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

 

Date of Report (Date of earliest event reported): December 29, 2020

GOLDEN NUGGET ONLINE GAMING, INC.

(Exact name of registrant as specified in its charter)

 

Delaware 001-38893 83-3593048
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

 

1510 West Loop South, Houston, Texas 77027

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: 713-850-1010

 

Not Applicable

(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))
   

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading
Symbol(s)
  Name of each exchange on which
registered
Class A common stock, par value $0.0001 per share   GNOG   The Nasdaq Stock Market LLC
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share   GNOGW   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Introductory Note

 

On December 29, 2020 (the “Closing Date”), Golden Nugget Online Gaming, Inc. (formerly known as Landcadia Holdings II, Inc.), a Delaware corporation (the “Company”), consummated its previously announced acquisition of Golden Nugget Online Gaming, LLC (formerly known as Golden Nugget Online Gaming, Inc.), a New Jersey limited liability company and wholly-owned subsidiary of GNOG Holdco (as defined below) (“GNOG LLC”), pursuant to the Purchase Agreement, dated as of June 28, 2020 (as amended, the “Purchase Agreement”), by and among the Company, LHGN HoldCo, LLC, a Delaware limited liability company and newly formed, wholly-owned subsidiary of the Company (“Landcadia Holdco”), Landry’s Fertitta, LLC, a Texas limited liability company (“LF LLC”), GNOG Holdings, LLC, a Delaware limited liability company and newly formed, wholly-owned subsidiary of LF LLC (“GNOG Holdco”), and GNOG LLC. The transactions contemplated by the Purchase Agreement are referred to herein as the “Business Combination.”

 

Pursuant to the Purchase Agreement, on the Closing Date, LF LLC contributed all of its membership interests in GNOG HoldCo to Landcadia HoldCo (the “GNOG Contribution”), in exchange for (i) 31,350,625 Class B membership interests in Landcadia HoldCo (the “HoldCo Class B Units”), (ii) a corresponding number of shares of Class B common stock, par value $0.0001 per share, of the Company (the “Class B common stock”), each of which entitle the holder thereof to 10 votes per share, subject to the adjustments and limitations described below, (iii) cash consideration in an amount of $30.0 million (the “Closing Cash Consideration”) and (iv) the repayment of $150.0 million of the principal amount outstanding under that certain Credit Agreement, dated as of April 28, 2020, by and among GNOG LLC, LF LLC, Jefferies Finance LLC, Coöperatieve Rabobank U.A., New York Branch, Keybanc Capital Markets Inc., Citizens Bank, N.A., and the lenders party thereto, as amended from time to time (as amended, the “Credit Agreement”), and a related prepayment premium in an amount of approximately $24.0 million (together, the “Credit Agreement Payoff Amount”), as well as accrued and unpaid interest in an amount of approximately $4.9 million.

 

In connection with the closing of the Business Combination (the “Closing”), the Company changed its name from Landcadia Holdings II, Inc. to Golden Nugget Online Gaming, Inc. The Company is now operated as an umbrella partnership C-corporation, or “Up-C,” meaning that substantially all of the assets of the Company are held indirectly through GNOG LLC and the business of the Company is conducted through GNOG LLC. The Company’s only direct asset is its 54.1% membership interests in Landcadia HoldCo, which owns all of the equity interests in GNOG Holdco and GNOG LLC.

 

Unless the context otherwise requires, the “Company” refers to the registrant and its subsidiaries, including GNOG LLC and its subsidiaries, after the Closing, and “Landcadia” refers to the registrant prior the Closing.

 

Item 1.01. Entry into a Material Definitive Agreement.

 

A&R HoldCo LLC Agreement

 

On December 29, 2020, in connection with the Closing, the Company, Landcadia HoldCo and LF LLC entered into the Amended and Restated Limited Liability Company Agreement of Landcadia HoldCo (the “A&R HoldCo LLC Agreement”), which provides, among other things, that beginning 180 days after the Closing, each holder of HoldCo Class B Units will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of Class B common stock) for either one share of Class A common stock or, or at the election of the Company, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of one share of Class A common stock. In addition, the A&R HoldCo LLC Agreement provides for additional issuances of HoldCo Class B Units and the equivalent number of shares of Class B common stock to LF LLC in consideration of payments to be made by LF LLC to GNOG LLC pursuant to the terms of the Second A&R Intercompany Note (as defined below), with such payments and equity issuances being treated as capital transactions for accounting purposes. The additional HoldCo LLC Class B Units will be issued at the then-current market price of Class A common stock calculated as set forth in the A&R HoldCo LLC Agreement.

 

The foregoing description of the A&R HoldCo LLC Agreement does not purport to be complete and is qualified in its entirety by the full text of the A&R HoldCo LLC Agreement, a copy of which is attached as Exhibit 10.1 and is incorporated herein by reference.

 

 

 

 

Tax Receivable Agreement

 

On December 29, 2020, in connection with the Closing, the Company entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with LF LLC. The Tax Receivable Agreement provides for payment by the Company to LF LLC in respect of 85% of the U.S. federal, state and local income tax savings allocable to the Company from Landcadia HoldCo and arising from certain transactions, including (a) certain transactions contemplated under the Purchase Agreement and (b) the exchange of LF LLC’s HoldCo Class B Units for shares of the Company’s Class A common stock, par value $0.0001 per share (the “Class A common stock”), as determined on a “with and without” basis, and for an early termination payment by the Company to LF LLC in the event of a termination with a majority vote of disinterested directors, a material breach of a material obligation, or a change of control, subject to certain limitations, including in connection with available cash flow and financing facilities. Assuming no exchange of LF LLC’s HoldCo Class B Units pursuant the A&R HoldCo LLC Agreement (as defined below), the estimated liability under the Tax Receivable Agreement (“TRA liability”) is $24.2 million, subject to adjustment as provided in the Tax Receivable Agreement. Payments for such TRA liability will, subject to certain limitations, including in connection with available cash flow and financing facilities, be made annually in cash and are expected to be funded with tax distributions from Landcadia HoldCo. The Tax Receivable Agreement payments will commence in the year following the Company’s ability to realize tax savings provided through the transaction and, at this time, are expected to commence in 2025 (with respect to taxable periods ending in 2024). The amount and timing of such Tax Receivable Agreement payments may vary based upon a number of factors. The Tax Receivable Agreement also provides for an accelerated lump sum payment on the occurrence of certain events, among them a change of control. Based upon certain assumptions, it is estimated that such early termination payment could amount to approximately $257.4 million. It is anticipated that such early termination payments may be made from the proceeds of such change of control transaction; however, the Company may be required to fund such early termination payments from other sources and there can be no assurances that the Company will be able to finance such obligations in a manner that does not adversely affect its working capital or financial conditions.

 

The foregoing description of the Tax Receivable Agreement does not purport to be complete and is qualified in its entirety by the full text of the Tax Receivable Agreement, a copy of which is attached as Exhibit 10.2 and is incorporated herein by reference.

 

Lock-Up Amendment

 

At the Closing, certain insiders of the Company, including Tilman J. Fertitta and Jefferies Financial Group Inc. (f/k/a Leucadia National Corporation), a New York corporation (“JFG Sponsor”), and certain of the Company’s directors, entered into an amendment (the “Lock-Up Amendment”) to that certain letter agreement entered into on May 6, 2019 in connection with the Company’s initial public offering (the “Letter Agreement”), which added an additional acceleration event to the lock-up period contemplated under the Letter Agreement based on a price target of $15.00 per share of the Class A common stock following a period of 60 days after the Closing. The Letter Agreement and the lock-up period thereunder does not apply to the HoldCo Class B Units or shares of Class B common stock to be received by LF LLC pursuant to the Purchase Agreement.

 

The foregoing description of the Lock-Up Amendment does not purport to be complete and is qualified in its entirety by the full text of the Lock-Up Amendment, a copy of which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.

 

Amended and Restated Registration Rights Agreement

 

On December 29, 2020, in connection with the Closing, the Company entered into an amended and restated registration rights agreement (the “A&R Registration Rights Agreement”) with JFG Sponsor, Tilman Fertitta and LF LLC, which amended and restated that certain registration rights agreement, dated May 6, 2019, by and among Landcadia and certain of its initial investors, to include shares of Class A common stock issuable pursuant to the Purchase Agreement and the A&R HoldCo LLC Agreement.

 

The foregoing description of the A&R Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the full text of the A&R Registration Rights Agreement, a copy of which is attached hereto as Exhibit 10.4 and is incorporated herein by reference.

 

 

 

 

Second A&R Intercompany Note

 

On December 29, 2020, in connection with the Closing, LF LLC and GNOG LLC entered into the Second A&R Intercompany Note, which amended and restated that certain Amended and Restated Intercompany Note, dated as of December 16, 2020 by LF LLC and GNOG LLC (the “First A&R Intercompany Note”), to continue to act as a guarantee to the Credit Agreement and provided for, among other things, (a) a reduction in the principal amount outstanding under the First A&R Intercompany Note by $150.0 million, which reduction occurred at Closing, and (b) a reduction in the amounts payable thereunder to 6% per annum, to be paid quarterly on the outstanding balance from day to day thereunder. The Second A&R Intercompany Note will continue to provide for a corresponding reduction in the remaining principal amount due and owing thereunder for each payment made under the Credit Agreement that reduces the principal amount of the loans under the Credit Agreement. The A&R HoldCo LLC Agreement provides for additional issuances of HoldCo Class B Units and the equivalent number of shares of Class B common stock to LF LLC in consideration of the payments described in clause (b) above to be made by LF LLC to GNOG LLC pursuant to the terms of the Second A&R Intercompany Note, with such payments and equity issuances being treated as capital transactions for accounting purposes.

 

The foregoing description of the Second A&R Intercompany Note does not purport to be complete and is qualified in its entirety by the full text of the Second A&R Intercompany Note, a copy of which is attached hereto as Exhibit 10.5 and is incorporated herein by reference.

 

Trademark Licensing Agreement

 

On December 29, 2020, in connection with the Closing, GNOG LLC, Golden Nugget, LLC (“Golden Nugget”) and GNLV, LLC (“GNLV”) entered into a trademark license agreement (the “Trademark License Agreement”), pursuant to which GNLV has granted to GNOG LLC an exclusive license to use certain “Golden Nugget” trademarks (and other trademarks related to GNOG LLC’s business) in connection with operating online real money casino gambling and sports wagering in the U.S. and any of its territories, subject to certain restrictions. The license has a twenty-year term that commenced on the Closing Date. During the term of the agreement, GNOG LLC has agreed to pay Golden Nugget a monthly royalty payment equal to 3% of Net Gaming Revenue (as defined therein). Upon the tenth and fifteenth anniversary of the effective date of the Trademark License Agreement, the monthly royalty amount payable to GNLV will be adjusted to equal the greater of (i) 3% of Net Gaming Revenue and (ii) the fair market value of the licenses (as determined by an independent appraiser, if necessary).

 

While the trademarks licensed under the Trademark License Agreement generally will be exclusively licensed to GNOG LLC, in the event that (i) a new market or opportunity becomes available (e.g., pursuant to the legalization of online gaming in another jurisdiction), and (ii) GNOG LLC is unwilling, unable or otherwise fails to pursue such market or opportunity, Golden Nugget will be permitted to pursue such market or opportunity and utilize the trademarks covered by the Trademark License Agreement with respect thereto. For the avoidance of doubt, nothing in the Trademark License Agreement will restrict GNOG LLC (or Golden Nugget) from owning or operating an online-based casino using marks that are not covered by the A&R Trademark License Agreement.

 

The foregoing description of the Trademark License Agreement does not purport to be complete and is qualified in its entirety by the full text of the Trademark License Agreement, a copy of which is attached hereto as Exhibit 10.6 and is incorporated herein by reference.

 

A&R Online Gaming Operations Agreement

 

On December 29, 2020, in connection with the Closing, GNOG LLC and Golden Nugget Atlantic City, LLC (“GNAC”) entered into an amended and restated online gaming operations agreement (the “A&R Online Gaming Operations Agreement”), pursuant to which GNAC granted GNOG LLC the right to host, manage, control, operate, support and administer, under GNAC’s land-based casino operating licenses, the Golden Nugget-branded online gaming business, live dealer studio in New Jersey and the third-party operators. In addition, GNOG LLC is responsible for managing, administering and operating its online gaming business and providing services to GNAC in connection with the management and administration of certain platform agreements and GNAC is required to provide certain operational and infrastructure services to GNOG LLC in connection with its New Jersey operations. In addition to the 3% royalty payable pursuant to the A&R Trademark License Agreement as described above, GNOG LLC is also obligated to reimburse GNAC for certain expenses incurred by GNAC in connection with the New Jersey online gaming business, such as New Jersey licensing costs, regulatory fees, certain gaming taxes and other expenses incurred by GNAC directly in connection with GNOG LLC’s operations in New Jersey. The A&R Online Gaming Operations Agreement has a term of five years commencing from April 2020 and is renewable by GNOG LLC for an additional five-year term. The A&R Online Gaming Operations Agreement also provides for, among other things, (a) minimum performance standards under which GNOG LLC is required to operate the Golden Nugget online gaming business, and (b) an arms-length risk allocation framework (including with respect to insurance and indemnification obligations).

 

 

 

 

The foregoing description of the A&R Online Gaming Operations Agreement does not purport to be complete and is qualified in its entirety by the full text of the A&R Online Gaming Operations Agreement, a copy of which is attached hereto as Exhibit 10.7 and is incorporated herein by reference.

 

Winter Employment Agreement

 

On December 29, 2020, in connection with the Closing, Thomas Winter entered into an employment agreement with GNOG LLC, which superseded and replaced Mr. Winter’s existing employment agreement with GNOG LLC (the “Winter Employment Agreement”). Subject to earlier termination in accordance with its terms, the Winter Employment Agreement provides for a term through December 31, 2024, with an annual base salary of $400,000 and annual restricted stock awards in an amount equal to $600,000 under the Incentive Plan (as defined below), with each such award to vest in two equal installments over a two-year service period. Additionally, the Winter Employment Agreement provides for (i) an annual performance bonus opportunity equal to 175% of Mr. Winter’s base salary (but, in any event, not to exceed $700,000), based upon the attainment of certain performance metrics established by the Company’s chief executive officer (the “CEO”) or compensation committee of the Company’s board of directors, if applicable (the “Annual Performance Bonus”), (ii) an annual discretionary bonus in an amount up to $300,000, payable in cash or restricted stock, to be paid at the sole discretion of the CEO or the compensation committee, if applicable (the “Annual Discretionary Bonus”), (iii) upon the Closing, an initial equity award of 1,000,000 restricted stock units (the “Initial Equity Award”), and (iv) upon the Closing, an initial cash award of $7,500,000 (the “Initial Cash Award”) to be payable as follows: (a) $2,500,000 within five days of the Closing, (b) $2,500,000 within one year of the Closing, and (c) $2,500,000 within two years of the Closing.

 

Mr. Winter’s employment may be terminated by either the Company or Mr. Winter at any time and for any reason upon 30 day’s prior written notice. Mr. Winter is entitled to certain severance benefits upon a termination without Cause (as defined in the Winter Employment Agreement) or if Mr. Winter terminates his own employment for Good Reason (as defined in the Winter Employment Agreement) during the term. Such severance benefits are conditioned upon a release of claims in favor of GNOG LLC and include: (1) the balance of the Initial Cash Award not yet paid; (2) any accrued by unpaid Annual Performance Bonus with respect to any completed calendar year immediately preceding the termination date; (3) 1.0 times Mr. Winter’s base salary as in effect immediately prior to the termination date; (4) a payment equal to the product of (x) the target amount of the Annual Performance Bonus for the fiscal year in which the termination date occurs, and (y) a fraction, the numerator of which is the number of days Mr. Winter was employed by the Company during the year of termination and the denominator of which is the number of days in such year (the “Pro-Rata Bonus”); (5) if continuation coverage is timely and properly elected, a health plan continuation coverage subsidy in the form of reimbursement for up to the twelve-month period following the termination date; and (6) any unvested equity awards granted to Mr. Winter will accelerate and fully-vest upon such termination. If Mr. Winter’s employment terminates because of his death or disability (as defined in the employment agreement) during the term, Mr. Winter will receive: (1) the balance of the Initial Cash Award not yet paid; (2) any accrued but unpaid Annual Performance Bonus with respect to any completed calendar year immediately preceding the termination date; and (3) any unvested equity awards granted to Mr. Winter will accelerate and fully-vest upon such termination.

 

The foregoing description of the Winter Employment Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Winter Employment Agreement, a copy of which is attached hereto as Exhibit 10.10 and is incorporated herein by reference.

 

Indemnification Agreements

 

On December 29, 2020, in connection with the Closing, the Company entered into indemnification agreements with each of its directors and executive officers. Each indemnification agreement provides that, subject to limited exceptions, and among other things, the Company will indemnify the director or officer to the fullest extent permitted by applicable law for claims arising in his or her capacity as a director or officer of the Company. 

 

The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreements, a form of which is attached hereto as Exhibit 10.12 and is incorporated herein by reference.

 

 

 

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference.

 

On December 29, 2020, the Business Combination was approved by the stockholders of the Company at the special meeting in lieu of the 2020 annual meeting of stockholders (the “Special Meeting”). The Business Combination was completed on December 29, 2020.

 

The aggregate consideration for the Business Combination was $522.4 million, consisting of (i) $313.5 million payable in 31,350,625 HoldCo Class B Units and 31,350,625 shares of Class B common stock, (ii) $30 million in Closing Cash Consideration and (iii) the repayment of $150.0 million, representing one-half of the existing principal amount owed by GNOG LLC under the Credit Agreement, together with related prepayment premium of approximately $24.0 million, as well as accrued and unpaid interest in an amount of approximately $4.9 million. Houlihan Lokey rendered an opinion as to the fairness, from a financial point of view, to the Company, of the consideration to be paid by the Company pursuant to the Purchase Agreement.

 

Tilman J. Fertitta, our Chief Executive Officer and Chairman and one of the sponsors, and the former Chief Executive Officer and Co-Chairman of Landcadia, indirectly owns all of the equity interests in LF LLC which, prior to the Closing of the Business Combination, owned all of the equity interests in GNOG HoldCo and GNOG LLC.

 

As of the Closing Date and following the completion of the Business Combination, the Company had the following outstanding securities:

 

  36,982,320 shares of Class A common stock;
  31,350,625 shares of Class B common stock;
  16,425,000 warrants, each exercisable for one share of Class A Common Stock at a price of $11.50 per share.

As of the Closing Date and following the completion of the Business Combination, LF LLC owned 31,350,625 HoldCo Class B Units and 31,350,625 shares of Class B common stock. Pursuant to the terms of the A&R HoldCo LLC Agreement, beginning 180 days after the Closing, LF LLC will be entitled to cause Landcadia HoldCo to exchange all or a portion of its HoldCo Class B Units (upon the surrender of a corresponding number of shares of Class B common stock), on a one for-one basis, for either shares of Class A common stock, or at the election of the Company, in its capacity as the sole managing member of Landcadia HoldCo, the cash equivalent of the market value of such shares of Class A common stock, each of which is redeemable on a one-for-one basis for shares of Class A Common Stock.

 

Immediately following the Closing and by virtue of the holdings by Mr. Fertitta and his affiliates, including LF LLC, of shares of Class A common stock and Class B common stock, Mr. Fertitta beneficially owns approximately 11.1% of the economic interests of the Company (excluding any shares of Class A common stock that may be issued upon exercise of the warrants held by them) and 79.9% of the voting power of the capital stock of the Company (after the automatic downward adjustment of Mr. Fertitta and his affiliates’ voting power in accordance with the terms of the Fourth Amended and Restated Charter (as defined below)). Mr. Fertitta and his affiliates beneficially own approximately 45.9% of the economic interests of Landcadia HoldCo through LF LLC’s HoldCo Class B Units, which carry no voting rights. In addition, Landcadia HoldCo owns all of the equity interests in GNOG HoldCo, which owns all of the equity interests in GNOG LLC.

 

The rules of the Nasdaq Stock Market (“Nasdaq”) define a “controlled company” as a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. As noted above, following the completion of the Business Combination, Mr. Fertitta and his affiliates hold 79.9% of the voting power of the Company. As a result, the Company is a controlled company under the Nasdaq listing rules. As a “controlled company,” the Company qualifies for exemptions from certain corporate governance rules, including (i) a board of directors comprised of a majority of independent directors; (ii) compensation of the Company’s executive officers being determined by a majority of the independent directors or a compensation committee comprised solely of independent directors; (iii) a compensation committee charter which, among other things, provides the compensation committee with the authority and funding to retain compensation consultants and other advisors; and (iv) director nominees selected, or recommended for the board’s selection, either by a majority of the independent directors or a nominating committee comprised solely of independent directors. Following the Closing, the Company intends to rely on the exemptions described in clauses (i), (ii), (iii) and (iv) above. If the Company ceases to be a “controlled company,” and its securities are still listed on Nasdaq, it will be required to comply with these requirements by the date its status as a “controlled company” changes or within specified transition periods applicable to certain provisions, as the case may be.

 

 

 

 

Prior to the Closing, the Landcadia was a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. After the Closing, the Company became a holding company whose assets primarily consist of interests in its subsidiaries, including GNOG LLC.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

The Company makes forward-looking statements in this Current Report on Form 8-K. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for the Company’s business. Specifically, forward-looking statements may include statements relating to:

 

  · the benefits of the Business Combination;

 

  · the future financial performance of the Company following the Business Combination;

 

  · expansion plans and opportunities; and

 

  · other statements preceded by, followed by or that include the words “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

 

These forward-looking statements are based on information available as of the date of this Current Report on Form 8-K and the Company’s management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

· the risk that the Business Combination disrupts current plans and operations;

 

· the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of the combined business to grow and manage growth profitably;

 

· costs related to the Business Combination;

 

· changes in applicable laws or regulations;

 

· factors relating to the future business, operations and financial performance of GNOG LLC, including:

 

· GNOG LLC’s inability to compete with other forms of entertainment for consumers’ discretionary time and income;

 

· market conditions and global and economic factors beyond GNOG LLC’s control, including the potential adverse effects of the ongoing global COVID-19 pandemic and reductions in discretionary consumer spending, among others;

 

· GNOG LLC’s inability to attract and retain users;

 

· GNOG LLC’s inability to profitably expand into new markets;

 

· changes in applicable laws or regulations;

 

· the failure of third-party service providers to perform services and protect intellectual property rights required for the operation of GNOG LLC’s business;

 

· the possibility that the Company or GNOG LLC may be adversely affected by other economic, business, and/or competitive factors; and

 

 

 

 

· other risks and uncertainties indicated or incorporated by reference in this Current Report on Form 8-K, including those set forth in the “Risk Factors” section in Landcadia’s definitive proxy statement filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 2, 2020 (the “Proxy Statement”) relating to the Special Meeting, which is incorporated herein by reference.

 

Business

 

The business of Landcadia prior to the Business Combination is described in the Proxy Statement in the section entitled “Information About the Company,” which is incorporated herein by reference. The business of GNOG LLC prior to the Business Combination is described in in the Proxy Statement in the section entitled “Business of GNOG,” which is incorporated herein by reference.

 

Risk Factors

 

The risk factors related to the Company’s business and operations and the Business Combination are set forth in the Proxy Statement in the section entitled “Risk Factors,” which is incorporated herein by reference.

 

Properties

 

The properties of the Company are described in the Proxy Statement in the section entitled “Business of GNOG – Property,” which is incorporated herein by reference.

 

Financial Information

 

Reference is made to the disclosure set forth in Item 9.01 of this Current Report concerning the financial information of GNOG LLC, which is incorporated herein by reference. Reference is further made to the disclosures contained in the Proxy Statement in the sections titled “Summary Historical Financial Information of GNOG” and GNOG Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are incorporated herein by reference.

 

The unaudited pro forma condensed combined financial information of the Company as of and for the nine months ended September 30, 2020 is set forth in Exhibit 99.1 hereto and is incorporated herein by reference.

 

Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth information known to the Company regarding beneficial ownership of the Company’s common stock as of December 29, 2020, after giving effect to the Closing, by:

 

  · each person known by the Company to be the beneficial owner of more than 5% of outstanding common stock;

 

  · each of the Company’s executive officers and directors; and

 

  · all executive officers and directors of the Company as a group.

 

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Shares of common stock issuable upon exercise of options or warrants currently exercisable or exercisable within 60 days are deemed outstanding solely for purposes of calculating the percentage of class and percentage of total voting power of the beneficial owner thereof.

 

The beneficial ownership of the Company’s common stock is based on 36,982,320 shares of Class A common stock and 31,350,625 shares of Class B common stock issued and outstanding as of December 29, 2020.

 

Unless otherwise indicated, the Company believes that each person named in the table below has sole voting and investment power with respect to all shares of common stock beneficially owned by him.

 

 

 

 

Name and Address of
Beneficial Owner
(1)
 

Number of Shares of
Class A Common
Stock

Beneficially Owned

  %   Number of Shares of
Class B Common
Stock Beneficially
Owned
  %   % of Total Voting
Power**
Directors and Executive Officers                    
Tilman J. Fertitta(2)   7,032,292   17.6   31,350,625   100   79.9
Richard H. Liem   -   -   -   -   -
Steven L. Scheinthal   -   -   -   -   -
Michael S. Chadwick   -   -   -   -   -
G. Michael Stevens   -   -   -   -   -
Scott Kelly   -   -   -   -   -
Thomas Winter   -   -   -   -   -
Michael Harwell   -   -   -   -   -
All Executive Officers and Directors as a Group (eight individuals)   7,032,292   17.6   31,350,625   100   79.9
Greater than 5% Stockholders                    
Davidson Kempner(3)   2,000,000   5.4   -   -   *

 

* Less than 1%.

** Percentage of total voting power represents the combined voting power with respect to all shares of Class A common stock and Class B common stock, voting as a single class. As described elsewhere herein, each share of Class B common stock is entitled to 10 votes per share, subject to certain limitations described herein, and each share of Class A common stock is entitled to one vote per share.

(1) Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is c/o Golden Nugget Online Gaming, Inc., 1510 West Loop South, Houston, Texas 77027.
(2) The number of shares of Class A common stock includes 2,941,667 shares of Class A common stock underlying the private placement warrants held by Mr. Fertitta. LF LLC is the record holder of the shares of Class B common stock reported herein. LF LLC is indirectly owned by Fertitta Entertainment, Inc. (“FEI”) and Mr. Fertitta is the owner of FEI. As such, Mr. Fertitta may be deemed to have beneficial ownership of the shares of Class B common stock held directly by LF LLC.
(3) According to a Schedule 13G filed on May 17, 2019, Davidson Kempner Partners (“DKP”), Davidson Kempner Institutional Partners, LP. (“DKIP”) and Davidson Kempner International, Ltd., (“DKIL”) hold the interests shown. MHD Management Co. (“MHD”) is the general partner of DKP and MHD Management Co. GP, L.L.C. is the general partner of MHD. Davidson Kempner Capital Management LP (“DKCM”) is responsible for the voting and investment decisions of DKP, DKIP and DKIL. Thomas L. Kempner, Jr. and Anthony A. Yoseloff, through DKCM, are responsible for the voting and investment decisions relating to the securities held by DKP, DKIP and DKIL. The address of each of these entities is c/o Davidson Kempner Capital Management LP, 520 Madison Avenue, 30th Floor, New York, New York 10022.

 

Directors and Executive Officers

 

Information with respect to the Company’s directors and executive officers after the Closing is set forth in the Proxy Statement in the section entitled “Management After the Transaction,” which is incorporated herein by reference.

 

In connection with and effective upon the Closing, each of Landcadia’s officers and directors resigned, with the exception of Mr. Fertitta.

 

In addition, effective upon the Closing, the size of the Company’s board of directors (the “Board”) was increased from five to six members. At the Special Meeting, each of Michael S. Chadwick, Tilman J. Fertitta, Scott J. Kelly, Richard H. Liem, Steven L. Scheinthal and G. Michael Stevens and were elected by the Company’s stockholders to serve as directors of the Company, with terms expiring at the Company’s 2021 annual meeting of stockholders.

 

Director Independence

 

The Board has determined that each of Messrs. Chadwick, Kelly, and Stevens are independent within the meaning of the Nasdaq rules and the applicable SEC rules.

 

 

 

 

Committees of the Board of Directors

 

Following the Closing, the only standing committee of the board is the audit committee (the “Audit Committee”). The principal functions of the Audit Committee are detailed in the Audit Committee charter, which is available on the Company’s website, and include, among others:

 

· the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by the Company;

 

· pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by the Company, and establishing pre-approval policies and procedures;

 

· reviewing and discussing with the independent auditors all relationships the auditors have with the Company in order to evaluate their continued independence;

 

· setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations;

 

· setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

 

· obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and the Company to assess the independent registered public accounting firm’s independence;

 

· reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to the Company entering into such transaction; and

 

· reviewing with management, the independent registered public accounting firm, and the Company‘s legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding the Company‘s financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

 

Effective upon the Closing, the Board appointed Messrs. Chadwick, Kelly and Stevens as members of the Audit Committee. All members of the Audit Committee are independent within the meaning of the federal securities laws and the meaning of the Nasdaq rules. Each member of the Audit Committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC and Nasdaq, and the Board has determined that Mr. Chadwick is an “audit committee financial expert,” as that term is defined by the applicable rules of the SEC.

 

Executive Compensation

 

Information with respect to the executive compensation of GNOG LLC’s executive officers and directors prior to the Closing is described in the Proxy Statement in the section entitled “Executive Compensation,” which is incorporated herein by reference.

 

The Board adopted and the stockholders of the Company approved the Golden Nugget Online Gaming, Inc. 2020 Incentive Award Plan (the “Incentive Plan”), effective upon Closing. The material terms of the Incentive Plan are described in the section entitled “Proposal No. 6 – The Incentive Plan Proposal” in the Proxy Statement, which is incorporated herein by reference. A copy of the full text of the Incentive Plan is attached hereto as Exhibit 10.9 and is incorporated herein by reference. 

 

Certain Relationships and Related Transactions

 

The disclosure set forth in Item 1.01 above is incorporated herein by reference.

 

The information set forth in the section entitled “Certain Relationships and Related Party Transactions” in the Proxy Statement is incorporated herein by reference.

 

 

 

 

On December 31, 2020, the Company agreed that it would, in lieu of LF LLC, pay the required interest payment of $2.3 million to GNOG LLC due on such date under the Second A&R Intercompany Note. As a result of the Company making such payment, no shares of Class B common stock or HoldCo Class B Units were issued to LF LLC under the HoldCo LLC Agreement.  

 

Legal Proceedings

 

Information with respect to the legal proceedings is described in the Proxy Statement in the section entitled “Litigation Relating to the Transaction,” which is incorporated herein by reference.

 

Market Price and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

 

In connection with the Closing, the shares of Class A common stock and warrants began trading on The Nasdaq Global Market under the symbols “GNOG” and “GNOGW,” respectively. Landcadia’s units automatically separated into their component securities upon consummation of the Business Combination and, as a result, no longer trade as a separate security and were delisted from Nasdaq. There is no public market for the shares of Class B common stock.

 

As of the Closing Date, there were approximately three holders of record of Class A common stock and 1 holder of record of Class B common stock. Such amounts do not include DTC participants or beneficial owners holding shares through nominee names.

 

The Company has not paid any cash dividends on its common stock to date. It is the present intention of the Company to retain any earnings for use in its business operations and, accordingly, the Company does not anticipate the Board declaring any dividends in the foreseeable future.

 

Recent Sales of Unregistered Securities

 

Information about unregistered sales of the Company’s equity securities is set forth under Item 3.02 of this Current Report on Form 8-K, which is incorporated herein by reference.

 

Description of the Company’s Securities

 

A description of the Company’s common stock, preferred stock and warrants is included in the Proxy Statement in the section entitled “Description of Securities,” which is incorporated herein by reference.

 

Indemnification of Directors and Officers

 

Information about the indemnification of the Company’s directors and officers is set forth in the sections of the Proxy Statement entitled “Information about the Company – Limitation on Liability and Indemnification of Officers and Directors” and “Certain Relationships and Related Transactions – Indemnification Agreements and Directors and Officers Liability Insurance” and under “Indemnification Agreements” in Item 1.01 of this Current Report on Form 8-K, which information is incorporated herein by reference.

 

Financial Statements, Supplementary Data and Exhibits

 

The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

As of April 28, 2020 (“Credit Agreement Closing Date”), Golden Nugget Online Gaming, Inc. (predecessor to GNOG LLC) (“GNOG Inc.”) entered into the Credit Agreement by and among LF LLC, as parent, GNOG, Inc., as borrower, the lenders from time to time party thereto (“Lenders”), and Jefferies Finance LLC, as agent for the Lenders (“Agent”).

 

The Credit Agreement was amended on June 12, 2020 by the First Amendment to Credit Agreement and on June 29, 2020 by the Second Amendment to Credit Agreement to amend certain provisions to permit GNOG Holdco and LF LLC to enter into the Purchase Agreement and consummate the transaction including, but not limited to, amendments to permit the formation of GNOG Holdco, the conversion of GNOG Inc. into a limited liability company by merging with and into GNOG LLC (the “GNOG Conversion”), and the sale by LF LLC of the equity in GNOG Holdco. (Unless the context otherwise indicates, references below in this Item 2.03 to “Credit Agreement” refer to the Credit Agreement, as amended.)

 

 

 

 

The Credit Agreement originally provided for senior secured term loans in the aggregate amount of $300.0 million as of the Credit Agreement Closing Date. After giving effect to the transaction, including the payment of the Credit Agreement Payoff Amount, the aggregate principal amount of indebtedness under the Credit Agreement is $150.0 million. The outstanding senior secured term loans under the Credit Agreement are set to mature on October 4, 2023. All outstanding term loans bear interest on the daily balance thereof, at the option of GNOG LLC, at either (1) an adjusted LIBOR or (2) a base rate, in each case plus an applicable margin. The applicable margin is 12% with respect to LIBOR loans and 11% with respect to base rate loans. Following the Closing, LF LLC will make payments to GNOG LLC under the Second A&R Intercompany Note in an amount equal to 6% per annum, paid quarterly, on the outstanding balance from day to day thereunder. The cash from such payments may be used to alleviate the payments due under the Credit Facility, but do not reduce the principal balance of the Second A&R Intercompany Note. These payments and the related equity issuance will be treated as capital transactions for accounting purposes. The A&R HoldCo LLC Agreement provides for additional issuances of HoldCo Class B Units and the equivalent number of shares of Class B common stock to LF LLC in consideration of payments described in the preceding sentence.

 

On November 30, 2020, GNOG HoldCo and Agent entered into joinder agreements to (i) the Security Agreement to grant a first priority pledge of equity interests owned by GNOG HoldCo and a first priority security interest in substantially all of GNOG HoldCo’s assets, and (ii) the Guaranty Agreement to guarantee to the Agent in favor of the Lenders the guaranteed obligations. Also on November 30, 2020, GNOG Inc., GNOG LLC and Agent entered into the following documentation to effect the GNOG Conversion: (i) a Successor Borrower Assumption Agreement pursuant to which GNOG LLC expressly assumed all of GNOG Inc.’s obligations under the Credit Agreement, (ii) a Reaffirmation Agreement pursuant to which GNOG HoldCo, GNOG LLC and of each direct, wholly-owned restricted subsidiary of GNOG HoldCo or GNOG LLC confirmed that its guarantee of, and grant of any lien as security for, the obligations of GNOG Inc. shall apply to GNOG LLC, and (iii) an Officer’s Certificate, certifying that the merger complies with the Credit Agreement and no event of default then exists or would result therefrom.

 

Effective as of the Closing, the obligations of GNOG LLC under the Credit Agreement and certain of its obligations under hedging arrangements, cash management arrangements, or other bank products, as applicable, continue to be unconditionally guaranteed by the LF LLC, GNOG Holdco, and each existing and subsequently acquired or organized direct or indirect wholly-owned U.S. organized restricted subsidiary of GNOG LLC (together with GNOG Holdco, the “Guarantors”). After giving effect to the transaction, the Credit Agreement is secured by (i) a first priority pledge of the equity interests owned by GNOG Holdco, GNOG LLC and of each direct, wholly-owned restricted subsidiary of GNOG Holdco or GNOG LLC, (ii) a first priority security interest in substantially all of the assets (subject to customary exceptions) of GNOG Holdco, GNOG LLC and each direct, wholly-owned restricted subsidiary of GNOG LLC, including the Second A&R Intercompany Note, the outstanding principal amount of which will be reduced dollar for dollar by the amount of any principal payments under the Credit Agreement, and (iii) a collateral assignment by LF LLC of a promissory note payable to LF LLC made by Golden Nugget, which note is secured by a security interest in substantially all the assets of Golden Nugget, and its existing and subsequently acquired or organized direct or indirect wholly-owned US organized restricted subsidiaries, consisting of casino properties and more than 600 restaurant locations (subject to customary exceptions), on a pari passu basis with the liens securing the existing senior bank indebtedness of Golden Nugget.

 

The Credit Agreement contains a number of customary negative covenants. Such covenants, among other things, limit or restrict the ability of GNOG LLC and its restricted subsidiaries, and where applicable, the Guarantors, to:

 

incur additional indebtedness, issue disqualified stock and make guarantees;

 

incur liens on assets;

 

engage in mergers or consolidations or fundamental changes;

 

sell assets;

 

pay dividends and distributions or repurchase capital stock;

 

make investments, loans and advances, including acquisitions;

 

amend organizational documents and certain intercompany agreements;

 

 

 

 

enter into certain agreements that would restrict the ability to pay dividends;

 

repay certain junior indebtedness; and

 

change the conduct of its business.

 

The aforementioned restrictions are subject to certain exceptions including (i) the ability to incur additional indebtedness, liens, investments, dividends and distributions, and prepayments of junior indebtedness subject, in each case, to compliance with certain financial metrics and certain other conditions and (ii) a number of other traditional exceptions that grant GNOG LLC and the other loan parties continued flexibility to operate and develop their businesses. The Credit Agreement also contains certain customary representations and warranties, affirmative covenants and events of default.

 

The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by the full text of the First Amendment to Credit Agreement and the Second Amendment to Credit Agreement, copies of which are attached as Exhibit 10.15 and Exhibit 10.16, respectively, and are incorporated herein by reference.

 

Item 3.02. Unregistered Sales of Equity Securities.

 

On the Closing Date, the Company issued 31,350,625 shares of Class B common stock to LF LLC and an aggregate of 5,362,500 shares of Class A common stock to Mr. Fertitta and JFG Sponsor upon conversion of the shares of Class B common stock held by them in accordance with the terms of the Company’s third amended and restated certificate of incorporation. The issuances were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and/or Regulation D promulgated thereunder. Descriptions of the rights, preferences and privileges of the shares of Class B common stock are set forth in Item 2.01 under “—Description of the Company’s Securities” above.

 

Item 3.03. Material Modification to Rights of Security Holders.

 

On December 29, 2020, in connection with the consummation of the Business Combination, the Company amended and restated its third amended and restated certificate of incorporation (as so amended and restated, the “Fourth Amended and Restated Charter”) and amended and restated its bylaws (the “Amended and Restated Bylaws”). The material terms of the Fourth Amended and Restated Charter and the general effect upon the rights of holders of the Company’s capital stock are included in the Proxy Statement under the sections entitled “Proposal No. 3 – The Charter Amendment Proposal” and “Proposal No. 4 – The Advisory Charter Proposals,” which are incorporated herein by reference.

 

Copies of the Fourth Amended and Restated Charter and the Amended and Restated Bylaws are included as Exhibits 3.1 and 3.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

 

Item 5.01 Changes in Control of Registrant.

 

The information set forth above in the “Introductory Note” and Item 2.01 is incorporated herein by reference.

 

Item 5.02              Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

The information set forth under “Directors and Executive Officers,” “Director Independence,” “Committees of the Board of Directors” and “Executive Compensation” in Item 2.01 are incorporated herein by reference.

 

The information set forth under “Winter Employment Agreement” in Item 1.01 is incorporated herein by reference.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

The disclosure set forth in Item 3.03 of this Current Report on Form 8-K is incorporated herein by reference.

 

 

 

 

Item 5.06. Change in Shell Company Status.

 

As a result of the Business Combination, which fulfilled the definition of an “initial business combination” as required by Landcadia’s organizational documents, the Company ceased to be a shell company, as defined in Rule 12b-2 of the Exchange Act, as of the Closing Date. The material terms of the Business Combination are described in the section entitled “Proposal No. 1 – The Transaction Proposal” of the Proxy Statement, and are incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired.

 

The audited financial statements of GNOG LLC for the years ended December 31, 2019 and 2018 are included in the Proxy Statement beginning on page F-49 and are incorporated herein by reference.

 

The unaudited condensed financial statements of GNOG LLC for the nine months ended September 30, 2020 and 2019 are included in the Proxy Statement beginning on page F-37 and are incorporated herein by reference. 

 

(b) Pro Forma Financial Information.

 

The unaudited pro forma condensed combined financial information of the Company for the year ended December 31, 2019 and for the nine months ended September 30, 2020 is set forth in Exhibit 99.1 hereto and is incorporated herein by reference.

 

(d) Exhibits

Exhibit No.   Description
2.1   Purchase Agreement, dated as of June 28, 2020, by and among the Company, LHGN HoldCo, LLC, Golden Nugget Online Gaming, Inc., GNOG Holdings, LLC and Landry’s Fertitta, LLC (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by the Company on June 29, 2020).
2.2   Amendment to the Purchase Agreement, dated as of September 17, 2020, by and among Landcadia Holdings II, Inc., LHGN HoldCo, LLC, Golden Nugget Online Gaming, Inc., GNOG Holdings, LLC and Landry’s Fertitta, LLC (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by the Company on September 22, 2020).
2.3   Second Amendment to the Purchase Agreement, dated as of December 20, 2020, by and among Landcadia Holdings II, Inc., LHGN HoldCo, LLC, Golden Nugget Online Gaming, LLC, GNOG Holdings, LLC and Landry’s Fertitta, LLC (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed by the Company on December 21, 2020).
3.1   Fourth Amended and Restated Certificate of Incorporation of Golden Nugget Online Gaming, Inc.
3.2   Amended and Restated Bylaws of Golden Nugget Online Gaming, Inc.
4.1   Warrant Agreement, dated May 6, 2019, between the Company and Continental Stock Transfer &Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by the Company on May 9, 2019).
10.1   Amended and Restated Limited Liability Company Agreement of LHGN HoldCo, LLC, dated as of December 29, 2020, by and among the Company, Landry’s Fertitta, LLC and the other members party thereto.
10.2   Tax Receivable Agreement, dated as of December 29, 2020, by and among the Company, LHGN HoldCo, LLC and Landry’s Fertitta, LLC.
10.3   Amendment to Letter Agreement, dated as of December 29, 2020, by and among the Company, Tilman J. Fertitta, Jefferies Financial Group Inc. and the other signatories thereto.
10.4   Amended and Restated Registration Rights Agreement, dated as of December 29, 2020, by and among the Company, Jefferies Financial Group Inc., Tilman J. Fertitta, Landry’s Fertitta, LLC and the other parties thereto.
10.5   Second Amended and Restated Intercompany Note, dated as of December 29, 2020, between the Company and Landry’s Fertitta, LLC.
10.6   Trademark License Agreement, dated as of December 29, 2020, by and among Golden Nugget, LLC, GNLV, LLC and Golden Nugget Online Gaming, LLC.

 

 

 

 

10.7   Amended and Restated Online Gaming Operations Agreement, dated as of December 29, 2020, by and between Golden Nugget Online Gaming, LLC and Golden Nugget Atlantic City, LLC.
10.8   Sponsor Forfeiture and Call-Option Agreement, dated as of June 28, 2020, by and between the Company and Jefferies Financial Group, Inc. (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by the Company on June 29, 2020).
10.9   Golden Nugget Online Gaming, Inc. 2020 Incentive Award Plan.
10.10   Employment Agreement, dated as of December 29, 2020, by and between GNOG LLC and Thomas Winter.
10.11   Golden Nugget Online Gaming, Inc. 2020 Incentive Award Plan Restricted Stock Unit Award Agreement for Thomas Winter.
10.12   Form of Indemnification Agreement.
10.13   Letter Agreement, dated as of May 6, 2019, by and among the Company, Tilman J. Fertitta, Richard Handler, Richard H. Liem, Steven L. Scheinthal, Nicholas Daraviras, G. Michael Stevens, Michael Chadwick, Jefferies Financial Group Inc. and Fertitta Entertainment, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on May 9, 2019).
10.14   Letter Agreement, dated as of May 12, 2020, by and between the Company and Scott Kelly (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed by the Company on May 14, 2020).
10.15   First Amendment to Credit Agreement, dated as of June 12, 2020, by and among Golden Nugget Online Gaming, Inc., Landry’s Fertitta, LLC, Jefferies Finance LLC and the other parties thereto.
10.16   Second Amendment to Credit Agreement, dated as of June 29, 2020, by and among Golden Nugget Online Gaming, Inc., Jefferies Finance LLC and the other parties thereto.
10.17*   Online Gaming Operations Agreement, dated as of November 18, 2020, by and between Golden Nugget Online Gaming, Inc. and Danville Development, LLC.
21.1   Subsidiaries of the Company.
99.1   Unaudited pro forma condensed consolidated combined financial information of the Company for the year ended December 31, 2019 and as of and for the nine months ended September 30, 2020.

 

*Certain portions of this exhibit have been omitted pursuant to Regulation S-K Item 601(b)(10)(iv). The Company agrees to furnish an unredacted copy of the exhibit to the SEC upon its request.

 

 

 

 

SIGNATURE

 

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

 

 

GOLDEN NUGGET ONLINE GAMING, INC.

     
  By: /s/ Tilman J. Fertitta
    Name: Tilman J. Fertitta
    Title: Chief Executive Officer and Chairman
     
Dated: January 5, 2021    

 

 

 

Exhibit 3.1

 

FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF

 

LANDCADIA HOLDINGS II, INC.

 

December 29, 2020

 

Landcadia Holdings II, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY AS FOLLOWS:

 

The Corporation was initially formed as CAPS Holding LLC (the “Formation LLC”), a Delaware limited liability company, on August 11, 2015. On February 4, 2019, the Formation LLC filed a certificate of conversion with the Secretary of State of the State of Delaware for purposes of converting the Formation LLC to a corporation.

 

The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on February 4, 2019. The First Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on February 14, 2019. The Second Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on March 13, 2019. The Third Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on May 6, 2019 (the “Third Amended and Restated Certificate”).

 

This Fourth Amended and Restated Certificate of Incorporation (the “Fourth Amended and Restated Certificate”), which both restates and amends the provisions of the Third Amended and Restated Certificate, was duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”).

 

This Fourth Amended and Restated Certificate shall become effective on the date of filing with Secretary of State of Delaware.

 

The text of the Third Amended and Restated Certificate is hereby restated and amended in its entirety to read as follows:

 

Article I
NAME

 

The name of the corporation is Golden Nugget Online Gaming, Inc. (the “Corporation”).

 

Article II
PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL. In addition to the powers and privileges conferred upon the Corporation by law and those incidental thereto, the Corporation shall possess and may exercise all the powers and privileges that are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the Corporation.

 

Article III
REGISTERED AGENT

 

The address of the Corporation’s registered office in the State of Delaware is The Corporation Trust Company, 1209 Orange Street in the City of Wilmington, County of New Castle, State of Delaware, 19801, and the name of the Corporation’s registered agent at such address is The Corporation Trust Company.

 

 

 

Article IV
CAPITALIZATION

 

Section 4.1      Authorized Capital Stock. The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation is authorized to issue is 271,000,000 shares, consisting of (a) 270,000,000 shares of common stock (the “Common Stock”), including (i) 220,000,000 shares of Class A common stock (the “Class A Common Stock”), and (ii) 50,000,000 shares of Class B common stock (the “Class B Common Stock”), and (b) 1,000,000 shares of preferred stock (the “Preferred Stock” and, collectively with Common Stock, “Stock”). Upon the filing of this Fourth Amended and Restated Certificate (such date, the “Effective Date”), which shall coincide with the consummation of the transactions contemplated by that certain Purchase Agreement, dated as of June 28, 2020, as amended, by and among the Corporation, LHGN HoldCo, LLC (the “LLC”) and Golden Nugget Online Gaming, Inc. (f/k/a Landry’s Finance Acquisition Co.), GNOG Holdings, LLC, Landry’s Fertitta, LLC (“Seller”), each former share of class B common stock of the Corporation outstanding prior to the Effective Date has converted into one issued and outstanding, fully paid and nonassessable share of Class A Common Stock, without any action required on the part of the Corporation or the holders thereof, in accordance with the Third Amended and Restated Certificate.

 

Section 4.2      Preferred Stock. The Board of Directors of the Corporation (the “Board”) is hereby expressly authorized to provide out of the unissued shares of the Preferred Stock for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof, as shall be stated in the resolution or resolutions adopted by the Board providing for the issuance of such series and included in a certificate of designation (a “Preferred Stock Designation”) filed pursuant to the DGCL, and the Board is hereby expressly vested with the authority to the full extent provided by law, now or hereafter, to adopt any such resolution or resolutions.

 

Section 4.3      Common Stock.

 

(a)          Voting.

 

(i)            Except as otherwise required by law or this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), the holders of the Common Stock shall exclusively possess all voting power with respect to the Corporation.

 

(ii)            Except as otherwise required by law or this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), the holders of shares of Class A Common Stock shall be entitled to one vote for each such share on each matter properly submitted to the stockholders on which the holders of the Class A Common Stock are entitled to vote.

 

(iii)            Except as otherwise required by law or this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), on each matter properly submitted to the stockholders on which the holders of the Class B Common Stock are entitled to vote,

 

A. until the occurrence of a Sunset Event (as defined below), the holders of shares of Class B Common Stock shall be entitled to ten (10) votes for each such share; provided that, the voting power with respect to any shares of Stock held by the Seller Group (as defined below), as a percentage of the voting power with respect to all shares of Stock outstanding, shall not exceed 79.9%. In furtherance of the foregoing, the number of votes to which each share of Class B Common Stock is entitled shall, automatically and without further act or formality, be adjusted to the extent necessary for the voting power of all shares of Stock held by the Seller Group not to exceed 79.9%; and

 

B. following the occurrence of a Sunset Event, the holders of shares of Class B Common Stock shall be entitled to one (1) vote for each such share.

 

2

 

 

Except as otherwise required by law or this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), holders of the Class A Common Stock and holders of the Class B Common Stock, voting together as a single class, shall have the exclusive right to vote on all matters properly submitted to a vote of the stockholders. Notwithstanding the foregoing, except as otherwise required by law or this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), holders of shares of any series of Common Stock shall not be entitled to vote on any amendment to this Fourth Amended and Restated Certificate (including any amendment to any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock or other series of Common Stock if the holders of such affected series of Preferred Stock or Common Stock, as applicable, are entitled exclusively, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Fourth Amended and Restated Certificate (including any Preferred Stock Designation) or the DGCL.

 

(b)          Class B Common Stock.

 

(i)            Voting. Except as otherwise required by law or this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), for so long as any shares of Class B Common Stock shall remain outstanding, the Corporation shall not, without the prior vote or written consent of the holders of a majority of the shares of Class B Common Stock then outstanding, voting separately as a single class, amend, alter or repeal any provision of this Fourth Amended and Restated Certificate, whether by merger, consolidation or otherwise if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B Common Stock.

 

(ii)            Issuance of Class B Common Stock.

 

A. From and after the Effective Date, additional shares of Class B Common Stock may be issued only to, and registered in the name of, a Fertitta Affiliate (including all successors, assigns and permitted transferees) (collectively, “Permitted Class B Owners”). The Corporation shall not issue additional shares of Class B Common Stock after the Effective Date other than in connection with the valid issuance of Units in accordance with the Amended and Restated Limited Liability Company Agreement of the LLC, dated on or about the date hereof (the “LLC Agreement”) to any Permitted Class B Owner.

 

B. Following the surrender of any shares of Class B Common Stock to the Corporation in accordance with this Fourth Amended and Restated Certificate of Incorporation, the Corporation will take all actions necessary to retire such shares and such shares shall not be re-issued by the Corporation.

 

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(iii)            Transfer of Class B Common Stock.

 

A. A holder of Class B Common Stock may surrender shares of Class B Common Stock to the Corporation for no consideration at any time.

 

A holder of Class B Common Stock may transfer shares of Class B Common Stock to any transferee (other than the Corporation) only if, and only to the extent permitted by the LLC Agreement, such holder also simultaneously transfers a corresponding number of such holder’s Units to such transferee. Upon a transfer of Units in accordance with the LLC Agreement, a corresponding number of shares of Class B Common Stock held by the holder of such Units will automatically and simultaneously be transferred to the same transferee of such Units. The transfer restrictions described in this Section 4.3(b)(iii). are referred to as the “Restrictions”. For the avoidance of doubt, when Class B Units are transferred to a Fertitta Affiliate as expressly permitted by the LLC Agreement, a corresponding number of shares of Class B Common Stock shall be simultaneously transferred to a Fertitta Affiliate, and such transfer shall not be subject to the Restrictions.

 

B. Any purported transfer of shares of Class B Common Stock in violation of the Restrictions shall be null and void. If, notwithstanding the Restrictions, a person shall, voluntarily or involuntarily, purportedly become or attempt to become, the purported owner (“Purported Owner”) of shares of Class B Common Stock in violation of the Restrictions, then the Purported Owner shall not obtain any rights in and to such shares of Class B Common Stock (the “Restricted Shares”), and the purported transfer of the Restricted Shares to the Purported Owner shall not be recognized by the Corporation’s transfer agent (the “Transfer Agent”).

 

C. Upon a determination by the Board (including the vote of the majority of the disinterested directors serving on the Board at such time), or by a committee composed solely of disinterested directors, that a person has attempted or may attempt to transfer or to acquire Restricted Shares in violation of the Restrictions, the Corporation shall refuse to give effect to such transfer or acquisition on the books and records of the Corporation. In furtherance of the foregoing, the Corporation shall cause the Transfer Agent to refuse to record the Purported Owner’s transferor as the record owner of the Restricted Shares and shall institute proceedings to enjoin or rescind any such transfer or acquisition.

 

D. The Board (including the vote of a majority of the disinterested directors serving on the Board at such time), or by a committee composed solely of disinterested directors may, to the extent permitted by law, from time to time establish, modify, amend or rescind, by bylaw or otherwise, regulations and procedures that are consistent with the provisions of this Section 4.3(b)(iii) for determining whether any transfer or acquisition of shares of Class B Common Stock would violate the Restrictions and for the orderly application, administration and implementation of the provisions of this Section 4.3(b)(iii). Any such procedures and regulations shall be kept on file with the Secretary of the Corporation and with the Transfer Agent and shall be made available for inspection by any prospective transferee and, upon written request, shall be mailed to holders of shares of Class B Common Stock.

 

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(iv)            Cancellation of Class B Common Stock. To the extent that any holder of Class B Common Stock exercises its right pursuant to the LLC Agreement to exchange some or all of such holder’s Units in accordance with the LLC Agreement, then, concurrently with such exchange under the LLC Agreement, a number of shares of Class B Common Stock registered in the name of such holder equal to the number of Units that are exchanged by such holder in such transaction (subject to equitable adjustment for any event described in Section 4.3(d) below, as applicable) shall be transferred to the Corporation and cancelled for no consideration.

 

(v)            Restrictive Legend. All certificates or book entries representing shares of Class B Common Stock, as the case may be, shall bear a legend substantially in the following form (or in such other form as the Board may from time to time determine):

 

THE SECURITIES REPRESENTED BY THIS BOOK ENTRY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”).

 

THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT.

 

THESE CERTIFICATES ARE SUBJECT TO THE RESTRICTIONS (INCLUDING RESTRICTIONS ON TRANSFER) SET FORTH IN THE FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS THE SAME MAY BE AMENDED AND/OR RESTATED FROM TIME TO TIME, AND THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF LHGN HOLDCO, LLC, DATED AS OF DECEMBER 29, 2020, AMONG THE MEMBERS LISTED THEREIN, AS THE SAME MAY BE AMENDED AND/OR RESTATED FROM TIME TO TIME (COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE CORPORATION AND SHALL BE PROVIDED FREE OF CHARGE TO ANY STOCKHOLDER MAKING A REQUEST THEREFOR). NO TRANSFER OF THESE SECURITIES WILL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED.

 

(c)           Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock an amount equal to the number of then-outstanding Units subject to exchange under the LLC Agreement.

 

(d)           Splits. If the Corporation at any time combines or subdivides (by any stock split, stock dividend, recapitalization, reorganization, merger, amendment of this Fourth Amended and Restated Certificate of Incorporation, scheme, arrangement or otherwise) the number of shares of Class A Common Stock into a greater or lesser number of shares, the shares of Class B Common Stock outstanding immediately prior to such subdivision shall be proportionately similarly combined or subdivided such that the ratio of shares of outstanding Class B Common Stock to shares of outstanding Class A Common Stock immediately prior to such subdivision shall be maintained immediately after such combination or subdivision. Any adjustment described in this Section 4.3(d) shall become effective at the close of business on the date the combination or subdivision becomes effective. In no event shall the shares of either Class B Common Stock be split, subdivided, or combined (including by way of stock dividend) unless the outstanding shares of Class A Common Stock shall be proportionately split, subdivided or combined.

 

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(e)           Dividends.

 

(i)            Subject to applicable law and the rights, if any, of the holders of any outstanding series of the Preferred Stock, the holders of shares of Class A Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property or capital stock of the Corporation) when, as and if declared thereon by the Board from time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions.

 

(ii)            Dividends and other distributions shall not be declared or paid on the shares of Class B Common Stock.

 

(f)           Liquidation, Dissolution or Winding Up of the Corporation. Subject to applicable law and the rights, if any, of the holders of any outstanding series of the Preferred Stock, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of shares of Class A Common Stock shall be entitled to receive all the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Class A Common Stock held by them. Holders of Class B Common Stock shall not be entitled to receive any assets of the Corporation in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation.

 

Section 4.4      Rights and Options. The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to acquire from the Corporation any shares of its capital stock of any class or classes, with such rights, warrants and options to be evidenced by or in instrument(s) approved by the Board. The Board is empowered to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital stock issuable upon exercise thereof may not be less than the par value thereof.

 

Section 4.5      Definitions. For purposes of this Fourth Amended and Restated Certificate of Incorporation, other than Article X, the following definitions apply.

 

Affiliate” means with respect to any specified Person, any Person that is a member (or is treated as disregarded as separate from a member under U.S. Treasury Regulations Section 301.7701-3) of the “affiliated group” (as defined in Section 1504 of the Code) of corporations filing consolidated U.S. federal income tax returns of which FEI is the parent and any other Person that, under U.S. federal income tax principles, would be treated as holding shares of Stock for which any specified Person is treated as the beneficial owner, directly or indirectly.

 

Associate” has the meaning ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended.

 

A Person shall be deemed to “beneficially own” shares which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended); provided that, the meaning of “beneficial owner” in the definition of “Affiliate” shall be governed by U.S. federal income tax principles.

 

Code” means the Internal Revenue Code of 1986, as amended.

 

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Fertitta Affiliates” means, (i) Mr. Fertitta, (ii) Paige Fertitta, (iii) each of their direct descendants (iv) each such descendant’s adopted child, stepchild, spouse and any person (other than a tenant or employee) sharing the household of such descendant, (v) any trust, the beneficiary of which is any Person listed in clauses (i) through (iii) and (vi) with respect to any Person listed in clauses (i) through (iii), any Person directly or indirectly controlling or controlled by, or under common control with, such Person; provided, that, for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

Person” means any individual, firm, corporation, limited liability company, partnership or other entity.

 

Seller Group” means, collectively, Mr. Fertitta, Seller, Fertitta Entertainment, Inc., and their respective Affiliates.

 

Sunset Event” means the earliest time when the aggregate number of shares of Class A Common Stock that are beneficially owned by Mr. Fertitta (together with the Fertitta Affiliates), inclusive of any shares of Class A Common Stock into which the Units beneficially owned by Mr. Fertitta (together with the Fertitta Affiliates) may be exchanged, is less than thirty percent (30%) of the sum of (i) such aggregate number calculated as of the Effective Date plus (ii) all other shares of Class A Common Stock issued and outstanding as of the Effective Date. Any calculation made in accordance with this definition is subject to equitable adjustment for any event described in Section 4.3(d) above, as applicable.

 

Units” means the Class B Units (as defined in the LLC Agreement).

 

Article V
BOARD OF DIRECTORS

 

Section 5.1      Board Powers. The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. In addition to the powers and authority expressly conferred upon the Board by statute, this Fourth Amended and Restated Certificate or the Bylaws of the Corporation (the “Bylaws”), the Board is hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the DGCL, this Fourth Amended and Restated Certificate and any Bylaws adopted by the stockholders; provided, however, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the Board that would have been valid if such Bylaws had not been adopted.

 

Section 5.2      Number, Election and Term.

 

(a)           Subject to the rights, if any, of holders of any series of Preferred Stock to elect directors of the Corporation, the number of directors of the Corporation shall be fixed from time to time by resolution of the Board or (i) by the holders of a majority of the voting power of the Stock while Mr. Fertitta (together with the Fertitta Affiliates) beneficially owns a majority of the voting power of the Stock and (ii) exclusively by resolution of the Board from and after the time that Mr. Fertitta (together with the Fertitta Affiliates) no longer beneficially owns a majority of the voting power of the Stock.

 

(b)           Directors shall be elected for terms of one year at each annual meeting of the stockholders of the Corporation and, subject to Section 10.13(c), each director shall hold office until his or her successor is duly elected and qualified, subject to his or her earlier death, resignation, retirement, disqualification or removal. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more Preferred Stock Designation, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon.

 

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(c)           Unless and except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot.

 

Section 5.3      Newly Created Directorships and Vacancies. Subject to Section 5.5, newly created directorships resulting from an increase in the number of directors and any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other cause may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum or by a sole remaining director (and not by stockholders), and any director so chosen shall hold office for the remainder of the full term in which the vacancy occurred and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal and Section 10.13(c). In the event of a vacancy on the Board, the remaining directors, except as otherwise provided by law, shall exercise the powers of the full board until the vacancy is filled.

 

Section 5.4      Removal. Subject to Section 5.5, any or all of the directors may be removed from office with or without cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

Section 5.5      Preferred Stock - Directors. Notwithstanding any other provision of this Article V, and except as otherwise required by law, whenever the holders of one or more series of the Preferred Stock shall have the right, voting separately by class or series, to elect one or more directors, the term of office, the filling of vacancies, the removal from office and other features of such directorships shall be governed by the terms of such series of the Preferred Stock as set forth in this Fourth Amended and Restated Certificate (including any Preferred Stock Designation).

 

Section 5.6      Quorum. A quorum for the transaction of business by the directors shall be set forth in the Bylaws.

 

Article VI
BYLAWS

 

In furtherance and not in limitation of the powers conferred upon it by law, the Board shall have the power and is expressly authorized to adopt, amend, alter or repeal the Bylaws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the Bylaws. Notwithstanding any other provisions of this Fourth Amended and Restated Certificate or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of Stock required by law or by this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), the Bylaws also may be adopted, amended, altered or repealed by (a) the holders of a majority of the voting power of the Stock while Mr. Fertitta (together with the Fertitta Affiliates) beneficially owns a majority of the voting power of the Stock and (b) at least two-thirds of the voting power of the Stock from and after the time that Mr. Fertitta (together with the Fertitta Affiliates) no longer beneficially owns a majority of the voting power of the Stock; and provided further, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the Board that would have been valid if such Bylaws had not been adopted.

 

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Article VII
MEETINGS OF STOCKHOLDERS; ACTION BY WRITTEN CONSENT

 

Section 7.1      Meetings. Except as otherwise provided by law or by this Fourth Amended and Restated Certificate (including any Preferred Stock Designation) and subject to the rights of the holders of one or more series of Preferred Stock, special meetings of stockholders of the Corporation may be called at any time (a) by the Chairman of the Board, by the Chief Executive Officer of the Corporation upon direction of the Board pursuant to a resolution adopted by a majority of the Board or by the holders of a majority of the voting power of the Stock and (b) at such time that Mr. Fertitta (together with the Fertitta Affiliates) no longer beneficially owns a majority of the voting power of the Stock, only by the Chairman of the Board or by the Chief Executive Officer of the Corporation upon direction of the Board pursuant to a resolution adopted by a majority of the Board, and may not be called by any other person or persons.

 

Section 7.2      Advance Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.

 

Section 7.3      Action by Written Consent. Except as otherwise provided by law or by this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), any action required or permitted to be taken by the stockholders of the Corporation may be effected by an action by written consent in lieu of a meeting with the approval of the holders of outstanding Stock having not less than the minimum voting power that would be necessary to authorize or take such action at a meeting at which all shares of the Stock entitled to vote thereon were present and voted; provided, that from and after the time that Mr. Fertitta (together with the Fertitta Affiliates) no longer beneficially owns a majority of the voting power of all outstanding shares of the Stock of the Corporation, no action which is required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken by written consent without a meeting. Any alteration, amendment or repeal of this Section 7.3 shall require the affirmative vote of (a) a majority of the voting power of the all outstanding shares of the Stock of the Corporation while a majority of the voting power of all outstanding shares of the Stock of the Corporation is owned by Mr. Fertitta (together with the Fertitta Affiliates) and (b) at least two thirds of the voting power of all outstanding shares of the Stock from and after the time that Mr. Fertitta (together with the Fertitta Affiliates) no longer owns a majority of the voting power of the all outstanding shares of the Stock of the Corporation.

 

Article VIII
LIMITED LIABILITY; INDEMNIFICATION

 

Section 8.1      Limitation of Director Liability. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended unless a director violated his or her duty of loyalty to the Corporation or its stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from his or her actions as a director. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

 

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Section 8.2      Indemnification and Advancement of Expenses.

 

(a)           Right to Indemnification and Advancement of Expenses. To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such indemnitee in connection with such proceeding. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including, without limitation, attorneys’ fees) incurred by an indemnitee in defending or otherwise participating in any proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking (hereinafter an “undertaking”), by or on behalf of the indemnitee, to repay all amounts so advanced if it shall ultimately be determined that the indemnitee is not entitled to be indemnified under this Section 8.2 or otherwise. The rights to indemnification and advancement of expenses conferred by this Section 8.2 shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing provisions of this Section 8.2(a), except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to an indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board.

 

(b)           Non-Exclusivity of Rights. The rights to indemnification and advancement of expenses conferred on any indemnitee by this Section 8.2 shall not be exclusive of any other rights that any indemnitee may have or hereafter acquire under applicable law, this Fourth Amended and Restated Certificate, the Bylaws, an agreement, a vote of stockholders or disinterested directors, or otherwise.

 

(c)           Amendments. Any repeal or amendment of this Section 8.2 by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of this Fourth Amended and Restated Certificate inconsistent with this Section 8.2, shall, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect of any proceeding (regardless of when such proceeding is first threatened, commenced or completed) arising out of, or related to, any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

 

(d)           Indemnification of Other Persons. This Section 8.2 shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other than indemnitees. Without limiting the foregoing, the Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any other person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, to the maximum extent of the provisions of this Section 8.2 with respect to the indemnification and advancement of expenses of indemnitees under this Section 8.2. Any person serving as a director, officer, partner, member, trustee, administrator, employee, or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, at least 50% of whose equity interests are owned, directly or indirectly, by the Corporation (a “subsidiary” for purposes of this Section 8.2) shall be conclusively presumed to be serving in such capacity at the request of the Corporation.

 

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(e)           Procedure for Indemnification. Any indemnification of a director or officer of the Corporation or advancement of expenses (including attorneys’ fees, costs and charges) under this Section 8.2 shall be made promptly, and in any event within forty-five days (or, in the case of an advancement of expenses, twenty days, provided that the director or officer has delivered the undertaking contemplated by Section 8.2(a) if required), upon the written request of the director or officer. If the Corporation denies a written request for indemnification or advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within forty-five days (or, in the case of an advancement of expenses, twenty days, provided that the director or officer has delivered the undertaking contemplated by Section 8.2(a) if required), the right to indemnification or advancements as granted by this Section 8.2 shall be enforceable by the director or officer in the Court of Chancery of the State of Delaware, which shall be the sole and exclusive forum for any such action. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation to the maximum extent permitted by applicable law. It shall be a defense to any such action (other than an action brought to enforce a claim for the advancement of expenses where the undertaking required pursuant to Section 8.2(a), if any, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the Corporation to the maximum extent permitted by law. Neither the failure of the Corporation (including its Board, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

 

(f)           Insurance. The Corporation may maintain insurance, at its expense, to protect itself and/or any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability, or loss under the DGCL.

 

(g)           Certain Definitions. For purposes of this Section 8.2, (a) references to “other enterprise” shall include any employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and (c) references to “serving at the request of the Corporation” shall include any service that imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries.

 

(h)           Merger or Consolidation. For purposes of this Section 8.2, references to the “Corporation” shall include, in addition to the resulting Corporation, any constituent Corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent Corporation, or is or was serving at the request of such constituent Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Section 8.2 with respect to the resulting or surviving Corporation as he or she would have with respect to such constituent Corporation if its separate existence had continued.

 

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(i)            Reliance. Persons who after the date of the adoption of this provision become or remain directors or officers of the Corporation or who, while a director or officer of the Corporation, become or remain a director, officer, employee or agent of a subsidiary, shall be conclusively presumed to have relied on the rights to indemnity, advancement of expenses and other rights contained in this Section 8.2 in entering into or continuing such service. The rights to indemnification and to the advancement of expenses conferred in this Section 8.2 shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.

 

(j)            Severability. If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable as applied to any Person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article VIII (including, without limitation, each portion of any sentence of this Article VIII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other Persons or entities and circumstances shall not in any way be affected or impaired thereby. Any Person or entity purchasing or otherwise acquiring any interest in shares of Stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article VIII.

 

Article IX
CORPORATE OPPORTUNITY

 

To the fullest extent permitted by applicable law, the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation or any of its officers or directors, or any of their respective affiliates, in circumstances where the application of any such doctrine would conflict with any fiduciary duties or contractual obligations they may have as of the date of this Fourth Amended and Restated Certificate or in the future, and the Corporation renounces any expectancy that any of the directors or officers of the Corporation will offer any such corporate opportunity of which he or she may become aware to the Corporation, except, the doctrine of corporate opportunity shall apply with respect to any of the directors or officers of the Corporation with respect to a corporate opportunity that was offered to such person solely in his or her capacity as a director or officer of the Corporation and (i) such opportunity is one the Corporation is legally and contractually permitted to undertake and would otherwise be reasonable for the Corporation to pursue and (ii) the director or officer is permitted to refer that opportunity to the Corporation without violating any legal obligation.

 

Article X
UNSUITABLE PERSONS

 

Section 10.1      Definitions. For purposes of this Article X, the following definitions apply.

 

Affiliate” (and derivatives of such term) with respect to any Person, has the meaning ascribed to such term under Rule 12b-2 promulgated by the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

 

Affiliated Companies” means those partnerships, corporations, limited liability companies, trusts or other entities directly or indirectly Affiliated or under common Ownership or Control with the Corporation including, without limitation, any subsidiary of the Corporation, holding company or intermediary company (as those or similar terms are defined under the Gaming Laws of any applicable Gaming Jurisdictions), in each case that is registered or licensed under applicable Gaming Laws.

 

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Control” (and derivatives of such term) (i) with respect to any Person, shall have the meaning ascribed to such term under Rule 12b-2 promulgated by the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, (ii) with respect to any Interest, shall mean the possession, directly or indirectly, of the power to direct, whether by agreement, contract, agency or otherwise, the voting rights or disposition of such Interest, and (iii) as applicable, the meaning ascribed to the term “control” (and derivatives of such term) under the Gaming Laws of any applicable Gaming Jurisdictions.

 

Equity Interest” means any share of the Stock or any other equity or voting securities of the Corporation, or securities exchangeable or exercisable for, or convertible into, such other equity or voting securities of the Corporation.

 

Gaming” or “Gaming Activities” means the conduct of gaming and gambling activities, race books and sports pools, or the use of gaming devices, equipment and supplies in the operation of a casino, simulcasting facility, card club or other enterprise, including, without limitation, slot machines, gaming tables, cards, dice, gaming chips, player tracking systems, cashless wagering systems, mobile gaming systems, inter-casino linked systems and related and associated equipment, supplies and systems.

 

Gaming Authorities” means all international, national, foreign, domestic, federal, state, provincial, regional, local, tribal, municipal and other regulatory and licensing bodies, instrumentalities, departments, commissions, authorities, boards, officials, tribunals and agencies with authority over or responsibility for the regulation of Gaming within any Gaming Jurisdiction.

 

Gaming Jurisdictions” means all jurisdictions, domestic and foreign, and their political subdivisions, in which Gaming Activities are or may be lawfully conducted, including, without limitation, all Gaming Jurisdictions in which the Corporation or any of its Affiliated Companies currently conducts, or may in the future conduct Gaming Activities.

 

Gaming Laws” means all laws, statutes and ordinances pursuant to which any Gaming Authority possesses regulatory, permit and licensing authority over the conduct of Gaming Activities, or the Ownership or Control of an Equity Interest in an entity which conducts Gaming Activities, in any Gaming Jurisdiction, all orders, decrees, rules and regulations promulgated thereunder, all written and unwritten policies of the Gaming Authorities and all written and unwritten interpretations by the Gaming Authorities of such laws, statutes, ordinances, orders, decrees, rules, regulations and policies.

 

Gaming Licenses” shall mean all licenses, permits, certifications, approvals, orders, authorizations, registrations, findings of suitability, franchises, exemptions, waivers, concessions and entitlements issued by any Gaming Authority necessary for or relating to the conduct of Gaming Activities by any Person or the Ownership or Control by any Person of an Interest in an entity that conducts or may in the future conduct Gaming Activities.

 

Interest” means the Stock or other securities of an entity or any other interest or financial or other stake therein, including, without limitation, the Equity Interests.

 

New Jersey Act” means the New Jersey Casino Control Act, N.J.S.A. 5:12-1 et seq., as amended from time to time.

 

New Jersey Commission” means the New Jersey Casino Control Commission.

 

Own” or “Ownership” (and derivatives of such terms) shall mean (i) ownership of record, (ii) “beneficial ownership” as defined in Rule 13d-3 or Rule 16a-1(a)(2) promulgated by the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (but without regard to any requirement for a security or other Interest to be registered under Section 12 of the Securities Act of 1933, as amended), and (iii) as applicable, the meaning ascribed to the terms “own” or “ownership” (and derivatives of such terms) under the Gaming Laws of the relevant Gaming Jurisdiction.

 

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Person” means an individual, corporation, limited liability company, partnership, association, trust or any other entity or organization, including, without limitation, a government or political subdivision or an agency or instrumentality thereof.

 

Purchase Price” means that price per Equity Interest required to be paid by the Gaming Authority making the finding of unsuitability, or if such Gaming Authority does not require a certain price per Equity Interest to be paid, the lesser of (i) the consideration per Equity Interest paid to the Corporation by the holder of such Equity Interests and (ii) the fair value per Equity Interest as determined by the Board in its sole and absolute discretion.

 

Subsidiary” means any entity of which the Corporation is deemed a “holding company” or an “intermediary company” under the New Jersey Act.

 

Third-Party Transferees” shall mean one or more third parties designated by the Corporation (in its sole and absolute discretion) by written notice delivered to an Unsuitable Person or an Affiliate of an Unsuitable Person (as applicable) to purchase some or all of the Equity Interests to be automatically sold and transferred in accordance with a Transfer Notice.

 

Transfer” shall mean the sale and every other method, direct or indirect, of transferring or otherwise disposing of an Interest, or the Ownership, Control or possession thereof, or fixing a lien thereupon, whether absolutely or conditionally, voluntarily or involuntarily, by or without judicial proceedings, as a conveyance, sale, payment, pledge, mortgage, lien, encumbrance, gift, security, or otherwise (including by merger or consolidation).

 

Transfer Date” means the date specified in the Transfer Notice as the date on which the Equity Interests Owned or Controlled by an Unsuitable Person or an Affiliate of an Unsuitable Person (as applicable) are to be automatically sold and transferred to the Corporation or one or more Third-Party Transferees in accordance with Article X of this Fourth Amended and Restated Certificate or such other date determined by the Corporation in its sole and absolute discretion.

 

Transfer Notice” means that notice of transfer delivered by the Corporation to an Unsuitable Person or an Affiliate of an Unsuitable Person (as applicable) if a Gaming Authority so requires the Corporation, or if the Board deems it necessary or advisable, to cause such Unsuitable Person’s or Affiliate’s (as applicable) Equity Interests to be automatically sold and transferred pursuant to Article X of this Fourth Amended and Restated Certificate. Each Transfer Notice shall set forth (i) the Transfer Date, (ii) the number and class/series of Equity Interests to be automatically sold and transferred, (iii) the Purchase Price with respect to each class/series of such Equity Interests, (iv) the place where any certificates for such Equity Interests shall be surrendered, and (v) any other requirements of surrender of the Equity Interests, including how certificates representing such Equity Interests are to be endorsed, if at all.

 

Unsuitable Person” means a Person who (i) fails or refuses to file any required application, or has withdrawn or requested the withdrawal of a pending required application, to be found suitable by any Gaming Authority or for any Gaming License, (ii) is denied or disqualified from eligibility for any Gaming License by any Gaming Authority, (iii) is determined by a Gaming Authority to be unsuitable or disqualified to Own or Control any Equity Interests, (iv) is determined by a Gaming Authority to be unsuitable to be Affiliated, associated or involved with a Person engaged in Gaming Activities in any Gaming Jurisdiction, (v) causes any Gaming License of the Corporation or any Affiliated Company to be lost, rejected, rescinded, suspended, revoked or not renewed by any Gaming Authority, or causes the Corporation or any Affiliated Company to be threatened by any Gaming Authority with the loss, rejection, rescission, suspension, revocation or non-renewal of any Gaming License (in each of (ii) through (v) above, regardless of whether such denial, disqualification or determination by a Gaming Authority is final and non-appealable), or (vi) is deemed likely, in the sole and absolute discretion of the Board, to (A) preclude or materially delay, impede, impair, threaten or jeopardize any Gaming License held or desired in good faith to be held by the Corporation or any Affiliated Company or the Corporation’s or any Affiliated Company’s application for, right to the use of, entitlement to, or ability to obtain or retain, any Gaming License, (B) cause or otherwise result in, the disapproval, cancellation, termination, material adverse modification or non-renewal of any material contract to which the Corporation or any Affiliated Company is a party, or (C) cause or otherwise result in the imposition of any materially burdensome or unacceptable terms or conditions on any Gaming License of the Corporation or any Affiliated Company.

 

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Section 10.2      Finding of Unsuitability.

 

(a)           The Equity Interests Owned or Controlled by an Unsuitable Person or an Affiliate of an Unsuitable Person (as applicable) shall be subject to automatic sale and transfer to the Corporation or one or more Third-Party Transferees as and to the extent required by a Gaming Authority or deemed necessary or advisable by the Board in its sole and absolute discretion. If a Gaming Authority requires the Corporation, or the Board deems it necessary or advisable, to cause any such Equity Interests to be automatically sold and transferred, the Corporation shall deliver a Transfer Notice to the Unsuitable Person or its Affiliate(s) (as applicable) and shall purchase or cause one or more Third-Party Transferees to purchase the number, class and series of Equity Interests specified in the Transfer Notice on the Transfer Date and for the Purchase Price determined in accordance with this Article X and set forth in the Transfer Notice. From and after the Transfer Date, such Unsuitable Person or any Affiliate of such Unsuitable Person shall cease to be a stockholder with respect to such Equity Interests, and all rights of such Unsuitable Person or any Affiliate of such Unsuitable Person therein, other than the right to receive the Purchase Price or any other amount pursuant to applicable law or the order of any Gaming Authority, shall cease.

 

(b)           Commencing on the date that a Gaming Authority serves notice of a determination of unsuitability or disqualification of a holder of Equity Interests, or the Board otherwise determines that a Person is an Unsuitable Person, and until the Equity Interests Owned or Controlled by such Person are Owned or Controlled by a Person who is not an Unsuitable Person, the Unsuitable Person and any Affiliates of such Unsuitable Person shall not be entitled: (i) to receive any dividend, payment, distribution or interest with regard to the Equity Interests, (ii) to exercise, directly or indirectly or through any proxy, trustee, or nominee, any voting or other right conferred by such Equity Interests, and such Equity Interests shall not for any purposes be included in the shares of Stock of the Corporation entitled to vote or (iii) to receive any remuneration that may be due to such Person, accruing after the date of such notice of determination of unsuitability or disqualification by a Gaming Authority, in any form from the Corporation or any Affiliated Company for services rendered or otherwise.

 

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(c)           The closing of the transactions contemplated by subsections (a) and (b) of this Section 10.2 (the “Closing”) shall take place at the principal office of the Corporation or via electronic exchange of documents on the Transfer Date. At the Closing: (i) each of the Corporation and any applicable Third-Party Transferee shall deliver the aggregate applicable Purchase Price for the Equity Interests being purchased by it (x) by wire transfer of immediately available funds to the account specified in writing by the Unsuitable Person or Affiliate of such Unsuitable Person (as applicable), (y) by unsecured promissory note, or (z) by combination of both as required by the applicable Gaming Authority and, if not so required, as the Corporation may determine in its sole and absolute discretion and (ii) the Unsuitable Person or Affiliate of such Unsuitable Person (as applicable) shall deliver to the Corporation and any applicable Third-Party Transferee such stock powers, assignment instruments and other agreement as are necessary in the judgment of the Corporation to fully convey all right, title and interest in and to the Equity Interests being purchased by each of the foregoing, free and clear of all liens and other encumbrances (other than restrictions on transfer under this Fourth Amended and Restated Certificate, the Bylaws and applicable law and as set forth in any agreement between the Unsuitable Person or Affiliate of such Unsuitable Person (as applicable) and the Corporation) and to evidence the subordination of any promissory note if required by the Corporation. Such stock powers, assignment instruments and other agreements shall be in a form acceptable to the Corporation and shall include such representations and warranties (including, without limitation, representations and warranties as to title and ownership of the Equity Interests being sold, authorization, execution and delivery of relevant documents and the enforceability of such documents), covenants, releases (including, without limitation, a general release of claims and covenant not to sue in favor of the Corporation or any applicable Third-Party Transferee and each of their respective Affiliates, employees, directors, managers, officers, partners, members and the like with respect to the pre-Closing period) and indemnities as determined by the Corporation in its sole and absolute discretion. Any promissory note shall contain such terms and conditions as the Corporation determines necessary or advisable, including without limitation, prepayment at the maker’s option at any time without premium or penalty or subordination provisions. Subject to the forgoing, the principal amount of any promissory note together with any unpaid interest shall be due and payable no earlier than the tenth (10th) anniversary of delivery of such promissory note and interest on the unpaid principal thereof shall be payable annually in arrears at no more than the minimum rate of interest at the time of delivery which can be used without causing additional interest to be imputed pursuant to the Internal Revenue Code of 1986, as amended from time to time, or corresponding provisions of subsequent superseding federal revenue laws. The sale and transfer of the applicable Equity Interests shall be effected automatically at the Closing upon delivery of the Purchase Price in accordance with this Section 10.2(c) without regard to the provision by the Unsuitable Person or Affiliate of such Unsuitable Person (as applicable) of the stock powers, assignment instruments and other agreements described above; provided, however, that the Unsuitable Person or Affiliate of such Unsuitable Person (as applicable) shall continue to have the obligation to the Corporation and any applicable Third-Party Transferee to provide such stock powers, assignment instruments and other agreements.

 

Section 10.3      Notices. All notices given by the Corporation pursuant to this Article X, including Transfer Notices, shall be in writing and shall be deemed given when delivered by personal service, overnight courier, first-class mail, postage prepaid, addressed to the Person at such Person’s address as it appears on the books and records of the Corporation.

 

Section 10.4      Indemnification. Any Unsuitable Person and any Affiliate of an Unsuitable Person that Owns or Controls Equity Interests shall jointly and severally indemnify and hold harmless the Corporation and its Affiliated Companies for any and all losses, costs and expenses, including attorneys’ fees and expenses, incurred by the Corporation and its Affiliated Companies as a result of, or arising out of, such Person’s continuing Ownership or Control of Equity Interests, the neglect, refusal or other failure to comply with the provisions of this Article X, or failure to promptly divest itself of any Equity Interests when and in the specific manner required by the Gaming Laws or this Article X.

 

Section 10.5      Injunctive Relief. The Corporation is entitled to injunctive or other equitable relief in any court of competent jurisdiction to enforce the provisions of this Article X and each holder of Equity Interests shall be deemed to have consented to injunctive or other equitable relief and acknowledged, by virtue of acquiring and holding the Equity Interests, that the failure to comply with this Article X will expose the Corporation to irreparable injury for which there is no adequate remedy at law and that the Corporation is entitled to injunctive or other equitable relief to enforce the provisions of this Article X.

 

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Section 10.6      Non-Exclusivity of Rights. The right of the Corporation to purchase or cause to be purchased Equity Interests pursuant to this Article X shall not be exclusive of any other rights the Corporation may have or hereafter acquire under any agreement, provision of this Fourth Amended and Restated Certificate or the Bylaws of the Corporation or otherwise. To the extent permitted under applicable Gaming Laws, the Corporation shall have the right, exercisable in its sole and absolute discretion, to propose that the parties, immediately upon the delivery of the Transfer Notice, enter into an agreement or other arrangement, including, without limitation, a divestiture trust or divestiture plan, which will reduce or terminate an Unsuitable Person’s or its Affiliate’s Ownership or Control of all or a portion of its Equity Interests.

 

Section 10.7      Further Actions. Nothing contained in this Article X shall limit the authority of the Corporation to take such other action, to the extent permitted by law, as it deems necessary or advisable to protect the Corporation or its Affiliated Companies from the denial or threatened denial, loss or threatened loss or material delayed issuance or threatened material delayed issuance of any Gaming License of the Corporation or any of its Affiliated Companies. Without limiting the generality of the foregoing, the Corporation may conform any provision of this Article X to the extent necessary to make such provisions consistent with Gaming Laws. In addition, the Corporation may, to the extent permitted by law, from time to time establish, modify, amend or rescind bylaws, regulations, and procedures of the Corporation not inconsistent with the express provisions of this Article X for the purpose of determining whether any Person is an Unsuitable Person and for the orderly application, administration and implementation of the provisions of this Article X. Such procedures and regulations shall be kept on file with the Secretary of the Corporation, the secretary of its Affiliated Companies and with the transfer agent, if any, of the Corporation and any Affiliated Companies, and shall be made available for inspection and, upon reasonable request, mailed to any record holder of Equity Interests. The Board shall have exclusive authority and power to administer this Article X and to exercise all rights and powers specifically granted to the Board or the Corporation, or as may be necessary or advisable in the administration of this Article X. All such actions which are done or made by the Board shall be final, conclusive and binding on the Corporation and all other Persons; provided, however, the Board may delegate all or any portion of its duties and powers under this Article X to a committee of the Board as it deems necessary or advisable.

 

Section 10.8      Severability. If any provision or provisions of this Article X shall be held to be invalid, illegal or unenforceable as applied to any Person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article X (including, without limitation, each portion of any sentence of this Article X containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other Persons or entities and circumstances shall not in any way be affected or impaired thereby. Any Person or entity purchasing or otherwise acquiring any interest in shares of Stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article X.

 

Section 10.9      Termination and Waivers. Except as may be required by any applicable Gaming Law or Gaming Authority, the Corporation may waive any of its rights or any restrictions contained in this Article Twelfth in any instance in which and to the extent the Corporation determines that a waiver would be in the best interests of the Corporation. Except as required by a Gaming Authority, nothing in this Article Twelfth shall be deemed or construed to require the Corporation to purchase or caused to be purchased any Equity Interests Owned or Controlled by an Unsuitable Person or an Affiliate of an Unsuitable Person.

 

Section 10.10      Legend. The restrictions set forth in this Article X shall be noted conspicuously on any certificate evidencing Equity Interests in accordance with the requirements of the DGCL and any applicable Gaming Laws.

 

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Section 10.11      Compliance with Gaming Laws. All Equity Interests shall be held subject to the restrictions and requirements of all applicable Gaming Laws. All Persons Owning or Controlling Equity Interests shall comply with all applicable Gaming Laws, including any provisions of such Gaming Laws that require such Person to file applications for Gaming Licenses with, and provide information to, the applicable Gaming Authorities. Any Transfer of Equity Interests may be subject to the prior approval of the Gaming Authorities and/or the Corporation, and any purported Transfer thereof in violation of such requirements shall be void ab initio. This Fourth Amended and Restated Certificate shall be generally subject to the provisions of the applicable Gaming Laws and the rules and regulations promulgated thereunder by the applicable Gaming Authorities in each applicable Gaming Jurisdiction.

 

Section 10.12      Notification of Ownership. Any Person who Owns or Controls five percent (5%) or more of any class or series of the Corporation’s Equity Interests shall promptly notify the Corporation of such fact. In addition, any Person who Owns or Controls any shares of any class or series of the Corporation’s Equity Interests may be required by Gaming Laws to (i) provide to the Gaming Authorities in each Gaming Jurisdiction in which the Corporation or any subsidiary thereof either conducts Gaming or has a pending application for a Gaming License all information regarding such Person as may be requested or required by such Gaming Authorities and (ii) respond to written or oral questions or inquiries from any such Gaming Authorities. Any Person who Owns or Controls any shares of any class or series of the Corporation’s Equity Interests, by virtue of such Ownership or Control, consents to the performance of any personal background investigation that may be required by any Gaming Authorities.

 

Section 10.13      Required New Jersey Charter Provisions.

 

(a)           All provisions of the New Jersey Act, to the extent required to be stated in this Fourth Amended and Restated Certificate for the Corporation or any of its Subsidiaries to be eligible to apply for and maintain a casino license under the New Jersey Act, are incorporated herein by this reference. To the extent that anything contained in this Fourth Amended and Restated Certificate or in the Bylaws is inconsistent with any such provisions under the New Jersey Act, the provisions of the New Jersey Act shall govern.

 

(b)           This Fourth Amended and Restated Certificate shall be subject to the provisions of the New Jersey Act and the rules and regulations of the New Jersey Commission promulgated thereunder. Specifically, and in accordance with the provisions of Section 82(d)(7) and (9) of the New Jersey Act, the Equity Interests are held subject to the condition that, if any holder of Equity Interests is found to be disqualified by the New Jersey Commission pursuant to the provisions of the New Jersey Act, such holder must dispose of such Equity Interests in accordance with Section 10.2 and shall be subject to this Article X.

 

(c)           Any newly elected or appointed director or officer of, or nominee to any such position with, the Corporation, who is required to qualify pursuant to the New Jersey Act, shall not exercise any powers of the office to which such individual has been elected, appointed or nominated until such individual has been found qualified to hold such office or position by the New Jersey Commission in accordance with the New Jersey Act or the New Jersey Commission permits such individual to perform duties and exercise powers relating to any such position pending qualification. Notwithstanding any other provisions of this Fourth Amended and Restated Certificate or the Bylaws, any officer or director of the Corporation shall hold such position until such officer’s or director’s successor is duly qualified, until such individual’s earlier death, resignation, retirement, disqualification, removal, or an earlier determination of the New Jersey Commission that there is reasonable cause to believe that such individual may not be qualified to hold such position (a “New Jersey Adverse Determination”). Any officer of the Corporation shall be immediately removed from such position in the event of a New Jersey Adverse Determination with respect to such officer. Each director of the Corporation shall provide, or shall be deemed to have provided, upon such director’s qualification, such director’s resignation conditioned upon the occurrence of a New Jersey Adverse Determination with respect to such director in accordance with Section 141(b) of the DGCL.

 

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Article XI
AMENDMENT OF FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

Notwithstanding any other provisions of this Fourth Amended and Restated Certificate or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of Stock required by law or by the Bylaws or by this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), any alteration, amendment or repeal of this Fourth Amended and Restated Certificate shall require the affirmative vote of (a) the holders of a majority of the voting power of the Stock while Mr. Fertitta (together with the Fertitta Affiliates) beneficially owns a majority of the voting power of the Stock and (b) at least two-thirds of the voting power of the Stock from and after the time that Mr. Fertitta (together with the Fertitta Affiliates) no longer beneficially owns a majority of the voting power of the Stock; provided, that, so long as both shares of Class A Common Stock are outstanding and shares of Class B Common Stock are outstanding, the Corporation shall not amend, alter or repeal any provision of Fourth Amended and Restated Certificate so as to adversely affect the relative rights, preferences, qualifications, limitations or restrictions of either such class of Common Stock as compared to those of the other class of Common Stock without the affirmative vote of the holders of a majority of the voting power of the outstanding shares of each class of Common Stock, voting separately as a class, whose relative rights, preferences, qualifications, limitations or restrictions are adversely affected.

 

The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Fourth Amended and Restated Certificate (including any Preferred Stock Designation), and other provisions authorized by the laws of the State of Delaware at the time in force that may be added or inserted, in the manner now or hereafter prescribed by this Fourth Amended and Restated Certificate and the DGCL; and, except as set forth in Article VIII, all rights, preferences and privileges of whatever nature herein conferred upon stockholders, directors or any other persons by and pursuant to this Fourth Amended and Restated Certificate in its present form or as hereafter amended are granted subject to the rights reserved in this Article XI.

 

Article XII
EXCLUSIVE FORUM FOR CERTAIN LAWSUITS

 

Section 12.1      Forum. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the “Court of Chancery”) shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL or this Fourth Amended and Restated Certificate or the Bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Notwithstanding the foregoing, the provisions of this Section 12.1 will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in any security of the Corporation shall be deemed to have notice of and consented to the provisions of this Section 12.1.

 

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Section 12.2      Consent to Jurisdiction. If any action the subject matter of which is within the scope of Section 12.1 above is filed by a stockholder in a court other than a designated exclusive forum in Section 12.1 (an “Incorrect Forum Action”), such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 12.1 immediately above and (ii) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the Incorrect Forum Action as agent for such stockholder.

 

Section 12.3      Severability. If any provision or provisions of this Article XII shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article XII (including, without limitation, each portion of any sentence of this Article XII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in shares of Stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XII.

 

Article XIII
BUSINESS COMBINATIONS

 

The Corporation hereby elects not to be governed by Section 203 of the DGCL until such time as Mr. Fertitta (together with the Fertitta Affiliates) ceases to own beneficially, in the aggregate, shares of capital stock of the Corporation representing at least 10% in voting power of the capital stock entitled generally to vote on the election of directors, whereupon the Corporation shall immediately and automatically, without further action on the part of the Corporation or any holder of capital stock of the Corporation, become governed by Section 203 of the DGCL.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Landcadia Holdings II, Inc. has caused this Fourth Amended and Restated Certificate to be duly executed and acknowledged in its name and on its behalf by an authorized officer as of the date first set forth above.

 

  LANDCADIA HOLDINGS II, INC.
   
   
  By: /s/ Steven L. Scheinthal
    Name: Steven L. Scheinthal
    Title: Vice President and Secretary

 

[Signature Page to Fourth Amended and Restated Certificate of Incorporation]

 

 

Exhibit 3.2

 

AMENDED AND RESTATED BYLAWS

(THE “BYLAWS”)

OF

GOLDEN NUGGET ONLINE GAMING, INC. (f/k/a/ LANDCADIA HOLDINGS II, INC.)

(THE “CORPORATION”)

 

Article I
OFFICES

 

Section 1.1      Registered Office. The registered office of the Corporation within the State of Delaware shall be located at either (a) the principal place of business of the Corporation in the State of Delaware or (b) the office of the corporation or individual acting as the Corporation’s registered agent in Delaware.

 

Section 1.2      Additional Offices. The Corporation may, in addition to its registered office in the State of Delaware, have such other offices and places of business, both within and outside the State of Delaware, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or as the business and affairs of the Corporation may require.

 

Article II
STOCKHOLDERS MEETINGS

 

Section 2.1      Annual Meetings. The annual meeting of stockholders shall be held at such place, either within or without the State of Delaware, and time and on such date as shall be determined by the Board and stated in the notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a). At each annual meeting, the stockholders entitled to vote on such matters shall elect the directors of the Corporation and may transact any other business as may properly be brought before the meeting.

 

Section 2.2      Special Meetings. Except as otherwise provided by the Corporation’s Certificate of Incorporation, as the same may be amended or restated from time to time (the “Certificate of Incorporation”), and subject to the rights of the holders of any outstanding series of the preferred stock of the Corporation (“Preferred Stock”), and to the requirements of applicable law, special meetings of stockholders, for any purpose or purposes, may be called only by the Chairman of the Board, Chief Executive Officer, or the Board pursuant to a resolution adopted by a majority of the Board, and may not be called by any other person. Special meetings of stockholders shall be held at such place, either within or without the State of Delaware, and at such time and on such date as shall be determined by the Board and stated in the Corporation’s notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a).

 

Section 2.3      Notices. Written notice of each stockholders meeting stating the place, if any, date, and time of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting and the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, shall be given in the manner permitted by Section 9.3 to each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting, by the Corporation not less than 10 nor more than 60 days before the date of the meeting unless otherwise required by the General Corporation Law of the State of Delaware (the “DGCL”). If said notice is for a stockholders meeting other than an annual meeting, it shall in addition state the purpose or purposes for which the meeting is called, and the business transacted at such meeting shall be limited to the matters so stated in the Corporation’s notice of meeting (or any supplement thereto). Any meeting of stockholders as to which notice has been given may be postponed, and any meeting of stockholders as to which notice has been given may be cancelled, by the Board upon public announcement (as defined in Section 2.7(c)) given before the date previously scheduled for such meeting.

 

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Section 2.4      Quorum. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, the presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Corporation representing a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute a quorum for the transaction of business at such meeting, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. If a quorum shall not be present or represented by proxy at any meeting of the stockholders of the Corporation, the chairman of the meeting may adjourn the meeting from time to time in the manner provided in Section 2.6 until a quorum shall attend. The stockholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the voting power of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any such other corporation to vote shares held by it in a fiduciary capacity.

 

Section 2.5      Voting of Shares.

 

(a)        Voting Lists. The Secretary of the Corporation (the “Secretary”) shall prepare, or shall cause the officer or agent who has charge of the stock ledger of the Corporation to prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders of record entitled to vote at such meeting; provided, however, that if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order and showing the address and the number and class of shares registered in the name of each stockholder. Nothing contained in this Section 2.5(a) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If a meeting of stockholders is to be held solely by means of remote communication as permitted by Section 9.5(a), the list shall be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list required by this Section 2.5(a) or to vote in person or by proxy at any meeting of stockholders.

 

(b)        Manner of Voting. At any stockholders meeting, every stockholder entitled to vote may vote in person or by proxy. If authorized by the Board, the voting by stockholders or proxy holders at any meeting conducted by remote communication may be effected by a ballot submitted by electronic transmission (as defined in Section 9.3(c)), provided that any such electronic transmission must either set forth or be submitted with information from which the Corporation can determine that the electronic transmission was authorized by the stockholder or proxy holder. The Board, in its discretion, or the chairman of the meeting of stockholders, in such person’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.

 

(c)        Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Proxies need not be filed with the Secretary until the meeting is called to order, but shall be filed with the Secretary before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, either of the following shall constitute a valid means by which a stockholder may grant such authority. No stockholder shall have cumulative voting rights.

 

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(i)            A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.

 

(ii)            A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

 

(d)       Required Vote. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred Stock, at all meetings of stockholders at which a quorum is present, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. All other matters presented to the stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon, unless the matter is one upon which, by applicable law, the Certificate of Incorporation, these Bylaws or applicable stock exchange rules, a different vote is required, in which case such provision shall govern and control the decision of such matter.

 

(e)        Inspectors of Election. The Board may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more persons as inspectors of election, who may be employees of the Corporation or otherwise serve the Corporation in other capacities, to act at such meeting of stockholders or any adjournment thereof and to make a written report thereof. The Board may appoint one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspectors of election or alternates are appointed by the Board, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall ascertain and report the number of outstanding shares and the voting power of each; determine the number of shares present in person or represented by proxy at the meeting and the validity of proxies and ballots; count all votes and ballots and report the results; determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. No person who is a candidate for an office at an election may serve as an inspector at such election. Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors.

 

Section 2.6      Adjournments. Any meeting of stockholders, annual or special, may be adjourned by the chairman of the meeting, from time to time, whether or not there is a quorum, to reconvene at the same or some other place. Notice need not be given of any such adjourned meeting if the date, time, and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting in accordance with Section 9.2, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.

 

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Section 2.7      Advance Notice for Business.

 

(a)        Annual Meetings of Stockholders. No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the annual meeting by or at the direction of the Board or (iii) otherwise properly brought before the annual meeting by any stockholder of the Corporation (A) who is a stockholder of record entitled to vote at such annual meeting on the date of the giving of the notice provided for in this Section 2.7 (at and on the record date for the determination of stockholders entitled to vote at such annual meeting and (B) who complies with the notice procedures set forth in this Section 2.7(a). Notwithstanding anything in this Section 2.7(a) to the contrary, only persons nominated for election as a director to fill any term of a directorship that expires on the date of the annual meeting pursuant to Section 3.2 will be considered for election at such meeting.

 

(i)            In addition to any other applicable requirements, for business (other than nominations) to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary and such business must otherwise be a proper matter for stockholder action. Subject to Section 2.7(a)(iii), a stockholder’s notice to the Secretary with respect to such business, to be timely, must be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day before the meeting and not later than the later of (A) the close of business on the 90th day before the meeting or (B) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting is first made by the Corporation. The public announcement of an adjournment or postponement of an annual meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 2.7(a).

 

(ii)            To be in proper written form, a stockholder’s notice to the Secretary with respect to any business (other than nominations) must set forth as to each such matter such stockholder proposes to bring before the annual meeting (A) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend these Bylaws, the language of the proposed amendment) and the reasons for conducting such business at the annual meeting, (B) the name and record address of such stockholder and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on whose behalf the proposal is made, (D) a description of all arrangements or understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and any other person or persons (including their names) in connection with the proposal of such business by such stockholder, (E) any material interest of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made in such business and (F) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.

 

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(iii)            The foregoing notice requirements of this Section 2.7(a) shall be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such stockholder has complied with the requirements of such Rule for inclusion of such proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 2.7(a), provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 2.7(a) shall be deemed to preclude discussion by any stockholder of any such business. If the Board or the chairman of the annual meeting determines that any stockholder proposal was not made in accordance with the provisions of this Section 2.7(a) or that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 2.7(a), such proposal shall not be presented for action at the annual meeting. Notwithstanding the foregoing provisions of this Section 2.7(a), if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present the proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such matter may have been received by the Corporation.

 

(iv)           In addition to the provisions of this Section 2.7(a), a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 2.7(a)shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

 

(b)        Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting only pursuant to Section 3.2.

 

(c)        Public Announcement. For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act (or any successor thereto).

 

Section 2.8      Conduct of Meetings. The chairman of each annual and special meeting of stockholders shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the President or if the President is not a director, such other person as shall be appointed by the Board. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the chairman of the meeting. The Board may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with these Bylaws or such rules and regulations as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The secretary of each annual and special meeting of stockholders shall be the Secretary or, in the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary so appointed to act by the chairman of the meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

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Section 2.9      Consents in Lieu of Meeting. Except as otherwise provided by law or by the Certificate of Incorporation, any action required or permitted to be taken by the stockholders of the Corporation may be effected by an action by written consent in lieu of a meeting with the approval of the the holders of outstanding stock entitled to vote thereon having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Such consent shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

 

Article III
DIRECTORS

 

Section 3.1      Powers; Number. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws. Directors need not be stockholders or residents of the State of Delaware. Subject to the Certificate of Incorporation, the number of directors shall be fixed exclusively by resolution of the Board.

 

Section 3.2      Advance Notice for Nomination of Directors.

 

(a)         Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided by the terms of one or more series of Preferred Stock with respect to the rights of holders of one or more series of Preferred Stock to elect directors. Nominations of persons for election to the Board at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as set forth in the Corporation’s notice of such special meeting, may be made (i) by or at the direction of the Board or (ii) by any stockholder of the Corporation (A) who is a stockholder of record entitled to vote in the election of directors on the date of the giving of the notice provided for in this Section 3.2 and on the record date for the determination of stockholders entitled to vote at such meeting and (B) who complies with the notice procedures set forth in this Section 3.2.

 

(b)        In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice to the Secretary must be received by the Secretary at the principal executive offices of the Corporation (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so received not earlier than the close of business on the 120th day before the meeting and not later than the later of (A) the close of business on the 90th day before the meeting or (B) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Corporation; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting or special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 3.2.

 

(c)        Notwithstanding anything in paragraph (b) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public announcement by the Corporation naming all of the nominees for the additional directors to be elected or specifying the size of the increased Board before the close of business on the 90th day prior to the first anniversary date of the immediately preceding annual meeting of stockholders, a stockholder’s notice required by this Section 3.2 shall also be considered timely, but only with respect to nominees for the additional directorships created by such increase that are to be filled by election at such annual meeting, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the date on which such public announcement was first made by the Corporation.

 

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(d)        To be in proper written form, a stockholder’s notice to the Secretary must set forth (i) as to each person whom the stockholder proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially or of record by the person and (D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (ii) as to the stockholder giving the notice (A) the name and record address of such stockholder as they appear on the Corporation’s books and the name and address of the beneficial owner, if any, on whose behalf the nomination is made, (B) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and the beneficial owner, if any, on whose behalf the nomination is made, (C) a description of all arrangements or understandings relating to the nomination to be made by such stockholder among such stockholder, the beneficial owner, if any, on whose behalf the nomination is made, each proposed nominee and any other person or persons (including their names), (D) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (E) any other information relating to such stockholder and the beneficial owner, if any, on whose behalf the nomination is made that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

 

(e)        If the Board or the chairman of the meeting of stockholders determines that any nomination was not made in accordance with the provisions of this Section 3.2, or that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 3.2, then such nomination shall not be considered at the meeting in question. Notwithstanding the foregoing provisions of this Section 3.2, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting of stockholders of the Corporation to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Corporation.

 

(f)         In addition to the provisions of this Section 3.2, a stockholder shall also comply with all of the applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 3.2 shall be deemed to affect any rights of the holders of Preferred Stock to elect directors pursuant to the Certificate of Incorporation.

 

Section 3.3      Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board shall have the authority to fix the compensation of directors, including for service on a committee of the Board, and may be paid either a fixed sum for attendance at each meeting of the Board or other compensation as director. The directors may be reimbursed their expenses, if any, of attendance at each meeting of the Board. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board may be allowed like compensation and reimbursement of expenses for service on the committee.

 

Article IV
BOARD MEETINGS

 

Section 4.1      Annual Meetings. The Board shall meet as soon as practicable after the adjournment of each annual stockholders meeting at the place of the annual stockholders meeting unless the Board shall fix another time and place and give notice thereof in the manner required herein for special meetings of the Board. No notice to the directors shall be necessary to legally convene this meeting, except as provided in this Section 4.1.

 

Section 4.2      Regular Meetings. Regularly scheduled, periodic meetings of the Board may be held without notice at such times, dates and places (within or without the State of Delaware) as shall from time to time be determined by the Board.

 

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Section 4.3      Special Meetings. Special meetings of the Board (a) may be called, in writing, by the Chairman of the Board or Chief Executive Officer (if he or she shall be a director) and (b) shall be called by the Chairman of the Board, Chief Executive Officer (if he or she shall be a director) or Secretary on the written request of at least a majority of directors then in office, or the sole director, as the case may be, and shall be held at such time, date and place (within or without the State of Delaware) as may be determined by the person calling the meeting or, if called upon the request of directors or the sole director, as specified in such written request. Notice of each special meeting of the Board shall be given, as provided in Section 9.3, to each director (i) at least 24 hours before the meeting if such notice is oral notice given personally or by telephone or written notice given by hand delivery or by means of a form of electronic transmission and delivery; (ii) at least two days before the meeting if such notice is sent by a nationally recognized overnight delivery service; and (iii) at least five days before the meeting if such notice is sent through the United States mail. If the Secretary shall fail or refuse to give such notice, then the notice may be given by the officer who called the meeting or the directors who requested the meeting. Any and all business that may be transacted at a regular meeting of the Board may be transacted at a special meeting. Except as may be otherwise expressly provided by applicable law, the Certificate of Incorporation, or these Bylaws, neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice or waiver of notice of such meeting. A special meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in accordance with Section 9.4.

 

Section 4.4      Quorum; Required Vote. A majority of the Board shall constitute a quorum for the transaction of business at any meeting of the Board, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by applicable law, the Certificate of Incorporation or these Bylaws. If a quorum shall not be present at any meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

 

Section 4.5      Consent In Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions (or paper reproductions thereof) are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Section 4.6      Organization. The chairman of each meeting of the Board shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or in the absence (or inability or refusal to act) of the President or if the President is not a director, a chairman elected from the directors present. The Secretary shall act as secretary of all meetings of the Board. In the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary shall perform the duties of the Secretary at such meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.

 

Article V
COMMITTEES OF DIRECTORS

 

Section 5.1      Establishment. The Board may by resolution of the Board designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.

 

Section 5.2      Available Powers. Any committee established pursuant to Section 5.1 hereof, to the extent permitted by applicable law and by resolution of the Board, shall have and may exercise all of the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it.

 

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Section 5.3      Alternate Members. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.

 

Section 5.4      Procedures. Unless the Board otherwise provides, the time, date, place, if any, and notice of meetings of a committee shall be determined by such committee. At meetings of a committee, a majority of the number of members of the committee (but not including any alternate member, unless such alternate member has replaced any absent or disqualified member at the time of, or in connection with, such meeting) shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of the committee, except as otherwise specifically provided by applicable law, the Certificate of Incorporation, these Bylaws or the Board. If a quorum is not present at a meeting of a committee, the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. Unless the Board otherwise provides and except as provided in these Bylaws, each committee designated by the Board may make, alter, amend and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board is authorized to conduct its business pursuant to Article III and Article IV of these Bylaws.

 

Article VI
OFFICERS

 

Section 6.1      Officers. The officers of the Corporation elected by the Board shall be a Chief Executive Officer, a Chief Financial Officer, a Secretary and such other officers (including without limitation, a Chairman of the Board, Presidents, Vice Presidents, Assistant Secretaries and a Treasurer) as the Board from time to time may determine. Officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article VI. Such officers shall also have such powers and duties as from time to time may be conferred by the Board. The Chief Executive Officer or President may also appoint such other officers (including without limitation one or more Vice Presidents and Controllers) as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers shall have such powers and duties and shall hold their offices for such terms as may be provided in these Bylaws or as may be prescribed by the Board or, if such officer has been appointed by the Chief Executive Officer or President, as may be prescribed by the appointing officer.

 

(a)        Chairman of the Board. The Chairman of the Board shall preside when present at all meetings of the stockholders and the Board. The Chairman of the Board shall have general supervision and control of the acquisition activities of the Corporation subject to the ultimate authority of the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The powers and duties of the Chairman of the Board shall not include supervision or control of the preparation of the financial statements of the Corporation (other than through participation as a member of the Board). The position of Chairman of the Board and Chief Executive Officer may be held by the same person.

 

(b)        Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Corporation, shall have general supervision of the affairs of the Corporation and general control of all of its business subject to the ultimate authority of the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters, except to the extent any such powers and duties have been prescribed to the Chairman of the Board pursuant to Section 6.1(a) above. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The position of Chief Executive Officer and President may be held by the same person.

 

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(c)        President. The President shall make recommendations to the Chief Executive Officer on all operational matters that would normally be reserved for the final executive responsibility of the Chief Executive Officer. In the absence (or inability or refusal to act) of the Chairman of the Board and Chief Executive Officer, the President (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The President shall also perform such duties and have such powers as shall be designated by the Board. The position of President and Chief Executive Officer may be held by the same person.

 

(d)        Vice Presidents. In the absence (or inability or refusal to act) of the President, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board) shall perform the duties and have the powers of the President. Any one or more of the Vice Presidents may be given an additional designation of rank or function.

 

(e)        Secretary.

 

(i)            The Secretary shall attend all meetings of the stockholders, the Board and (as required) committees of the Board and shall record the proceedings of such meetings in books to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board and shall perform such other duties as may be prescribed by the Board, the Chairman of the Board, Chief Executive Officer or President. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or any Assistant Secretary, shall have authority to affix the same to any instrument requiring it, and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing thereof by his or her signature.

 

(ii)            The Secretary shall keep, or cause to be kept, at the principal executive office of the Corporation or at the office of the Corporation’s transfer agent or registrar, if one has been appointed, a stock ledger, or duplicate stock ledger, showing the names of the stockholders and their addresses, the number and classes of shares held by each and, with respect to certificated shares, the number and date of certificates issued for the same and the number and date of certificates cancelled.

 

(f)         Assistant Secretaries. The Assistant Secretary or, if there be more than one, the Assistant Secretaries in the order determined by the Board shall, in the absence (or inability or refusal to act) of the Secretary, perform the duties and have the powers of the Secretary.

 

(g)        Chief Financial Officer. The Chief Financial Officer shall perform all duties commonly incident to that office (including, without limitation, the care and custody of the funds and securities of the Corporation, which from time to time may come into the Chief Financial Officer’s hands and the deposit of the funds of the Corporation in such banks or bust companies as the Board, the Chief Executive Officer or the President may authorize).

 

(h)        Treasurer. The Treasurer shall, in the absence (or inability or refusal to act) of the Chief Financial Officer, perform the duties and exercise the powers of the Chief Financial Officer.

 

Section 6.2      Term of Office; Removal; Vacancies. The elected officers of the Corporation shall be appointed by the Board and shall hold office until their successors are duly elected and qualified by the Board or until their earlier death, resignation, retirement, disqualification, or removal from office. Any officer may be removed, with or without cause, at any time by the Board. Any officer appointed by the Chief Executive Officer or President may also be removed, with or without cause, by the Chief Executive Officer or President, as the case may be, unless the Board otherwise provides. Any vacancy occurring in any elected office of the Corporation may be filled by the Board. Any vacancy occurring in any office appointed by the Chief Executive Officer or President may be filled by the Chief Executive Officer, or President, as the case may be, unless the Board then determines that such office shall thereupon be elected by the Board, in which case the Board shall elect such officer.

 

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Section 6.3      Other Officers. The Board may delegate the power to appoint such other officers and agents, and may also remove such officers and agents or delegate the power to remove same, as it shall from time to time deem necessary or desirable.

 

Section 6.4      Multiple Officeholders; Stockholder and Director Officers. Any number of offices may be held by the same person unless the Certificate of Incorporation or these Bylaws otherwise provide. Officers need not be stockholders or residents of the State of Delaware.

 

Article VII
SHARES

 

Section 7.1      Certificated and Uncertificated Shares. Subject to applicable law and the Certificate of Incorporation, the shares of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the DGCL.

 

Section 7.2      Multiple Classes of Stock. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the Corporation shall (a) cause the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights to be set forth in full or summarized on the face or back of any certificate that the Corporation issues to represent shares of such class or series of stock or (b) in the case of uncertificated shares, within a reasonable time after the issuance or transfer of such shares, send to the registered owner thereof a written notice containing the information required to be set forth on certificates as specified in clause (a) above; provided, however, that, except as otherwise provided by applicable law, in lieu of the foregoing requirements, there may be set forth on the face or back of such certificate or, in the case of uncertificated shares, on such written notice a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.

 

Section 7.3      Signatures. Each certificate representing capital stock of the Corporation shall be signed by or in the name of the Corporation by (a) the Chairman of the Board, Chief Executive Officer, the President or a Vice President and (b) the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Corporation. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar on the date of issue.

 

Section 7.4      Consideration and Payment for Shares.

 

(a)        Subject to applicable law and the Certificate of Incorporation, shares of stock may be issued for such consideration, having in the case of shares with par value a value not less than the par value thereof, and to such persons, as determined from time to time by the Board. The consideration may consist of any tangible or intangible property or any benefit to the Corporation including cash, promissory notes, services performed, contracts for services to be performed or other securities, or any combination thereof.

 

(b)        Subject to applicable law and the Certificate of Incorporation, shares may not be issued until the full amount of the consideration has been paid, unless upon the face or back of each certificate issued to represent any partly paid shares of capital stock or upon the books and records of the Corporation in the case of partly paid uncertificated shares, there shall have been set forth the total amount of the consideration to be paid therefor and the amount paid thereon up to and including the time said certificate representing certificated shares or said uncertificated shares are issued.

 

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Section 7.5      Lost, Destroyed or Wrongfully Taken Certificates.

 

(a)        If an owner of a certificate representing shares claims that such certificate has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate representing such shares or such shares in uncertificated form if the owner: (i) requests such a new certificate before the Corporation has notice that the certificate representing such shares has been acquired by a protected purchaser; (ii) if requested by the Corporation, delivers to the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, wrongful taking or destruction of such certificate or the issuance of such new certificate or uncertificated shares; and (iii) satisfies other reasonable requirements imposed by the Corporation.

 

(b)        If a certificate representing shares has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the Corporation of that fact within a reasonable time after the owner has notice of such loss, apparent destruction or wrongful taking and the Corporation registers a transfer of such shares before receiving notification, the owner shall be precluded from asserting against the Corporation any claim for registering such transfer or a claim to a new certificate representing such shares or such shares in uncertificated form.

 

Section 7.6      Transfer of Stock.

 

(a)        If a certificate representing shares of the Corporation is presented to the Corporation with an endorsement requesting the registration of transfer of such shares or an instruction is presented to the Corporation requesting the registration of transfer of uncertificated shares, the Corporation shall register the transfer as requested if:

 

(i)            in the case of certificated shares, the certificate representing such shares has been surrendered;

 

(ii)            (A) with respect to certificated shares, the endorsement is made by the person specified by the certificate as entitled to such shares; (B) with respect to uncertificated shares, an instruction is made by the registered owner of such uncertificated shares; or (C) with respect to certificated shares or uncertificated shares, the endorsement or instruction is made by any other appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;

 

(iii)            the Corporation has received a guarantee of signature of the person signing such endorsement or instruction or such other reasonable assurance that the endorsement or instruction is genuine and authorized as the Corporation may request;

 

(iv)            the transfer does not violate any restriction on transfer imposed by the Corporation that is enforceable in accordance with Section 7.8(a); and

 

(v)            such other conditions for such transfer as shall be provided for under applicable law have been satisfied.

 

(b)        Whenever any transfer of shares shall be made for collateral security and not absolutely, the Corporation shall so record such fact in the entry of transfer if, when the certificate for such shares is presented to the Corporation for transfer or, if such shares are uncertificated, when the instruction for registration of transfer thereof is presented to the Corporation, both the transferor and transferee request the Corporation to do so.

 

Section 7.7      Registered Stockholders. Before due presentment for registration of transfer of a certificate representing shares of the Corporation or of an instruction requesting registration of transfer of uncertificated shares, the Corporation may treat the registered owner as the person exclusively entitled to inspect for any proper purpose the stock ledger and the other books and records of the Corporation, vote such shares, receive dividends or notifications with respect to such shares and otherwise exercise all the rights and powers of the owner of such shares, except that a person who is the beneficial owner of such shares (if held in a voting trust or by a nominee on behalf of such person) may, upon providing documentary evidence of beneficial ownership of such shares and satisfying such other conditions as are provided under applicable law, may also so inspect the books and records of the Corporation.

 

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Section 7.8       Effect of the Corporation’s Restriction on Transfer.

 

(a)        A written restriction on the transfer or registration of transfer of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any person or group of persons, if permitted by the DGCL and noted conspicuously on the certificate representing such shares or, in the case of uncertificated shares, contained in a notice, offering circular or prospectus sent by the Corporation to the registered owner of such shares within a reasonable time prior to or after the issuance or transfer of such shares, may be enforced against the holder of such shares or any successor or transferee of the holder including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder.

 

(b)        A restriction imposed by the Corporation on the transfer or the registration of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any person or group of persons, even if otherwise lawful, is ineffective against a person without actual knowledge of such restriction unless: (i) the shares are certificated and such restriction is noted conspicuously on the certificate; or (ii) the shares are uncertificated and such restriction was contained in a notice, offering circular or prospectus sent by the Corporation to the registered owner of such shares within a reasonable time prior to or after the issuance or transfer of such shares.

 

Section 7.9      Regulations. The Board shall have power and authority to make such additional rules and regulations, subject to any applicable requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of shares of stock or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.

 

Article VIII
INDEMNIFICATION

 

Section 8.1      Right to Indemnification and Advancement of Expenses. To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such indemnitee in connection with such proceeding. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including, without limitation, attorneys’ fees) incurred by an indemnitee in defending or otherwise participating in any proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking (hereinafter an “undertaking”), by or on behalf of the indemnitee, to repay all amounts so advanced if it shall ultimately be determined that the indemnitee is not entitled to be indemnified under this Article VIII or otherwise. The rights to indemnification and advancement of expenses conferred by this Article VIII shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing provisions of this Section 8.1, except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to an indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board.

 

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Section 8.2      Non-Exclusivity of Rights. The rights to indemnification and advancement of expenses conferred on any indemnitee by this Article VIII shall not be exclusive of any other rights that any indemnitee may have or hereafter acquire under applicable law, the Certificate of Incorporation, these Bylaws, an agreement, a vote of stockholders or disinterested directors, or otherwise.

 

Section 8.3      Amendments. Any repeal or amendment of this Article VIII by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of these Bylaws inconsistent with this Article VIII, shall, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect of any proceeding (regardless of when such proceeding is first threatened, commenced or completed) arising out of, or related to, any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

 

Section 8.4      Indemnification of Other Persons. This Article VIII shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other than indemnitees. Without limiting the foregoing, the Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any other person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, to the maximum extent of the provisions of this Article VIII with respect to the indemnification and advancement of expenses of indemnitees under this Article VIII. Any person serving as a director, officer, partner, member, trustee, administrator, employee, or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, at least 50% of whose equity interests are owned, directly or indirectly, by the Corporation (a “subsidiary” for purposes of this Article VIII) shall be conclusively presumed to be serving in such capacity at the request of the Corporation.

 

Section 8.5      Procedure for Indemnification. Any indemnification of a director or officer of the Corporation or advancement of expenses (including attorneys’ fees, costs and charges) under this Article VIII shall be made promptly, and in any event within 45 days (or, in the case of an advancement of expenses, 20 days, provided that the director or officer has delivered the undertaking contemplated by Section 8.1 if required), upon the written request of the director or officer. If the Corporation denies a written request for indemnification or advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within 45 days (or, in the case of an advancement of expenses, 20 days, provided that the director or officer has delivered the undertaking contemplated by Section 8.1 if required), the right to indemnification or advancements as granted by this Article VIII shall be enforceable by the director or officer in the Court of Chancery of the State of Delaware, which shall be the sole and exclusive forum for any such action. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation to the maximum extent permitted by applicable law. It shall be a defense to any such action (other than an action brought to enforce a claim for the advancement of expenses where the undertaking required pursuant to Section 8.1, if any, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the Corporation to the maximum extent permitted by law. Neither the failure of the Corporation (including its Board, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

 

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Section 8.6      Insurance. The Corporation may maintain insurance, at its expense, to protect itself and/or any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability, or loss under the DGCL.

 

Section 8.7      Certain Definitions. For purposes of this Article VIII, (a) references to “other enterprise” shall include any employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and (c) references to “serving at the request of the Corporation” shall include any service that imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries.

 

Section 8.8      Merger or Consolidation. For purposes of this Article VIII, references to the “Corporation” shall include, in addition to the resulting Corporation, any constituent Corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent Corporation, or is or was serving at the request of such constituent Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article VIII with respect to the resulting or surviving Corporation as he or she would have with respect to such constituent Corporation if its separate existence had continued.

 

Section 8.9      Reliance. Persons who after the date of the adoption of this provision become or remain directors or officers of the Corporation or who, while a director or officer of the Corporation, become or remain a director, officer, employee or agent of a subsidiary, shall be conclusively presumed to have relied on the rights to indemnity, advancement of expenses and other rights contained in this Article VIII in entering into or continuing such service. The rights to indemnification and to the advancement of expenses conferred in this Article VIII shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.

 

Section 8.10      Severability. If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable as applied to any Person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article VIII (including, without limitation, each portion of any sentence of this Article VIII containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other Persons or entities and circumstances shall not in any way be affected or impaired thereby. Any Person or entity purchasing or otherwise acquiring any interest in shares of Stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article VIII.

 

Article IX
MISCELLANEOUS

 

Section 9.1      Place of Meetings. If the place of any meeting of stockholders, the Board or committee of the Board for which notice is required under these Bylaws is not designated in the notice of such meeting, such meeting shall be held at the principal business office of the Corporation; provided, however, that the Board may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5 hereof.

 

Section 9.2      Fixing Record Dates.

 

(a)        In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. In such case only stockholders of record on such record date shall be so entitled notwithstanding any transfer of stock on the books of the Corporation after the record date.

 

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(b)        If no record date is fixed by the Board, (a) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held, (b) the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is necessary, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in this state, to its principal place of business, or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded, and (c) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

 

Section 9.3      Means of Giving Notice.

 

(a)        Notice to Directors. Whenever under applicable law, the Certificate of Incorporation or these Bylaws notice is required to be given to any director, such notice shall be given either (i) in writing and sent by mail, or by a nationally recognized delivery service, (ii) by means of facsimile telecommunication or other form of electronic transmission, or (iii) by oral notice given personally or by telephone. A notice to a director will be deemed given as follows: (i) if given by hand delivery, orally, or by telephone, when actually received by the director, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iv) if sent by facsimile telecommunication, when sent to the facsimile transmission number for such director appearing on the records of the Corporation, (v) if sent by electronic mail, when sent to the electronic mail address for such director appearing on the records of the Corporation, or (vi) if sent by any other form of electronic transmission, when sent to the address, location or number (as applicable) for such director appearing on the records of the Corporation.

 

(b)        Notice to Stockholders. Whenever under applicable law, the Certificate of Incorporation or these Bylaws notice is required to be given to any stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States mail, or by a nationally recognized overnight delivery service for next day delivery, or (ii) by means of a form of electronic transmission consented to by the stockholder, to the extent permitted by, and subject to the conditions set forth in Section 232 of the DGCL. A notice to a stockholder shall be deemed given as follows: (i) if given by hand delivery, when actually received by the stockholder, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, and (iv) if given by a form of electronic transmission consented to by the stockholder to whom the notice is given and otherwise meeting the requirements set forth above, (A) if by facsimile transmission, when directed to a number at which the stockholder has consented to receive notice, (B) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice, (C) if by a posting on an electronic network together with separate notice to the stockholder of such specified posting, upon the later of (1) such posting and (2) the giving of such separate notice, and (D) if by any other form of electronic transmission, when directed to the stockholder. A stockholder may revoke such stockholder’s consent to receiving notice by means of electronic communication by giving written notice of such revocation to the Corporation. Any such consent shall be deemed revoked if (1) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent and (2) such inability becomes known to the Secretary or an Assistant Secretary or to the Corporation’s transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

 

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(c)         Electronic Transmission. “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process, including but not limited to transmission by telex, facsimile telecommunication, electronic mail, telegram and cablegram.

 

(d)        Notice to Stockholders Sharing Same Address. Without limiting the manner by which notice otherwise may be given effectively by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholder’s consent by delivering written notice of such revocation to the Corporation. Any stockholder who fails to object in writing to the Corporation within 60 days of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented to receiving such single written notice.

 

(e)        Exceptions to Notice Requirements. Whenever notice is required to be given, under the DGCL, the Certificate of Incorporation or these Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given.

 

In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

 

Whenever notice is required to be given by the Corporation, under any provision of the DGCL, the Certificate of Incorporation or these Bylaws, to any stockholder to whom (1) notice of two consecutive annual meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without a meeting to such stockholder during the period between such two consecutive annual meetings, or (2) all, and at least two payments (if sent by first-class mail) of dividends or interest on securities during a 12-month period, have been mailed addressed to such stockholder at such stockholder’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such stockholder shall not be required. Any action or meeting that shall be taken or held without notice to such stockholder shall have the same force and effect as if such notice had been duly given. If any such stockholder shall deliver to the Corporation a written notice setting forth such stockholder’s then current address, the requirement that notice be given to such stockholder shall be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to Section 230(b) of the DGCL. The exception in subsection (1) of the first sentence of this paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.

 

Section 9.4      Waiver of Notice. Whenever any notice is required to be given under applicable law, the Certificate of Incorporation, or these Bylaws, a written waiver of such notice, signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to such required notice. All such waivers shall be kept with the books of the Corporation. Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.

 

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Section 9.5      Meeting Attendance via Remote Communication Equipment.

 

(a)           Stockholder Meetings. If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders (entitled to vote at such meeting) and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:

 

(i)             participate in a meeting of stockholders; and

 

(ii)            be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and, if entitled to vote, to vote on matters submitted to the applicable stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation.

 

(b)           Board Meetings. Unless otherwise restricted by applicable law, the Certificate of Incorporation or these Bylaws, members of the Board or any committee thereof may participate in a meeting of the Board or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.

 

Section 9.6         Dividends. The Board may from time to time declare, and the Corporation may pay, dividends (payable in cash, property or shares of the Corporation’s capital stock) on the Corporation’s outstanding shares of capital stock, subject to applicable law and the Certificate of Incorporation.

 

Section 9.7         Reserves. The Board may set apart out of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.

 

Section 9.8         Contracts and Negotiable Instruments. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, any contract, bond, deed, lease, mortgage or other instrument may be executed and delivered in the name and on behalf of the Corporation by such officer or officers or other employee or employees of the Corporation as the Board may from time to time authorize. Such authority may be general or confined to specific instances as the Board may determine. The Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer or any Vice President may execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation. Subject to any restrictions imposed by the Board, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer or any Vice President may delegate powers to execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation to other officers or employees of the Corporation under such person’s supervision and authority, it being understood, however, that any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power.

 

Section 9.9         Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board.

 

Section 9.10       Seal. The Board may adopt a corporate seal, which shall be in such form as the Board determines. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

 

Section 9.11      Books and Records. The books and records of the Corporation may be kept within or outside the State of Delaware at such place or places as may from time to time be designated by the Board.

 

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Section 9.12      Resignation. Any director, committee member or officer may resign by giving notice thereof in writing or by electronic transmission to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. The resignation shall take effect at the time it is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

Section 9.13      Surety Bonds. Such officers, employees and agents of the Corporation (if any) as the Chairman of the Board, Chief Executive Officer, President or the Board may direct, from time to time, shall be bonded for the faithful performance of their duties and for the restoration to the Corporation, in case of their death, resignation, retirement, disqualification or removal from office, of all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Corporation, in such amounts and by such surety companies as the Chairman of the Board, Chief Executive Officer, President or the Board may determine. The premiums on such bonds shall be paid by the Corporation and the bonds so furnished shall be in the custody of the Secretary.

 

Section 9.14      Securities of Other Corporations. Powers of attorney, proxies, waivers of notice of meeting, consents in writing and other instalments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, Chief Executive Officer, President, any Vice President or any officers authorized by the Board. Any such officer, may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities, or to consent in writing, in the name of the Corporation as such holder, to any action by such corporation, and at any such meeting or with respect to any such consent shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed. The Board may from time to time confer like powers upon any other person or persons.

 

Section 9.15      Amendments. The Board shall have the power to adopt, amend, alter or repeal the Bylaws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the Bylaws. The Bylaws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by applicable law or the Certificate of Incorporation, any adoption, amendment, alteration or repeal of the Bylaws shall require the affirmative vote of (a) a majority of the voting power of all outstanding shares of capital stock of the Corporation while Tilman J. Fertitta (“Mr. Fertitta”) (together with the Fertitta Affiliates) beneficially owns a majority of the voting power of all outstanding shares of capital stock of the Corporation and (b) at least two thirds of the voting power of all outstanding shares of capital stock from and after the time that Mr. Fertitta (together with the Fertitta Affiliates) no longer beneficially owns a majority of the voting power of all outstanding shares of capital stock of the Corporation. “Fertitta Affiliates” means, (i) Mr. Fertitta, (ii) Paige Fertitta, (iii) each of their direct descendants (iv) each such descendant’s adopted child, stepchild, spouse and any person (other than a tenant or employee) sharing the household of such descendant, (v) any trust, the beneficiary of which is any Person listed in clauses (i) through (iii) and (vi) with respect to any Person listed in clauses (i) through (iii), any Person directly or indirectly controlling or controlled by, or under common control with, such Person; provided, that, for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

19

 

Exhibit 10.1

 

AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

LHGN HOLDCO, LLC

 

DATED AS OF DECEMBER 29, 2020

 

THE LIMITED LIABILITY COMPANY INTERESTS IN LHGN HOLDCO, LLC HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAWS OF ANY STATE, OR ANY OTHER APPLICABLE SECURITIES LAWS, AND HAVE BEEN OR ARE BEING ISSUED IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE SECURITIES LAWS OF ANY STATE AND ANY OTHER APPLICABLE SECURITIES LAWS; (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT; AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THE LIMITED LIABILITY COMPANY INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS, THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, AND ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BY THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THEREFORE, PURCHASERS AND OTHER TRANSFEREES OF SUCH LIMITED LIABILITY COMPANY INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT OR ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.

 

 

 

 

TABLE OF CONTENTS

 

    Page
     
Article I DEFINITIONS 2
Section 1.1 Definitions 2
Section 1.2 Interpretive Provisions 11
   
Article II ORGANIZATION OF THE LIMITED LIABILITY COMPANY 11
Section 2.1 Formation 11
Section 2.2 Filing 11
Section 2.3 Name 12
Section 2.4 Registered Office; Registered Agent 12
Section 2.5 Principal Place of Business 12
Section 2.6 Purpose; Powers 12
Section 2.7 Term 12
Section 2.8 Intent 12
     
Article III CLOSING TRANSACTIONS 12
Section 3.1 Purchase Agreement Transactions 12
     
Article IV OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS 12
Section 4.1 Authorized Units; General Provisions with Respect to Units 12
Section 4.2 Voting Rights 14
Section 4.3 Capital Contributions; Unit Ownership 14
Section 4.4 Capital Accounts 16
Section 4.5 Other Matters 16
Section 4.6 Redemption of Class B Units 17
Section 4.7 Representations and Warranties of the Members 21
     
Article V ALLOCATIONS OF PROFITS AND LOSSES 21
Section 5.1 Profits and Losses 21
Section 5.2 Special Allocations 22
Section 5.3 Allocations for Tax Purposes in General 23
Section 5.4 Other Allocation Rules 24
     
Article VI DISTRIBUTIONS 25
Section 6.1 Distributions 25
Section 6.2 Tax-Related Distributions 25
Section 6.3 Distribution Upon Withdrawal 26
     
Article VII MANAGEMENT 26
Section 7.1 Managing Member Rights; Fiduciary Duties 26
Section 7.2 Officers 26
Section 7.3 Warranted Reliance by Officers on Others 27
Section 7.4 Indemnification 27
Section 7.5 Resignation or Termination of Managing Member 29
Section 7.6 No Inconsistent Obligations 29
Section 7.7 Reclassification Events of PubCo 29
Section 7.8 Certain Costs and Expenses 30
     
Article VIII ROLE OF MEMBERS 30
Section 8.1 Rights or Powers 30
Section 8.2 Voting 30
Section 8.3 Various Capacities 31
Section 8.4 Investment Opportunities 31

 

i 

 

 

Article IX TRANSFERS OF INTERESTS 31
Section 9.1 Restrictions on Transfer 31
Section 9.2 Notice of Transfer 32
Section 9.3 Transferee Members 32
Section 9.4 Legend 33
     
Article X ACCOUNTING 33
Section 10.1 Books of Account 33
Section 10.2 Tax Elections 33
Section 10.3 Tax Returns; Information; Certain Audits of Acquired Companies 34
Section 10.4 Company Representative 34
Section 10.5 Withholding Tax Payments and Obligations 34
     
Article XI DISSOLUTION 35
Section 11.1 Liquidating Events 35
Section 11.2 Bankruptcy 36
Section 11.3 Procedure 36
Section 11.4 Rights of Members 37
Section 11.5 Notices of Dissolution 37
Section 11.6 Reasonable Time for Winding Up 37
Section 11.7 No Deficit Restoration 37
     
Article XII GENERAL 37
Section 12.1 Amendments; Waivers 37
Section 12.2 Further Assurances 38
Section 12.3 Successors and Assigns 38
Section 12.4 Entire Agreement 38
Section 12.5 Rights of Members Independent 38
Section 12.6 Governing Law 38
Section 12.7 Jurisdiction and Venue 38
Section 12.8 Headings 39
Section 12.9 Counterparts 39
Section 12.10 Notices 39
Section 12.11 Representation by Counsel; Interpretation 40
Section 12.12 Severability 40
Section 12.13 Expenses 40
Section 12.14 Waiver of Jury Trial 40
Section 12.15 No Third-Party Beneficiaries 40
Section 12.16 No Recourse 40

 

ii 

 

 

 

AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

LHGN HOLDCO, LLC

 

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (as amended, supplemented or restated from time to time, this “Agreement”) of LHGN HoldCo, LLC, a Delaware limited liability company (the “Company”), is entered into as of December 29, 2020, by and among Landcadia Holdings II, Inc., a Delaware corporation (“PubCo”), Landry’s Fertitta, LLC (“LF LLC”), and each other Person who is or at any time becomes a Member (each, a “Party” and collectively, the “Parties”) in accordance with the terms of this Agreement and the Act. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in Section 1.1.

 

RECITALS

 

WHEREAS, the Company was formed pursuant to a Certificate of Formation filed in the office of the Secretary of State of the State of Delaware on June 26, 2020, and was originally governed by the Limited Liability Company Agreement of the Company, dated as of June 26, 2020 (the “Existing LLC Agreement”);

 

WHEREAS, prior to giving effect to the transactions contemplated by the Purchase Agreement (as defined below), the Company was wholly owned by PubCo and PubCo contributed to the Company an amount in cash equal to the Landcadia Closing Cash Contribution Amount and a number of shares of Class B Common Stock equal to the Voting Stock Consideration (as set forth in the Purchase Agreement) in exchange for Class A Units, and such Class A Units were the only issued and outstanding Units of the Company;

 

WHEREAS, prior to giving effect to the transactions contemplated by the Purchase Agreement, PubCo adopted the Fourth Amended and Restated Certificate of Incorporation which, among other things, following the automatic conversion of the existing shares of class B common stock into shares of Class A Common Stock in accordance with the Third Amended and Restated Certificate of Incorporation of PubCo, authorized a number of additional shares of Class B Common Stock equal to the Voting Stock Consideration, which have no economic interest in PubCo but will have voting rights equal to ten (10) votes per share, subject to the terms and conditions set forth in the Fourth Amended and Restated Certificate of Incorporation of PubCo;

 

WHEREAS, on June 28, 2020, the Company, PubCo, LF LLC, GNOG Holdings, LLC, a Delaware limited liability company (“GNOG HoldCo”), and Golden Nugget Online Gaming, Inc., a New Jersey corporation, entered into that certain Purchase Agreement (as amended, modified or supplemented from time to time, the “Purchase Agreement”), pursuant to which, among other things, at the closing contemplated in the Purchase Agreement, LF LLC transferred to the Company all of the issued and outstanding membership interests in GNOG HoldCo in exchange for the Second Landcadia Contribution, which includes the Company’s (i) transfer of the Closing Cash Consideration to LF LLC, (ii) transfer of a number of shares of Class B Common Stock equal to the Voting Stock Consideration to LF LLC, and (iii) the issuance of a number of Class B Units equal to the Equity Interest Consideration to LF LLC;

 

WHEREAS, as of the Effective Time, LF LLC and PubCo are the sole Members of the Company;

 

 

 

 

WHEREAS, the Members desire to amend and restate the Existing LLC Agreement as of the Effective Time to reflect (a) the consummation of the transactions contemplated by the Purchase Agreement, (b) PubCo’s designation as the sole managing Member of the Company (in its capacity as managing Member, as applicable, the “Managing Member”), and (c) the rights and obligations of the Members that are enumerated and agreed upon in the terms of this Agreement effective as of the Effective Time;

 

WHEREAS, each Class B Unit may be exchanged, at the election of the holder of such Class B Unit, into Class A Common Stock in accordance with the terms and conditions of this Agreement; and

 

WHEREAS, this Agreement shall supersede the Existing LLC Agreement in its entirety as of the date hereof.

 

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

 

Article I
DEFINITIONS

 

Section 1.1      Definitions. As used in this Agreement and the Schedules and Exhibits attached to this Agreement, the following definitions shall apply:

 

A&R Registration Rights Agreement” means the Amended and Restated Registration Rights Agreement, dated as of the date hereof, by and among PubCo and the other parties thereto (together with any other parties that become a party thereto from time to time upon execution of a joinder in accordance with the terms thereof by any successor or assign to any party to such Agreement).

 

Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended from time to time (or any corresponding provisions of succeeding law).

 

Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Entity.

 

Adjusted Basis” has the meaning given such term in Section 1011 of the Code.

 

Adjusted Capital Account Deficit” means the deficit balance, if any, in such Member’s Capital Account at the end of any Fiscal Year or other taxable period, with the following adjustments:

 

(a)            credit to such Capital Account any amount that such Member is obligated to restore under Treasury Regulations Section 1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to last sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) after taking into account thereunder any changes during such year in Company Minimum Gain and Member Minimum Gain; and

 

(b)            debit to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

 

This definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

Advancement of Expenses” is defined in Section 7.4(b).

 

Affiliate” means, when used with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person in question. For purposes of this Agreement, (i) no Member shall be deemed to be an Affiliate of any other Member and (ii) no Member shall be deemed to be an Affiliate of the Company.

 

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Agreement” is defined in the preamble to this Agreement.

 

beneficially own” shall be as defined in Rule 13d-3 of the rules promulgated under the Exchange Act.

 

Bipartisan Budget Act” means Title XI of the Bipartisan Budget Act of 2015, as may be amended from time to time (or any corresponding provisions of succeeding law), and any related provisions of Law, including court decisions, regulations and administrative guidance.

 

Board” means the board of directors of PubCo.

 

Business Day” means each day of the week except Saturdays, Sundays and days on which banking institutions are authorized by Law to close in New York, New York or Houston, Texas.

 

Capital Account” means, with respect to any Member, the capital account maintained for such Member in accordance with Section 4.4.

 

Capital Contribution” means, with respect to any Member, the amount of cash and the initial Gross Asset Value of any property (other than cash) contributed to the Company by such Member. Any reference to the Capital Contribution of a Member will include any Capital Contributions made by a predecessor holder of such Member’s Units to the extent that such Capital Contribution was made in respect of Units Transferred to such Member.

 

Cash Election” is defined in Section 4.6(a)(iv).

 

Cash Election Amount” means with respect to a particular Redemption for which a Cash Election has been made, (i) if the Class A Common Stock trades on a National Securities Exchange or automated or electronic quotation system, an amount of cash equal to the product of (A) the number of shares of Class A Common Stock that would have been received in such Redemption if a Cash Election had not been made and (B) the average of the volume-weighted closing price for a share of Class A Common Stock on the principal U.S. securities exchange or automated or electronic quotation system, as applicable, on which the Class A Common Stock trades, as reported by Bloomberg, L.P. or its successor, for each of the ten (10) consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the Redemption Notice Date; and (ii) if the Class A Common Stock is not then traded on a U.S. securities exchange or automated or electronic quotation system, as applicable, an amount of cash equal to the product of (A) the number of shares of Class A Common Stock that would have been received in such Redemption if a Cash Election had not been made and (B) the Fair Market Value of one share of Class A Common Stock that would be obtained in an arms-length transaction between an informed and willing buyer and an informed and willing seller, neither of whom is under any compulsion to buy or sell, respectively, and without regard to the particular circumstances of the buyer or seller, in each case of clauses (i) and (ii) subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the Class A Common Stock.

 

Cash Election Notice” is defined in Section 4.6(a)(iv).

 

Class A Common Stock” means, as applicable, (a) the Class A Common Stock, par value $0.0001 per share, of PubCo or (b) following any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other Person or cash or other property that become payable in consideration for the Class A Common Stock or into which the Class A Common Stock is exchanged or converted as a result of such consolidation, merger, reclassification or other similar event.

 

3 

 

 

Class A Units” means the Class A limited liability company membership interests designated as such by the Managing Member upon issuance and shall also include any Equity Security of the Company issued in respect of or in exchange for Class A Units, whether by way of dividend or other distribution, split, recapitalization, merger, rollup transaction, consolidation, conversion or reorganization.

 

Class B Common Stock” means, as applicable, (a) the Class B Common Stock, par value $0.0001 per share, of PubCo or (b) following any consolidation, merger, reclassification or other similar event involving PubCo, any shares or other securities of PubCo or any other Person or cash or other property that become payable in consideration for the Class B Common Stock or into which the Class B Common Stock is exchanged or converted as a result of such consolidation, merger, reclassification or other similar event.

 

Class B Units” means the Class B limited liability company membership interests designated as such by the Managing Member upon issuance, which shall have no voting rights.

 

Closing Cash Considerationhas the meaning set forth in the Purchase Agreement.

 

Closing Date Capital Account Balance” means, with respect to any Member, the positive Capital Account balance of such Member as of the date hereof after giving effect to the transactions contemplated by the Purchase Agreement, the amount or deemed value of which is set forth on Exhibit A.

 

Code” means the United States Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law).

 

Commission” means the U.S. Securities and Exchange Commission, including any governmental body or agency succeeding to the functions thereof.

 

Company” is defined in the preamble to this Agreement.

 

Company Minimum Gain” has the meaning of “partnership minimum gain” set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d). It is further understood that Company Minimum Gain shall be determined in a manner consistent with the rules of Treasury Regulations Section 1.704-2(b)(2), including the requirement that if the adjusted Gross Asset Value of property subject to one or more Nonrecourse Liabilities differs from its adjusted tax basis, Company Minimum Gain shall be determined with reference to such Gross Asset Value.

 

Company Representative” has the meaning assigned to the term “partnership representative” in Section 6223 of the Code and any Treasury Regulations or other administrative or judicial pronouncements promulgated thereunder.

 

Contract” means any written agreement, contract, lease, sublease, license, sublicense, obligation, promise or undertaking.

 

control” means the possession, directly or indirectly, through one or more intermediaries, of the following: (a) in the case of a corporation, more than 50% of the outstanding voting securities thereof, (b) in the case of a limited liability company, partnership, limited partnership or joint venture, the right to more than 50% of the distributions therefrom (including liquidating distributions), (c) in the case of a trust or estate, more than 50% of the beneficial interest therein, (d) in the case of any other entity, more than 50% of the economic or beneficial interest therein or (e) in the case of any entity, the power or authority, through ownership of voting securities, by Contract or otherwise, to direct the management, activities or policies of the entity.

 

Credit Agreement” means that certain Credit Agreement, dated as of April 28, 2020 (as amended), by and among Golden Nugget Online Gaming, Inc., a New Jersey corporation, GNOG HoldCo, LF LLC and the Lenders, pursuant to which the Lenders initially extended credit in the form of senior secured term loans in an aggregate principal amount of $300,000,000.

 

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Debt Securities” means, with respect to PubCo, any and all debt instruments or debt securities that are not convertible or exchangeable into Equity Securities of PubCo.

 

Depreciation” means, for each Fiscal Year or other taxable period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal Year or other taxable period, except that (a) with respect to any such property the Gross Asset Value of which differs from its Adjusted Basis for U.S. federal income tax purposes and which difference is being eliminated by use of the “remedial method” pursuant to Treasury Regulations Section 1.704-3(d), Depreciation for such Fiscal Year or other taxable period shall be the amount of book basis recovered for such Fiscal Year or other taxable period under the rules prescribed by Treasury Regulations Section 1.704-3(d)(2), and (b) with respect to any other such property the Gross Asset Value of which differs from its Adjusted Basis for U.S. federal income tax purposes at the beginning of such Fiscal Year or other taxable period. Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year or other taxable period bears to such beginning Adjusted Basis; provided, however, that if the Adjusted Basis for U.S. federal income tax purposes of an asset at the beginning of such Fiscal Year or other taxable period is zero, Depreciation with respect to such asset shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Managing Member.

 

DGCL” means the General Corporation Law of the State of Delaware, as amended from time to time (or any corresponding provisions of succeeding law).

 

Discount” has the meaning set forth in Section 4.6(b)(ii).

 

Disinterested Director” shall mean a member of the Corporation’s audit committee or another body of independent directors of the Corporation authorized to approve the referenced matter in accordance with the Corporation’s related party policy; provided, that for purposes of this Agreement, any matter referenced in this Agreement that is to be approved by the Disinterested Directors shall be deemed to constitute a “related party transaction” for purposes of the related party policy, regardless of the dollar amount involved.

 

Effective Time” means 12:01 a.m. Central Standard Time on the date hereof.

 

Equity Interest Consideration” has the meaning set forth in the Purchase Agreement.

 

Equity Securities” means (a) with respect to a partnership, limited liability company or similar Person, any and all units, interests, rights to purchase, warrants, options or other equivalents of, or other ownership interests in, any such Person as well as debt or equity instruments convertible, exchangeable or exercisable into any such units, interests, rights or other ownership interests and (b) with respect to a corporation, any and all shares, interests, participation or other equivalents (however designated) of corporate stock, including all common stock and preferred stock, or warrants, options or other rights to acquire any of the foregoing, including any debt instrument convertible or exchangeable into any of the foregoing.

 

ERISA” means the Employee Retirement Security Act of 1974, as amended.

 

Exchange Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (or any corresponding provisions of succeeding law).

 

Existing LLC Agreement” is defined in the recitals to this Agreement.

 

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Fair Market Value” means the fair market value of any property as determined in Good Faith by the Managing Member after taking into account such factors as the Managing Member shall deem appropriate.

 

Fertitta Affiliates” means, (i) Tilman Fertitta, (ii) Paige Fertitta, (iii) each of their direct descendants, (iv) each such descendant’s adopted child, stepchild, spouse and any person (other than a tenant or employee) sharing the household of such descendant, (v) any trust, the beneficiary of which is any Person listed in clauses (i) through (iv) and (vi) with respect to any Person listed in clauses (i) through (iv), any Person directly or indirectly controlling or controlled by, or under common control with, such Person; provided, that, for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

Final Adjudication” is defined in Section 7.4(b).

 

Fiscal Year” means the fiscal year of the Company, which shall end on December 31 of each calendar year unless, for U.S. federal income tax purposes, another fiscal year is required. The Company shall have the same fiscal year for U.S. federal income tax purposes and for accounting purposes.

 

GAAP” means U.S. generally accepted accounting principles at the time.

 

GNOG HoldCo” is defined in the recitals to this Agreement.

 

GNOG LLC” means Golden Nugget Online Gaming, LLC, a New Jersey limited liability company.

 

Good Faith” means a Person having acted in good faith and in a manner such Person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to a criminal proceeding, having had no reasonable cause to believe such Person’s conduct was unlawful.

 

Governmental Entity” means any federal, national, supranational, state, provincial, local, foreign or other government, governmental, stock exchange, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body.

 

Gross Asset Value” means, with respect to any asset, the asset’s Adjusted Basis for U.S. federal income tax purposes, except as follows:

 

(a)            the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross Fair Market Value of such asset as of the date of such contribution;

 

(b)            the Gross Asset Values of all Company assets shall be adjusted to equal their respective gross Fair Market Values as of the following times: (i) the acquisition of an Interest (or additional Interest) in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution to the Company; (ii) the grant of an Interest (other than a de minimis Interest) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in a member capacity, or by a new Member acting in a member capacity or in anticipation of becoming a Member of the Company; (iii) the distribution by the Company to a Member of more than a de minimis amount of Company assets as consideration for an Interest in the Company; (iv) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g)(1); (v) the acquisition of an Interest in the Company by any new or existing Member upon the exercise of a non-compensatory option in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(s); or (vi) any other event to the extent determined by the Managing Member to be permitted and necessary or appropriate to properly reflect Gross Asset Values in accordance with the standards set forth in Treasury Regulations Section 1.704-1(b)(2)(iv)(g); provided, however, that adjustments pursuant to clauses (i), (ii), (iii) and (v) above shall be made only if the Managing Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company. If any non-compensatory options are outstanding upon the occurrence of an event described in this paragraph (b)(i) through (b)(vi), the Company shall adjust the Gross Asset Values of its properties in accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2);

 

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(c)            the Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross Fair Market Value of such asset on the date of such distribution;

 

(d)            the Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the Adjusted Basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and subsection (f) in the definition of “Profits” or “Losses” below or Section 5.2(h); provided, however, that the Gross Asset Value of a Company asset shall not be adjusted pursuant to this subsection (d) to the extent the Managing Member determines that an adjustment pursuant to subsection (b) of this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subsection (d); and

 

(e)            if the Gross Asset Value of a Company asset has been determined or adjusted pursuant to subsections (a), (b) or (d) of this definition of Gross Asset Value, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits, Losses and other items allocated pursuant to Article V.

 

Indebtedness” means (a) all indebtedness for borrowed money (including capitalized lease obligations, sale- leaseback transactions or other similar transactions, however evidenced), (b) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar instrument, (c) notes payable and (d) lines of credit and any other agreements relating to the borrowing of money or extension of credit.

 

Indemnifiable Losses” is defined in Section 7.4(a).

 

Indemnitee” is defined in Section 7.4(a).

 

Intercompany Agreement” means the agreement between LF LLC and Golden Nugget, LLC, a Nevada limited liability company, under which LF LLC is obligated to pay Golden Nugget, LLC for the interest due under the Credit Agreement.

 

Intercompany Agreement Contribution” is defined in Section 4.2(A)(a)(ii).

 

Interest” means the entire interest of a Member in the Company, including the Units and all of such Member’s rights, powers and privileges under this Agreement and the Act.

 

Law” means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

 

Lenders” means Jefferies Finance LLC, Coӧperatieve Rabobank U.A., New York Branch, Keybanc Capital Markets Inc., Citizens Bank, N.A., and the lenders signatory to the Credit Agreement.

 

LF LLC” is defined in the preamble to this Agreement.

 

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Liability” means any liability or obligation, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated and whether due or to become due, regardless of when asserted.

 

Liquidating Event” is defined in Section 11.1.

 

Managing Member” is defined in the recitals to this Agreement.

 

Member” means any Person that executes this Agreement as a Member, and any other Person admitted to the Company as an additional or substituted Member, that has not made a disposition of such Person’s entire Interest.

 

Member Minimum Gain” has the meaning ascribed to “partner nonrecourse debt minimum gain” set forth in Treasury Regulations Section 1.704-2(i). It is further understood that the determination of Member Minimum Gain and the net increase or decrease in Member Minimum Gain shall be made in the same manner as required for such determination of Company Minimum Gain under Treasury Regulations Sections 1.704-2(d) and 1.704-2(g)(3).

 

Member Nonrecourse Debt” has the meaning of “partner nonrecourse debt” set forth in Treasury Regulations Section 1.704-2(b)(4).

 

Member Nonrecourse Deductions” has the meaning of “partner nonrecourse deductions” set forth in Treasury Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

 

National Securities Exchange” means an exchange registered with the Commission under the Exchange Act.

 

Nonrecourse Deductions” has the meaning assigned that term in Treasury Regulations Section 1.704-2(b).

 

Nonrecourse Liability” is defined in Treasury Regulations Section 1.704-2(b)(3).

 

Officer” means each Person appointed as an officer of the Company pursuant to and in accordance with the provisions of Section 7.2 and listed on Exhibit B attached hereto.

 

Party” or “Parties” is defined in the preamble to this Agreement.

 

Party Affiliate” is defined in Section 12.16.

 

Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.

 

Plan Asset Regulations” means the regulations issued by the U.S. Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the Code of Federal Regulations, or any successor regulations as the same may be amended from time to time.

 

Prime Rate” means, on any date of determination, a rate per annum equal to the rate of interest most recently published by The Wall Street Journal as the “prime rate” at large U.S. money center banks.

 

Proceeding” is defined in Section 7.4(a).

 

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Profits” or “Losses” means, for each Fiscal Year or other taxable period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):

 

(a)            any income or gain of the Company that is exempt from U.S. federal income tax and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss;

 

(b)            any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses, shall be subtracted from such taxable income or loss;

 

(c)            in the event the Gross Asset Value of any Company asset is adjusted pursuant to subsection (b) or (c) of the definition of Gross Asset Value above, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the Company asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the Company asset) from the disposition of such asset and shall, except to the extent allocated pursuant to Section 5.2, be taken into account for purposes of computing Profits or Losses;

 

(d)            gain or loss resulting from any disposition of Company assets with respect to which gain or loss is recognized for U.S. federal income tax purposes shall be computed with reference to the Gross Asset Value of the asset disposed of notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value;

 

(e)            in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation;

 

(f)             to the extent an adjustment to the adjusted tax basis of any asset pursuant to Code Section 734(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Account balances as a result of a distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or an item of loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and

 

(g)            any items of income, gain, loss or deduction which are specifically allocated pursuant to the provisions of Section 5.2 shall not be taken into account in computing Profits or Losses for any taxable year, but such items available to be specially allocated pursuant to Section 5.2 will be determined by applying rules analogous to those set forth in subparagraphs (a) through (f) above.

 

PubCo” is defined in the preamble to this Agreement.

 

PubCo Common Stock” means all classes and series of common stock of PubCo, including the Class A Common Stock and the Class B Common Stock.

 

Purchase Agreement” is defined in the recitals to this Agreement.

 

Reclassification Event” means any of the following: (a) any reclassification or recapitalization of PubCo Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination or any transaction subject to Section 4.1(f)), (b) any merger, consolidation or other combination involving PubCo or (c) any sale, conveyance, lease, or other disposal of all or substantially all the properties and assets of PubCo to any other Person, in each of clauses (a), (b) or (c), as a result of which holders of PubCo Common Stock shall be entitled to receive cash, securities or other property for their shares of PubCo Common Stock.

 

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Redeeming Member” is defined in Section 4.6(a)(i).

 

Redemption” has the meaning set forth in Section 4.6(a)(i).

 

Redemption Date” means (a) the later of (i) the date that is five (5) Business Days after the Redemption Notice Date and (ii) if the Company or PubCo has made a valid Cash Election with respect to the relevant Redemption, the first Business Day on which the Company or PubCo has available funds to pay the Cash Election Amount, which in no event shall be more than ten (10) Business Days after the Redemption Notice Date, or (b) such later date (i) specified in the Redemption Notice or (ii) on which a contingency described in Section 4.6(a)(ii)(C) that is specified in the Redemption Notice is satisfied.

 

Redemption Notice” is defined in Section 4.6(a)(ii).

 

Redemption Notice Date” is defined in Section 4.6(a)(ii).

 

Registration Statement” means any registration statement that PubCo is required to file pursuant to the A&R Registration Rights Agreement.

 

Regulatory Allocations” is defined in Section 5.2(i).

 

Retraction Notice” is defined in Section 4.6(b)(i).

 

Second Landcadia Contribution” has the meaning set forth in the Purchase Agreement.

 

Securities Act” means the Securities Act of 1933, and the rules and regulations promulgated thereunder, as the same may be amended from time to time (or any corresponding provisions of succeeding law).

 

Subsidiary” means, with respect to any specified Person, any other Person with respect to which such specified Person (a) has, directly or indirectly, the power, through the ownership of securities or otherwise, to elect a majority of directors or similar managing body or (b) beneficially owns, directly or indirectly, a majority of such Person’s Equity Securities.

 

Tax Distribution Date” means any date that is five (5) Business Days prior to (a) the date on which estimated federal income tax payments are required to be made by calendar year corporate taxpayers and (b) the due date for federal income tax returns of corporate calendar year taxpayers (without regard to extensions).

 

Tax Receivable Agreement” means that certain Tax Receivable Agreement by and between LF LLC and PubCo, dated as of December 29, 2020.

 

Trading Day” means a day on which the Nasdaq Capital Market or such other principal United States securities exchange on which the Class A Common Stock is listed or admitted to trading and is open for the transaction of business (unless such trading shall have been suspended for the entire day).

 

Transfer” means, when used as a noun, any voluntary or involuntary, direct or indirect (whether through a change of control of the Transferor or any Person that controls the Transferor, the issuance or transfer of Equity Securities of the Transferor, by operation of Law or otherwise), transfer, sale, pledge or hypothecation or other disposition and, when used as a verb, voluntarily or involuntarily, directly or indirectly (whether through a change of control of the Transferor or any Person that controls the Transferor, the issuance or transfer of Equity Securities of the Transferor or any Person that controls the Transferor, by operation of Law or otherwise), to transfer, sell, pledge or hypothecate or otherwise dispose of. The terms “Transferee,” “Transferor,” “Transferred,” and other forms of the word “Transfer” shall have the correlative meanings.

 

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Transfer Agent” is defined in Section 4.6(a)(iii).

 

Treasury Regulations” means pronouncements, as amended from time to time, or their successor pronouncements, which clarify, interpret and apply the provisions of the Code, and which are designated as “Treasury Regulations” by the United States Department of the Treasury.

 

Uniform Commercial Code” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of Delaware.

 

Units” means the Class A Units, the Class B Units and any other Equity Security of the Company.

 

Voting Stock Consideration” has the meaning set forth in the Purchase Agreement.

 

Section 1.2      Interpretive Provisions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

 

(a)            the terms defined in Section 1.1 are applicable to the singular as well as the plural forms of such terms;

 

(b)            all accounting terms not otherwise defined herein have the meanings assigned under GAAP;

 

(c)            all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars;

 

(d)            when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated;

 

(e)            whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”;

 

(f)             “or” is not exclusive;

 

(g)            pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms; and

 

(h)            the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement.

 

Article II
ORGANIZATION OF THE LIMITED LIABILITY COMPANY

 

Section 2.1       Formation. The Company has been formed as a limited liability company subject to the provisions of the Act upon the terms, provisions and conditions set forth in this Agreement.

 

Section 2.2      Filing. The Company’s Certificate of Formation has been filed with the Secretary of State of the State of Delaware in accordance with the Act. The Members shall execute such further documents (including amendments to such Certificate of Formation) and take such further action as is appropriate to comply with the requirements of Law for the operation of a limited liability company in all states and counties where the Company may conduct its business.

 

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Section 2.3      Name. The name of the Company is “LHGN HoldCo, LLC” and all business of the Company shall be conducted in such name or, in the discretion of the Managing Member, under any other name.

 

Section 2.4      Registered Office; Registered Agent. The location of the registered office of the Company in the State of Delaware is Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, or at such other place as the Managing Member from time to time may select. The name and address for service of process on the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, New Castle County, Wilmington, Delaware 19801, or such other qualified Person as the Managing Member may designate from time to time and its business address.

 

Section 2.5      Principal Place of Business. The principal place of business of the Company shall be located in such place as is determined by the Managing Member from time to time.

 

Section 2.6      Purpose; Powers. The nature of the business or purposes to be conducted or promoted by the Company is to engage in any lawful act or activity for which limited liability companies may be formed under the Act. The Company shall have the power and authority to take any and all actions and engage in any and all activities necessary, appropriate, desirable, advisable, ancillary or incidental to the accomplishment of the foregoing purpose.

 

Section 2.7      Term. The term of the Company commenced on the date of filing of the Certificate of Formation of the Company with the office of the Secretary of State of the State of Delaware in accordance with the Act and shall continue indefinitely. The Company may be dissolved and its affairs wound up only in accordance with Article XI.

 

Section 2.8     Intent. It is the intent of the Members that the Company be operated in a manner consistent with its treatment as a “partnership” for U.S. federal and applicable state and local income tax purposes. Neither the Company nor any Member shall take any action inconsistent with the express intent of the parties hereto as set forth in this Section 2.8.

 

Article III
CLOSING TRANSACTIONS

 

Section 3.1      Purchase Agreement Transactions.

 

(a)            Pursuant to the terms of the Purchase Agreement, LF LLC transferred to the Company all of the issued and outstanding membership interests in GNOG HoldCo in exchange for the Second Landcadia Contribution.

 

(b)            PubCo shall take all actions necessary to cause the stock records of the Class B Common Stock to be held on the books and records of the Transfer Agent.

 

Article IV
OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

 

Section 4.1      Authorized Units; General Provisions with Respect to Units.

 

(a)            Subject to the provisions of this Agreement, the Company shall be authorized to issue from time to time such number of Class A Units and such other Equity Securities as the Managing Member shall determine in accordance with Section 4.3. Each authorized Unit may be issued pursuant to such agreements as the Managing Member shall approve, including pursuant to options and warrants. The Company may reissue any Units that have been repurchased or acquired by the Company; provided, that any such issuance, and the admission of any Person as a Member in connection therewith, is otherwise made in accordance with the provisions of this Agreement.

 

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(b)            Initially, the Units will be uncertificated. If the Managing Member determines that it is in the interest of the Company to issue certificates representing the Units, certificates will be issued and the Units will be represented by those certificates, and this Agreement shall be amended as the Managing Member shall determine necessary or desirable to reflect the issuance of certificated Units for purposes of the Uniform Commercial Code. Nothing contained in this Section 4.1(b) shall be deemed to authorize or permit any Member to Transfer its Units except as otherwise permitted under this Agreement.

 

(c)            The total number and type of Units issued and outstanding and held by the Members is set forth on Exhibit A (as amended from time to time in accordance with the terms of this Agreement) as of the date set forth therein.

 

(d)            If, at any time after the Effective Time, PubCo issues a share of its Class A Common Stock or any other Equity Security of PubCo (other than shares of Class B Common Stock), (i) the Company shall concurrently issue to PubCo one Class A Unit (if PubCo issues a share of Class A Common Stock), or such other Equity Security of the Company (if PubCo issues Equity Securities other than Class A Common Stock) corresponding to the Equity Securities issued by PubCo, and with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo to be issued and (ii) PubCo shall concurrently contribute to the Company the net proceeds or other property received by PubCo, if any, for such share of Class A Common Stock or other Equity Security; provided, however, that if PubCo issues any shares of Class A Common Stock in order to acquire or fund the acquisition from a Member (other than PubCo) of a number of Class B Units (and shares of Class B Common Stock) equal to the number of shares of Class A Common Stock so issued, then the Company shall not issue any new Units in connection therewith and, where such shares of Class A Common Stock have been issued for cash to fund an acquisition, PubCo shall not be required to transfer such net proceeds to the Company, and such net proceeds shall instead be transferred to such Member as consideration for such acquisition. Notwithstanding the foregoing, this Section 4.1(d) shall not apply to the issuance and distribution to holders of shares of PubCo Common Stock of rights to purchase Equity Securities of PubCo under a “poison pill” or similar shareholders rights plan (and upon any Redemption of Units for Class A Common Stock, such Class A Common Stock will be issued together with a corresponding right under such plan), or to the issuance under PubCo’s employee benefit plans of any warrants, options, stock appreciation right, restricted stock, restricted stock units, performance based award or other rights to acquire Equity Securities of PubCo or rights or property that may be converted into or settled in Equity Securities of PubCo, but shall in each of the foregoing cases apply to the issuance of Equity Securities of PubCo in connection with the exercise or settlement of such rights, warrants, options, stock appreciation right, restricted stock, restricted stock units, performance based award or other rights or property. Except pursuant to Section 4.6, (x) the Company may not issue any additional Units to PubCo or any of its Subsidiaries unless substantially simultaneously therewith PubCo or such Subsidiary issues or sells an equal number of newly-issued shares of Class A Common Stock to another Person and contributes the net proceeds therefrom to the Company, and (y) the Company may not issue any other Equity Securities of the Company to PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary issues or sells, to another Person, an equal number of newly-issued shares of a new class or series of Equity Securities of PubCo or such Subsidiary with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of the Company and contributes the net proceeds therefrom to the Company. If at any time PubCo or any of its Subsidiaries (other than the Company and its Subsidiaries) issues Debt Securities, PubCo or such Subsidiary shall transfer to the Company (in a manner to be determined by the Managing Member in its reasonable discretion) the proceeds received by PubCo or such Subsidiary, as applicable, in exchange for such Debt Securities in a manner that directly or indirectly burdens the Company with the repayment of the Debt Securities. In the event any Equity Security outstanding at PubCo is exercised or otherwise converted and, as a result, any shares of Class A Common Stock or other Equity Securities of PubCo are issued, (i) the corresponding Equity Security outstanding at the Company shall be similarly exercised or otherwise converted, as applicable, and an equivalent number of Units or other Equity Securities of the Company shall be issued to PubCo as contemplated by the first sentence of this Section 4.1(d), and (ii) PubCo shall concurrently contribute to the Company the net proceeds received by PubCo from any such exercise.

 

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(e)           PubCo or any of its Subsidiaries may not redeem, repurchase or otherwise acquire (i) any shares of Class A Common Stock (including upon forfeiture of any unvested shares of Class A Common Stock) unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from PubCo or such Subsidiary an equal number of Class A Units for the same price per security or (ii) any other Equity Securities of PubCo, unless substantially simultaneously the Company redeems, repurchases or otherwise acquires from PubCo or such Subsidiary an equal number of Equity Securities of the Company of a corresponding class or series with substantially the same rights to dividends and distributions (including distributions upon liquidation) and other economic rights as those of such Equity Securities of PubCo for the same price per security. The Company may not redeem, repurchase or otherwise acquire (x) except pursuant to Section 4.6, any Class A Units from PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary redeems, repurchases or otherwise acquires an equal number of shares of Class A Common Stock for the same price per security from holders thereof, or (y) any other Equity Securities of the Company from PubCo or any of its Subsidiaries unless substantially simultaneously PubCo or such Subsidiary redeems, repurchases or otherwise acquires for the same price per security an equal number of Equity Securities of PubCo of a corresponding class or series with substantially the same rights to dividends and distributions (including distribution upon liquidation) and other economic rights as those of such Equity Securities of PubCo. Notwithstanding the foregoing, to the extent that any consideration payable by PubCo in connection with the Redemption or repurchase of any shares of Class A Common Stock or other Equity Securities of PubCo or any of its Subsidiaries consists (in whole or in part) of shares of Class A Common Stock or such other Equity Securities (including, for the avoidance of doubt, in connection with the cashless exercise of an option or warrant other than those issued under PubCo’s employee benefit plans), then the Redemption or repurchase of the corresponding Units or other Equity Securities of the Company shall be effectuated in an equivalent manner.

 

(f)            The Company shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding Units unless accompanied by an identical subdivision or combination, as applicable, of the outstanding PubCo Common Stock, with corresponding changes made with respect to any other exchangeable or convertible securities. PubCo shall not in any manner effect any subdivision (by any equity split, equity distribution, reclassification, recapitalization or otherwise) or combination (by reverse equity split, reclassification, recapitalization or otherwise) of the outstanding PubCo Common Stock unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

 

Section 4.2      Voting Rights. No Member has any voting right except with respect to those matters specifically reserved for a Member vote under the Act and for matters expressly requiring the approval of Members under this Agreement. Except as otherwise required by the Act, each Class A Unit will entitle the holder thereof to one vote on all matters to be voted on by the Members. For the avoidance of doubt, Class B Units shall have no voting rights. Except as otherwise expressly provided in this Agreement, the holders of Class A Units having voting rights will vote together as a single class on all matters to be approved by the Members.

 

Section 4.3      Capital Contributions; Unit Ownership.

 

(a)           Capital Contributions. Except as otherwise set forth in Section 4.1(d), no Member shall be required to make additional Capital Contributions.

 

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(b)          Issuance of Additional Units or Interests.

 

(i) Except as otherwise expressly provided in this Agreement, the Managing Member shall have the right, in its sole discretion, to authorize and cause the Company to issue on such terms (including price) as may be determined by the Managing Member (i) subject to the limitations of Section 4.1, additional Units or other Equity Securities in the Company (including creating preferred interests or other classes or series of interests having such rights, preferences and privileges as determined by the Managing Member in its sole discretion, which rights, preferences and privileges may be senior to the Units) and (ii) obligations, evidences of Indebtedness or other securities or interests convertible or exchangeable for Units or other Equity Securities in the Company; provided, that, at any time following the date hereof, in each case the Company shall not issue Equity Securities in the Company to any Person unless such Person shall have executed a counterpart to this Agreement and all other documents, agreements or instruments deemed necessary or desirable in the discretion of the Managing Member. Upon such issuance and execution, such Person shall be admitted as a Member of the Company. In that event, the Managing Member shall amend Exhibit A to reflect such additional issuances. Subject to Section 12.1, the Managing Member is hereby authorized to amend this Agreement to set forth the designations, preferences, rights, powers and duties of such additional Units or other Equity Securities in the Company, or such other amendments that the Managing Member determines to be otherwise necessary or appropriate in connection with the creation, authorization or issuance of, any class or series of Units or other Equity Securities in the Company pursuant to this Section 4.3(b); provided, that notwithstanding the foregoing, the Managing Member shall have the right to amend this Agreement as set forth in this sentence without the approval of any other Person (including any Member) and notwithstanding any other provision of this Agreement (including Section 12.1) if such amendment is necessary, and then only to the extent necessary, in order to consummate any offering of shares of PubCo Common Stock or other Equity Securities of PubCo; provided, that the designations, preferences, rights, powers and duties of any such additional Units or other Equity Securities of the Company as set forth in such amendment are substantially similar to those applicable to such shares of PubCo Common Stock or other Equity Securities of PubCo.

 

(ii) Within five (5) days of each payment made by LF LLC to GNOG LLC as a result of obligations under the Intercompany Agreement for the purpose of a payment of interest under the Credit Agreement (each, an “Intercompany Agreement Contribution”) the Managing Member shall cause the Company to issue to LF LLC a number of Class B Units equal to (rounded down to the nearest whole Unit) (A) the amount of the relevant Intercompany Agreement Contribution divided by (B) (x) if the Class A Common Stock trades on a National Securities Exchange or automated or electronic quotation system, the average of the volume-weighted closing price for a share of Class A Common Stock on the principal U.S. securities exchange or automated or electronic quotation system, as applicable, on which the Class A Common Stock trades, as reported by Bloomberg, L.P. or its successor, for each of the ten (10) consecutive full Trading Days ending on and including the last full Trading Day immediately prior to the due date of such payment in accordance with the Intercompany Agreement; and (y) if the Class A Common Stock is not then traded on a U.S. securities exchange or automated or electronic quotation system, the Fair Market Value of one share of Class A Common Stock that would be obtained in an arms-length transaction between an informed and willing buyer and an informed and willing seller, neither of whom is under any compulsion to buy or sell, respectively, and without regard to the particular circumstances of the buyer or seller, in each case of clauses (x) and (y), subject to appropriate and equitable adjustment for any stock splits, reverse splits, stock dividends or similar events affecting the Class A Common Stock. Simultaneously with the delivery of Class B Units under this Section 4.3(b)(ii), PubCo shall deliver to LF LLC an equal number of shares of Class B Common Stock, which shares shall be validly issued, fully paid and nonassessable when issued in accordance with this Agreement.

 

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Section 4.4      Capital Accounts.

 

(a)            A Capital Account shall be maintained for each Member in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv) and, to the extent consistent with such regulations, the other provisions of this Agreement. Each Member’s Capital Account balance as of the date hereof shall be equal to the amount of its respective Closing Date Capital Account Balance set forth opposite such Member’s name on Exhibit A. Thereafter, each Member’s Capital Account shall be (a) increased by (i) allocations to such Member of Profits pursuant to Section 5.1 and any other items of income or gain allocated to such Member pursuant to Section 5.2, (ii) the amount of cash or the initial Gross Asset Value of any asset (net of any Liabilities assumed by the Company and any Liabilities to which the asset is subject) contributed to the Company by such Member, and (iii) any other increases allowed or required by Treasury Regulations Section 1.704-1(b)(2)(iv), and (b) decreased by (i) allocations to such Member of Losses pursuant to Section 5.1 and any other items of deduction or loss allocated to such Member pursuant to the provisions of Section 5.2, (ii) the amount of any cash or the Gross Asset Value of any asset (net of any Liabilities assumed by the Member and any Liabilities to which the asset is subject) distributed to such Member, and (iii) any other decreases allowed or required by Treasury Regulations Section 1.704-1(b)(2)(iv). In the event of a Transfer of Units made in accordance with this Agreement (including a deemed Transfer for U.S. federal income tax purposes as described in Section 4.6(a)(v)), the Capital Account of the Transferor that is attributable to the Transferred Units shall carry over to the Transferee Member in accordance with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)(l).

 

(b)            Each Intercompany Agreement Contribution shall be treated as a capital contribution by LF LLC and increase LF LLC’s Capital Contribution and Capital Account.

 

Section 4.5      Other Matters.

 

(a)            No Member shall demand or receive a return on or of its Capital Contributions or withdraw from the Company without the consent of the Managing Member. Under circumstances requiring a return of any Capital Contributions, no Member has the right to receive property other than cash.

 

(b)            No Member shall receive any interest, salary, compensation, draw or reimbursement with respect to its Capital Contributions or its Capital Account, or for services rendered or expenses incurred on behalf of the Company or otherwise in its capacity as a Member, except as otherwise provided in Section 7.8 or as otherwise contemplated by this Agreement.

 

(c)            The Liability of each Member shall be limited as set forth in the Act and other applicable Law and, except as expressly set forth in this Agreement or required by Law, no Member (or any of its Affiliates) shall be personally liable, whether to the Company, any of the other Members, the creditors of the Company, or any other third party, for any debt or Liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Member of the Company.

 

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(d)          Except as otherwise required by the Act, a Member shall not be required to restore a deficit balance in such Member’s Capital Account, to lend any funds to the Company or, except as otherwise set forth herein, to make any additional contributions or payments to the Company.

 

(e)          The Company shall not be obligated to repay any Capital Contributions of any Member.

 

Section 4.6      Redemption of Class B Units.

 

(a)          Redemption.

 

(i)            Upon the terms and subject to the conditions set forth in this Section 4.6, following one hundred and eighty (180) days after the date hereof, each of the Members (other than PubCo and its wholly-owned Subsidiaries) (each, a “Redeeming Member”) shall be entitled to cause the Company to redeem all or a portion of such Member’s Class B Units (together with the surrender and delivery of the same number of shares of Class B Common Stock) for either (x) the delivery by the Company of a number of shares of Class A Common Stock equal to the number of Class B Units surrendered (a “Redemption”) or (y) at the Company’s election made in accordance with Section 4.6(a)(iv), the delivery by the Company of cash equal to the Cash Election Amount calculated with respect to such Redemption. Absent the prior written consent of the Managing Member, with respect to each Redemption, a Redeeming Member shall be:

 

(A) required to redeem at least a number of Class B Units equal to the lesser of (x) 1,000 Class B Units and (y) all of the Class B Units then held by such Redeeming Member; provided, that a Redeeming Member shall be permitted to effect a Redemption of Class B Units at least as frequently as once per calendar quarter; and

 

(B) Upon the Redemption of all of a Member’s Units, such Member shall, for the avoidance of doubt, cease to be a Member of the Company.

 

(ii)           In order to exercise the Redemption right under Section 4.6(a)(i), the Redeeming Member shall provide written notice (the “Redemption Notice”) to the Company, with a copy to PubCo (the date of delivery of such Redemption Notice, the “Redemption Notice Date”), stating:

 

(A) the number of Class B Units (together with the surrender and delivery of an equal number of shares of Class B Common Stock) the Redeeming Member elects to have the Company redeem;

 

(B) if the shares of Class A Common Stock to be received are to be issued other than in the name of the Redeeming Member, the name(s) of the Person(s) in whose name or on whose order the shares of Class A Common Stock are to be issued;

 

(C) whether the exercise of the Redemption right is to be contingent (including as to timing) upon (i) the closing of an underwritten offering of the shares of Class A Common Stock for which the Class B Units will be redeemed, (ii) the closing of an announced merger, consolidation or (iii) other transaction or event to which PubCo is a party in which the shares of Class A Common Stock would be exchanged or converted or become exchangeable for or convertible into cash or other securities or property; and

 

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(D) if the Redeeming Member requires the Redemption to take place on a specific Business Day, such Business Day; provided, that, any such specified Business Day shall not be earlier than the date that would otherwise apply pursuant to clause (a) of the definition of Redemption Date.

 

(iii)         If the Class B Units to be redeemed (or the shares of Class B Common Stock to be transferred and surrendered) by the Redeeming Member are represented by a certificate or certificates, prior to the Redemption Date, the Redeeming Member shall also present and surrender such certificate or certificates representing such Class B Units (or shares of Class B Common Stock) during normal business hours at the principal executive offices of the Company, or if any agent for the registration or transfer of Class A Common Stock is then duly appointed and acting (the “Transfer Agent”), at the office of the Transfer Agent. If required by the Managing Member or the Transfer Agent, the Redeeming Member shall also deliver, prior to the Redemption Date, instruments of transfer, in forms reasonably satisfactory to the Managing Member and the Transfer Agent, duly executed by the Redeeming Member or the Redeeming Member’s duly authorized representative.

 

(iv)          Upon receipt of a Redemption Notice, the Company shall be entitled to elect (a “Cash Election”) to settle the Redemption by delivering to the Redeeming Member, in lieu of the applicable number of shares of Class A Common Stock that would be received in such Redemption, an amount of cash equal to the Cash Election Amount for such Redemption; provided, that so long as Pubco makes the election on behalf of the Company in its capacity as the sole managing member of the Company, such election shall be approved by a majority of the Disinterested Directors. In order to make a Cash Election with respect to a Redemption, the Company must provide written notice of such election (a “Cash Election Notice”) to the Redeeming Member (with a copy to PubCo) prior to 5:00 p.m., Texas time, on the third Business Day after the Redemption Notice Date. If the Company fails to provide such written notice prior to such time, it shall not be entitled to make a Cash Election with respect to such Redemption.

 

(v)           For U.S. federal and applicable state and local income tax purposes, each of the Redeeming Member, the Company and PubCo, as the case may be, agree to treat each Redemption as a sale of the Redeeming Member’s Class B Units (together with the same number of shares of Class B Common Stock) to PubCo in exchange for shares of Class A Common Stock or cash, as applicable.

 

(b)          Redemption Procedures.

 

(i)            Subject to the satisfaction of any contingency described in Section 4.6(a)(ii)(C) or (D) that is specified in the relevant Redemption Notice, the Redemption shall be completed on the Redemption Date; provided, that if a valid Cash Election has not been made, the Redeeming Member may, at any time prior to the Redemption Date, revoke its Redemption Notice by giving written notice (the “Retraction Notice”) to the Company (with a copy to PubCo); provided, however, that in no event may the Redeeming Member deliver a Retraction Notice later than two (2) Business Days prior to the applicable Redemption Date. The timely delivery of a Retraction Notice shall terminate all of the Redeeming Member’s, the Company’s and PubCo’s rights and obligations arising from the retracted Redemption Notice.

 

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(ii)            Unless the Redeeming Member has timely delivered a Retraction Notice as provided in Section 4.6(b)(i), on the Redemption Date (to be effective immediately prior to the close of business on the Redemption Date) (A) the Redeeming Member shall transfer and surrender the Class B Units to be redeemed (and a corresponding number of shares of Class B Common Stock to be canceled) to the Company, in each case free and clear of all liens and encumbrances, (B) PubCo shall contribute to the Company the consideration the Redeeming Member is entitled to receive under Section 4.6(a)(i) or 4.6(a)(iv), as applicable, and as described in Section 4.1(d), the Company shall issue to PubCo a number of Class B Units or other Equity Securities of the Company as consideration for such contribution, (C) the Company shall (x) cancel the redeemed Class B Units, (y) transfer to the Redeeming Member the consideration the Redeeming Member is entitled to receive under Section 4.6(a)(i) or 4.6(a)(iv), as applicable, and (z) if the Class B Units are certificated, issue to the Redeeming Member a certificate for a number of Class B Units equal to the difference (if any) between the number of Class B Units evidenced by the certificate surrendered by the Redeeming Member pursuant to Section 4.6(b)(ii)(A) and the number of redeemed Class B Units and (D) PubCo shall cancel the surrendered shares of Class B Common Stock. Notwithstanding any other provisions of this Agreement to the contrary, in the event that the Company makes a valid Cash Election, PubCo shall only be obligated to contribute to the Company an amount in cash equal to the net proceeds (after deduction of any underwriters’ discounts or commissions and brokers’ fees or commissions (including, for the avoidance of doubt, any deferred discounts or commissions and brokers’ fees or commissions payable in connection with or as a result of such public offering) (such difference, the “Discount”)) from the sale by PubCo of a number of shares of Class A Common Stock equal to the number of Class B Units and Class B Common Stock to be redeemed with such cash or from the sale of other PubCo Equity Securities used to fund the Cash Election Amount; provided, that PubCo’s Capital Account shall be increased by an amount equal to any such Discounts relating to such sale of shares of Class A Common Stock or other PubCo Equity Securities in accordance with Section 7.8; provided, further, that the contribution of such net proceeds shall in no event affect the Redeeming Member’s right to receive the Cash Election Amount.

 

(c)            Splits, Distributions and Reclassifications. If (i) there is any reclassification, reorganization, recapitalization or other similar transaction pursuant to which the shares of Class A Common Stock are converted or changed into another security, securities or other property (other than as a result of a subdivision or combination or any transaction subject to Section 4.1(f)), or (ii) PubCo, by dividend or otherwise, distributes to all holders of the shares of Class A Common Stock evidences of its Indebtedness or assets, including securities (including shares of Class A Common Stock and any rights, options or warrants to all holders of the shares of Class A Common Stock to subscribe for, to purchase or to otherwise acquire shares of Class A Common Stock, or other securities or rights convertible into, or exchangeable or exercisable for, shares of Class A Common Stock) but excluding any cash dividend or distribution as well as any such distribution of Indebtedness or assets received by PubCo from the Company in respect of the Class B Units, then upon any subsequent Redemption, in addition to the shares of Class A Common Stock or the Cash Election Amount, as applicable, each Member shall be entitled to receive the amount of such security, securities or other property that such Member would have received if such Redemption had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization, other similar transaction, dividend or other distribution, taking into account any adjustment as a result of any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective date of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the shares of Class A Common Stock are converted or changed into another security, securities or other property, or any dividend or distribution (other than an excluded dividend or distribution, as described above), this Section 4.6 shall continue to be applicable, mutatis mutandis, with respect to such security or other property. This Agreement shall apply to the Class B Units held by the Members and their Transferees as of the date hereof, as well as any Class B Units hereafter acquired by a Member and his or her or its Transferees.

 

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(d)            PubCo Covenants. PubCo shall at all times keep available, solely for the purpose of issuance upon a Redemption, out of its authorized but unissued shares of Class A Common Stock, such number of shares of Class A Common Stock that shall be issuable upon the Redemption of all outstanding Class B Units; provided, that nothing contained herein shall be construed to preclude PubCo from satisfying its obligations with respect to a Redemption by delivery of cash pursuant to a Cash Election or shares of Class A Common Stock that are held in the treasury of PubCo. PubCo covenants that all shares of Class A Common Stock that shall be issued upon a Redemption shall, upon issuance thereof, be validly issued, fully paid and non- assessable. In addition, for so long as the shares of Class A Common Stock are listed on a National Securities Exchange, PubCo shall use its reasonable best efforts to cause all shares of Class A Common Stock issued upon a Redemption to be listed on such National Securities Exchange at the time of such issuance. For purposes of this Section 4.6(d), references to the “Class A Common Stock” shall be deemed to include any Equity Securities issued or issuable as a result of any reclassification, combination, subdivision or similar of the Class A Common Stock.

 

(e)            Redemption Taxes. The issuance of shares of Class A Common Stock upon a Redemption shall be made without charge to the Redeeming Member for any stamp or other similar tax in respect of such issuance; provided, however, that if any such shares of Class A Common Stock are to be issued in a name other than that of the Redeeming Member, then the Person or Persons in whose name the shares are to be issued shall pay to PubCo the amount of any tax that may be payable in respect of any Transfer involved in such issuance or shall establish to the satisfaction of PubCo that such tax has been paid or is not payable.

 

(f)             [Reserved]

 

(g)            Distribution Rights. No Redemption shall impair the right of the Redeeming Member to receive any distributions payable on the Class B Units redeemed pursuant to such Redemption in respect of a record date that occurs prior to the Redemption Date for such Redemption. For the avoidance of doubt, no Redeeming Member, or a Person designated by a Redeeming Member to receive shares of Class A Common Stock, shall be entitled to receive, with respect to such record date, distributions or dividends both on Class B Units redeemed by the Company from such Redeeming Member and on shares of Class A Common Stock received by such Redeeming Member, or other Person so designated, if applicable, in such Redemption.

 

(h)            PubCo Membership. Any Class B Units acquired by the Company under this Section 4.6 and Transferred by the Company to PubCo shall remain outstanding and shall not be cancelled as a result of their acquisition by the Company. Notwithstanding any other provision of this Agreement, PubCo shall continue as a Member of the Company with respect to any Class A Units or other Equity Securities in the Company it receives under this Agreement (including under this Section 4.6 in connection with any Redemption).

 

(i)             Redemption Restrictions. The Managing Member may impose additional limitations and restrictions on Redemptions (including limiting Redemptions or creating priority procedures for Redemptions), to the extent it determines, in Good Faith, such limitations and restrictions to be necessary or appropriate to avoid undue risk that the Company may be classified as a “publicly traded partnership” within the meaning of Section 7704 of the Code.

 

(j)             Tax Certificates. In connection with any Redemption, the Redeeming Member shall deliver to PubCo or the Company, as applicable, a certificate, dated as of the date of the Redemption and sworn under penalties of perjury, in a form reasonably acceptable to PubCo or the Company, as applicable, certifying as to such Redeeming Member’s taxpayer identification number and that such Redeeming Member is a not a foreign person for purposes of Section 1445 and Section 1446(f) of the Code.

 

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(k)            Representations and Warranties. In connection with any Redemption, upon the acceptance of the Class A Common Stock or an amount of cash equal to the Cash Election Amount, the Redeeming Member shall represent and warrant that the Redeeming Member is the owner of the number of Class B Units the Redeeming Member is electing to have the Company redeem and that such Class B Units are not subject to any liens or restrictions to transfer the shares (other than restrictions imposed by this Agreement and PubCo’s Fourth Amended and Restated Certificate of Incorporation).

 

Section 4.7      Representations and Warranties of the Members. Unless otherwise set forth in an agreement between the Company and a Member, each Member severally (and not jointly) represents and warrants to the Company and each other Member as of the date of such Member’s admittance to the Company that (i) to the extent it is not a natural person, it is duly formed, validly existing and in good standing under the Laws of the jurisdiction of its formation, and if required by Law is duly qualified to conduct business and is in good standing in the jurisdiction of its principal place of business (if not formed in such jurisdiction); (ii) to the extent it is not a natural person, it has full corporate, limited liability company, partnership, trust or other applicable power and authority to execute and deliver this Agreement and to perform its obligations hereunder and all necessary actions by the board of directors, shareholders, managers, members, partners, trustees, beneficiaries or other Persons necessary for the due authorization, execution, delivery and performance of this Agreement by that Member have been duly taken; (iii) it has duly executed and delivered this Agreement, and this Agreement is enforceable against such Member in accordance with its terms, subject to bankruptcy, moratorium, insolvency and other Laws generally affecting creditors’ rights and general principles of equity (whether applied in a Proceeding in a court of law or equity); (iv) its authorization, execution, delivery, and performance of this Agreement does not breach or conflict with or constitute a default under (A) such Member’s charter or other governing documents to the extent it is not a natural person or (B) any material obligation under any other material agreement or arrangement to which that Member is a party or by which it is bound; and (v) it: (A) has been furnished with such information about the Company and the Interest as that Member has requested, (B) has made its own independent inquiry and investigation into, and based thereon has formed an independent judgment concerning, the Company and such Member’s Interest herein, (C) has adequate means of providing for its current needs and possible contingencies, is able to bear the economic risks of this investment and has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such loss should occur, (D) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company, (E) is, or is controlled by, an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D, promulgated under the Securities Act, and (F) understands and agrees that its Interest shall not be sold, pledged, hypothecated or otherwise Transferred except in accordance with the terms of this Agreement and pursuant to an effective Registration Statement under the Securities Act or an applicable exemption from registration and/or qualification under the Securities Act and applicable state securities Laws.

 

Article V
ALLOCATIONS OF PROFITS AND LOSSES

 

Section 5.1      Profits and Losses. After giving effect to the allocations under Section 5.2 and subject to Section 5.4, Profits and Losses (and, to the extent determined by the Managing Member to be necessary and appropriate to achieve the resulting Capital Account balances described below, any allocable items of income, gain, loss, deduction or credit includable in the computation of Profits and Losses) for each Fiscal Year or other taxable period shall be allocated among the Members during such Fiscal Year or other taxable period in a manner such that, after giving effect to all distributions through the end of such Fiscal Year or other taxable period, the Capital Account balance of each Member, immediately after making such allocation, is, as nearly as possible, equal to (i) the amount such Member would receive pursuant to Section 11.3(b) if all assets of the Company on hand at the end of such Fiscal Year or other taxable period were sold for cash equal to their Gross Asset Values, all liabilities of the Company were satisfied in cash in accordance with their terms (limited with respect to each Nonrecourse Liability to the Gross Asset Value of the assets securing such liability), and all remaining or resulting cash was distributed, in accordance with Section 11.3(b), to the Members immediately after making such allocation, minus (ii) such Member’s share of Company Minimum Gain and Member Minimum Gain, computed immediately prior to the hypothetical sale of assets, and the amount any such Member is treated as obligated to contribute to the Company, computed immediately after the hypothetical sale of assets.

 

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Section 5.2      Special Allocations.

 

(a)            Nonrecourse Deductions for any Fiscal Year or other taxable period shall be specially allocated to the Members on a pro rata basis in accordance with the number of Units owned by each Member. The amount of Nonrecourse Deductions for a Fiscal Year or other taxable period shall equal the excess, if any, of the net increase, if any, in the amount of Company Minimum Gain during that Fiscal Year or other taxable period over the aggregate amount of any distributions during that Fiscal Year or other taxable period of proceeds of a Nonrecourse Liability that are allocable to an increase in Company Minimum Gain, determined in accordance with the provisions of Treasury Regulations Section 1.704-2(d).

 

(b)            Any Member Nonrecourse Deductions for any Fiscal Year or other taxable period shall be specially allocated to the Member who bears economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i). If more than one Member bears the economic risk of loss for such Member Nonrecourse Debt, the Member Nonrecourse Deductions attributable to such Member Nonrecourse Debt shall be allocated among the Members according to the ratio in which they bear the economic risk of loss. This Section 5.2(b) is intended to comply with the provisions of Treasury Regulations Section 1.704-2(i) and shall be interpreted consistently therewith.

 

(c)            Notwithstanding any other provision of this Agreement to the contrary, if there is a net decrease in Company Minimum Gain during any Fiscal Year or other taxable period (or if there was a net decrease in Company Minimum Gain for a prior Fiscal Year or other taxable period and the Company did not have sufficient amounts of income and gain during prior periods to allocate among the Members under this Section 5.2(c)), each Member shall be specially allocated items of Company income and gain for such Fiscal Year or other taxable period in an amount equal to such Member’s share of the net decrease in Company Minimum Gain during such year (as determined pursuant to Treasury Regulations Section 1.704-2(g)(2)). This Section 5.2(c) is intended to constitute a minimum gain chargeback under Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

 

(d)            Notwithstanding any other provision of this Agreement except Section 5.2(c), if there is a net decrease in Member Minimum Gain during any Fiscal Year or other taxable period (or if there was a net decrease in Member Minimum Gain for a prior Fiscal Year or other taxable period and the Company did not have sufficient amounts of income and gain during prior periods to allocate among the Members under this Section 5.2(d)), each Member shall be specially allocated items of Company income and gain for such year in an amount equal to such Member’s share of the net decrease in Member Minimum Gain (as determined pursuant to Treasury Regulations Section 1.704-2(i)(4)). This Section 5.2(d) is intended to constitute a partner nonrecourse debt minimum gain chargeback under Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

(e)            Notwithstanding any provision hereof to the contrary except Section 5.2(a) and 5.2(b), no Losses or other items of loss or expense shall be allocated to any Member to the extent that such allocation would cause such Member to have an Adjusted Capital Account Deficit (or increase any existing Adjusted Capital Account Deficit) at the end of such Fiscal Year or other taxable period. All Losses and other items of loss and expense in excess of the limitation set forth in this Section 5.2(e) shall be allocated to the Members who do not have an Adjusted Capital Account Deficit in proportion to their relative positive Capital Accounts but only to the extent that such Losses and other items of loss and expense do not cause any such Member to have an Adjusted Capital Account Deficit.

 

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(f)            Notwithstanding any provision hereof to the contrary except Section 5.2(c) and 5.2(d), in the event any Member unexpectedly receives any adjustment, allocation or distribution described in paragraph (4), (5) or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d), items of income and gain (consisting of a pro rata portion of each item of income, including gross income, and gain for the Fiscal Year or other taxable period) shall be specially allocated to such Member in an amount and manner sufficient to eliminate any Adjusted Capital Account Deficit of that Member as quickly as possible; provided, that an allocation pursuant to this Section 5.2(f) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in Section 5.1 and 5.2 have been tentatively made as if this Section 5.2(f) were not in this Agreement. This Section 5.2(f) is intended to constitute a qualified income offset under Treasury Regulations Section 1.704-1(b)(2)(ii) and shall be interpreted consistently therewith.

 

(g)            If any Member has a deficit balance in its Capital Account at the end of any Fiscal Year or other taxable period that is in excess of the sum of (i) the amount that such Member is obligated to restore and (ii) the amount that the Member is deemed to be obligated to restore pursuant to the penultimate sentence of Treasury Regulations Sections 1.704-2(g)(1) and (i)(5), that Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 5.2(g) shall be made only if and to the extent that such Member would have a deficit balance in its Capital Account in excess of such sum after all other allocations provided for in Section 5.1 and 5.2 have been made as if Section 5.2(f) and 5.2(g) were not in this Agreement.

 

(h)            To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Sections 734(b) or 743(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution to any Member in complete liquidation of such Member’s Interest in the Company, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such item of gain or loss shall be allocated to the Members in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) if such section applies or to the Member to whom such distribution was made if Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

 

(i)            The allocations set forth in Section 5.2(a) through 5.2(h) (the “Regulatory Allocations”) are intended to comply with certain requirements of Treasury Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding any other provision of this Article V (other than the Regulatory Allocations), the Regulatory Allocations (and anticipated future Regulatory Allocations) shall be taken into account in allocating other items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocation of other items and the Regulatory Allocations to each Member should be equal to the net amount that would have been allocated to each such Member if the Regulatory Allocations had not occurred. This Section 5.2(i) is intended to minimize to the extent possible and to the extent necessary any economic distortions which may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith.

 

Section 5.3      Allocations for Tax Purposes in General.

 

(a)            Except as otherwise provided in this Section 5.3, each item of income, gain, loss and deduction of the Company for U.S. federal income tax purposes shall be allocated among the Members in the same manner as such item is allocated under Section 5.1 and 5.2.

 

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(b)            In accordance with Code Section 704(c) and the Treasury Regulations thereunder (including the Treasury Regulations applying the principles of Code Section 704(c) to changes in Gross Asset Values), items of income, gain, loss and deduction with respect to any Company property having a Gross Asset Value that differs from such property’s adjusted U.S. federal income tax basis shall, solely for U.S. federal income tax purposes, be allocated among the Members to account for any such difference using any method or methods determined by the Managing Member to be appropriate and in accordance with the applicable Treasury Regulations; provided, that, no method other than the “traditional method” shall be used absent the consent of a majority of the Disinterested Directors.

 

(c)            Any (i) recapture of depreciation or any other item of deduction shall be allocated, in accordance with Treasury Regulations Sections 1.1245-1(e) and 1.1254-5, to the Members who received the benefit of such deductions and (ii) recapture of credits shall be allocated to the Members in accordance with applicable Law.

 

(d)            Allocations pursuant to this Section 5.3 are solely for purposes of U.S. federal, state and local income taxes and shall not affect or in any way be taken into account in computing any Member’s Capital Account or share of Profits, Losses, other items or distributions pursuant to any provision of this Agreement.

 

(e)            If, as a result of an exercise of a non-compensatory option to acquire an interest in the Company, a Capital Account reallocation is required under Treasury Regulations Section 1.704-1(b)(2)(iv)(s)(3), the Company shall make corrective allocations pursuant to Treasury Regulations Section 1.704-1(b)(4)(x).

 

(f)            Any adjustment to the adjusted tax basis of Company property pursuant to Code Section 743(b) resulting from a transfer of a Company Interest shall be handled in accordance with Treasury Regulations Section 1.743-1(j).

 

Section 5.4      Other Allocation Rules.

 

(a)            The Members are aware of the income tax consequences of the allocations made by this Article V and the economic impact of the allocations on the amounts receivable by them under this Agreement. The Members hereby agree to be bound by the provisions of this Article V in reporting their share of Company income and loss for U.S. federal and applicable state and local income tax purposes.

 

(b)            The provisions regarding the establishment and maintenance for each Member of a Capital Account as provided by Section 4.4 and the allocations set forth in Section 5.1, 5.2 and 5.3 are intended to comply with the Treasury Regulations and to reflect the intended economic entitlement of the Members. If the Managing Member determines that the application of the provisions in Section 4.4, 5.1, 5.2 or 5.3would result in non-compliance with the Treasury Regulations or would be inconsistent with the intended economic entitlement of the Members, the Managing Member is authorized to make any appropriate adjustments to such provisions to the extent permitted by applicable Law.

 

(c)            All items of income, gain, loss, deduction and credit allocable to an interest in the Company that may have been Transferred shall be allocated between the Transferor and the Transferee based on the portion of the Fiscal Year or other taxable period during which each was recognized as the owner of such interest, without regard to the results of Company operations during any particular portion of that year and without regard to whether cash distributions were made to the Transferor or the Transferee during that year; provided, however, that this allocation must be made in accordance with a method determined by the Managing Member and permissible under Code Section 706 and the Treasury Regulations thereunder.

 

(d)            The Members’ proportionate shares of the “excess nonrecourse liabilities” of the Company, within the meaning of Treasury Regulations Section 1.752-3(a)(3), shall be allocated to the Members on a pro rata basis in accordance with the number of Units owned by each Member.

 

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Article VI
DISTRIBUTIONS

 

Section 6.1      Distributions.

 

(a)            Distributions. To the extent permitted by applicable Law and hereunder, and except as otherwise provided in Section 11.3, distributions to Members may be declared by the Managing Member out of funds legally available therefor in such amounts and on such terms (including the payment dates of such distributions) as the Managing Member shall determine (in its sole discretion in accordance with the fiduciary duties set forth in Section 7.1(b)) using such record date as the Managing Member may designate. Any such distribution shall be made to the Members as of the close of business on such record date on a pro rata basis (except that, for the avoidance of doubt, repurchases or redemptions made in accordance with Section 4.1(e) or Section 4.6 or payments made in accordance with Section 7.4, Section 7.8 or Section 10.4 need not be on a pro rata basis), in accordance with the number of Units owned by each Member as of the close of business on such record date; provided, however, that the Managing Member shall have the obligation to make distributions as set forth in Section 6.2 and 11.3(b)(iii); and provided, further, that, notwithstanding any other provision herein to the contrary, no distributions shall be made to any Member to the extent such distribution would render the Company insolvent or violate the Act. For purposes of the foregoing sentence, insolvency means the inability of the Company to meet its payment obligations when due. Promptly following the designation of a record date and the declaration of a distribution pursuant to this Section 6.1, the Managing Member shall give notice to each Member of the record date, the amount and the terms of the distribution and the payment date thereof.

 

(b)            Successors. For purposes of determining the amount of distributions, each Member shall be treated as having made the Capital Contributions and as having received the distributions made to or received by its predecessors in respect of any of such Member’s Units.

 

(c)            Distributions In-Kind. Except as otherwise provided in this Agreement, any distributions may be made in cash or in kind, or partly in cash and partly in kind, as determined by the Managing Member. In the event of any distribution of (i) property in kind or (ii) both cash and property in kind, each Member shall be distributed its proportionate share of any such cash so distributed and its proportionate share of any such property so distributed in kind (based on the Fair Market Value of such property). To the extent that the Company distributes property in-kind to the Members, the Company shall be treated as making a distribution equal to the Fair Market Value of such property for purposes of Section 6.1(a) and such property shall be treated as if it were sold for an amount equal to its Fair Market Value. Any resulting gain or loss shall be allocated to the Member’s Capital Accounts in accordance with Sections 5.1 and 5.2.

 

Section 6.2      Tax-Related Distributions. On or prior to each Tax Distribution Date, the Company will, subject to the availability of funds and any restrictions contained in any agreement to which the Company is bound, make distributions to the Members pro rata in proportion to their respective number of Units in an amount sufficient to allow each Member to satisfy all of its federal, state, local and non-U.S. tax liabilities arising from allocations of income, gain, loss, deduction and credit attributable to such Member’s interests in the Company during the taxable period to which the tax-related distribution under this Section 6.2 relates (a) assuming for this purpose that each Member has no income or deductions from any other source (b) assuming for this purpose that each Member is a corporation subject to the highest applicable combined tax rate applicable to a corporation, and (c) without taking into account any amortization and depreciation or other items of deduction allocated to any Member, or any step-up in basis from the sale of any assets, in each case, for which such Member is required to make payments under the Tax Receivable Agreement.

 

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Section 6.3      Distribution Upon Withdrawal. No withdrawing Member shall be entitled to receive any distribution or the value of such Member’s Interest in the Company as a result of withdrawal from the Company prior to the liquidation of the Company, except as specifically provided in this Agreement.

 

Article VII
MANAGEMENT

 

Section 7.1      Managing Member Rights; Fiduciary Duties.

 

(a)            PubCo shall be the sole Managing Member of the Company. Except as otherwise required by Law or expressly provided for in this Agreement, (i) the Managing Member shall have full and complete charge of all affairs of the Company, (ii) the management and control of the Company’s business activities and operations shall rest exclusively with the Managing Member, and the Managing Member shall make all decisions regarding the business, activities and operations of the Company (including the incurrence of costs and expenses) in its sole discretion without the consent of any other Member and (iii) the Members, other than the Managing Member (in their capacity as such), shall not participate in the control, management, direction or operation of the activities or affairs of the Company and shall have no power to act for or bind the Company.

 

(b)            In connection with the performance of its duties as the Managing Member of the Company, except as otherwise set forth herein, the Managing Member acknowledges that it will owe to the Members the same fiduciary duties as it would owe to the stockholders of a Delaware corporation if it were a member of the board of directors of such a corporation and the Members were stockholders of such corporation. The Members acknowledge that the Managing Member will take action through the Board, and that the members of the Board will owe comparable fiduciary duties to the stockholders of the Managing Member.

 

Section 7.2      Officers.

 

(a)            The Managing Member may appoint, employ or otherwise contract with any Person for the transaction of the business of the Company or the performance of services for or on behalf of the Company, and the Managing Member may delegate to any such Persons such authority to act on behalf of the Company as the Managing Member may from time to time deem appropriate.

 

(b)            The Officers of the Company as of the date hereof are set forth on Exhibit B attached hereto.

 

(c)            Except as otherwise set forth herein, the Chief Executive Officer, if appointed by the Managing Member in its discretion, will be responsible for the general and active management of the business of the Company and its Subsidiaries and will see that all orders of the Managing Member are carried into effect. The Chief Executive Officer will report to the Managing Member and have the general powers and duties of management usually vested in the office of chief executive officer of a corporation organized under the DGCL, subject to the terms of this Agreement, and will have such other powers and duties as may be prescribed by the Managing Member or this Agreement. The Chief Executive Officer will have the power to execute bonds, mortgages and other Contracts requiring a seal, under the seal of the Company, except where required or permitted by Law to be otherwise signed and executed, and except where the signing and execution thereof will be expressly delegated by the Managing Member to some other Officer or agent of the Company.

 

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(d)            Except as set forth herein, the Managing Member may appoint Officers at any time, and the Officers may include one or more vice presidents, a secretary, one or more assistant secretaries, a chief financial officer, a general counsel, a treasurer, one or more assistant treasurers, a chief operating officer, an executive chairman, and any other officers that the Managing Member deems appropriate. Except as set forth herein, the Officers will serve at the pleasure of the Managing Member, subject to all rights, if any, of such Officer under any Contract of employment. Any individual may hold any number of offices, and an Officer may, but need not, be a Member of the Company. The Officers will exercise such powers and perform such duties as specified in this Agreement or as determined from time to time by the Managing Member.

 

(e)            Subject to this Agreement and to the rights, if any, of an Officer under a Contract of employment, any Officer may be removed, either with or without cause, by the Managing Member. Any Officer may resign at any time by giving written notice to the Managing Member. Any resignation will take effect at the date of the receipt of that notice or at any later time specified in that notice and, unless otherwise specified in that notice, the acceptance of the resignation will not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any Contract to which the Officer is a party. A vacancy in any office because of death, resignation, removal, disqualification or any other cause will be filled in the manner prescribed in this Agreement for regular appointments to that office.

 

(f)            The Officers, in the performance of their duties as such, shall owe to the Company and the Members duties of loyalty and due care of the type owed by the officers of a corporation to such corporation and its shareholders under the DGCL.

 

Section 7.3      Warranted Reliance by Officers on Others. In exercising their authority and performing their duties under this Agreement, the Officers shall be entitled to rely on information, opinions, reports, or statements of the following Persons or groups unless they have actual knowledge concerning the matter in question that would cause such reliance to be unwarranted:

 

(a)            one or more employees or other agents of the Company or subordinates whom the Officer reasonably believes to be reliable and competent in the matters presented; and

 

(b)            any attorney, public accountant, or other Person as to matters which the Officer reasonably believes to be within such Person’s professional or expert competence.

 

Section 7.4      Indemnification.

 

(a)            Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise subject to or involved in any claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she is or was a member, director or an officer of the Company or is or was serving at the request of the Company as a member, director, officer, employee or agent of another company or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (an “Indemnitee”), whether the basis of such Proceeding is alleged action in an official capacity as a member, director, officer, employee or agent or in any other capacity while serving as a member, director, officer, employee or agent, shall be indemnified by the Company to the fullest extent permitted or required by the Act and any other applicable Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment), against all expense, Liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith (“Indemnifiable Losses”); provided, however, that, except as provided in Section 7.4(d) with respect to Proceedings to enforce rights to indemnification, the Company shall indemnify any such Indemnitee pursuant to this Section 7.4 in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board.

 

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(b)            Right to Advancement of Expenses. The right to indemnification conferred in Section 7.4(a) shall include the right to advancement by the Company of any and all expenses (including, without limitation, attorneys’ fees and expenses) incurred in defending any such Proceeding in advance of its final disposition (an “Advancement of Expenses”); provided, however, that, if the Act so requires, an Advancement of Expenses incurred by an Indemnitee in his or her capacity as a member, director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including without limitation service to an employee benefit plan) shall be made pursuant to this Section 7.4(b) only upon delivery to the Company of an undertaking (an “Undertaking”), by or on behalf of such Indemnitee, to repay, without interest, all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “Final Adjudication”) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 7.4(b). An Indemnitee’s right to an Advancement of Expenses pursuant to this Section 7.4(b) is not subject to the satisfaction of any standard of conduct and is not conditioned upon any prior determination that Indemnitee is entitled to indemnification under Section 7.4(a) with respect to the related Proceeding or the absence of any prior determination to the contrary.

 

(c)            Contract Rights. The rights to indemnification and to the Advancement of Expenses conferred in Sections 7.4(a) and (b) shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a member, director, officer, employee or agent and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.

 

(d)            Right of Indemnitee to Bring Suit. If a claim under Sections 7.4(a) or (b) is not paid in full by the Company within sixty (60) calendar days after a written claim has been received by the Company, except in the case of a claim for an Advancement of Expenses, in which case the applicable period shall be twenty (20) calendar days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to the fullest extent permitted or required by the Act, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader reimbursements of prosecution or defense expenses than such Law permitted the Company to provide prior to such amendment), to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a defense that, and (ii) any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses, without interest, upon a Final Adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the Act. Neither the failure of the Company (including its Managing Member or independent legal counsel) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the Act, nor an actual determination by the Company (including the Managing Member or independent legal counsel) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by an Indemnitee to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses hereunder pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such Advancement of Expenses, shall be on the Company.

 

(e)            Appearance as a Witness. Notwithstanding any other provision of this Section 7.4, the Company shall pay or reimburse expenses incurred by any Person entitled to be indemnified pursuant to this Section 7.4 in connection with such Person’s appearance as a witness or other participation in a Proceeding at a time when he is not a named defendant or respondent in the Proceeding.

 

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(f)            Non-exclusivity of Rights. The rights to indemnification and the Advancement of Expenses conferred in this Section 7.4 shall not be exclusive of any other right which a Person may have or hereafter acquire under any statute, this Agreement, any agreement, any vote of stockholders or disinterested directors or otherwise. Nothing contained in this Section 7.4 shall limit or otherwise affect any such other right or the Company’s power to confer any such other right.

 

(g)            No Duplication of Payments. The Company shall not be liable under this Section 7.4 to make any payment to an Indemnitee in respect of any Indemnifiable Losses to the extent that the Indemnitee has otherwise actually received payment (net of any expenses incurred in connection therewith and any repayment by the Indemnitee made with respect thereto) under any insurance policy or from any other source in respect of such Indemnifiable Losses.

 

(h)            Maintenance of Insurance or Other Financial Arrangements. In compliance with applicable Law, the Company (with the approval of the Managing Member) may purchase and maintain insurance or make other financial arrangements on behalf of any Person who is or was a Member, employee or agent of the Company, or at the request of the Company, is or was serving as a manager, director, officer, employee or agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, for any Liability asserted against such Person and Liability and expenses incurred by such Person in such Person’s capacity as such, or arising out of such Person’s status as such, whether or not the Company has the authority to indemnify such Person against such expense, Liability or loss under the Act.

 

Section 7.5      Resignation or Termination of Managing Member. PubCo shall not, by any means, resign as, cease to be or be replaced as Managing Member except in compliance with this Section 7.5. No termination or replacement of PubCo as Managing Member shall be effective unless proper provision is made, in compliance with this Agreement, so that the obligations of PubCo, its successor (if applicable) and any new Managing Member and the rights of all Members under this Agreement and applicable Law remain in full force and effect. No appointment of a Person other than PubCo (or its successor, as applicable) as Managing Member shall be effective unless PubCo (or its successor, as applicable) and the new Managing Member (as applicable) provide all other Members with contractual rights, directly enforceable by such other Members against PubCo (or its successor, as applicable) and the new Managing Member (as applicable), to cause (a) PubCo to comply with all PubCo’s obligations under this Agreement (including its obligations under Section 4.6) other than those that must necessarily be taken in its capacity as Managing Member and (b) the new Managing Member to comply with all the Managing Member’s obligations under this Agreement.

 

Section 7.6      No Inconsistent Obligations. The Managing Member represents that it does not have any Contracts, other agreements, duties or obligations that are inconsistent with its duties and obligations (whether or not in its capacity as Managing Member) under this Agreement and covenants that, except as permitted by Section 7.1, it will not enter into any Contracts or other agreements or undertake or acquire any other duties or obligations that are inconsistent with such duties and obligations.

 

Section 7.7      Reclassification Events of PubCo. If a Reclassification Event occurs, the Managing Member or its successor, as the case may be, shall, as and to the extent necessary, amend this Agreement in compliance with Section 12.1, and enter into any necessary supplementary or additional agreements, to ensure that, following the effective date of the Reclassification Event: (i) the redemption rights of holders of Units set forth in Section 4.6 provide that each Unit (together with the surrender and delivery of one share of Class B Common Stock) is redeemable for the same amount and same type of property, securities or cash (or combination thereof) that one share of Class A Common Stock becomes exchangeable for or converted into as a result of the Reclassification Event and (ii) PubCo or the successor to PubCo, as applicable, is obligated to deliver such property, securities or cash upon such redemption. PubCo shall not consummate or agree to consummate any Reclassification Event unless the successor Person, if any, becomes obligated to comply with the obligations of PubCo (in whatever capacity) under this Agreement.

 

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Section 7.8      Certain Costs and Expenses. The Company shall (i) pay, or cause to be paid, all costs, fees, operating expenses and other expenses of the Company (including the costs, fees and expenses of attorneys, accountants or other professionals and the compensation of all personnel providing services to the Company) incurred in pursuing and conducting, or otherwise related to, the activities of the Company and (ii) upon the determination of the Managing Member (acting in its sole discretion in accordance with the fiduciary duties set forth in Section 7.1(b)), reimburse the Managing Member for any costs, fees or expenses incurred by it in connection with serving as the Managing Member. To the extent that the Managing Member determines in its sole discretion that such expenses are related to the business and affairs of the Managing Member that are conducted through the Company and/or its Subsidiaries (including expenses that relate to the business and affairs of the Company and/or its Subsidiaries and that also relate to other activities of the Managing Member), the Managing Member may cause the Company to pay or bear all expenses of the Managing Member, including, without limitation, costs of securities offerings not borne directly by Members, board of directors compensation and meeting costs, costs of periodic reports to its stockholders, litigation costs and damages arising from litigation, accounting and legal costs; provided, that the Company shall not pay or bear any income tax obligations of the Managing Member. In the event that (i) shares of Class A Common Stock or other Equity Securities of PubCo were sold to underwriters in any public offering after the Effective Time, in each case, at a price per share that is lower than the price per share for which such shares of Class A Common Stock or other Equity Securities of PubCo are sold to the public in such public offering after taking into account any Discount and (ii) the proceeds from such public offering are used to fund the Cash Election Amount for any redeemed Units or otherwise contributed to the Company, the Company shall reimburse the Managing Member for such Discount by treating such Discount as an additional Capital Contribution made by the Managing Member to the Company, issuing Units in respect of such deemed Capital Contribution in accordance with Section 4.6(b)(ii), and increasing the Managing Member’s Capital Account by the amount of such Discount. For the avoidance of doubt, any payments made to or on behalf of the Managing Member pursuant to this Section 7.8 shall not be treated as a distribution pursuant to Section 6.1(a) but shall instead be treated as a cost or an expense of the Company.

 

Article VIII
ROLE OF MEMBERS

 

Section 8.1      Rights or Powers. Other than the Managing Member, the Members, acting in their capacity as Members, shall not have any right or power to take part in the management or control of the Company or its business and affairs, or to act for or bind the Company in any way. Notwithstanding the foregoing, the Members have all the rights and powers specifically set forth in this Agreement and, to the extent not inconsistent with this Agreement, in the Act. Any Member, its Affiliates and its and their employees, stockholders, agents, directors or officers may also be an employee or be retained as an agent of the Company. Except as specifically provided herein, a Member (other than the Managing Member) shall not, in its capacity as a Member, take part in the operation, management or control of the Company’s business, transact any business in the Company’s name or have the power to sign documents for or otherwise bind the Company.

 

Section 8.2      Voting.

 

(a)            Meetings of the Members may be called by the Managing Member. Such request shall state the location of the meeting and the nature of the business to be transacted at the meeting. Written notice of any such meeting shall be given to all Members not less than two (2) Business Days and not more than thirty (30) days prior to the date of such meeting. Members holding Class A Units may vote in person, by proxy or by telephone at any meeting of the Members and may waive advance notice of such meeting. Whenever the vote or consent of Members is permitted or required under this Agreement, such vote or consent may be given at a meeting of the Members or may be given in accordance with the procedure prescribed in this Section 8.2. Except as otherwise expressly provided in this Agreement, the affirmative vote of the Members holding a majority of the outstanding Class A Units shall constitute the act of the Members. For the avoidance of doubt, Members holding Class B Units shall not be entitled to any voting rights under this Agreement.

 

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(b)            Each Member may authorize any Person or Persons to act for it by proxy on all matters in which such Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by such Member or its attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Member executing it.

 

(c)            Each meeting of Members shall be conducted by an Officer designated by the Managing Member or such other individual Person as the Managing Member deems appropriate.

 

(d)            Any action required or permitted to be taken by the Members may be taken without a meeting if the requisite Members whose approval is necessary consent thereto in writing.

 

Section 8.3      Various Capacities. The Members acknowledge and agree that the Members or their Affiliates will from time to time act in various capacities, including as a Member or Company Representative.

 

Section 8.4      Investment Opportunities. To the fullest extent permitted by applicable law, the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Company or any of the Members or officers of the Company, or any of their respective affiliates, in circumstances where the application of any such doctrine would conflict with any fiduciary duties or contractual obligations they may have as of the date of this Amended and Restated Limited Liability Company Agreement or in the future, and the Company renounces any expectancy that any of the Members or the officers of the Company will offer any such corporate opportunity of which he or she may become aware to the Company, except, the doctrine of corporate opportunity shall apply with respect to any of the Members and officers of the Company with respect to a corporate opportunity that was offered to such person solely in his or her capacity as a Members or officer of the Company and (i) such opportunity is one the Company is legally and contractually permitted to undertake and would otherwise be reasonable for the Company to pursue and (ii) the Member or officer is permitted to refer that opportunity to the Company without violating any legal obligation.

 

Article IX
TRANSFERS OF INTERESTS

 

Section 9.1      Restrictions on Transfer.

 

(a)            Except as provided in Section 4.6, no Member shall Transfer all or any portion of its Interest without the Managing Member’s prior written consent, which consent shall be granted or withheld in the Managing Member’s sole discretion; provided, however, that the Class B Units may be Transferred to any Fertitta Affiliate without any consent of the Managing Member. If, notwithstanding the provisions of this Section 9.1(a), all or any portion of a Member’s Interests are Transferred in violation of this Section 9.1(a), involuntarily, by operation of Law or otherwise, then without limiting any other rights and remedies available to the other parties under this Agreement or otherwise, the Transferee of such Interest (or portion thereof) shall not be admitted to the Company as a Member nor be entitled to any rights as a Member hereunder, and the Transferor will continue to be bound by all obligations hereunder, unless and until the Managing Member consents in writing to such admission, which consent shall be granted or withheld in the Managing Member’s sole discretion. Any attempted or purported Transfer of all or a portion of a Member’s Interests in violation of this Section 9.1(a) shall, to the fullest extent permitted by Law, be null and void and of no force or effect whatsoever. For the avoidance of doubt, the restrictions on Transfer contained in this Article IX shall not apply to the Transfer of any capital stock of the Managing Member; provided, that no shares of Class B Common Stock may be Transferred unless a corresponding number of Units are Transferred therewith in accordance with this Agreement.

 

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(b)            In addition to any other restrictions on Transfer contained herein, including the provisions of this Article IX, in no event may any Transfer or assignment of Interests by any Member be made (i) to any Person who lacks the legal right, power or capacity to own Interests; (ii) if such Transfer would (A) be considered to be effected on or through an “established securities market” or a “secondary market or the substantial equivalent thereof” as such terms are used in Treasury Regulations Section 1.7704-1, (B) result in the Company having more than 100 partners, within the meaning of Treasury Regulations Section 1.7704-1(h)(1) (determined taking into account the rules of Treasury Regulations Section 1.7704-1(h)(3)), or (C) cause the Company to be treated as a “publicly traded partnership” within the meaning of Section 7704 of the Code or a successor provision or to be taxed as a corporation pursuant to the Code or successor of the Code; (iii) if such Transfer would cause the Company to become, with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(e)(2) of the Code); (iv) if such Transfer would, in the opinion of counsel to the Company, cause any portion of the assets of the Company to constitute assets of any employee benefit plan pursuant to the Plan Asset Regulations or otherwise cause the Company to be subject to regulation under ERISA; (v) if such Transfer requires the registration of such Interests or any Equity Securities issued upon any exchange of such Interests, pursuant to any applicable U.S. federal or state securities Laws; or (vi) if such Transfer subjects the Company to regulation under the Investment Company Act or the Investment Advisors Act of 1940, each as amended (or any succeeding law). Any attempted or purported Transfer of all or a portion of a Member’s Interests in violation of this Section 9.1(b) shall be null and void and of no force or effect whatsoever.

 

Section 9.2      Notice of Transfer. Other than in connection with Transfers made pursuant to Section 4.6, each Member shall, after complying with the provisions of this Agreement, but in any event no later than three (3) Business Days following any Transfer of Interests, give written notice to the Company of such Transfer. Each such notice shall describe the manner and circumstances of the Transfer.

 

Section 9.3      Transferee Members. A Transferee of Interests pursuant to this Article IX shall have the right to become a Member only if (i) the requirements of this Article IX are met, (ii) such Transferee executes an instrument reasonably satisfactory to the Managing Member agreeing to be bound by the terms and provisions of this Agreement and assuming all of the Transferor’s then existing and future Liabilities arising under or relating to this Agreement, (iii) such Transferee represents that the Transfer was made in accordance with all applicable securities Laws, (iv) the Transferor or Transferee shall have reimbursed the Company for all reasonable expenses (including attorneys’ fees and expenses) of any Transfer or proposed Transfer of a Member’s Interest, whether or not consummated and (v) if such Transferee or his or her spouse is a resident of a community property jurisdiction, then such Transferee’s spouse shall also execute an instrument reasonably satisfactory to the Managing Member agreeing to be bound by the terms and provisions of this Agreement to the extent of his or her community property or quasi-community property interest, if any, in such Member’s Interest. Unless agreed to in writing by the Managing Member, the admission of a Member shall not result in the release of the Transferor from any Liability that the Transferor may have to each remaining Member or to the Company under this Agreement or any other Contract between the Managing Member, the Company or any of its Subsidiaries, on the one hand, and such Transferor or any of its Affiliates, on the other hand. Written notice of the admission of a Member shall be sent promptly by the Company to each remaining Member. Notwithstanding anything to the contrary in this Section 9.3, and except as otherwise provided in this Agreement, following a Transfer by one or more Members (or a transferee of the type described in this sentence) to a Transferee of all or substantially all of their Interests, such transferee shall succeed to all of the rights of such Member(s) under this Agreement.

 

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Section 9.4      Legend. Each certificate representing a Unit, if any, will be stamped or otherwise imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

 

THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT.

 

THE TRANSFER AND VOTING OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF LHGN HOLDCO, LLC, DATED AS OF DECEMBER 29, 2020, AMONG THE MEMBERS LISTED THEREIN, AS IT MAY BE AMENDED, SUPPLEMENTED AND/OR RESTATED FROM TIME TO TIME, (COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE COMPANY AND SHALL BE PROVIDED FREE OF CHARGE TO ANY MEMBER MAKING A REQUEST THEREFOR) AND NO TRANSFER OF THESE SECURITIES WILL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED.”

 

Article X
ACCOUNTING

 

Section 10.1    Books of Account. The Company shall, and shall cause each Subsidiary to, maintain true books and records of account in which full and correct entries shall be made of all its business transactions pursuant to a system of accounting established and administered in accordance with GAAP, and shall set aside on its books all such proper accruals and reserves as shall be required under GAAP.

 

Section 10.2    Tax Elections.

 

(a)            The Company and any eligible Subsidiary shall make an election (or continue a previously made election) pursuant to Section 754 of the Code for the taxable year of the Company that includes the date hereof, shall not thereafter revoke such election and shall make a new election pursuant to Section 754 of the Code to the extent necessary following any “termination” of the Company or the Subsidiary, as applicable, under Section 708 of the Code. In addition, the Company shall make the following elections on the appropriate forms or tax returns:

 

(i)         to adopt the calendar year as the Company’s Fiscal Year, if permitted under the Code;

 

(ii)        to adopt the accrual method of accounting for U.S. federal income tax purposes;

 

(iii)       to elect to amortize the organizational expenses of the Company as permitted by Section 709(b) of the Code; and

 

(iv)       except as otherwise provided in this Agreement, any other election the Managing Member may deem appropriate and in the best interests of the Company.

 

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Section 10.3    Tax Returns; Information; Certain Audits of Acquired Companies.

 

(a)            The Company Representative shall arrange for the preparation and timely filing of all income and other tax and informational returns of the Company. The Company Representative shall furnish to each Member a copy of each approved return and statement, together with any schedules or other information which each Member may require in connection with such Member’s own tax affairs as soon as practicable (but in no event more than ninety (90) days after the end of each Fiscal Year). The Members agree to take all actions reasonably requested by the Company or the Company Representative to comply with the Bipartisan Budget Act, including where applicable, filing amended returns as provided in Sections 6225 or 6226 of the Code and providing confirmation thereof to the Company Representative, or to otherwise allow the Company or Company Representative to avoid or reduce any. To the fullest extent allowable by Law, and except with respect to the information described in the first sentence of this Section 10.3, each Member (other than the Managing Member) hereby waives all rights to any information that it may otherwise obtain pursuant to Section 18-505 of the Act.

 

(b)            Any “Tax” audit or other suit or proceeding, including any “Tax Matter,” of or with respect to “GNOG HoldCo,” the “Company” or “New GNOG” to which the third sentence of Section 5.14(b) of the Purchase Agreement does not apply shall be within the control of the Managing Member. Notwithstanding the foregoing, to the extent any such audit, suit or proceeding relates solely to a “Tax Return” of a “Pre-Closing Tax Period,” the Managing Member shall not settle or compromise such audit, suit or proceeding absent the consent of LF LLC, which consent shall not be unreasonably withheld, conditioned, or delayed. All terms in quotations used in this Section 10.3(b) shall have the meaning assigned thereto in the Purchase Agreement.

 

Section 10.4    Company Representative. The Managing Member is specially authorized and appointed to act as the Company Representative. The Company Representative may retain, at the Company’s expense, such outside counsel, accountants and other professional consultants as it may reasonably deem necessary in the course of fulfilling its obligations as Company Representative. The Company Representative shall have the right and obligation to take all actions (and make all elections) authorized and required, respectively, by the Code for the Company Representative, and is authorized and required to represent the Company (at the Company’s expense) in connection with all examinations of the Company affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Company funds for professional services reasonably incurred in connection therewith. Each Member agrees to cooperate with the Company and to do or refrain from doing any or all things reasonably requested by the Company Representative with respect to the conduct of such proceedings. Promptly following the written request of the Company Representative, the Company shall, to the fullest extent permitted by Law, reimburse and indemnify the Company Representative (including, for the avoidance of doubt, any “designated individual”, as such term is used in Treasury Regulations Section 301.6223-1) for all reasonable expenses, including reasonable legal and accounting fees, claims, liabilities, losses and damages incurred by the Company Representative in connection with the exercise of its rights and fulfillment of its duties under this Section 10.4. In the event of a conflict between the terms of the indemnity in this Section 10.4 and the terms of any other indemnity in this Agreement (including in Section 7.4), this indemnity shall control.

 

Section 10.5    Withholding Tax Payments and Obligations.

 

(a)            Upon providing reasonable advance written notice of its intention to withhold and giving a Member a reasonable opportunity to demonstrate that withholding may not be required or, alternatively, that withholding at a lesser tax rate may be permissible, the Company and its Subsidiaries may withhold from distributions, allocations or portions thereof if it is required to do so by any applicable rule, regulation or Law, and each Member hereby authorizes the Company and its Subsidiaries to withhold or pay on behalf of or with respect to such Member any amount of taxes that the Managing Member determines, in Good Faith, that the Company or any of its Subsidiaries is required to withhold or pay with respect to any amount distributable or allocable to such Member pursuant to this Agreement.

 

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(b)            To the extent that any tax is paid by (or withheld from amounts payable to) the Company or any of its Subsidiaries and the Managing Member determines, in Good Faith, that such tax relates to one or more specific Members (including any tax payable by the Company or any of its Subsidiaries pursuant to Section 6225 of the Code with respect to items of income, gain, loss deduction or credit allocable or attributable to such Member), such tax shall be treated as an amount of taxes withheld or paid with respect to such Member pursuant to this Section 10.5.

 

(c)            For all purposes under this Agreement, any amounts withheld or paid with respect to a Member pursuant to this Section 10.5 shall be treated as if distributed to such Member at the time such withholding or payment is made. Further, to the extent that the cumulative amount of such withholding or payment for any period exceeds the distributions to which such Member is entitled for such period, the amount of such excess shall be considered a loan from the Company to such Member, with interest accruing at the Prime Rate in effect from time to time, compounded annually. The Managing Member may, in its discretion, either demand payment of the principal and accrued interest on such demand loan at any time (which payment shall not be deemed a Capital Contribution for purposes of this Agreement), and enforce payment thereof by legal process, or may withhold from one or more distributions to a Member amounts sufficient to satisfy such Member’s obligations under any such demand loan.

 

(d)            Neither the Company nor the Managing Member shall be liable for any excess taxes withheld in respect of any Member, and, in the event of over withholding, a Member’s sole recourse shall be to apply for a refund from the appropriate Governmental Entity.

 

(e)            Notwithstanding any other provision of this Agreement, (i) any Person who ceases to be a Member shall be treated as a Member for purposes of this Section 10.5 and (ii) the obligations of a Member pursuant to this Section 10.5 shall survive indefinitely with respect to any taxes withheld or paid by the Company that relate to the period during which such Person was actually a Member, regardless of whether such taxes are assessed, withheld or otherwise paid during such period.

 

Article XI
DISSOLUTION

 

Section 11.1    Liquidating Events

 

. The Company shall dissolve and commence winding up and liquidating upon the first to occur of the following (each, a “Liquidating Event”):

 

(a)            the sale of all or substantially all of the assets of the Company;

 

(b)            the determination of the Managing Member to dissolve the Company;

 

(c)            the termination of the legal existence of the last remaining member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining member of the Company in the Company unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act; and

 

(d)            the entry of a decree of judicial dissolution under Section 18‒802 of the Act.

 

The Members hereby agree that the Company shall not dissolve prior to the occurrence of a Liquidating Event and that no Member shall seek a dissolution of the Company, under Section 18-802 of the Act or otherwise, other than based on the matters set forth in subsections (a) and (b) above. In the event of a dissolution pursuant to Section 11.1(b), the relative economic rights of each class of Units immediately prior to such dissolution shall be preserved to the greatest extent practicable with respect to distributions made to Members pursuant to Section 11.3 in connection with such dissolution, taking into consideration tax and other legal constraints that may adversely affect one or more parties to such dissolution and subject to compliance with applicable Laws and regulations, unless, with respect to any class of Units, holders of a majority of the Units of such class consent in writing to a treatment other than as described above.

 

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Section 11.2    Bankruptcy. For purposes of this Agreement, the “bankruptcy” of a Member shall mean the occurrence of any of the following: (a) (i) any Governmental Entity shall take possession of any substantial part of the property of that Member or shall assume control over the affairs or operations thereof (ii) or a receiver or trustee shall be appointed, or a writ, order, attachment or garnishment shall be issued with respect to any substantial part thereof, and such possession, assumption of control, appointment, writ or order shall continue for a period of ninety (90) consecutive days, (b) a Member shall (i) admit in writing of its inability to pay its debts when due, or make an assignment for the benefit of creditors, (ii) apply for or consent to the appointment of any receiver, trustee or similar officer or for all or any substantial part of its property or (iii) institute (by petition, application, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debts, dissolution, liquidation, or similar proceeding under the Laws of any jurisdiction or (c) a receiver, trustee or similar officer shall be appointed for such Member or with respect to all or any substantial part of its property without the application or consent of that Member, and such appointment shall continue undischarged or unstayed for a period of ninety (90) consecutive days or any bankruptcy, insolvency, reorganization, arrangements, readjustment of debt, dissolution, liquidation or similar proceedings shall be instituted (by petition, application or otherwise) against that Member and shall remain undismissed for a period of ninety (90) consecutive days.

 

Section 11.3    Procedure.

 

(a)            In the event of the dissolution of the Company for any reason, the Members shall commence to wind up the affairs of the Company and to liquidate the Company’s investments; provided, that if a Member is in bankruptcy or dissolved, the Managing Member shall commence to wind up the affairs of the Company and, subject to Section 11.4(a), the Managing Member shall have full right and unlimited discretion to determine in Good Faith the time, manner and terms of any sale or sales of the Property or other assets pursuant to such liquidation, having due regard to the activity and condition of the relevant market and general financial and economic conditions. The Members shall continue to share Profits and Losses during the period of liquidation in the same manner and proportion as though the Company had not dissolved. The Company shall engage in no further business except as may be necessary, in the reasonable discretion of the Managing Member, to preserve the value of the Company’s assets during the period of dissolution and liquidation.

 

(b)            Following the allocation of all Profits and Losses as provided in Article V, the proceeds of the liquidation and any other funds of the Company shall be distributed in the following order of priority:

 

(i)         First, to set up such cash reserves which the Managing Member reasonably deems necessary for contingent, conditional or unmatured Liabilities or future payments described in Section 11.3(b) (which reserves when they become unnecessary shall be distributed in accordance with the provisions of subsection (iii), below);

 

(ii)        Second, to the payment of all expenses of liquidation and discharge of all of the Company’s debts and Liabilities to creditors (whether third parties or, to the fullest extent permitted by Law, Members), in the order of priority as provided by Law, except any obligations to the Members in respect of their Capital Accounts or liabilities under 18-601 or 18-604 of the Act; and

 

(iii)       Third, the balance to the Members, pro rata in proportion to their respective ownership of Units.

 

(c)            Except as provided in Section 11.4(a), no Member shall have any right to demand or receive property other than cash upon dissolution and termination of the Company.

 

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(d)            Upon the completion of the liquidation of the Company and the distribution of all Company funds, the Company shall terminate and the Managing Member shall have the authority to execute and record a certificate of cancellation of the Company, as well as any and all other documents required to effectuate the dissolution and termination of the Company.

 

Section 11.4    Rights of Members.

 

(a)            Each Member irrevocably waives any right that it may have to maintain an action for partition with respect to the property of the Company.

 

(b)            Except as otherwise provided in this Agreement, (i) each Member shall look solely to the assets of the Company for the return of its Capital Contributions, and (ii) no Member shall have priority over any other Member as to the return of its Capital Contributions, distributions or allocations.

 

Section 11.5    Notices of Dissolution. In the event a Liquidating Event occurs or an event occurs that would, but for the provisions of Section 11.1, result in a dissolution of the Company, the Company shall, within thirty (30) days thereafter, (a) provide written notice thereof to each of the Members and to all other parties with whom the Company regularly conducts business (as determined in the discretion of the Managing Member), and (b) comply, in a timely manner, with all filing and notice requirements under the Act or any other applicable Law.

 

Section 11.6    Reasonable Time for Winding Up. A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets in order to minimize any losses that might otherwise result from such winding up.

 

Section 11.7    No Deficit Restoration. No Member shall be personally liable for a deficit Capital Account balance of that Member, it being expressly understood that the distribution of liquidation proceeds shall be made solely from existing Company assets.

 

Article XII
GENERAL

 

Section 12.1    Amendments; Waivers.

 

(a)            The terms and provisions of this Agreement may be waived, modified or amended (including by means of merger, consolidation or other business combination to which the Company is a party) only with both (y) the approval of the Managing Member and (z) except for any amendment pursuant to Section 7.8, if, at such time, LF LLC beneficially owns any Units, the approval of LF LLC; provided, that no waiver, modification or amendment shall be effective until after written notice is provided to the Members that the requisite consent has been obtained for such waiver, modification or amendment, and, for the avoidance of doubt, any Member, including any Member not providing written consent, shall have the right to file a Redemption Notice prior to the effectiveness of such waiver, modification or amendment; provided, further, that no amendment to this Agreement may:

 

(i)         modify the limited liability of any Member, or increase the liabilities or obligations of any Member, in each case, without the prior written consent of each such affected Member; or

 

(ii)        except as provided in the provisos in the last sentence of Section 4.3, alter or change any rights, preferences or privileges of any Interests in a manner that is different or prejudicial relative to any other Interests, without the prior written approval of a majority in interest of the Members holding the Interests affected in such a different or prejudicial manner.

 

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(b)            Notwithstanding the foregoing subsection (a), the Managing Member, acting alone, may amend this Agreement, including Exhibit A, (i) to reflect the admission of new Members, Transfers of Interests, the issuance of additional Units or Equity Securities, as provided by the terms of this Agreement, and, subject to Section 12.1(a), subdivisions or combinations of Units made in compliance with Section 4.1(f) and (ii) as necessary, and solely to the extent necessary, in the reasonable advice of legal counsel or a qualified tax advisor (including any nationally recognized accounting firm) to the Company, to avoid the Company being classified as a “publicly traded partnership” within the meaning of Section 7704(b) of the Code.

 

(c)            No waiver of any provision or default under, nor consent to any exception to, the terms of this Agreement or any agreement contemplated hereby shall be effective unless in writing and signed by the Party to be bound and then only to the specific purpose, extent and instance so provided.

 

Section 12.2    Further Assurances. Each Party agrees that it will from time to time, upon the reasonable request of another Party, execute such documents and instruments and take such further action as may be required to accomplish the purposes of this Agreement.

 

Section 12.3    Successors and Assigns. All of the terms and provisions of this Agreement shall be binding upon the parties and their respective successors and assigns, but shall inure to the benefit of and be enforceable by the successors and assigns of any Member only to the extent that they are permitted successors and assigns pursuant to the terms hereof. No party may assign its rights hereunder except as herein expressly permitted.

 

Section 12.4    Entire Agreement. This Agreement, together with all Exhibits and Schedules hereto and all other agreements referenced therein and herein, constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth herein and therein.

 

Section 12.5    Rights of Members Independent. The rights available to the Members under this Agreement and at Law shall be deemed to be several and not dependent on each other and each such right accordingly shall be construed as complete in itself and not by reference to any other such right. Any one or more and/or any combination of such rights may be exercised by a Member and/or the Company from time to time and no such exercise shall exhaust the rights or preclude another Member from exercising any one or more of such rights or combination thereof from time to time thereafter or simultaneously.

 

Section 12.6    Governing Law. This Agreement, the legal relations between the parties and any Action, whether contractual or non-contractual, instituted by any Party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, shall be governed by and construed in accordance with the Laws of the State of Delaware applicable to Contracts made and performed in such State and without regard to conflicts of law doctrines, except to the extent that certain matters are preempted by federal Law.

 

Section 12.7    Jurisdiction and Venue. The parties hereto hereby agree and consent to be subject to the jurisdiction of any federal court of the District of Delaware or the Delaware Court of Chancery over any Action arising out of or in connection with this Agreement. The parties hereto irrevocably waive the defense of an inconvenient forum to the maintenance of any such Action. Each of the parties hereto further irrevocably consents, to the fullest extent permitted by Law, to the service of process out of any of the aforementioned courts in any such Action by the mailing of copies thereof by registered mail, postage prepaid, to such Party at its address set forth in this Agreement, such service of process to be effective upon acknowledgment of receipt of such registered mail. Nothing in this Section 12.7 shall affect the right of any Party hereto to serve legal process in any other manner permitted by law.

 

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Section 12.8    Headings. The descriptive headings of the Articles, Sections and subsections of this Agreement are for convenience only and do not constitute a part of this Agreement.

 

Section 12.9    Counterparts. This Agreement and any amendment hereto or any other agreement (or document) delivered pursuant hereto may be executed in one or more counterparts and by different parties in separate counterparts. All of such counterparts shall constitute one and the same agreement (or other document) and shall become effective (unless otherwise provided therein) when one or more counterparts have been signed by each Party and delivered to the other Party. Any signature hereto delivered by a Party by facsimile or other means of electronic transmission shall be deemed an original signature hereto.

 

Section 12.10   Notices. Any notice, request, demand or other communication hereunder must be given in writing and (a) delivered in person, (b) transmitted by facsimile, by telecommunications mechanism or electronically or (c) mailed by certified or registered mail, postage prepaid, receipt requested as follows:

 

If to the Company or the Managing Member, addressed to it at:

 

Landcadia Holdings II, Inc.

1510 West Loop South

Houston, Texas 77027

Attention: General Counsel
Email: SScheinthal@ldry.com

 

With copies (which shall not constitute notice) to:

 

White & Case LLP

1221 Avenue of the Americas

New York, New York 10020

Fax: (713) 836-3601
Attention: Joel Rubinstein
  Michael Deyong
Email: joel.rubinstein@whitecase.com
  Michael.deyong@whitecase.com

 

If to the LF LLC, addressed to it at:

 

c/o Landry’s, Inc.

1510 West Loop South

Houston, Texas 77027

Attention: Chief Financial Officer
E-mail: RLiem@ldry.com

 

with a copy (which shall not constitute notice) to:

 

Haynes and Boone, LLP
2323 Victory Avenue, Suite 700
Dallas, TX 75219

Attention: Jennifer Wisinski
  Paul Amiel
E-mail: Jennifer.Wisinski@haynesboone.com
  Paul.Amiel@haynesboone.com

 

or to such other address or to such other Person as either Party shall have last designated by such notice to the other parties. Each such notice or other communication shall be effective (i) if given by telecommunication or electronically, when transmitted to the applicable number or electronic mail address so specified in (or pursuant to) this Section 12.10 and an appropriate answerback is received or, if transmitted after 5:00 p.m. Texas time on a Business Day in the jurisdiction to which such notice is sent or at any time on a day that is not a Business Day in the jurisdiction to which such notice is sent, then on the immediately following Business Day, (ii) if given by mail, on the first Business Day in the jurisdiction to which such notice is sent following the date three (3) days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, on the Business Day when actually received at such address or, if not received on a Business Day, on the Business Day immediately following such actual receipt.

 

39 

 

Section 12.11  Representation by Counsel; Interpretation. The Parties acknowledge that each Party to this Agreement has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of Law, or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived.

 

Section 12.12  Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable by any Governmental Entity, the remaining provisions of this Agreement, to the extent permitted by Law shall remain in full force and effect; provided, that the essential terms and conditions of this Agreement for all parties remain valid, binding and enforceable.

 

Section 12.13  Expenses. Except as otherwise provided in this Agreement, each Party shall bear its own expenses in connection with the transactions contemplated by this Agreement.

 

Section 12.14  Waiver of Jury Trial. EACH OF THE COMPANY, THE MEMBERS, THE MANAGING MEMBER AND ANY INDEMNITEES SEEKING REMEDIES HEREUNDER, HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY MEMBER OR INDEMNITEE, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.

 

Section 12.15  No Third-Party Beneficiaries. Except as expressly provided in Sections 7.4 and 10.2, nothing in this Agreement, express or implied, is intended to confer upon any Party, other than the parties hereto and their respective successors and permitted assigns, any rights or remedies under this Agreement or otherwise create any third-party beneficiary hereto.

 

Section 12.16  No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement (except in the case of the immediately succeeding sentence) or any document, agreement, or instrument delivered contemporaneously herewith, and notwithstanding the fact that any Party may be a partnership or limited liability company, each Party hereto, by its acceptance of the benefits of this Agreement, covenants, agrees and acknowledges that no Persons other than the Parties shall have any obligation hereunder and that it has no rights of recovery hereunder against, and no recourse hereunder or under any documents, agreements, or instruments delivered contemporaneously herewith or in respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against, any former, current or future director, officer, agent, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative or employee of any Party (or any of their successor or permitted assignees), against any former, current, or future general or limited partner, manager, stockholder or member of any Party (or any of their successors or permitted assignees) or any Affiliate thereof or against any former, current or future director, officer, agent, employee, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative, general or limited partner, stockholder, manager or member of any of the foregoing, but in each case not including the Parties (each, but excluding for the avoidance of doubt, the Parties, a “Party Affiliate”), whether by or through attempted piercing of the corporate veil, by or through a claim (whether in tort, contract or otherwise) by or on behalf of such party against the Party Affiliates, by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable Law, or otherwise; it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on, or otherwise be incurred by any Party Affiliate, as such, for any obligations of the applicable party under this Agreement or the transactions contemplated hereby, under any documents or instruments delivered contemporaneously herewith, in respect of any oral representations made or alleged to be made in connection herewith or therewith, or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, such obligations or their creation. Notwithstanding the foregoing, a Party Affiliate may have obligations under any documents, agreements or instruments delivered contemporaneously herewith or otherwise contemplated by this Agreement if such Party Affiliate is a party to such document, agreement, agreement or instrument. Except to the extent otherwise expressly set forth in, and subject in all cases to the terms and conditions of and limitations herein, this Agreement may only be enforced against, and any claim or cause of action of any kind based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the Persons that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such Party. Each Party Affiliate is expressly intended as a third-party beneficiary of this Section 12.16.

 

[Signatures on Next Page]

 

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IN WITNESS WHEREOF, each of the Parties hereto has caused this Amended and Restated Limited Liability Company Agreement to be executed as of the day and year first above written.

 

  COMPANY:
   
  LHGN HOLDCO, LLC
     
  By: /s/ Steven L. Scheintal
  Name: Steven L. Scheinthal
  Title: Vice President and Secretary

 

  MANAGING MEMBER:
   
  LANDCADIA HOLDINGS II, INC.
     
  By: /s/ Steven L. Scheintal
  Name: Steven L. Scheinthal
  Title: Vice President and Secretary

 

  MEMBERS:
   
  LANDRY’S FERTITTA, LLC
     
  By: /s/ Richard H. Liem
  Name: Richard H. Liem
  Title: Vice President and Secretary

 

[Signature Page to Amended and Restated Limited Liability Company Agreement of LHGN HoldCo, LLC]

 

 

 

Exhibit A

 

Members   Number of
Shares of Class 
A Common Stock Owned
    Number of
Shares of Class 
B Common Stock Owned
    Number of
Units
Owned
    Closing Date
Capital Account
Balance
 
Landcadia Holdings II, Inc.     36,982,320       0       36,982,320     $ 369,823,200.00  
Landry’s Fertitta, LLC     0       31,350,625       31,350,625     $ 313,506,250.00  

 

Exhibit A

 

 

 

Exhibit B

 

Officer Listing

 

Tilman J. Fertitta Chief Executive Officer
   
Thomas Winter President
   
Michael Harwell Chief Financial Officer

 

Exhibit B

 

 

 

Exhibit 10.2

 

TAX RECEIVABLE AGREEMENT

 

This TAX RECEIVABLE AGREEMENT (as amended from time to time, this “Agreement”), dated as of December 29, 2020, is hereby entered into by and among Golden Nugget Online Gaming, Inc. (f/k/a Landcadia Holdings II, Inc.), a Delaware corporation (the “Corporation”), LHGN HoldCo, LLC, a Delaware limited liability company (“Holdings”), and Landry’s Fertitta, LLC, a Texas limited liability company (“LF LLC”).

 

RECITALS

 

WHEREAS, LF LLC and the Corporation own membership interests in Holdings (the “Units”), which is treated as a partnership for United States federal income tax purposes;

 

WHERAS, in connection with the Transactions, the Corporation shall issue shares of Class B common stock of the Corporation, par value $0.01 per share (“Class B Shares”) to LF LLC;

 

WHEREAS, pursuant to the LLC Agreement, LF LLC will have the right to have redeemed from time to time (the “Redemption Right”) all or a portion of its Units (together with the surrender and delivery of an equal number of Class B Shares), in each case, in exchange for an equal number of shares of Class A common stock of the Corporation, par value $0.01 per share (“Class A Shares”) or, at the election of Holdings, cash;

 

WHEREAS, Holdings and each of its direct and indirect Subsidiaries treated as a partnership for United States federal income tax purposes will have in effect an election under Section 754 of the United States Internal Revenue Code of 1986, as amended (the “Code”), for each Taxable Year in which a Basis Transaction occurs, which election is intended to result for certain Basis Transactions in an adjustment to the Tax basis of the assets owned by Holdings and such Subsidiaries (solely with respect to the Corporation);

 

WHEREAS, the income, gain, loss, expense and other Tax items of the Corporation, as a member of Holdings (and in respect of each of Holdings’ direct and indirect Subsidiaries treated as disregarded entities or partnerships for United States federal income tax purposes), may be affected by (i) the Basis Adjustments, and (ii) the Imputed Interest (collectively, “Tax Attributes”); and

 

WHEREAS, the parties to this Agreement desire to make certain arrangements with respect to the actual or deemed effect of the Tax Attributes on the liability for Taxes of the Corporation.

 

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:

 

Article I
DEFINITIONS

 

Definitions. As used in this Agreement, the terms set forth in this ARTICLE I shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined).

 

Action” means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any governmental entity.

 

 

 

 

Actual Tax Liability” means, with respect to any Taxable Year, the sum of (i) the actual liability for U.S. federal income taxes of the Corporation as reported on its Corporation Return for such Taxable Year, and, without duplication, the portion of any liability for U.S. federal income taxes imposed directly on Holdings (and Holdings’ applicable Subsidiaries) under Section 6225 or any similar provision of the Code that is allocable to the Corporation under Section 704 of the Code (provided, that such amount will be calculated excluding deductions of (and other impacts of) state and local income taxes) and (ii) the product of the amount of the United States federal taxable income or gain for such Taxable Year reported on the Corporation Return and the Assumed Rate.

 

Affiliate” means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person.

 

Agreed Rate” means LIBOR plus 100 basis points.

 

Agreement” is defined in the Recitals of this Agreement.

 

Alternate Source” is defined in the definition of LIBOR.

 

Amended Schedule” is defined in Section 2.4(b) of this Agreement.

 

Amendment” means that certain amendment to the Purchase Agreement, dated as of September 17, 2020.

 

Assumed Rate” means, with respect to any Taxable Year, the sum, with respect to each state and local jurisdiction in which the Corporation files Tax Returns, of the products of (i) the Corporation’s tax apportionment rate(s) for such jurisdiction for such Taxable Year multiplied by (ii) the highest corporate tax rate(s) for such jurisdiction for such Taxable Year.

 

Attributable” means the portion of any item that is attributable to an Eligible Member as determined by reference to the Tax Attributes, under the following principles:

 

(i)            any Basis Adjustments shall be determined separately with respect to each Eligible Member and are Attributable to each Eligible Member to the extent the Basis Adjustments relates to such Eligible Member; and

 

(ii)           any deduction to the Corporation with respect to a Taxable Year in respect of any payment (including amounts attributable to Imputed Interest) made under this Agreement is Attributable to the Person that is required to include the Imputed Interest or other payment in income.

 

Available Cash” means all cash and cash equivalents of the Corporation on hand, less the amount of cash reserves reasonably established in good faith by the Corporation to (i) provide for the proper conduct of the business of the Corporation or (ii) comply with applicable Law or any Senior Obligations.

 

Basis Adjustment” means any adjustment to the Tax basis of a Reference Asset as a result of a Basis Transaction, taking into account Section 2.1 of this Agreement, including, but not limited to: (i) under the principles of Sections 732 and 1012 of the Code (including in a situation where, as a result of one or more Basis Transactions, Holdings becomes an entity that is disregarded as separate from its owner for Tax purposes) or (ii) Sections 704(c)(1)(B), 707, 734, 743(b) and 754 of the Code (including in situations where, following a Basis Transaction, Holdings remains in existence as an entity for Tax purposes) and, in each case, comparable sections of state and local Tax laws. Notwithstanding any other provision of this Agreement, the amount of any Basis Adjustment resulting from a Basis Transaction of one or more Units shall be determined without regard to any Pre-Redemption Transfer of such Units and as if any such Pre-Redemption Transfer had not occurred.

 

2

 

 

Basis Schedule” is defined in Section 2.2 of this Agreement.

 

Basis Transaction” means any (i) Redemption, (ii) transaction characterized under Section 707(a)(2)(B) of the Code as a sale by an Eligible Member of Units or Reference Assets (iii) distribution (including a deemed distribution) by a member of the Holdings to a Member that results in a basis adjustment to a Reference Asset under Section 734(b) or 732 of the Code or (iv) the Transactions.

 

Basis Transaction Date” means the date of any Basis Transaction.

 

Beneficial Owner” of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares (i) voting power, which includes the power to vote, or to direct the voting of, such security, and/or (ii) investment power, which includes the power to dispose of, or to direct the disposition of, such security. The terms “Beneficially Own” and “Beneficial Ownership” shall have correlative meanings.

 

Board” means the board of directors of the Corporation.

 

Breach Notice” is defined in Section 4.1(b).

 

Business Day” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of Texas shall not be regarded as a Business Day.

 

Cash Election” means an election by Holdings pursuant to the LLC Agreement to pay cash instead of Class A Shares in the event of a Redemption; provided, that so long as the Corporation makes the election on behalf of Holdings in its capacity as the sole managing member of Holdings, such election shall be approved by a majority of the Disinterested Directors.

 

Change of Control” means the occurrence of any of the following events:

 

(a)            any Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act, or any successor provisions thereto (excluding a corporation or other entity owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation representing more than fifty percent (50%) of the combined voting power of the Corporation’s then outstanding voting securities (excluding any Person or any group of Persons who, on the Closing Date, is the Beneficial Owner, directly or indirectly, of securities of the Corporation representing more than fifty percent (50%) of the combined voting power of the Corporation’s then outstanding voting securities);

 

(b)            there is consummated a merger or consolidation of the Corporation with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (x) the Board immediately prior to the merger or consolidation does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a Subsidiary, the ultimate parent thereof, or (y) all of the Persons who were the respective Beneficial Owners of the voting securities of the Corporation immediately prior to such merger or consolidation do not Beneficially Own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the Person resulting from such merger or consolidation; or

 

3

 

 

(c)            the shareholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Corporation of all or substantially all of the Corporation’s assets, other than such sale or other disposition by the Corporation of all or substantially all of the Corporation’s assets to a Subsidiary or an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by shareholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale.

 

Notwithstanding the foregoing, except with respect to clause (b)(x) above, a “Change of Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions for which the record holders of the shares of the Corporation immediately prior to such transaction or series of transactions continue to have immediately following such transaction or series of transactions substantially the same proportionate ownership in an entity which owns, directly or indirectly, all or substantially all of the assets of the Corporation immediately following such transaction or series of transactions.

 

Class A Shares” is defined in the Recitals of this Agreement.

 

Class B Shares” is defined in the Recitals of this Agreement.

 

Closing Date” shall have the meaning ascribed thereto in the Purchase Agreement.

 

Code” is defined in the Recitals of this Agreement.

 

Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

Corporation” is defined in the Recitals of this Agreement.

 

Corporation Return” means the IRS Form 1120 (or any successor form) of the Corporation filed with respect to Taxes for any Taxable Year.

 

Cumulative Net Realized Tax Benefit” for a Taxable Year means the cumulative amount of Realized Tax Benefits of the Corporation for all Taxable Years, up to and including such Taxable Year, net of the cumulative amount of Realized Tax Detriments for the same period (but not less than zero). The Realized Tax Benefit and Realized Tax Detriment for each Taxable Year shall be determined based on the most recent Tax Benefit Schedule or Amended Schedule, if any, in existence at the time of such determination; provided, that the computation of the Cumulative Net Realized Tax Benefit shall be adjusted to reflect any applicable Determination with respect to any Realized Tax Benefits and/or Realized Tax Detriments.

 

Default Rate” means LIBOR plus 500 basis points.

 

Determination” shall have the meaning ascribed to such term in Section 1313(a) of the Code or similar provision of state and local Tax law, as applicable, or any other event (including the execution of an IRS Form 870-AD) that finally and conclusively establishes the amount of any liability for Tax.

 

Disinterested Director” shall mean a member of the Corporation’s audit committee or another body of independent directors of the Corporation authorized to approve the referenced matter in accordance with the Corporation’s related party policy; provided, that for purposes of this Agreement, any matter referenced in this Agreement that is to be approved by the Disinterested Directors shall be deemed to constitute a “related party transaction” for purposes of the related party policy, regardless of the dollar amount involved.

 

4

 

 

Early Termination Date” means the date of an Early Termination Notice for purposes of determining the Early Termination Payment.

 

Early Termination Notice” is defined in Section 4.2 of this Agreement.

 

Early Termination Payment” is defined in Section 4.3(b) of this Agreement.

 

Early Termination Rate” means LIBOR plus 100 basis points.

 

Early Termination Schedule” is defined in Section 4.2 of this Agreement.

 

Eligible Member” means LF LLC, and each other Person who from time to time executes a Joinder in the form attached hereto as Exhibit A.

 

Estimated TRA Benefit” shall mean the projected reduction in the Corporation’s Taxes due as a result of the Basis Adjustment achieved as a result of the Transactions, which shall be calculated as of the Closing Date and in accordance with the Laws in effect as of the Closing Date.

 

Estimated TRA Payments” shall mean the projected amount of payments expected to be made by the Corporation under this Agreement as a result of the Estimated TRA Benefit, which shall be calculated as of the Closing Date and in accordance with the Laws in effect as of the Closing Date.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

Expert” is defined in Section 7.8 of this Agreement.

 

Holdings” is defined in the Recitals of this Agreement.

 

Hypothetical Tax Liability” means, with respect to any Taxable Year, the liability for Taxes of, without duplication, (a) the Corporation and (b) Holdings, but only with respect to Taxes imposed on Holdings under Section 6225 of the Code and allocable to the Corporation, in each case using the same methods, elections, conventions and similar practices used on the relevant Corporation Return, but (i) using the Non-Stepped Up Tax Basis (as reflected on the applicable Basis Schedule including amendments thereto for the Taxable Year) provided, that Hypothetical Tax Liability shall be calculated assuming that the liability for state and local Taxes (but not, for the avoidance of doubt, United States federal taxes) shall be equal to the product of (x) the amount of the U.S. federal taxable income or gain calculated for purposes of this definition of Hypothetical Tax Liability for such Taxable Year multiplied by (y) the Assumed Rate, and (ii) excluding any deduction attributable to Imputed Interest for the Taxable Year. For the avoidance of doubt, Hypothetical Tax Liability shall be determined without taking into account the carryover or carryback of any Tax item (or portions thereof) that is attributable to any Tax Attribute.

 

Imputed Interest” shall mean any interest imputed under Section 1272, 1274 or 483 or other provision of the Code and any similar provision of state and local Tax law with respect to the Corporation’s payment obligations under this Agreement.

 

Interest Amount” is defined in Section 3.1(b) of this Agreement.

 

IRS” means the United States Internal Revenue Service.

 

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Joinder” means the Joinder in the form attached hereto as Exhibit A.

 

LIBOR” means during any period, the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by the Corporation as an authorized information vendor for the purpose of displaying rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternate Source”), at approximately 11:00 a.m., London time, two (2) Business Days prior to the first day of such period, as the London interbank offered rate for U.S. dollars having a borrowing date and a maturity comparable to such period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Corporation at such time, which determination shall be conclusive absent manifest error); provided that, at no time shall LIBOR be less than 0%. If the Corporation has made the determination (such determination to be conclusive absent manifest error) that (i) LIBOR is no longer a widely recognized benchmark rate for newly originated loans in the U.S. loan market in U.S. dollars or (ii) the applicable supervisor or administrator (if any) of LIBOR has made a public statement identifying a specific date after which LIBOR shall no longer be used for determining interest rates for loans in the U.S. loan market in U.S. dollars, then the Corporation shall (as determined by the Corporation to be consistent with market practice generally), establish a replacement interest rate (the “Replacement Rate”), in which case, the Replacement Rate shall, subject to the next two sentences, replace LIBOR for all purposes under this Agreement. In connection with the establishment and application of the Replacement Rate, this Agreement shall be amended solely with the consent of the Corporation and LF LLC, as may be necessary or appropriate, in the reasonable judgment of the Corporation, to effect the provisions of this definition. The Replacement Rate shall be applied in a manner consistent with market practice; provided that, in each case, to the extent such market practice is not administratively feasible for the Corporation, such Replacement Rate shall be applied as otherwise reasonably determined by the Corporation.

 

Law” means any federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).

 

LF LLC” in defined in the Recitals of this Agreement.

 

LLC Agreement” means the Amended and Restated Limited Liability Agreement of Holdings, dated on or about the date hereof, as such agreement may be amended from time to time.

 

Market Value” shall mean the closing price of the Class A Shares on the applicable Basis Transaction Date on the national securities exchange or interdealer quotation system on which such Class A Shares are then traded or listed, as reported by the Wall Street Journal; provided that if the closing price is not reported by the Wall Street Journal for the applicable Basis Transaction Date, then the Market Value shall mean the closing price of the Class A Shares on the Business Day immediately preceding such Basis Transaction Date on the national securities exchange or interdealer quotation system on which such Class A Shares are then traded or listed, as reported by the Wall Street Journal; provided further, that if the Class A Shares are not then listed on a national securities exchange or interdealer quotation system, “Market Value” shall mean the cash consideration paid for Class A Shares, or the fair market value of the other property delivered for Class A Shares, as determined by the Board of Directors of the Corporation in good faith.

 

Material Objection Notice” has the meaning set forth in Section 4.2.

 

Net Tax Benefit” is defined in Section 3.1(b) of this Agreement.

 

6

 

 

Non-Stepped Up Tax Basis” means, with respect to any asset at any time, the Tax basis that such asset would have had at such time if no Basis Adjustment had been made.

 

Objection Notice” has the meaning set forth in Section 2.4(a).

 

Payment Date” means any date on which a payment is required to be made pursuant to Section 3.1(a).

 

Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.

 

Pre-Redemption Transfer” means any transfer (including upon the death of an Eligible Member) or distribution of one or more Units (i) that occurs prior to a Redemption of such Units, and (ii) to which Section 743(b) of the Code applies.

 

Purchase Agreement” means the purchase agreement entered into on June 28, 2020, by the Corporation with Holdings, LF LLC, GNOG Holdings, LLC, a Delaware limited liability company and newly formed, wholly-owned subsidiary of LF LLC (“GNOG HoldCo”), and Golden Nugget Online Gaming, Inc. (f/k/a Landry’s Finance Acquisition Co.), a New Jersey corporation and wholly-owned subsidiary of LF LLC, including any amendments thereto, such as the Amendment.

 

Realized Tax Benefit” means, for a Taxable Year, the net excess, if any, of the Hypothetical Tax Liability over the Actual Tax Liability, for such Taxable Year, of (a) the Corporation and (b) Holdings, but only with respect to Taxes imposed on Holdings and allocable to the Corporation, with such “actual” liability to be computed in accordance with the definition of “Actual Tax Liability” and Section 2.1 of this Agreement. If all or a portion of the Actual Tax Liability of the Corporation (or Holdings, but only with respect to Taxes imposed on Holdings and allocable to the Corporation) for such Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Benefit unless and until there has been a Determination.

 

Realized Tax Detriment” means, for a Taxable Year, the net excess, if any, of the Actual Tax Liability, for such Taxable Year, of (a) the Corporation and (b) Holdings, but only with respect to Taxes imposed on Holdings and allocable to the Corporation, with such “actual” liability to be computed in accordance with the definition of “Actual Tax Liability” and Section 2.1 of this Agreement, over the Hypothetical Tax Liability for such Taxable Year. If all or a portion of the Actual Tax Liability of the Corporation (or Holdings, but only with respect to Taxes imposed on Holdings and allocable to the Corporation) for such Taxable Year arises as a result of an audit by a Taxing Authority of any Taxable Year, such liability shall not be included in determining the Realized Tax Detriment unless and until there has been a Determination.

 

Reconciliation Dispute” has the meaning set forth in Section 7.8.

 

Reconciliation Procedures” shall mean those procedures set forth in Section 7.8 of this Agreement.

 

Redemption” means any redemption by an Eligible Member, pursuant to the Redemption Right, of all or a portion of its Units for Class A Shares (or, in the event of a Cash Election, cash).

 

Redemption Right” is defined in the Recitals of this Agreement.

 

Reference Asset” means an asset that is held by Holdings, or by any of its direct or indirect Subsidiaries treated as a partnership or disregarded entity for purposes of the applicable Tax, at the time of, or immediately prior to, a Basis Transaction. A Reference Asset also includes any asset that is “substituted basis property” under Section 7701(a)(42) of the Code with respect to a Reference Asset.

 

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Replacement Rate” is defined in the definition of LIBOR.

 

Retained Benefit” shall be an amount, which shall be calculated as of the Closing Date, equal to the excess, if any, between the Transaction 1 Benefit and the Transaction 2 Benefit.

 

Schedule” means any Basis Schedule or Tax Benefit Schedule and the Early Termination Schedule, as well as any Amended Schedule when the context requires.

 

Senior Obligations” is defined in Section 5.1 of this Agreement.

 

Subsidiaries” means, with respect to any Person, as of any date of determination, any other Person as to which such first Person, owns, directly or indirectly, or otherwise controls more than 50% of the voting shares or other similar interests or the sole general partner interest or managing member or similar interest of such other Person.

 

Tax Attributes” is defined in the Recitals of this Agreement.

 

Tax Benefit Payment” is defined in Section 3.1(b) of this Agreement.

 

Tax Benefit Schedule” is defined in Section 2.3 of this Agreement.

 

Tax Return” means any return, declaration, report or similar statement required to be filed with respect to Taxes (including any attached schedules), including, without limitation, any information return, claim for refund, amended return and declaration of estimated Tax.

 

Taxable Year” means a taxable year of the Corporation as defined in Section 441(b) of the Code or comparable section of state or local Tax law, as applicable (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is prepared), ending on or after the Closing Date.

 

Taxes” means any and all United States federal, state and local taxes, assessments or similar charges that are based on or measured with respect to net income or profits, whether as an exclusive or on an alternative basis, and any interest related thereto.

 

Taxing Authority” shall mean the IRS and any other U.S. or non-U.S. federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body, exercising any Taxing authority or any other authority exercising Tax regulatory authority.

 

TRA Payment” is defined in Section 5.1 of this Agreement.

 

TRA Payment Adjustment Amount” shall mean the Retained Benefit as calculated by PricewaterhouseCoopers, provided that upon the election of a majority of the Disinterested Directors, the Corporation may engage (at its expense), a different reputable national accounting firm (selected by the Corporation and consented to by LF LLC, which consent shall not be unreasonably withheld, conditioned, or delayed) to review the Retained Benefit as calculated by PricewaterhouseCoopers (with the scope of such review to be determined by a majority of the Disinterested Directors), provided that such accounting firm complete its review of the Retained Benefit within 90 days following the Closing Date, in which case the Retained Benefit as adjusted based upon the review by such other accounting firm shall replace the Retained Benefit as calculated by PricewaterhouseCoopers if there is a difference of greater than 20 percentage points. LF LLC shall cooperate with the Corporation and such accounting firm in good faith to calculate the Retained Benefit.

 

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Transactions” means all of the transactions contemplated under Section 5.14(h)(v) of the Purchase Agreement, as amended pursuant to the Amendment, except where the context otherwise requires.

 

Transaction 1 Benefit” shall mean the excess amount of the Estimated TRA Benefit over the Estimated TRA Payments in accordance with the tax characterization of the Transactions as described in Section 5.14(h)(v) of the Purchase Agreement prior to the Amendment.

 

Transaction 2 Benefit” shall mean the excess amount of the Estimated TRA Benefit over the Estimated TRA Payments in accordance with the tax characterization of the Transactions as described in Section 5.14(h)(v) of the Purchase Agreement as amended pursuant to the Amendment.

 

Transfer” has the meaning set forth in the LLC Agreement and the terms “Transferee,” “Transferred,” and other forms of the word “Transfer” shall have the correlative meanings.

 

Treasury Regulations” means the final, temporary and proposed regulations under the Code promulgated from time to time (including corresponding provisions and succeeding provisions) as in effect for the relevant taxable period.

 

Units” is defined in the Recitals of this Agreement.

 

Valuation Assumptions” means, in respect of an Eligible Member, as of an Early Termination Date, the assumptions that (a) in each Taxable Year ending on or after such Early Termination Date, the Corporation will have taxable income sufficient to fully use the deductions and/or losses (including, as applicable and for the avoidance of doubt, any deductions taken as a result of applying the Valuation Assumptions) arising from any Tax Attribute during such Taxable Year or future Taxable Years (including, as applicable and for the avoidance of doubt, Basis Adjustments and Imputed Interest that would result from future Tax Benefit Payments that would be paid in accordance with the Valuation Assumptions) in which such deductions or losses would become available; (b) the federal Tax rates and state and local Tax rates that will be in effect for each such Taxable Year will be those specified for each such Taxable Year by the Code and other applicable law as in effect on the Early Termination Date, except to the extent any change to such Tax rates for such Taxable Year have already been enacted into law; (c) all taxable income of the Corporation will be subject to the maximum applicable Tax rates for each Tax throughout the relevant period; (d) any loss or credit carryovers relating to or generated by any Tax Attribute in respect of such Eligible Member and available as of the date of the Early Termination Schedule will be used by the Corporation on a pro rata basis from the date of the Early Termination Schedule through the scheduled expiration date of such loss carryovers (and for losses without an expiration date will be used through fifteen years after such losses are generated); (e) any non-amortizable assets (i) will be disposed of in the case of inventory, accounts receivables and cash equivalents, 12 months after the Early Termination Date, (ii) will never be disposed of in the case of stock of a Subsidiary of Holdings, and (iii) will be disposed of in the case of all other non-amortizable assets, on the fifteenth anniversary of the earlier of the Basis Adjustment and the Early Termination Date; (f) if, at the Early Termination Date, there are Units that have not been Redeemed, then each such Unit shall be deemed to be Redeemed for the Market Value of the Class A Shares and the amount of cash that would be transferred if the Redemption occurred on the Early Termination Date as provided in Section 4.3(b); (g) any future payment obligations pursuant to this Agreement that are used to calculate the Early Termination Payment will be satisfied on the date that any Tax Return to which any such payment obligation relates is required to be filed (including any extensions) as provided in Section 4.3(b); and (h) with respect to Taxable Years ending prior to the Early Termination Date, any unpaid Tax Benefit Payments and any applicable interest accruing at the Default Rate will be paid.

 

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Article II
DETERMINATION OF CUMULATIVE REALIZED TAX BENEFIT

 

Section 2.1           Applicable Calculation Principles. Subject to Section 2.1, Section 3.3(a), Section 4.1(c) and Section 4.3, the Realized Tax Benefit or Realized Tax Detriment is intended to measure the decrease or increase in the actual liability for Taxes of the Corporation (and without duplication, Holdings, but only with respect to Taxes imposed on Holdings under Section 6225 of the Code and allocable to the Corporation) for such Taxable Year attributable to the Tax Attributes determined using a “with and without” methodology (which shall be calculated using the methodology set forth in the definitions of Realized Tax Benefit and Realized Tax Detriment). For the avoidance of doubt, the Actual Tax Liability will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as interest under the Code based upon the characterization of Tax Benefit Payments as additional consideration payable by the Corporation for the Units acquired in a Redemption. Carryovers or carrybacks of any Tax item attributable to the Tax Attributes shall be considered to be subject to the rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local Tax law, as applicable, governing the use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Tax item includes a portion that is attributable to a Tax Attribute, and another portion that is not, such portions shall be considered to be used in accordance with the “with and without” methodology. The parties agree that, except as otherwise required by applicable Law, (i) any Tax Benefit Payment in respect of an Eligible Member attributable to a Basis Transaction in respect of such Eligible Member (other than amounts accounted for as interest under the Code) will (A) be treated as a subsequent upward purchase price adjustment and (B) have the effect of creating additional Basis Adjustments in respect of such Eligible Member with respect to Reference Assets in the year of payment, and (ii) as a result, such additional Basis Adjustments in respect of such Eligible Member will be incorporated into the current year calculation and into future year calculations, as appropriate. The parties to this Agreement acknowledge and agree that, except as otherwise required by applicable law, each Basis Transaction will give rise to Basis Adjustments, to the extent permitted by applicable Law.

 

Section 2.2           Basis Schedule. Within 120 days after the filing of the Corporation Return for each Taxable Year in which there is a Basis Transaction with respect to an Eligible Member, the Corporation shall deliver to each such Eligible Member a schedule (a “Basis Schedule”) that shows, in reasonable detail, for purposes of Taxes, (a) the actual Tax basis and the Non-Stepped Up Tax Basis of the Reference Assets attributable to such Eligible Member as of each applicable Basis Transaction Date, (b) the Basis Adjustments attributable to such Eligible Member as a result of each Basis Transaction effected in such Taxable Year by such Eligible Member, (c) the period or periods, if any, over which the Reference Assets are estimated to be amortizable and/or depreciable, and (d) the period or periods, if any, over which each Basis Adjustment Attributable to such Eligible Member is estimated to be amortizable and/or depreciable. A Basis Schedule will become final and binding on the parties to this Agreement pursuant to the procedures set forth in Section 2.4(a) and may be amended by the parties to this Agreement pursuant to the procedures set forth in Section 2.4(b).

 

Section 2.3           Tax Benefit Schedule. Within 120 days after the filing of the Corporation Return for any Taxable Year in which there is a Realized Tax Benefit or Realized Tax Detriment Attributable to an Eligible Member, the Corporation shall provide to each such Eligible Member a schedule showing, in reasonable detail, (i) the calculation of the Realized Tax Benefit or Realized Tax Detriment Attributable to such Eligible Member for such Taxable Year and (ii) the calculation of any Tax Benefit Payment to be made to such Eligible Member pursuant to Article III with respect to such Taxable Year (a “Tax Benefit Schedule”). The Tax Benefit Schedule will become final as provided in Section 2.4(a) and may be amended as provided in Section 2.4(b).

 

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Section 2.4           Procedures, Amendments.

 

(a)            Procedure. Every time the Corporation delivers to an Eligible Member an applicable Schedule under this Agreement, including any Amended Schedule delivered pursuant to Section 2.4(b), but excluding any Early Termination Schedule or amended Early Termination Schedule, the Corporation shall also deliver to the Eligible Member schedules and work papers, as determined by the Corporation or reasonably requested by the Eligible Member (in which case the Eligible Member shall pay for any out-of-pocket expenses incurred in connection with such request), providing reasonable detail regarding the preparation of the Schedule. Without limiting the generality of the preceding sentence, each time the Corporation delivers to an Eligible Member a Tax Benefit Schedule, in addition to the Tax Benefit Schedule, the Corporation shall also deliver to such Eligible Member a reasonably detailed calculation by the Corporation of the applicable Hypothetical Tax Liability and Actual Tax Liability in respect of such Eligible Member. The applicable Tax Benefit Schedule and the Basis Schedule shall become final and binding on all parties unless the Eligible Member, within 30 calendar days after receiving such Schedule or amendment thereto, provides the Corporation with notice of its material objection to such Schedule (an “Objection Notice”) made in good faith. If the parties, for any reason, are unable to successfully resolve the issues raised in any such Objection Notice within 30 calendar days of receipt thereof by the Corporation, the Corporation and the Eligible Member shall employ the Reconciliation Procedures as described in Section 7.8 of this Agreement. Following the resolution of the issues raised by an Objection Notice, including as a result of the Reconciliation Procedures, the Corporation shall revise (and deliver to the Eligible Member) the relevant Schedule in accordance with such resolution, and such revised Schedule shall become final and binding on the relevant Eligible Member (and on the Corporation as to that Eligible Member).

 

(b)            Amended Schedule. The applicable Schedule in respect of an Eligible Member for any Taxable Year may be amended from time to time by the Corporation (i) in connection with a Determination affecting such Schedule, (ii) to correct material inaccuracies in the Schedule, including those identified as a result of the receipt of additional factual information relating to a Taxable Year after the date the Schedule was provided to the Eligible Member, (iii) to comply with the Expert’s determination under the Reconciliation Procedures, (iv) to reflect a material change in the Realized Tax Benefit or Realized Tax Detriment in respect of the Eligible Member for such Taxable Year attributable to a carryback or carryforward of a loss or other Tax item to such Taxable Year, (v) to reflect a material change in the Realized Tax Benefit or Realized Tax Detriment in respect of the Eligible Member for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year, or (vi) to adjust the Basis Schedule to take into account payments made pursuant to this Agreement (such Schedule, an “Amended Schedule”). The Corporation shall provide any Amended Schedule to the Eligible Member when the Corporation delivers the Basis Schedule for the following Taxable Year. In the event a Schedule is amended after such Schedule becomes final pursuant to Section 2.4(a) or, if applicable, Section 7.8, (A) the Amended Schedule shall not be taken into account in calculating any Tax Benefit Payment in the Taxable Year to which the amendment relates but instead shall be taken into account in calculating the Cumulative Net Realized Tax Benefit for the Taxable Year in which the amendment actually occurs, and (B) as a result of the foregoing, any increase of the Net Tax Benefit attributable to an Amended Schedule shall not accrue the Interest Amount (or any other interest hereunder) until after the due date (without extensions) for filing the Corporation Return with respect to the Taxable Year in which the amendment actually occurs.

 

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Article III
TAX BENEFIT PAYMENTS

 

Section 3.1           Payments.

 

(a)            Payments. Within five Business Days of a Tax Benefit Schedule that was delivered to an Eligible Member becoming final in accordance with Section 2.4(a), the Corporation shall pay to such Eligible Member for such Taxable Year the Tax Benefit Payment determined pursuant to Section 3.1(b). Each such Tax Benefit Payment shall be made by wire transfer (or as otherwise agreed by the Corporation and the Eligible Member) of immediately available funds to a bank account of the Eligible Member previously designated by such Eligible Member to the Corporation. No Eligible Member shall be required under any circumstances to return any portion of any TRA Payment previously paid by the Corporation to such Eligible Member.

 

(b)            A “Tax Benefit Payment” means in respect of each Eligible Member an amount, not less than zero, equal to the sum of the Net Tax Benefit and the Interest Amount Attributable to such Eligible Member. For the avoidance of doubt, for Tax purposes, the Interest Amount shall not be treated as interest but instead shall be treated as additional consideration for the acquisition of Units or other assets in a Basis Transaction unless otherwise required by Law. The “Net Tax Benefit” for each Taxable Year shall be an amount equal to the excess, if any, of 85% of the Cumulative Net Realized Tax Benefit as of the end of such Taxable Year over the total amount of payments previously made under this Section 3.1, excluding payments attributable to the Interest Amount. Notwithstanding anything to the contrary in this Agreement, the parties acknowledge and agree that the determination of the portion of the Tax Benefit Payment to be paid to an Eligible Member under this Agreement with respect to state and local taxes shall not require separate “with and without” calculations in respect of each applicable state and local tax jurisdiction but rather will be based on the United States federal taxable income or gain for such taxable year reported on the Corporation Return and the Assumed Rate. The “Interest Amount” for a given Taxable Year shall equal the interest on the Net Tax Benefit for such Taxable Year calculated at the Agreed Rate from the due date (without extensions) for filing the Corporation Return with respect to Taxes for the most recently ended Taxable Year until the Payment Date; provided that such interest shall not accrue on the amount of any Net Tax Benefit after the date on which such amount is actually paid to any Eligible Member, regardless of whether such payment is made prior to the Payment Date. The Net Tax Benefit and the Interest Amount shall be determined separately with respect to each separate Basis Transaction, by reference to the resulting Basis Adjustment.

 

(c)            The Corporation shall use good faith efforts to ensure that it has sufficient Available Cash to make all payments due under this Agreement.

 

Section 3.2           No Duplicative Payments. Notwithstanding anything in this Agreement to the contrary, it is intended that the provisions of this Agreement will not result in duplicative payment of any amount (including interest) required under this Agreement. It is also intended that the provisions of this Agreement will result in 85% of the Corporation’s Cumulative Net Realized Tax Benefit, and the Interest Amount thereon, being paid to the applicable Eligible Members pursuant to this Agreement. The provisions of this Agreement shall be construed in the appropriate manner so that these fundamental results are achieved. For the avoidance of doubt, no Tax Benefit Payment shall be required to be calculated or made in respect of any estimated Tax payments, including estimated U.S. federal Tax payments.

 

Section 3.3           Pro Rata Payments; Coordination of Benefits.

 

(a)            Notwithstanding anything in Section 3.1 to the contrary, to the extent that the aggregate Tax benefit of the Corporation’s deductions with respect to the Tax Attributes is limited in a particular Taxable Year because the Corporation does not have sufficient taxable income, the limitation on the Tax benefit for the Corporation shall be allocated among the Eligible Members in proportion to the respective amounts of Tax Benefit Payments that would have been determined under this Agreement in respect of each such Eligible Member if the Corporation had sufficient taxable income so that there were no such limitation.

 

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(b)            If for any reason the Corporation does not fully satisfy its payment obligations to make all Tax Benefit Payments due under this Agreement in respect of a particular Taxable Year, then the Corporation and the Eligible Members agree that (i) the Corporation shall pay to each Eligible Member eligible to receive a Tax Benefit Payment for such Taxable Year the same proportion of each Tax Benefit Payment due under this Agreement in respect of such Taxable Year, without favoring one obligation over the other, and (ii) no Tax Benefit Payment shall be made in respect of any Taxable Year until all Tax Benefit Payments in respect of prior Taxable Years have been made in full.

 

Section 3.4           Overpayments. To the extent the Corporation makes a payment to an Eligible Member in respect of a particular Taxable Year under Section 3.1 in an amount in excess of the amount of such payment that should have been made to such Eligible Member in respect of such Taxable Year (taking into account Section 3.3) under the terms of this Agreement, then such Eligible Member shall not receive further payments under this Agreement until such Eligible Member has foregone an amount of payments equal to such excess.

 

Article IV
TERMINATION

 

Section 4.1           Early Termination and Breach of Agreement.

 

(a)            The Corporation (upon a majority vote of its Disinterested Directors) may terminate this Agreement at any time by paying to each Eligible Member the Early Termination Payment Attributable to each such Eligible Member; provided, however, that this Agreement shall only terminate upon the receipt of the Early Termination Payment by all Eligible Members; and provided, further, that the Corporation may withdraw any notice to execute its termination rights under this Section 4.1(a) prior to the time at which any Early Termination Payment has been paid. Upon payment of the Early Termination Payments by the Corporation, neither the Eligible Members nor the Corporation shall have any further payment obligations under this Agreement, other than for any (i) Tax Benefit Payment agreed to by the Corporation and an Eligible Member as due and payable but unpaid as of Early Termination Date (which Tax Benefit Payment shall not be included in the Early Termination Payment described in this Section 4.1(a)) and (ii) Tax Benefit Payment in respect of an Eligible Member due for the Taxable Year ending with or including the Early Termination Date (except to the extent that the amount described in this clause (ii) is included in the Early Termination Payment described in this Section 4.1(a) or (at the option of the Corporation) in clause (i)); provided, that upon payment of all amounts, to the extent applicable and without duplication, described in this sentence, this Agreement shall terminate. For the avoidance of doubt, if a Basis Transaction occurs after the Corporation makes the Early Termination Payments with respect to all Eligible Members, the Corporation shall have no obligations under this Agreement with respect to such Basis Transaction, and its only obligations under this Agreement in such case shall be its obligations to all Eligible Members under Section 4.3(a).

 

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(b)            In the event that the Corporation materially breaches any of its material obligations under this Agreement, whether (i) as a result of (A) failure to make any payment when due to the extent not paid within three months (except for all or a portion of such payment that is being disputed in good faith under this Agreement) or (B) failure to honor any other material obligation required hereunder to the extent not cured within 30 Business Days, in the case of each of (A) and (B), following receipt by the Corporation of written notice of such failure from the Eligible Members following such failure (a “Breach Notice”) or (iii) by operation of law as a result of the rejection of this Agreement in a case commenced under the Bankruptcy Code (with a Breach Notice being deemed to be delivered on the date of such rejection), then all obligations hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination Notice had been dated as of the date of delivery of the Breach Notice and shall include (1) the Early Termination Payment of such Eligible Member calculated as if an Early Termination Notice had been dated as of the date of delivery of the Breach Notice, (2) any Tax Benefit Payment in respect of such Eligible Member agreed to by the Corporation and such Eligible Member as due and payable but unpaid as of the date of delivery of the Breach Notice (which Tax Benefit Payment shall not be included in the Early Termination Payment described in clause (1)), and (3) any Tax Benefit Payment in respect of such Eligible Member due for the Taxable Year ending with or including the date of delivery of the Breach Notice (except to the extent that the amount described in clause (3) is included in the Early Termination Payment described in clause (1) or (at the option of the Corporation) in the Tax Benefit Payment described in clause (2)); provided, that upon payment of all amounts, to the extent applicable and without duplication, described in this sentence, this Agreement shall terminate. Notwithstanding the foregoing, in the event that the Corporation breaches this Agreement, the Eligible Members shall be entitled to elect to receive the amounts set forth in clauses (1), (2) and (3) above or to seek specific performance of the terms hereof. The parties agree that the failure to make any payment due pursuant to this Agreement within three months of the receipt by the Corporation of a Breach Notice following the date such payment is due shall be deemed to be a material breach of a material obligation under this Agreement for all purposes of this Agreement (unless such payment is being disputed in good faith under this Agreement), and that it will not be considered to be a material breach of a material obligation under this Agreement to make a payment due pursuant to this Agreement within three months of receipt by the Corporation of a Breach Notice following the date such payment is due. Notwithstanding anything in this Agreement to the contrary, it shall not be a material breach of a material obligation of this Agreement if the Corporation fails to make any Tax Benefit Payment when due to the extent that the Corporation has insufficient Available Cash to make such payment or cannot make such payment as a result of obligations imposed in connection with the Senior Obligations or under applicable Law; provided, however, that the interest provisions of Section 5.2 shall apply to such late payment (unless the Corporation does not have Available Cash to make such payment as a result of limitations imposed by existing credit agreements to which Holdings (or any direct or indirect Subsidiary thereof) is a party, in which case Section 5.2 shall apply, but the Default Rate shall be replaced by the Agreed Rate). In the event of an acceleration under this Section 4.1(b), and notwithstanding anything to the contrary in the foregoing, the Early Termination Payment shall be calculated utilizing the Valuation Assumptions, substituting in each case the term “date of delivery of the Breach Notice” for “Early Termination Date”; the procedures of Section 4.2 (and Section 2.3, to the extent applicable) and Section 4.3 shall apply mutatis mutandis with respect to the determination of the amount payable by the Corporation pursuant to the first sentence of this Section 4.1(b) and the payment thereof; and if a Basis Transaction occurs after the Corporation makes all such required payments described in this Section 4.1(b), the Corporation shall have no obligations under this Agreement with respect to such Basis Transaction.

 

(c)            In the event of a Change of Control, all obligations hereunder shall be accelerated and such obligations shall be calculated pursuant to this Article IV as if an Early Termination Notice had been dated as of the closing date of the Change of Control and shall include (i) the Early Termination Payment in respect of such Eligible Member, calculated as if an Early Termination Notice had been dated as of the effective date of such Change of Control, (ii) any Tax Benefit Payment in respect of such Eligible Member agreed to by the Corporation and such Eligible Member as due and payable but unpaid as of the effective date of such Change of Control (which Tax Benefit Payment shall not be included in the Early Termination Payment described in clause (i)), and (iii) any Tax Benefit Payment in respect of such Eligible Member due for any Taxable Year ending prior to, with or including the effective date of such Change of Control (except to the extent that the amounts described in this clause (iii) are included in the calculation of the Early Termination Payment described in clause (i) (at the option of the Corporation) or are included in clause (ii)); provided, that upon payment of all amounts, to the extent applicable and without duplication, described in this sentence, this Agreement shall terminate. In the event of a Change of Control, the Early Termination Payment shall be calculated utilizing the Valuation Assumptions, substituting in each case the term “the closing date of a Change of Control” for “Early Termination Date”; the procedures of Section 4.2 (and Section 2.3, to the extent applicable) and Section 4.3 shall apply mutatis mutandis with respect to the determination of the amount payable by the Corporation pursuant to the preceding sentence and the payment thereof; and if a Basis Transaction occurs after the Corporation makes all such required payments described in this Section 4.1(c), the Corporation shall have no obligations under this Agreement with respect to such Basis Transaction.

 

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Section 4.2           Early Termination Notice. If the Corporation chooses to exercise its right of early termination under Section 4.1 above, the Corporation shall deliver to each Eligible Member notice of such intention to exercise such right (“Early Termination Notice”) and a schedule (the “Early Termination Schedule”) specifying the Corporation’s intention to exercise such right and showing in reasonable detail the calculation of the Early Termination Payment for that Eligible Member. The Early Termination Schedule shall become final and binding on an Eligible Member (and on the Corporation as to that Eligible Member) unless the Eligible Member, within 30 calendar days after receiving the Early Termination Schedule, provides the Corporation with notice of a material objection to such Schedule made in good faith (“Material Objection Notice”). If the parties, for any reason, are unable to successfully resolve the issues raised in such notice within 30 calendar days after receipt by the Corporation of the Material Objection Notice, the Corporation and the Eligible Member shall employ the Reconciliation Procedures as described in Section 7.8 of this Agreement. Following the resolution of the issues raised by a Material Objection Notice, including as a result of the Reconciliation Procedures, the Corporation shall revise (and deliver to the Eligible Member) the Early Termination Schedule in accordance with such resolution, and such revised Early Termination Schedule shall become final and binding on the relevant Eligible Member (and on the Corporation as to that Eligible Member).

 

Section 4.3           Payment upon Early Termination.

 

(a)            Within five Business Days after agreement between an Eligible Member and the Corporation of the Early Termination Schedule, the Corporation shall pay to such Eligible Member an amount equal to the Early Termination Payment determined for such Eligible Member. Such payment shall be made by wire transfer (or as otherwise agreed by the Corporation and the Eligible Member) of immediately available funds to a bank account designated by the Eligible Member.

 

(b)            The “Early Termination Payment” shall equal with respect to any Eligible Member the present value, discounted at the Early Termination Rate as of the date of delivery of the final and binding Early Termination Schedule to the Eligible Member, of all unpaid Tax Benefit Payments (excluding the Interest Amount) that would be required to be paid by the Corporation to the Eligible Member (which, in the case of an Eligible Member that has Units that have not previously been Redeemed, shall be calculated as if such Eligible Member made a Redemption of all its remaining Units on the Early Termination Date) and assuming that the Valuation Assumptions are applied and that each such Tax Benefit Payment for each relevant Taxable Year would be paid on the due date (including extensions) under applicable Law (as of the Early Termination Date) for filing the Corporation Return for each such Taxable Year.

 

Article V
SUBORDINATION AND LATE PAYMENTS

 

Section 5.1           Subordination. Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment required to be made by the Corporation to the Eligible Members under this Agreement (a “TRA Payment”) shall rank subordinate and junior in right of payment to any principal, interest or other amounts due and payable in respect of any obligations in respect of indebtedness for borrowed money of the Corporation and its Subsidiaries (“Senior Obligations”) and shall rank pari passu with all current or future unsecured obligations of the Corporation that are not Senior Obligations.

 

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Section 5.2           Late Payments by the Corporation. The amount of all or any portion of any Tax Benefit Payment or Early Termination Payment not made to any Eligible Member when due under the terms of this Agreement shall be payable together with any interest thereon, computed at the Default Rate and commencing from the date on which such payment was due and payable, except as otherwise provided in this Agreement.

 

Article VI
NO DISPUTES; CONSISTENCY; COOPERATION

 

Section 6.1           Participation of the Eligible Members in the Corporation’s and Holdings’ Tax Matters. Except as otherwise provided herein, the Corporation shall have full responsibility for, and sole discretion over, all Tax matters concerning the Corporation and Holdings, including without limitation the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Taxes. Notwithstanding the foregoing, the Corporation shall notify each Eligible Member of, and keep each such Eligible Member reasonably informed with respect to, the portion of any audit of the Corporation and Holdings by a Taxing Authority the outcome of which is reasonably expected to materially affect such Eligible Member’s rights and obligations under this Agreement, and shall provide to each such Eligible Member a reasonable opportunity to provide information and other input to the Corporation, Holdings and their respective advisors concerning the conduct of any such portion of such audit; provided, however, that the Corporation and Holdings shall not be required to take any action that is inconsistent with any provision of the LLC Agreement or the Purchase Agreement.

 

Section 6.2           Consistency. The Corporation and each Eligible Member agree to report and cause to be reported (including by their Affiliates) for all purposes, including federal, state, and local Tax purposes and financial reporting purposes, all Tax-related items (including, without limitation, Basis Adjustments and each Tax Benefit Payment) in a manner consistent with that specified by the Corporation in any final and binding Schedule or Amended Schedule provided by or on behalf of the Corporation under this Agreement.

 

Section 6.3           Cooperation. Each Eligible Member shall (a) furnish to the Corporation in a timely manner such information, documents and other materials as the Corporation may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (b) make itself available to the Corporation and its representatives to provide explanations of documents and materials and such other information as the Corporation or its representatives may reasonably request in connection with any of the matters described in clause (a) above, and (c) reasonably cooperate in connection with any such matter, and Holdings shall reimburse the Eligible Member for any reasonable and documented third-party costs and expenses incurred by the Eligible Member pursuant to this Section 6.3.

 

Article VII
MISCELLANEOUS

 

Section 7.1           Notices. Any notice, request, demand or other communication hereunder must be given in writing and (a) delivered in person, (b) transmitted by facsimile, by telecommunications mechanism or electronically or (c) mailed by certified or registered mail, postage prepaid, receipt requested as follows:

 

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If to the Corporation, addressed to it at:

 

Golden Nugget Online Gaming, Inc.

1510 West Loop South

Houston, Texas 77027

Attention: General Counsel
Email: SScheinthal@ldry.com

 

With copies (which shall not constitute notice) to:

 

White & Case LLP

1221 Avenue of the Americas

New York, New York 10020

Fax: (713) 836-3601
Attention: Joel Rubinstein
  Michael Deyong
  Sang Ji
Email: joel.rubinstein@whitecase.com
  michael.deyong@whitecase.com
  sji@whitecase.com

 

If to an Eligible Member, to the address and facsimile number set forth in Holdings’ records.

 

Each such notice or other communication shall be effective and deemed received for all purposes hereunder (i) if given by telecommunication or electronically, when transmitted to the applicable number or electronic mail address so specified in (or pursuant to) this Section 7.1 and an appropriate answerback is received or, if transmitted after 5:00 p.m. Texas time on a Business Day in the jurisdiction to which such notice is sent or at any time on a day that is not a Business Day in the jurisdiction to which such notice is sent, then on the immediately following Business Day, (ii) if given by mail, on the first Business Day in the jurisdiction to which such notice is sent following the date three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, on the Business Day when actually received at such address or, if not received on a Business Day, on the Business Day immediately following such actual receipt.

 

Any party may change its address or fax number by giving the other party written notice of its new address or fax number in the manner set forth above.

 

Section 7.2           Counterparts. This Agreement and any amendment hereto may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Delivery of an executed signature page, including by electronic signature, to this Agreement by facsimile transmission shall be as effective as delivery of a wet signature counterpart of this Agreement.

 

Section 7.3           Entire Agreement. This Agreement, together with all exhibits and schedules hereto and all other agreements referenced therein and herein, including the LLC Agreement and the Purchase Agreement, constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth herein and therein. In the event of a conflict between this Agreement and the LLC Agreement or this Agreement and the Purchase Agreement, the provisions of the LLC Agreement and the Purchase Agreement, respectively, shall govern.

 

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Section 7.4           No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer upon any Person, other than the parties hereto and their respective successors and permitted assigns, any rights or remedies under this Agreement or otherwise create any third-party beneficiary hereto.

 

Section 7.5           Governing Law. This Agreement, the legal relations between the parties and any Action, whether contractual or non-contractual, instituted by any party hereto with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, shall be governed by and construed in accordance with the Laws of the State of Delaware applicable to contracts made and performed in such state and without regard to conflicts of law doctrines, except to the extent that certain matters are preempted by federal Law.

 

Section 7.6           Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

 

Section 7.7           Successors; Assignment; Amendments; Waivers.

 

(a)            No Eligible Member may assign, sell, pledge or otherwise alienate or transfer all or any portion of its rights or obligations under this Agreement to any Person without the prior written approval of a majority of the Disinterested Directors, except that any Eligible Member that Transfers its Units in accordance with the LLC Agreement shall have the option to assign, without the approval of the Disinterested Directors, to the Transferee of such Units such Eligible Member’s rights and obligations under this Agreement with respect to such Transferred Units. As a condition to any such assignment, each transferee approved pursuant to the preceding sentence, and the Corporation, Holdings and the transferor, shall execute and deliver a Joinder, in the form attached hereto as Exhibit A. If there is an assignment, sale, pledge or other alienation or transfer of all or any portion of an Eligible Member’s payment rights under this Agreement in which such Eligible Member does not transfer corresponding Units, Tax Benefit Payments shall be determined based on the Basis Adjustments that are Attributable to such transferring Eligible Member. The Corporation may not assign any of its rights or obligations under this Agreement to any Person (other than any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation) without the prior written consent of each of the Eligible Members (and any purported assignment without such consent shall be null and void).

 

(b)            No provision of this Agreement may be amended unless such amendment is approved in writing by a majority of each of the Disinterested Directors and Eligible Members (which approval shall not be unreasonably withheld, conditioned or delayed), in which case such amendment shall be permitted. No provision of this Agreement may be waived unless such waiver is in writing and signed by the party against whom the waiver is to be effective.

 

18

 

 

(c)            All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, permitted assigns, heirs, executors, administrators and legal representatives. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

 

Section 7.8           Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

Section 7.9           Reconciliation. In the event that the Corporation and any Eligible Member are unable to resolve a disagreement with respect to the matters governed by Sections 2.4 and 4.2 within the relevant period designated in this Agreement (“Reconciliation Dispute”), the Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “Expert”) in the particular area of disagreement mutually acceptable to both parties. The Expert shall be a partner in a nationally recognized accounting firm or a law firm, and the Expert shall not, and, unless the Eligible Member agrees otherwise, the firm that employs the Expert shall not, have any material relationship with either the Corporation or the Eligible Member or other actual or potential conflict of interest. If the parties are unable to agree on an Expert within 15 days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the Expert shall be appointed by the International Chamber of Commerce Centre for Expertise. The Expert shall resolve any matter relating to the Basis Schedule or an amendment thereto or the Early Termination Schedule or an amendment thereto within 30 calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within 15 calendar days or, in each case, as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the preceding sentence, if the matter is not resolved before any payment that is the subject of a disagreement would be due (in the absence of such disagreement) or any Tax Return reflecting the subject of a disagreement is due, the undisputed amount shall be paid on such date and such Tax Return may be filed as prepared by the Corporation, subject to adjustment or amendment upon resolution.

 

The sum of (a) the costs and expenses relating to (i) the engagement (and, if applicable, selection by the International Chamber of Commerce Centre for Expertise) of such Expert and (ii) if applicable, amending any Tax Return in connection with the decision of such Expert and (b) the reasonable out-of-pocket costs and expenses of the Corporation and the Eligible Member incurred in the conduct of such proceeding shall be allocated between the Corporation, on the one hand, and the Eligible Member, on the other hand, in the same proportion that the aggregate amount of the disputed items so submitted to the Expert that is unsuccessfully disputed by each such party (as finally determined by the Expert) bears to the total amount of such disputed items so submitted, and each such party shall promptly reimburse the other party for the excess that such other party has paid in respect of such costs and expenses over the amount it has been so allocated. The Corporation may withhold payments under this Agreement to collect amounts due under the preceding sentence. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.9 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.9 shall be binding on the Corporation and the Eligible Member and may be entered and enforced in any court having jurisdiction.

 

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Section 7.10         Withholding. The Corporation shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts as the Corporation is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign tax Law. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by the Corporation, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Eligible Member. Each Eligible Member shall promptly provide the Corporation with any applicable tax forms and certifications reasonably requested by the Corporation in connection with determining whether any such deductions and withholdings are required under the Code or any provision of U.S. state, local or foreign tax Law.

 

Section 7.11         Admission of the Corporation into a Consolidated Group.

 

(a)            If the Corporation becomes a member of an affiliated or consolidated group of corporations that files a consolidated United States federal income tax return pursuant to Sections 1501 et seq. of the Code, then: (i) the provisions of this Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments, Early Termination Payments and other applicable items hereunder shall be computed with reference to the consolidated taxable income of the group as a whole.

 

(b)            If the Corporation, its successor in interest or any member of a group described in Section 7.11(a) transfers one or more Reference Assets to a corporation (or a Person classified as a corporation for U.S. income tax purposes) with which such entity does not file a consolidated United States federal income tax return pursuant to Section 1501, et seq. of the Code, such entity, for purposes of calculating the amount of any Tax Benefit Payment or Early Termination Payment due hereunder, shall be treated as having disposed of each such Reference Asset in a fully taxable transaction on the date of such transfer. The consideration deemed to be received by such entity shall be equal to the fair market value of the contributed Reference Asset as determined by a valuation expert selected by the Corporation plus, without duplication, (i) the amount of debt to which any such Reference Assets is subject, in the case of a transfer of an encumbered Reference Asset or (ii) the amount of debt allocated to any such Reference Asset, in the case of a contribution of a partnership interest. For purposes of this Section 7.11(b), and notwithstanding the foregoing, a transfer of a partnership interest shall be treated as a transfer of the transferring partner’s share of each of the assets and liabilities of that partnership. Notwithstanding anything to the contrary set forth herein, if the Corporation, its successor in interest or any member of a group described in Section 7.11(a), transfers its assets pursuant to a transaction that qualifies as a “reorganization” (within the meaning of Section 368(a) of the Code) in which such entity does not survive or pursuant to any other transaction to which Section 381(a) of the Code applies (other than any such reorganization or any such other transaction, in each case, pursuant to which such entity transfers assets to a corporation (or a Person classified as a corporation for U.S. income tax purposes) with which such entity does not file a consolidated United States federal income tax return pursuant to Section 1501, et seq. of the Code), the transfer will not cause such entity to be treated as having transferred any assets to a corporation (or a Person classified as a corporation for U.S. income tax purposes) pursuant to this Section 7.11(b). Notwithstanding the foregoing, no Tax Benefit Payment or Early Termination Payment shall be calculated, and no payment shall be made under this Agreement, with regard to any transfer to an Affiliate of the Corporation which is subject to this Section 7.11(b) unless a majority of the Disinterested Directors shall have approved such transfer.

 

20

 

 

Section 7.12         Confidentiality. Each Eligible Member acknowledges and agrees that it may acquire access to confidential information of the Corporation in connection with the transactions contemplated by this Agreement and such Person shall keep and retain in the strictest confidence and not disclose to any Person any confidential matters, acquired pursuant to this Agreement, of the Corporation and its Affiliates and successors, concerning Holdings and its Affiliates and successors or the other Eligible Members, learned by the Eligible Member heretofore or hereafter. This Section 7.12 shall not apply to (i) any information that has been made publicly available by the Corporation or any of its Affiliates, becomes public knowledge (except as a result of an act of such Eligible Member in violation of this Agreement) or is generally known to the public and (ii) the disclosure of information to the extent necessary for an Eligible Member to prepare and file his or her Tax Returns, to respond to any inquiries regarding the same from any Taxing Authority or to prosecute or defend any action, proceeding or audit by any Taxing Authority with respect to such returns. Notwithstanding anything to the contrary herein, each Eligible Member (and each employee, representative or other agent of such Eligible Member or assignee, as applicable) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the Corporation, Holdings, the Eligible Members and their Affiliates, and any of their transactions, and all materials of any kind (including opinions or other tax analyses) that are provided to the Eligible Members relating to such tax treatment and tax structure.

 

If an Eligible Member commits a breach, or threatens to commit a breach, of any of the provisions of this Section 7.12, the Corporation shall have the right and remedy to have the provisions of this Section 7.12 specifically enforced by injunctive relief or otherwise by any court of competent jurisdiction without the need to post any bond or other security, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to the Corporation or its Subsidiaries or the other Eligible Members and the accounts and funds managed by the Corporation and that money damages alone shall not provide an adequate remedy to such Persons. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available at law or in equity.

 

Section 7.13         Partnership Agreement. To the extent applicable, this Agreement shall be treated as part of the partnership agreement of Holdings as described in Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations.

 

Section 7.14         Independent Nature of Eligible Members’ Rights and Obligations. The obligations of each Eligible Member hereunder are several and not joint with the obligations of any other Eligible Member, and no Eligible Member shall be responsible in any way for the performance of the obligations of any other Eligible Member hereunder. The decision of each Eligible Member to enter into this Agreement has been made by such Eligible Member independently of any other Eligible Member. Nothing contained herein, and no action taken by any Eligible Member pursuant hereto, shall be deemed to constitute the Eligible Members as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Eligible Members are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby and the Corporation acknowledges that the Eligible Members are not acting in concert or as a group, and the Corporation will not assert any such claim, with respect to such obligations or the transactions contemplated hereby.

 

Section 7.15         Tax Treatment. The Corporation and the Eligible Members hereby acknowledge and agree that, as of the date of this Agreement and as of the date of any future Basis Transaction that may be subject to this Agreement, the aggregate value of the Tax Benefit Payments cannot be reasonably ascertained for U.S. federal income or other applicable tax purposes. Notwithstanding anything to the contrary in this Agreement, with respect to each Basis Transaction by or with respect to any Eligible Member, if such Eligible Member notifies the Corporation in writing of a stated maximum selling price (within the meaning of Treasury Regulation 15A.453-1(c)(2)) to be applied with respect to such Basis Transaction, the amount of the initial consideration received in connection with such Basis Transaction and the aggregate Tax Benefit Payments to such Eligible Member in respect of such Basis Transaction (other than amounts accounted for as interest under the Code) shall not exceed such stated maximum selling price.

 

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Section 7.16         Waiver of Jury Trial; Jurisdiction.

 

(a)          EACH PARTY TO THIS AGREEMENT HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO OR INDEMNITEE, IN EACH CASE, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.

 

(b)          The parties hereto hereby agree and consent to be subject to the jurisdiction of any federal court of the District of Delaware or the Delaware Court of Chancery over any Action arising out of or in connection with this Agreement. The parties hereto irrevocably waive the defense of an inconvenient forum to the maintenance of any such Action. Each of the parties hereto further irrevocably consents, to the fullest extent permitted by Law, to the service of process out of any of the aforementioned courts in any such Action by the mailing of copies thereof by registered mail, postage prepaid, to such party at its address set forth in this Agreement, such service of process to be effective upon acknowledgment of receipt of such registered mail. Nothing in this Section 7.15 shall affect the right of any party hereto to serve legal process in any other manner permitted by applicable Law.

 

Section 7.17         Certain Tax Benefit Payment Reductions Assumed in Connection with the Amendment. For each year prior to 2036 in which a Tax Benefit Payment is made pursuant to Section 3.1(a) with respect to the prior taxable year, that Tax Benefit Payment shall be reduced by the quotient of (a) the TRA Payment Adjustment Amount divided by (b) 15. To the extent that the TRA Payment Adjustment Amount exceeds the total reductions made pursuant to this Section 7.17 by December 31, 2035, then any Tax Benefit Payments made after that date shall be reduced by the amount of this excess until the total deductions made under this Section 7.17 equals the TRA Payment Adjustment Amount.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above.

 

  GOLDEN NUGGET ONLINE GAMING, INC.
(F/K/A LANDCADIA HOLDINGS II, INC.)
   
  By: /s/ Steven L. Scheinthal
    Name: Steven L. Scheinthal
    Title: Vice President and Secretary
   
   
  LHGN HOLDCO, LLC
   
   
  By: /s/ Steven L. Scheinthal
    Name: Steven L. Scheinthal
    Title: Vice President and Secretary
   
   
  LANDRY’S FERTITTA, LLC
   
   
  By: /s/ Richard H. Liem
    Name: Richard H. Liem
    Title: Vice President and Treasurer

 

[Signature Page to Tax Receivable Agreement]

 

 

 

EXHIBIT A

 

JOINDER

 

This JOINDER (this “Joinder”) to the Tax Receivable Agreement (as defined below), is by and among GOLDEN NUGGET ONLINE GAMING, INC (F/K/A LANDCADIA HOLDINGS II, INC.), a Delaware corporation (the “Corporation”), LHGN HoldCo, LLC, a Delaware limited liability company (“Holdings”), _____________ (“Transferor”) and _________________ (“Transferee”).

 

WHEREAS, on ______________________, Transferee shall acquire ______________________ percent of the Transferor’s right to receive payments that may become due and payable under the Tax Receivable Agreement (as defined below) (the “Acquired Interests”) from Transferor (the “Acquisition”); and

 

WHEREAS, Transferor, in connection with the Acquisition, has required Transferee to execute and deliver this Joinder pursuant to Section 7.7(a) of that certain Tax Receivable Agreement, dated as of December 29, 2020, among the Corporation, Holdings and the other party or parties thereto (the “Tax Receivable Agreement”).

 

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound, the parties hereto agree as follows:

 

Section 1.1     Definitions. To the extent capitalized words used in this Joinder are not defined in this Joinder, such words shall have the respective meanings set forth in the Tax Receivable Agreement.

 

Section 1.2     Acquisition. The Transferor hereby transfers and assigns to the Transferee all of the Acquired Interests.

 

Section 1.3     Joinder.

 

(a)            By executing and delivering this Joinder to the Corporation, the Transferee hereby agrees to become a party to, to be bound by, and to comply with the terms, conditions and provisions of the Tax Receivable Agreement in the same manner as if the Transferee were an original signatory and named as an Eligible Member thereunder, except as otherwise provided in the Tax Receivable Agreement. By executing and delivering this Joinder to the Transferee, the Corporation hereby consents to and confirms its acceptance of the Transferee as an Eligible Member for purposes of the Tax Receivable Agreement to the extent provided therein.

 

(b)            By executing and delivering this Joinder to the Corporation, the Transferee hereby acknowledges, agrees and confirms (i) that its address details for notices under the Tax Receivable Agreement are as set forth on the signature page hereto and made a part hereof, and (ii) the Transferee has received a copy of the Tax Receivable Agreement and has reviewed the same and understands its contents.

 

Section 1.4     Entire Agreement. This Joinder and the Tax Receivable Agreement contain the entire understanding, whether oral or written, of the parties with respect to the matters covered hereby. Any amendment or change in this Joinder shall not be valid unless made in writing and signed by all parties hereto.

 

 

 

Section 1.5     Governing Law. The provisions of Sections 7.5 (Governing Law) and 7.15 (Waiver of Jury Trial; Jurisdiction) of the Tax Receivable Agreement shall apply to this Joinder as though set out in full herein.

 

Section 1.6     Counterparts. This Joinder may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Delivery of an executed signature page, including by electronic signature, to this Joinder by facsimile or other electronic transmission shall be as effective as delivery of a wet signature.

 

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, this Joinder has been duly executed and delivered by the parties as of the date first above written.

 

  GOLDEN NUGGET ONLINE GAMING, INC.
(F/K/A LANDCADIA HOLDINGS II, INC.)
   
  By:     
    Name:            
    Title:  
   
  LHGN HOLDCO, LLC
   
  By:  
    Name:  
    Title:  
   
  [TRANSFEROR]
   
  By:  
    Name:  
    Title:  
   
  [TRANSFEREE]
   
  By:  
    Name:  
    Title:  
   
  Address for notices:

 

 

Exhibit 10.3

 

AMENDMENT
TO
LETTER AGREEMENT

 

This Amendment to the Letter Agreement (this “Amendment”) is made on December 29, 2020, by and among Tilman J. Fertitta (“TJF”) as successor-in-interest of Fertitta Entertainment, Inc. (“FEI”), Jefferies Financial Group Inc. (“Jefferies” and, collectively with TJF, the “Sponsors”), Landcadia Holdings II, Inc. (the “Company”) and the undersigned individuals, each of whom is a member of the Company’s board of directors and/or management team (collectively, the “Insiders” and, together with the Company and the Sponsors, the “Parties”).

 

RECITALS

 

WHEREAS, the Company is a blank check company incorporated to acquire one or more operating businesses through a Business Combination;

 

WHEREAS, in connection with the Company’s Public Offering, the Company and the Sponsors entered into that certain letter agreement dated May 6, 2019 (the “Letter Agreement”), pursuant to which, inter alia, the Sponsors agreed to not Transfer any Founder Shares until certain thresholds were satisfied.

 

WHEREAS, the Company has entered into a Purchase Agreement, dated of even date herewith, by and among the Company, Golden Nugget Online Gaming, Inc. (f/k/a Landry’s Finance Acquisition Co.), LHGN HoldCo, LLC, a wholly owned subsidiary of the Company (“LHGN HoldCo”), GNOG Holdings, LLC (“GNOG HoldCo”) and Landry’s Fertitta, LLC, a wholly owned subsidiary of FEI (“LF”) (as the same may be amended from time to time, the “Purchase Agreement”), pursuant to which LF agreed to contribute 100% of its membership interests in GNOG HoldCo to LHGN HoldCo in exchange for, inter alia, membership interests in LHGN HoldCo, which may be exchanged for shares of the Company’s Common Stock on the terms and conditions set forth therein, effective as of the date hereof (the “Closing”);

 

WHEREAS, in connection with the execution and delivery of the Purchase Agreement by the Company, Jefferies has entered into a Sponsor Share Forfeiture Agreement, dated of even date herewith, by and between Jefferies and the Company (the “Forfeiture Agreement”), pursuant to which Jefferies has agreed to forfeit a certain portion of its Founder Shares effective as of the Closing;

 

WHEREAS, as partial inducement for TJF to cause LF to enter into the Purchase Agreement and as partial inducement for Jefferies to enter into the Forfeiture Agreement, the Company has agreed to amend the Letter Agreement in accordance with Section 15 thereof as set forth herein; and

 

WHEREAS, capitalized terms used but not defined herein shall have the respective meaning ascribed to such terms in the Letter Agreement.

 

1 

 

 

NOW THEREFORE, in consideration of the mutual promises and covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Sponsors and the Insiders hereby agrees with the Company as follows:

 

1.            The first sentence of Section 7 of the Letter Agreement is hereby amended to read in its entirety as follows:

 

“(a) Each Sponsor and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or any shares of Common Stock issuable upon conversion thereof) until the earliest of (A) one year after the completion of the Company’s initial Business Combination or (B) subsequent to the Business Combination, (x) if the last sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination, (y) if the last sale price of the Common Stock equals or exceeds $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 60 days after the Company’s initial Business Combination or (z) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property (the “Founder Shares Lock-up Period”).”

 

2.            The second sentence of Section 14 is hereby amended to read in its entirety:

 

“This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto; provided, that, any waiver of the provisions in Section 7 shall require only the prior written consent of the Company's board of directors (including the vote of the majority of the disinterested directors serving on the board at such time).”

 

3.            This Amendment may be executed in any number of original or electronic counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

4.            Except as expressly set forth in this Amendment, no other amendment or modifications are made to any other provisions of the Letter Agreement, and the Letter Agreement shall remain in full force and effect, as amended hereby, and so amended, the Parties hereby reaffirm all of their respective rights and obligations thereunder.

 

5.            The provisions of Sections 15, 16, 18, and 19 of the Letter Agreement shall apply to this Amendment mutatis mutandis. Except as specifically amended hereby, the Letter Agreement shall continue in full force and effect as written.

 

[Signature Page Follows]

  

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

 

 

  /s/ Tilman J. Fertitta
  Tilman J. Fertitta
   
   
  JEFFERIES FINANCIAL GROUP INC.
   
  By: /s/ Nicholas Daraviras
  Name: Nicholas Daraviras
  Title: Managing Director
 
   
  /s/ Richard Handler
  Richard Handler
   
  /s/ Richard H. Liem
  Richard H. Liem
   
   
  /s/ Steven L. Scheinthal
  Steven L. Scheinthal
   
   
  /s/ Nicholas Daraviras
  Nicholas Daraviras
   
   
  /s/ G. Michael Stevens
  G. Michael Stevens
   
   
  /s/ Michael S. Chadwick
  Michael S. Chadwick
   
   
  Landcadia Holdings II, Inc.
   
   
  By: /s/ Steven L. Scheinthal
  Name: Steven L. Scheinthal
  Title: Vice President and Secretary

 

 

[Signature Page to Amendment to Letter Agreement]

 

 

 

 

 

 

Exhibit 10.4

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

This Amended and Restated Registration Rights Agreement (this “Agreement”) is made as of December 29, 2020, by and among Golden Nugget Online Gaming, Inc. (f/k/a Landcadia Holdings II, Inc.), a Delaware corporation (the “Company”), Jefferies Financial Group Inc., a New York corporation (“Jefferies”), Tilman J. Fertitta (“Mr. Fertitta”, and, together with Jefferies, each a “Sponsor” and, collectively, the “Sponsors”), Landry’s Fertitta, LLC (“LF LLC”), and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement (together with the Sponsors and LF LLC, each a “Holder” and, collectively, the “Holders”).

 

RECITALS

 

WHEREAS, this Agreement is made and entered into in connection with the closing of the transaction (the “Transaction”) contemplated by that certain Purchase Agreement, dated as of June 28, 2020, by and among the Company, Golden Nugget Online Gaming, Inc. (f/k/a Landry’s Finance Acquisition Co. (“GNOG”), LHGN HoldCo, LLC (“Landcadia HoldCo”), GNOG Holdings, LLC (“GNOG HoldCo”) and LF LLC (as the same may be amended from time to time, the “Purchase Agreement”), pursuant to which LF LLC agreed to contribute 100% of the membership interests in GNOG HoldCo to Landcadia HoldCo in exchange for, inter alia, membership interests in Landcadia HoldCo (the “HoldCo Class B Units”) and a corresponding number of shares of a new, non-economic Class B common stock, par value $0.0001 per share, of the Company (the “New Class B Common Stock”);

 

WHEREAS, immediately prior to the closing of the Transaction, the Sponsors owned all of the 7,906,250 Founder Shares (as defined below) then outstanding;

 

WHEREAS, in connection with the closing of the Transaction, Jefferies forfeited 2,543,750 of the Founder Shares then held by it;

 

WHEREAS, at the closing of the Transaction, all of the then outstanding Founder Shares automatically converted, on a one-for-one basis, into shares of Class A Common Stock (as defined below);

 

WHEREAS, the Sponsors also hold an aggregate of 5,883,333 Private Placement Warrants (as defined below), each of which became exercisable to purchase one share of Class A Common Stock after the closing of the Transaction, in accordance with its terms;

 

WHEREAS, in connection with the closing of the Transaction, the Company, Landcadia HoldCo and LF LLC entered into that certain amended and restated limited liability company agreement of Landcadia HoldCo (such agreement, as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “LLC Agreement”);

 

WHEREAS, the LLC Agreement provides that, according to the terms and subject to the conditions set forth therein, holders of the HoldCo Class B Units are entitled to cause Landcadia HoldCo to exchange all or a portion of their HoldCo Class B Units (upon surrender of a corresponding number of shares of New Class B Common Stock) for either an equal number of shares of Class A Common Stock or, at the election of the Company, the cash equivalent of the market value thereof;

 

WHEREAS, pursuant to the Purchase Agreement, the Company agreed to register for resale under the Securities Act the shares of Class A Common Stock issuable to LF LLC and its permitted transferees pursuant to the Purchase Agreement and the LLC Agreement; and

 

WHEREAS, this Agreement amends and restates in its entirety that certain Registration Rights Agreement, dated as of May 6, 2019, by and among the Company, Jefferies, Fertitta Entertainment Inc., a Texas corporation, as predecessor in interest to Mr. Fertitta, and the other parties thereto.

 

 

 

AGREEMENT

 

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

 

Article I
DEFINITIONS

 

Section 1.1              Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:

 

Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or principal financial officer of the Company, after consultation with counsel to the Company, (a) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) the Company has a bona fide business purpose for not making such information public.

 

Agreement” shall have the meaning given in the Preamble.

 

Blackout Period” shall have the meaning given in Section 3.4(b).

 

Business Day” shall mean any day of the year on which national banking institutions in New York are open to the public for conducting business and are not required or authorized to close.

 

Class A Common Stock” shall mean the Class A common stock, par value $0.0001 per share, of the Company.

 

Closing Date” shall have the meaning given in the Purchase Agreement.

 

Commission” shall mean the Securities and Exchange Commission.

 

Company” shall have the meaning given in the Preamble.

 

Demanding Holder” shall have the meaning given in Section 2.2(a).

 

Effectiveness Deadline” shall have the meaning given in Section 2.1.

 

Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.

 

Form S-3” shall have the meaning given in Section 2.4.

 

Founder Shares” shall mean shares of the Class B common stock, par value $0.0001 per share, of the Company outstanding prior to the closing of the Transaction.

 

HoldCo Class B Units” shall have the meaning given in the Preamble.

 

Holders” shall have the meaning given in the Preamble.

 

Initial Shelf” shall have the meaning given in Section 2.1.

 

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LLC Agreement” shall have the meaning given in the Recitals.

 

Maximum Number of Securities” shall have the meaning given in Section 2.2(b).

 

Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus in the light of the circumstances under which they were made not misleading.

 

New Class B Common Stock” shall have the meaning given in the Recitals.

 

Notice” shall have the meaning given to it in Section 5.1.

 

Piggyback Registration” shall have the meaning given in Section 2.3.

 

Private Placement Warrants” means the warrants that were issued to the Sponsors concurrently with the Company’s initial public offering, each of which will become exercisable for one share of Class A Common Stock after the closing of the Transaction, in accordance with its terms.

 

Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

 

Purchase Agreement” shall have the meaning given in the Recitals.

 

Registrable Securities” shall mean (a) any shares of Class A Common Stock issued or issuable by the Company upon conversion of any Founder Shares into shares of Class A Common Stock in connection with the closing of the Transaction in accordance with the Third Amended and Restated Certificate of Incorporation of the Company, (b) any shares of Class A Common Stock issued or issuable by the Company in connection with the exchange of any HoldCo Class B Units, in accordance with the terms of the LLC Agreement, including the exchange of HoldCo Class B Units issued to LF LLC (or any of its permitted transferees) upon any Intercompany Agreement Contribution (as defined in the LLC Agreement), (c) any shares of Class A Common Stock issued or issuable by the Company upon the exercise by a Holder or its permitted transferee of Private Placement Warrants, (d) any shares of Class A Common Stock held by any Holder on the Closing Date or thereafter, and (e) any other equity security of the Company issued or issuable to any Holder with respect to any such share of Class A Common Stock referred to in clauses (a) – (d) by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; or (iv) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.

 

Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

 

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Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:

 

(a)                all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Class A Common Stock is then listed;

 

(b)                fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);

 

(c)                printing, messenger, telephone and delivery expenses;

 

(d)                reasonable fees and disbursements of counsel for the Company;

 

(e)                reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration (including the expenses of any special audit and “comfort letters” required by or incident to such performance); and

 

(f)                 reasonable fees and expenses of legal counsel of any Holder in connection with any Registration.

 

Registration Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

 

Replacement S-3 Shelf” shall have the meaning given in Section 2.1.

 

Representative” shall mean, with respect to any person, such person’s affiliates and its and their respective directors, officers, employees, managers, members, stockholders, partners, incorporators, trustees, counsel, financial advisors, accountants, auditors and other agents or authorized representatives.

 

Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

Suspension Period” shall have the meaning given in Section 3.4(a).

 

Transactions” shall have the meaning given in the Recitals.

 

Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.

 

Underwritten Offering” shall mean an offering in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.

 

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Article II
REGISTRATIONS

 

Section 2.1              Registration Statement. The Company shall, as soon as practicable after the Closing Date, but in any event within 30 days after the Closing Date, file a Registration Statement under the Securities Act to permit the public resale of all the Registrable Securities held by the Holders from time to time as permitted by Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) on the terms and conditions specified in this Section 2.1 and shall use its reasonable best efforts to cause such Registration Statement to be declared effective as soon as practicable after the filing thereof, but in any event no later than the earlier of (a) 60 days (or 90 days if the Commission notifies the Company that it will “review” the Registration Statement) after the Closing Date and (b) the tenth Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Deadline”). The Registration Statement filed with the Commission pursuant to this Section 2.1 shall be on Form S-1 or such other form of registration statement as is then available to effect a registration for resale of such Registrable Securities, covering such Registrable Securities, and shall contain a Prospectus in such form as to permit any Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) at any time beginning on the effective date for such Registration Statement. If the initial Registration Statement (the “Initial Shelf”) filed by the Company pursuant to this Section 2.1 is on Form S-1, upon the Company becoming eligible to register the Registrable Securities for resale by the Holders on Form S-3, the Company shall use its reasonable best efforts to amend the Initial Shelf to a Registration Statement on Form S-3 or file a Registration Statement on Form S-3 in substitution of the Initial Shelf (the “Replacement S-3 Shelf”) and cause the Replacement S-3 Shelf to be declared effective as soon as practicable thereafter. A Registration Statement filed pursuant to this Section 2.1 shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders. The Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this Section 2.1 to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not available, that another registration statement is available, for the resale of all the Registrable Securities held by the Holders until all such Registrable Securities have ceased to be Registrable Securities. If at any time a Registration Statement filed pursuant to this Section 2.1 is not effective or is not otherwise available for the resale of all the Registrable Securities held by the Holders, Holder(s) of at least 15% of the then-outstanding Registrable Securities (any such Holder, a “Demanding Holder”) may demand registration under the Securities Act of all or part of their Registrable Securities at any time and from time to time, and the Company shall use its reasonable best efforts to file with the Commission following receipt of any such demand one or more Registration Statements with respect to all such Registrable Securities and to cause such Registration Statement to be declared effective by the Commission as soon as practicable after the filing thereof. As soon as practicable following the effective date of a Registration Statement filed pursuant to this Section 2.1, but in any event within three Business Days of such date, the Company shall notify the Holders of the effectiveness of such Registration Statement. When effective, a Registration Statement filed pursuant to this Section 2.1 (including any documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any Prospectus contained in such Registration Statement, in the light of the circumstances under which such statement is made).

 

Section 2.2              Underwritten Offering.

 

(a)                In the event that any Holder elects to dispose of Registrable Securities under a Registration Statement pursuant to an Underwritten Offering of all or part of such Registrable Securities that are registered by such Registration Statement, then the Company shall, upon the written demand of a majority-in-interest of the Demanding Holders, enter into an underwriting agreement in a form as is customary in Underwritten Offerings of equity securities with the managing Underwriter or Underwriters selected by such Demanding Holders in consultation with the Company, and shall take all such other reasonable actions as are requested by the managing Underwriter or Underwriters in order to expedite or facilitate the disposition of such Registrable Securities. In addition, the Company shall give prompt written notice to each other Holder regarding such proposed Underwritten Offering, and such notice shall offer such Holders the opportunity to include in the Underwritten Offering such number of Registrable Securities as each such Holder may request. Each such Holder shall make such request in writing to the Company within five Business Days after the receipt of any such notice from the Company, which request shall specify the number of Registrable Securities intended to be disposed of by such Holder. Each Holder proposing to distribute its Registrable Securities through an Underwritten Offering pursuant to this Section 2.2 shall enter into an underwriting agreement with the underwriters, which underwriting agreement shall contain such representations, covenants, indemnities (subject to Article IV) and other rights and obligations as are customary in underwritten offerings of equity securities; provided, however, that no such Holder shall be required to make any representations or warranties to or agreements with the Company or the Underwriters other than representations, warranties or agreements regarding such Holder’s authority to enter into such underwriting agreement and to sell, and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law.

 

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(b)                If the managing Underwriter or Underwriters in an Underwritten Offering, in good faith, advises the Company and the Demanding Holder that the dollar amount or number of Registrable Securities that the Demanding Holder desires to sell, taken together with all other shares of Class A Common Stock or other equity securities that the Company or any other Holder desires to sell and the shares of Class A Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows:

 

(i)                 first, the Registrable Securities of the Demanding Holders pro rata based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Demanding Holders have requested be included in such Underwritten Offering that can be sold without exceeding the Maximum Number of Securities;

 

(ii)               second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders (pro rata, based on the respective number of Registrable Securities that each such Holder has so requested) exercising their rights to register their Registrable Securities pursuant to Section 2.2(a) hereof, without exceeding the Maximum Number of Securities;

 

(iii)             third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i) or clause (ii), the shares of Class A Common Stock held by persons or entities that the Company is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons, which collectively can be sold without exceeding the Maximum Number of Securities; and

 

(iv)              fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), clause (ii), or clause (iii), shares of Class A Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities.

 

(c)                A Demanding Holder shall have the right to withdraw all or any portion of its Registrable Securities included in an Underwritten Offering pursuant to this Section 2.2 for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters of its intention to withdraw from such Underwritten Offering prior to the pricing of such Underwritten Offering and such withdrawn amount shall no longer be considered an Underwritten Offering. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with an Underwritten Offering prior to its withdrawal under this Section 2.2(c).

 

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Section 2.3              Piggyback Registration.

 

(a)                If at any time the Company proposes to file a Registration Statement under the Securities Act with respect to equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.2 hereof) on a form that would permit registration of Registrable Securities, other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the Company, (iv) for a dividend reinvestment plan or (v) on Form S-4, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten days before the anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within five days after receipt of such written notice (in the case of an “overnight” or “bought” offering, such requests must be made by the Holders within three Business Days after the delivery of any such notice by the Company) (such Registration a “Piggyback Registration”); provided, however, that if the Company has been advised in writing by the managing Underwriter(s) that the inclusion of Registrable Securities for sale for the benefit of the Holders will have an adverse effect on the price, timing or distribution of the Class A Common Stock in the Underwritten Offering, then (1) if no Registrable Securities can be included in the Underwritten Offering in the opinion of the managing Underwriter(s), the Company shall not be required to offer such opportunity to the Holders or (2) if any Registrable Securities can be included in the Underwritten Offering in the opinion of the managing Underwriter(s), then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.3(b). Subject to Section 2.3(b), the Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this Section 2.3 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. If no written request for inclusion from a Holder is received within the specified time, each such Holder shall have no further right to participate in such Underwritten Offering. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this Section 2.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company; provided, however, that (A) no such Holder shall be required to make any representations or warranties to or agreements with the Company or the Underwriters other than representations, warranties or agreements regarding such Holder’s authority to enter into such underwriting agreement and to sell, and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law and (B) no Holder shall be required to agree to any indemnification obligations on the part of such Holder that are greater than its obligations pursuant to Article IV.

 

(b)                If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of Class A Common Stock that the Company desires to sell, taken together with (i) the shares of Class A Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant to Sections 2.2 and 2.3, and (iii) the shares of Class A Common Stock, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then:

 

(i)                 If the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first, shares of Class A Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Sections 2.2 and 2.3 hereof which can be sold without exceeding the Maximum Number of Securities, allocated pro rata based on the respective number of Registrable Securities that each such Holder has requested be included in such Registration; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), shares of Class A Common Stock, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other stockholders of the Company, which can be sold without exceeding the Maximum Number of Securities;

 

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(ii)               If the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration (A) first, shares of Class A Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Sections 2.2 and 2.3 hereof which can be sold without exceeding the Maximum Number of Securities, allocated pro rata based on the respective number of Registrable Securities that each such Holder has requested be included in such Registration; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), shares of Class A Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), shares of Class A Common Stock or other equity securities for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.

 

(c)                Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of its intention to withdraw from such Piggyback Registration prior to the pricing of such Underwritten Offering. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.3.

 

(d)                For purposes of clarity, any Registration effected pursuant to Section 2.3 hereof shall not be counted as a Registration effected under Section 2.2 hereof.

 

Section 2.4              Registrations on Form S-3. The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company, pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities on Form S-3 or similar short form registration statement that may be available at such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such request through an Underwritten Offering. Within five days of the Company’s receipt of a written request from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give written notice of the proposed Registration on Form S-3 to all