Downstream Development Authority Announces Amendments to and Extension of Consent Solicitation for its 10.500% Senior Secured Notes Due 2023

QUAPAW, Okla., Sept. 12, 2019 /PRNewswire/ -- Downstream Development Authority of the Quapaw Tribe of Oklahoma (O-Gah-Pah) ("Downstream") today announced that it will amend and restate its previously announced solicitation of consents (the "Consent Solicitation") from holders of record of its outstanding 10.500% Senior Secured Notes due 2023 (the "Notes") as of 5:00 p.m., New York City time, on August 6, 2019, to approve amendments to the indenture relating to the Notes (the "Indenture"). The amendments would, among other things, allow Downstream to designate its subsidiary, Saracen Development, LLC ("Saracen"), as an "Unrestricted Subsidiary" under the Indenture and thereby permit Saracen to raise capital in one or more capital market transactions or through borrowings (the "Saracen Financing"). The Consent Solicitation will amend and restate the terms and conditions of the solicitation of consents of holders of record of the Notes by Downstream as set forth in the Consent Solicitation Statement dated August 7, 2019. Holders of the Notes who have previously  delivered consents in connection with the Consent Solicitation do not need to redeliver such consents or take any other action in response to this announcement in order to consent to the Consent Solicitation. 

Following the commencement of the consent solicitation on August 7, 2019, and the execution of certain confidentiality agreements entered into with certain noteholders, representatives of Downstream and its financial and legal advisers and representatives of such noteholders and their legal advisors commenced discussions of certain amendments to the terms and conditions of the consent solicitation as set forth in the Consent Solicitation Statement dated August 7, 2019. As a result of those discussions, the Consent Solicitation has been amended to provide, among other things, the following:

• each holder of Notes who validly consents and does not revoke such consent prior to the Expiration Time (as defined below) (the "Consenting Holders") will receive (i) a payment of $12.50 per $1,000 principal amount of the Notes held by such Consenting Holders as to which it has received and accepted consents prior to the Expiration Time (the "Consent Fee") promptly following the Expiration Time and upon the satisfaction or waiver of all conditions to the Consent Solicitation and (ii) an additional payment of $12.50 per $1,000 principal amount of the Notes held by such Consenting Holders prior to December 31, 2019 (the "Additional Consent Fee" and, together with the Consent Fee, the "Consent Fees"), in the manner described in the Consent Solicitation Statement;
• an increase of 2.0% in the redemption price of the Notes beginning on February 15 of the years indicated below:

• a license agreement between Downstream and Saracen providing for the payment of a license fee by Saracen to Downstream of (1) following the opening of the planned Saracen Casino annex, an amount equal to the greater of (a) 3.00% of the gross gaming revenue of the Saracen Casino annex and (b) $50,000 monthly and (2) following the opening of the planned Saracen Casino, an amount equal to the greater of (a) 1.25% of the gross gaming revenue of the Saracen Casino annex and the Saracen Casino and (b) $250,000 per month; and
• establish a receivable from Saracen to Downstream in the amount of $17.0 million, including any cash or pay-in-kind interest or dividend thereon at a rate equal to 10.5% prior to the Saracen Financing, and equal to the interest or dividend rate on the highest rate of any Saracen Financing after such Saracen Financing, and with a maturity date equal to the earliest maturity date of any Saracen Financing.

In addition, the amendments will include certain other changes to terms and covenants in the Indenture that were mutually agreed upon by the parties as described Consent Solicitation Statement (as amended and restated on the date hereof).

Adoption of the proposed amendments requires the consent of holders of at least a majority of the outstanding aggregate principal amount of the Notes (the "Requisite Consents").

The Consent Solicitation will expire at 5:00 p.m., New York City time, on September 18, 2019, unless Downstream extends it at its sole discretion (such date and time, as it may be extended, the "Expiration Time"). Downstream anticipates that the effective time of the amendments to the Indenture (the "Effective Time") will occur promptly after the receipt of the Requisite Consents at or prior to the Expiration Time. The Effective Time may be prior to the Expiration Time, and holders of the Notes will not be given prior notice of the Effective Time. Even though the amendments will become effective as of the Effective Time, amendments will not become operative thereunder until payment of the Consent Fee. Consents that have been validly delivered may be validly revoked until, but not after, the Effective Time. If the proposed amendments to the Indenture are approved, the amendments will be binding on all holders of the Notes, including those that did not deliver their consent, but only holders delivering valid and unrevoked consents on or prior to the Expiration Time will receive payment of the Consent Fees described above. No Consent Fees will be payable with respect to any Consents received after the Expiration Time. The Consent Solicitation is contingent upon the satisfaction of certain conditions, including the receipt of the Requisite Consents at or prior to the Expiration Time. Downstream may amend, extend or terminate the Consent Solicitation in its sole discretion and subject to applicable law.

None of Downstream, its subsidiaries or affiliates, the Solicitation Agent, the Information Agent or the Tabulation Agent is making any recommendation as to whether holders of the Notes should consent or refrain from consenting to the proposed amendments. Holders must make their own decision as to whether to consent. This press release is not a solicitation of consents with respect to the Notes and does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. The Consent Solicitation is being made solely pursuant to the Consent Solicitation Statement (as amended and restated on or about the date hereof) that Downstream will distribute to the holders of the Notes. For a complete statement of the terms and conditions of the Consent Solicitation and the proposed amendments to the Indenture, holders of the Notes should refer to the Consent Solicitation Statement, which will set forth the complete terms of the Consent Solicitation.

Questions concerning the terms of the Consent Solicitation should be directed to Credit Suisse Securities (USA) LLC, the Solicitation Agent, at (800) 820-1653 (U.S. toll free) or (212) 538-2147 (collect). Holders may obtain copies of the Consent Solicitation Statement from D.F. King & Co., Inc., the Information Agent and Tabulation Agent for the Consent Solicitation, by telephone at (212) 269-5550 (banks and brokers) or toll free at (800) 290-6424 (all others) or by email at [email protected].

About Downstream

Downstream is a wholly-owned, unincorporated instrumentality of the Quapaw Nation, a federally recognized tribe. Downstream owns and operates Downstream Casino Resort, which is a full-service destination casino resort located in northeast Oklahoma at the three-corner border of Oklahoma, Missouri and Kansas at Interstate 44, Missouri Exit 1, near Joplin, Missouri. The casino resort features a two tower hotel with 374 guestrooms and suites, approximately 70,000 square feet of gaming space with 1,983 slot machines, 32 table games and 14 poker tables, 38,000 square feet of meeting and event space, including an indoor 29,000 square-foot events pavilion, five restaurants, a health club and a heated outdoor swimming pool featuring a bar, cabanas and a hot tub.

Forward-Looking Statements

This press release contains forward-looking statements. These statements are based on management's current expectations, estimates and projections. Forward-looking statements are subject to risks and uncertainties that may cause actual results in the future to differ materially from the results projected or implied in any forward-looking statements contained in this press release. Such risks and uncertainties include but are not limited to: changes in federal or state laws or the administration of such laws affecting Downstream's gaming operation; maintenance of licenses required under gaming laws and regulations and other permits and approvals required under applicable laws and regulations; risks associated with Downstream's substantial indebtedness and debt service; Downstream's incurrence of any additional indebtedness; existing and new competition in our markets; Downstream's dependence on one casino resort; the local, regional, national or global economic climate; risks associated with reduction in discretionary consumer spending; difficulties in attracting and retaining qualified employees; and assumptions relating to any of the foregoing. Downstream does not undertake to update forward-looking statements.

SOURCE Downstream Development Authority of the Quapaw Tribe of Oklahoma