thereof.

Section 2.3 Merger Agreement. Each of CAC and CEC acknowledge and agree that nothing in this Amendment shall amend, alter or modify in any respect the terms of, or constitute a consent, approval or waiver of rights under, that certain Amended and Restated Agreement and Plan of Merger, dated as of July 9, 2016, between CAC and CEC (the “Merger Agreement”), including, without limitation, in respect of each party’s covenants and obligations under Section 5.2 of the Merger Agreement (as such covenants and obligations relate to the proposed casino project in South Korea or otherwise).

Section 2.4 Governing Law; Severability. This Amendment, and all rights and remedies in connection therewith, will be governed by, and construed under, the applicable laws of the State of Delaware, without regard to otherwise governing principles of conflicts of law (whether of the State of Delaware or otherwise) that would result in the application of the laws of any other jurisdiction. If any provision of this Amendment is held to be illegal, invalid or unenforceable under present or future applicable laws effective during the term of this Amendment, such provision shall be fully severable; this Amendment shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Amendment; and the remaining provisions of this Amendment shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Amendment. Furthermore, in lieu of each such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Amendment a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid, and enforceable.

Section 2.5 Counterparts. This Amendment may be executed in any number of counterparts (including facsimile counterparts), all of which together shall constitute a single instrument.

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the Company, the Managing Member and the other Members, and CEC have executed this Amendment as of the date first set forth above.

 

 

[Signature Page to Second Amendment to CGP Operating Agreement]

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[Signature Page to Second Amendment to CGP Operating Agreement]

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