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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission File Number: 001-39245
MSG-20210630_G1.JPG
MADISON SQUARE GARDEN ENTERTAINMENT CORP.
(Exact name of registrant as specified in its charter) 
Delaware   84-3755666
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
 Two Penn Plaza  New York ,  NY   10121
(Address of principal executive offices)  (Zip Code)
                    
Registrant’s telephone number, including area code: (212) 465-6000
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 MSGE New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act: None.
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant has been required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐
Indicate by check mark whether each Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☑ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The aggregate market value of the voting and non-voting common equity held by non-affiliates of Madison Square Garden Entertainment Corp. computed by reference to the price at which the common equity was last sold on the New York Stock Exchange as of December 31, 2020, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $1.99 billion.
Number of shares of common stock outstanding as of July 31, 2021:
Class A Common Stock par value $0.01 per share  — 27,093,988 
Class B Common Stock par value $0.01 per share  — 6,866,754 
Documents incorporated by reference — Certain information required for Part III of this report is incorporated herein by reference to the proxy statement for the 2021 annual meeting of the Company’s shareholders, expected to be filed within 120 days after the close of our fiscal year.



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PART I
Item 1. Business
Madison Square Garden Entertainment Corp. is a Delaware corporation with our principal executive offices at Two Pennsylvania Plaza, New York, NY, 10121. Unless the context otherwise requires, all references to “we,” “us,” “our,” “MSG Entertainment” or the “Company” refer collectively to Madison Square Garden Entertainment Corp., a holding company, and its direct and indirect subsidiaries. We conduct substantially all of our business activities discussed in this Annual Report on Form 10-K through MSG Entertainment Group, LLC and its direct and indirect subsidiaries. Our telephone number is 212-465-6000, our website is http://www.msgentertainment.com and the investor relations section of our website is http://investor.msgentertainment.com. We make available, free of charge through the investor relations section of our website, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as well as proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”). Copies of these filings are also available on the SEC’s website. References to our website in this report are provided as a convenience and the information contained on, or available through, our website is not part of this or any other report we file with or furnish to the SEC.
The Company was incorporated on November 21, 2019 as a direct, wholly-owned subsidiary of Madison Square Garden Sports Corp. (“MSG Sports”), formerly known as The Madison Square Garden Company. On March 31, 2020, MSG Sports’ board of directors approved the distribution of all the outstanding common stock of the Company to MSG Sports stockholders (the “Entertainment Distribution”) which occurred on April 17, 2020 (the “Entertainment Distribution Date”). On July 9, 2021, the Company completed its previously announced acquisition of MSG Networks Inc., a Delaware corporation (“MSG Networks”), pursuant to that certain Agreement and Plan of Merger, dated as of March 25, 2021 (the “Merger Agreement”), among the Company, Broadway Sub Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and MSG Networks. Merger Sub merged with and into MSG Networks (the “Merger”), with MSG Networks surviving and continuing as the surviving corporation in the Merger as a wholly-owned subsidiary of the Company. On July 9, 2021, at the effective time of the Merger (the “Effective Time”), (i) each share of Class A common stock, par value $0.01 per share, of MSG Networks (“MSGN Class A Common Stock”) issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive a number of shares of Class A common stock, par value $0.01 per share, of the Company (“Class A Common Stock”) such that each holder of record of shares of MSGN Class A Common Stock has the right to receive, in the aggregate, a number of shares of Class A Common Stock equal to the total number of shares of MSGN Class A Common Stock held of record immediately prior to the Effective Time multiplied by 0.172, with such product rounded up to the next whole share and (ii) each share of Class B common stock, par value $0.01 per share, of MSG Networks (“MSGN Class B Common Stock” and, together with MSGN Class A Common Stock, “MSGN Common Stock”) issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive a number of shares of Class B common stock, par value $0.01 per share, of the Company (“Class B Common Stock” and, together with Class A Common Stock, “Common Stock”) such that each holder of record of shares of MSGN Class B Common Stock has the right to receive, in the aggregate, a number of shares of Class B Common Stock equal to the total number of shares of MSGN Class B Common Stock held of record immediately prior to the Effective Time multiplied by 0.172, with such product rounded up to the next whole share, in each case except for Excluded Shares (as defined in the Merger Agreement).
The Company reports on a fiscal year basis ending on June 30th. In this annual report on Form 10-K, the years ended on June 30, 2021, 2020, and 2019 are referred to as “Fiscal Year 2021,” “Fiscal Year 2020,” and “Fiscal Year 2019,” respectively, and the year ending June 30, 2022 is referred to as “Fiscal Year 2022.”
Overview
MSG Entertainment is a leader in live entertainment comprised of iconic venues; marquee entertainment brands; regional sports and entertainment networks; popular dining and nightlife offerings; and a premier music festival. As of June 30, 2021, we managed our business through the following operating segments:
Entertainment: This segment includes our portfolio of venues: Madison Square Garden (“The Garden”), Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. In addition, the Company has unveiled its vision for state-of-the-art venues, called MSG Sphere, and is currently building its first venue in Las Vegas. Also included in this segment is the original production, the Christmas Spectacular Starring the Radio City Rockettes (“Christmas Spectacular”), as well as the Company’s controlling interest in Boston Calling Events, LLC (“BCE”), the entertainment production company that owns and operates the Boston Calling Music Festival. The Entertainment segment also includes our bookings business, which features a variety of live entertainment and sports experiences.
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Tao Group Hospitality: This segment features the Company’s controlling interest in TAO Group Holdings LLC (“Tao Group Hospitality”), a hospitality group with globally-recognized entertainment dining and nightlife brands including: Tao, Marquee, Lavo, Beauty & Essex, Cathédrale, Hakkasan and Omnia. Tao Group Hospitality operates 61 entertainment dining and nightlife venues spanning 23 markets across five continents.
The consummation of the Merger created our MSG Networks segment, which includes two regional sports and entertainment networks, MSG Network and MSG+, a companion streaming app, MSG GO, and other digital properties. MSG Networks serves the New York Designated Market Area (“DMA”), as well as other portions of New York, New Jersey, Connecticut and Pennsylvania and features a wide range of sports content, including exclusive live local games and other programming of the New York Knicks (the “Knicks”) of the National Basketball Association (the “NBA”) and the New York Rangers (the “Rangers”), New York Islanders (the “Islanders”), New Jersey Devils (the “Devils”) and Buffalo Sabres (the “Sabres”) of the National Hockey League (the “NHL”), as well as significant coverage of the New York Giants (the “Giants”) and Buffalo Bills (the “Bills”) of the National Football League (the “NFL”).
Impact of the COVID-19 Pandemic on Our Business
Our operations and operating results have been, and continue to be, materially impacted by the COVID-19 pandemic and actions taken in response by governmental authorities and certain professional sports leagues. For the majority of Fiscal Year 2021, substantially all of the Entertainment business operations were suspended and Tao Group Hospitality was operating at significantly reduced capacity and demand. While operations have started to resume, it is not clear when we will fully return to normal operations.
As a result of government-mandated assembly limitations and closures, all of our performance venues were closed beginning in mid-March 2020. Use of The Garden resumed for Knicks and Rangers home games without fans in December 2020 and January 2021, respectively, and, beginning on February 23, 2021, The Garden was permitted to host fans at games at 10% seating capacity with certain safety protocols, such as proof of full vaccination or a negative COVID-19 test and social distancing. Starting April 1, 2021, our other New York performance venues, Hulu Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre, were also permitted to reopen at 10% capacity with certain safety protocols. Although live events were permitted at our venues, government-mandated capacity restrictions and other safety requirements made it economically unfeasible to do so for most events at that time. Effective May 19, 2021, all of our New York venues were permitted to host guests at full capacity, subject to certain restrictions, and effective June 2021, The Chicago Theatre was permitted to host events without restrictions. As a result, The Garden hosted three Knicks playoff games with approximately 15,000-16,000 fans in attendance per game during Fiscal Year 2021, and we welcomed the Foo Fighters on June 20, 2021 for the first live event at The Garden with 100% capacity since our venues were shut down in March 2020. In addition, on June 19, 2021, Radio City Music Hall opened its doors for the first time in over a year to host the Tribeca Festival’s closing night film, Untitled: Dave Chappelle Documentary, with 100% capacity. The Beacon Theatre hosted its first ticketed event, at 100% capacity, on June 22, 2021 with the first of two shows from Trey Anastasio, and Hulu Theater at Madison Square Garden hosted its first ticketed event, at 100% capacity, with a boxing/hip-hop event on August 3, 2021. For all events hosted at our New York venues with 100% capacity prior to August 17, 2021, guests were required to provide proof of full vaccination or a negative COVID-19 test, depending on the requirements of that venue and/or preference of the performer. Effective August 17, 2021, all workers and customers in New York City indoor dining, indoor fitness and indoor entertainment facilities are required to show proof of at least one vaccination shot. In addition, effective August 20, 2021, face coverings are required for all individuals in indoor public spaces in Chicago, including our venues. For Fiscal Year 2021, the majority of ticketed events at our venues were postponed or canceled and, while live events are permitted to be held at all of our performance venues as of the date of this filing and we are continuing to host and book new events, due to the lead-time required to book touring acts and artists, which is the majority of our business, we expect that our bookings will continue to be impacted through the 2021 calendar year. We continue to actively pursue one-time or multi-night performances at our venues as the touring market ramps up.
The impact to our operations also included the cancellation of the 2020 production of the Christmas Spectacular and both the 2020 and 2021 Boston Calling Music Festivals. While the 2021 production of the Christmas Spectacular is currently on-sale, the current production is scheduled for 163 shows, as compared with 199 shows for the 2019 production, which was the last production presented prior to the impact of the COVID-19 pandemic.
The Company has long-term arena license agreements (the “Arena License Agreements”) with MSG Sports that require the Knicks and Rangers to play their home games at The Garden.
As discussed above, capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. On July 1, 2021, the Knicks and Rangers began paying the full amounts provided for under
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their respective Arena License Agreements. The NBA and NHL have each announced that they intend to return to traditional October to April regular season schedule, with full 82-game regular seasons, for the 2021-22 season.
Disruptions caused by the COVID-19 pandemic had a significant and negative impact on Tao Group Hospitality’s operations and financial performance for Fiscal Year 2021. Due to government actions taken in response to the COVID-19 pandemic, virtually all of Tao Group Hospitality’s venues were closed for approximately three months starting in mid-March 2020, and Avenue and Vandal in New York were permanently closed in April 2020 and June 2020, respectively. In addition, Avenue in Los Angeles was permanently closed in May 2021. Throughout Fiscal Year 2021, Tao Group Hospitality conducted limited operations at certain venues, subject to significant regulatory requirements, including capacity limits, curfews and social distancing requirements for outdoor and indoor dining. Tao Group Hospitality’s operations fluctuated throughout Fiscal Year 2021 as certain markets lifted restrictions, imposed restrictions, and changed operational requirements over time. As of June 30, 2021, 51 of Tao Group Hospitality’s venues were open for outdoor dining, limited or full capacity indoor dining (depending on the market), and delivery/takeout (23 legacy Tao Group Hospitality venues and 28 Hakkasan venues acquired in connection with the April 27, 2021 transaction), inclusive of Tao Asian Bistro & Lounge at Mohegan Sun, a new venue that first opened its doors in March 2021, while 10 venues remained closed (five legacy Tao Group Hospitality venues and five Hakkasan venues). Of the 51 Tao Group Hospitality venues currently operating, 29 are U.S.-based and operating without capacity restrictions (21 Tao Group Hospitality legacy venues and eight Hakkasan venues) and 22 are international (two Tao Group Hospitality legacy venues and 20 Hakkasan venues) and operating under various governmental safety protocols such as curfews, capacity limitations and social distancing. Effective August 17, 2021, workers and customers in New York City indoor dining facilities are required to show proof of at least one vaccination shot. In addition, certain U.S. jurisdictions have reinstated safety protocols, such as the mask mandates in Nevada and Chicago, but not otherwise limiting capacity.
MSG Networks depends on the appeal of its live programming to viewing subscribers of its networks and to its advertisers. As a result of the COVID-19 pandemic and league and government actions relating thereto, MSG Networks aired substantially fewer NBA and NHL telecasts during Fiscal Year 2021, as compared with Fiscal Year 2019 (the last full fiscal year not impacted by the COVID-19 pandemic), and consequently experienced a decrease in revenues, including a material decrease in advertising revenue. The absence of live sports games also resulted in a decrease in certain MSG Networks expenses, including rights fees, variable production expenses, and advertising sales commissions.
While operations have started to resume, we are unable to predict when we will be permitted or able to fully return to normal operations and what the longer-term effects, if any, of these events will be. See “— Item 1A. Risk Factors — General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues” and “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business.”
Our Strengths

•Strong and growing presence in live entertainment through:
◦A portfolio of world-renowned venues;
◦Marquee live entertainment brands and content;
◦Two award-winning regional sports and entertainment networks; and
◦Globally recognized brands in entertainment dining and nightlife.
•Deep industry relationships that drive top-tier performers and a wide variety of events to the Company’s venues;
•Proven track record of delivering significant value for partners through innovative sponsorships and premium hospitality;
•Reputation for world-class customer experience driven by decades of expertise in sales and marketing, and venue operations;
•Expertise in utilizing data to drive decisions to maximize revenue and the experience of our guests and viewers;
•Established history of successfully planning and executing comprehensive venue design and construction projects;
•Long-term agreements to host home games at The Garden for two of the most recognized franchises in professional
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sports — the Knicks and the Rangers;
•Exclusive local media rights to live games of five professional New York-area NBA and NHL teams, including long-term agreements with the Knicks and Rangers; and
•A strong and seasoned management team.
Our Strategy
Our strategy is to leverage our Company’s portfolio of marquee assets and brands — which includes renowned venues, entertainment brands and regional sports and entertainment networks — to create world-class live experiences. This unique collection of assets, coupled with our deep relationships in the entertainment and sports industries, our strong connection with diverse and passionate audiences, and our continued commitment to innovation, are what set the Company apart and represent a substantial opportunity for growth.
Key components of our strategy include:
•A unique strategy for our performance venues. The Company has a collection of iconic performance venues through which we deliver live entertainment and sporting events. This portfolio includes The Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. These venues, along with our venue management capabilities, effective bookings strategies and proven expertise in sponsorships, marketing, ticketing and hospitality, have positioned the Company as an industry leader in live entertainment. We leverage our unique assets, expertise and approach to ensure we create unmatched experiences for the benefit of all our stakeholders.
In addition to our existing venues, in February 2018, the Company unveiled its vision for MSG Sphere, new state-of-the-art venues that we believe will change entertainment by pioneering the next generation of immersive experiences. The Company is building its first MSG Sphere venue in Las Vegas — one of the world’s most important entertainment destinations.
◦Maximizing the live entertainment experience for our customers. We use our first-class operations, coupled with new innovations and our ability to attract top talent, to deliver unforgettable experiences for our guests — whether they are first-time visitors or repeat customers — ensuring they return to our venues. We have a track record of designing world-class facilities that exceed our customers’ expectations. This includes our renovations of The Garden, Radio City Music Hall, the Beacon Theatre and the Forum arena in Inglewood, California (which the Company sold in May 2020) to deliver top-quality amenities such as state-of-the-art lighting, sound and staging, a full suite of hospitality offerings and enhanced premium products. In addition to better on-site amenities, we continue to explore new ways to utilize technology to improve the customer experience and create communities around our live events. From the way our customers buy their food and beverage; to how we market and process their tickets; to the content we provide them to enhance their entertainment experience, we strive to give our customers the best experience in the industry. Our commitment to exceptional service and innovation will be elevated even further with the introduction of MSG Sphere — a venue that is being built, from the ground up, to deliver an entirely new guest experience through the use of advanced, cutting-edge architectural, visual and audio technologies that will create a fully immersive and customized entertainment experience. See “— Our Business — Our Performance Venues — MSG Sphere” for a description of the key design features of MSG Sphere that we believe will deliver this entirely new guest experience.
◦Leveraging our live entertainment expertise to increase productivity across our performance venues. Part of what drives our success is our “artist first” approach, which has created significant growth at our venues over our history. Through dedicated artist areas and top-tier service, this talent-friendly environment not only attracts artists to our venues, but also brings them back for repeat performances. We will continue to use our “artist first” approach to attract the industry’s top talent with the goal of increasing utilization across all our venues through more multi-night and multi-market concerts and other events, including more recurring high-profile shows that help expand our base of events. Examples of this strategy include our residencies, which feature legendary performers playing our venues each month, and have included Billy Joel at The Garden and Jerry Seinfeld at the Beacon Theatre.
Another part of our “artist first” approach is how we use our diverse collection of venues. With seating capacities and configurations that range from 2,800 to 21,000, our venue pipeline enables us to shepherd an artist through their growth and development, helping us to cultivate and develop deeper industry
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relationships. Examples of this include Trevor Noah, whose history with us includes a succession of sold-out shows — first at the Beacon Theatre in 2016, followed by Radio City Music Hall in 2018, and ultimately, at The Garden in 2019. Also, Brandi Carlile, who, after playing the Beacon Theatre, The Chicago Theatre and Radio City Music Hall throughout her career, headlined The Garden in September 2019. Our portfolio of venues also enables us to work with artists across multiple markets, further strengthening our partnerships as well as our opportunities for more extensive engagements. In 2018, we announced a dual-city, multi-year booking agreement with Tedeschi Trucks Band that includes the band performing multi-shows annually through 2022 at both the Beacon Theatre and The Chicago Theatre.
◦Selectively expanding our performance venues in key music and entertainment markets. In February 2018, we unveiled our vision for MSG Sphere, which will be the first large-scale venues to combine cutting-edge technology and multi-sensory storytelling to deliver fully immersive experiences. The Company is currently building its first venue in Las Vegas and, due to the transformative nature of these venues, believes there will be other markets — both domestic and international — where MSG Sphere can be successful. The design of MSG Sphere will be flexible to accommodate a wide range of sizes and capacities — from large-scale to smaller and more intimate — based on the needs of the individual market. Controlling a network of world-class venues provides the Company with a number of avenues for potential growth, including driving increased bookings and greater marketing and sponsorship opportunities. As we explore selectively extending the MSG Sphere network, we intend to utilize several options such as non-recourse debt financing, joint ventures, equity partners and a managed venue model. As we work with various companies to develop the technologies needed for MSG Sphere venues, we are focused on obtaining appropriate strategic rights with respect to intellectual property.
•Unique approach to marketing and sales. Our Company possesses powerful and attractive assets able to deliver significant exposure for marketing partners who share our vision of creating brand new experiences and innovative opportunities to engage with audiences. We also benefit from being part of a broader offering including our agreement with MSG Sports, through which the Company offers an integrated approach to marketing partnerships and corporate hospitality solutions to drive sponsorship, signage and suite sales.
◦Delivering unrivaled exposure for our partners. Our assets are highly sought after by companies that value the popularity of our venues, entertainment brands and media properties. These include The Garden — The World’s Most Famous Arena; Radio City Music Hall’s cherished holiday tradition, the Christmas Spectacular production; and MSG Network and MSG+, two award-winning regional sports and entertainment networks. Utilizing these powerful platforms, we collaborate with companies to create elevated experiences that showcase their brands in meaningful ways. With the debut of MSG Sphere, we expect the value proposition for our partners to continue to expand as we introduce unparalleled opportunities for them to connect with our guests. MSG Sphere in Las Vegas will feature cutting-edge technology capable of delivering innovative activations. For example, the venue will feature an exterior covered in fully programmable LED, creating a digital showcase for brands, events and partners.
◦The attractiveness of our assets is further strengthened by various agreements that enable our Company to deliver compelling, broad-based marketing platforms by combining our live entertainment and media assets with MSG Sports’ professional sports brands. We utilize this integrated approach to deliver unrivaled exposure in the New York area for a wide range of companies from both established and emerging industries such as mobile sports gaming, which is expected to be a significant opportunity in our market. As a result, we’ve attracted world-class partners that include JPMorgan Chase, Anheuser-Busch, Spectrum, Delta Air Lines, Kia, Lexus, PepsiCo and Squarespace.
◦The Company also offers a wide array of premium corporate hospitality offerings that cater to a variety of audiences. For example, The Garden has a range of suite and club products, including 21 Event Level suites, 58 Lexus Madison Level suites, 18 Signature Level suites, the Madison Club, Suite Sixteen and The Loft. These suites and clubs — which provide exclusive private spaces, first-class amenities and some of the best seats in The Garden — are primarily licensed to corporate customers with the majority being multi-year agreements, most of which have annual escalators. We believe the unique combination of our entertainment offerings and MSG Sports’ premium live sporting events, along with the continued importance of corporate hospitality to our guests, position us well to continue to grow this business. And as the Company’s expansion plans progress, our MSG Sphere venues will deliver additional hospitality options in other major markets.
◦Understanding our customers. We continue to forge deep direct-to-consumer relationships with customers and fans, with a focus on understanding how consumers interact with every aspect of the Company. A key
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component of this strategy is our large and growing proprietary database of millions of customers. Our ability to aggregate data across linear networks, venues and digital products provides the Company with significant insights into our viewers and consumers, including who is consuming our content, utilizing our apps, visiting our websites and attending our venues. In addition to providing value for our marketing partners, these insights can be leveraged to help drive revenue and engagement across our assets, providing us with an opportunity to tailor offerings and cross-promote our products and services, introducing customers to our wide range of assets and brands.
•A growing portfolio of proprietary venue content. We continue to explore the creation of proprietary venue content — including the development of attraction-like shows for our existing and planned venues — that enables us to benefit from being both content creator and venue operator. Content development will ultimately give us greater control over the utilization of our venues, making us less reliant on touring schedules. The Company is supporting this strategy with the creation of MSG Sphere Studios, a creative studio that brings together expertise from across the entertainment industry. The Company is also developing a set of tools specifically for MSG Sphere that makes content creation for this powerful platform an intuitive experience and maximizes the potential of the venues’ immersive technologies — whether someone is adapting existing content or developing original creations. The Company expects to collaborate with third-party creators and to also develop its own catalogue of unique and compelling material that can be used across MSG Sphere venues. This will range from original attractions, purpose-built for MSG Sphere, to the establishment of a dynamic library of content that can be used by artists or third parties who want to bring their experiences to life — whether for concerts, residencies or corporate events.
•A continued commitment to innovation in media. For more than 50 years, MSG Networks has been at the forefront of the industry, pushing the boundaries of regional sports coverage. We continually seek to enhance the value that our networks provide to viewers, advertisers and distributors by utilizing state-of-the-art technology to deliver high-quality, best-in-class content and live viewing experiences. MSG Networks has experimented with new types of content including alternative versions of live game telecasts and continues to evaluate new ways to monetize its media rights and content library through potential new and complimentary product offerings. MSG Networks has also been a pioneer in creating new and innovative ways to capitalize on emerging trends and engage with its audience. It became the first regional sports network (“RSN”) to include live stats and interactive gaming inside its streaming app, MSG GO, and was the first RSN to debut a standalone app for free-to-play pick ‘em-style contests. MSG Networks will continue to explore new ways to expand on these efforts as new opportunities arise such as mobile sports gaming.
•Utilizing our world-class hospitality expertise. The Company owns a controlling interest in Tao Group Hospitality — a leader in the global hospitality industry. Tao Group Hospitality operates 61 entertainment dining and nightlife venues in over 20 markets across five continents. It features a collection of widely recognized brands, including: Tao, Marquee, Lavo, Beauty & Essex, Cathédrale, Hakkasan, and Omnia. Tao Group Hospitality has been expanding in select markets both domestically and internationally, and with the acquisition of the business of Hakkasan USA, Inc. (“Hakkasan”) in April 2021, increased its domestic reach in markets such as Las Vegas, Hawaii, Southern California and Miami, while also significantly growing its international presence with the addition of important global destinations such as London and the Middle East. Its most recent location, Hakkasan Bodrum, opened in Bodrum, Turkey in June 2021. In addition to its expansion plans, Tao Group Hospitality has become a valuable strategic partner for the Company. This includes at The Garden, where Tao Group Hospitality is playing a larger role in the food and hospitality offerings, as well as in Las Vegas, where its more than 15-year history in the market will help to create a world-class guest experience for MSG Sphere.
Our Business
Entertainment
Our Company delivers unforgettable live experiences — all in extraordinary settings located in some of the country’s most important entertainment markets. This creates a significant demand for an association with our brands by a wide selection of artists, sporting events, premier companies and the public. And with a foundation of iconic venues, our Company has a proven ability to leverage the strength of our industry relationships, marketing assets, customer database and live event expertise to create compelling performance, promotion and distribution opportunities for artists, events and productions.
Specifically, through our Entertainment segment, the Company produces, presents and hosts a variety of live entertainment events, such as concerts, sporting events, family shows, performing arts events, special events and wholly-owned productions. In addition, the Company hosts two of the most recognized franchises in professional sports — the NBA’s Knicks and the NHL’s Rangers. These live events are held at the Company’s venues, which are: The Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. With seating capacities and configurations that
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range from 2,800 to 21,000, our diverse collection of venues enables us to showcase a plethora of acts and events that cover a wide spectrum of genres, to significantly varied audiences. The Company is also expanding its portfolio of venues with the construction of a new venue in Las Vegas, MSG Sphere at The Venetian.
Our productions include the beloved holiday show, the Christmas Spectacular — created for Radio City Music Hall and featuring the world-famous Radio City Rockettes (the “Rockettes”).
In addition, our Entertainment segment includes our controlling interest in BCE, the entertainment production company that owns and operates the Boston Calling Music Festival.
Our Bookings Business
Live Entertainment
Our Company is an established industry leader that books a wide variety of live entertainment events in our venues, which perennially include some of the biggest names in music and entertainment. Over the last several years, our venues have been key destinations for artists such as the Eagles, U2, Foo Fighters, Paul McCartney, Drake, Bruno Mars, Justin Bieber, Dead and Company, Phish, Fleetwood Mac, Eric Clapton, Jennifer Lopez, Carrie Underwood, Justin Timberlake, P!nk, Kanye West, Chris Stapleton, Radiohead, Barbra Streisand, Ariana Grande, Sebastian Maniscalco, Trevor Noah, and Dave Chappelle.
In addition, we have successfully developed new ways to increase the utilization of our venues, while creating unique experiences for artists and fans with our various residencies — including The Garden’s first music franchise: Billy Joel at The Garden. This extraordinary residency is at a historic 73 performances and counting since it began in January 2014, bringing Billy Joel’s lifetime performances at The World’s Most Famous Arena to 119 (through February 2020). The Company’s other residencies include: Jerry Seinfeld at the Beacon Theatre; and the multi-year, dual-city residency of Tedeschi Trucks Band at both the Beacon Theatre and The Chicago Theatre. The Company has also in recent years successfully created other unique bookings and residencies across its portfolio of venues, including Dave Chappelle at Radio City Music Hall, Phish’s 13-night “Baker’s Dozen” run at The Garden, Ali Wong at the Beacon Theatre, and Trey Anastasio’s eight-week virtual residency at the Beacon Theatre – a first for the Company.
Our venues also attract family shows and theatrical productions, which have included: Cirque du Soleil’s ’Twas the Night Before… at both The Chicago Theatre and Hulu Theater at Madison Square Garden, as well as Peppa Pig Live, Trolls Live and Sesame Street Live!. In addition, we frequently serve as the backdrop for high-profile special events, such as when 18,000 New York City public school students attended a free performance of Broadway’s To Kill A Mockingbird at The Garden in 2020, and the 60th Annual Grammy Awards, which returned to The Garden for the first time in 15 years in 2018. Other significant events that have taken place at our venues include the Tony Awards, America’s Got Talent, the final season premiere of HBO’s Game of Thrones and the MTV Video Music Awards. We have also hosted appearances by luminaries such as His Holiness Pope Francis, His Holiness the Dalai Lama and the Prime Minister of India, Narendra Modi; along with graduations, television upfronts, product launches and film premieres.
Although we primarily license our venues to third-party promoters for a fee, we also promote or co-promote shows. If we serve as promoters or co-promoters of a show, we have economic risk relating to the event.
Sports
MSG Sports’ professional sports teams, the Knicks and Rangers, are two of the most recognized franchises in sports, with passionate, multi-generational fanbases. The Company has long-term Arena License Agreements with MSG Sports that require the Knicks and the Rangers to play their home games at The Garden, allowing us to continue hosting their long-time fans at The World’s Most Famous Arena.
Our Company also promotes, produces and/or presents a broad array of other live sporting events, including professional boxing, college basketball, college hockey, professional bull riding, mixed martial arts, esports and wrestling. Many of these events are among the most popular in our history and are perennial highlights on our annual calendar, as well as some of The Garden’s longest-running associations.
Professional boxing has had a long history with The Garden. The Arena famously hosted Muhammad Ali and Joe Frazier’s 1971 “Fight of the Century,” considered among the greatest sporting events in modern history, as well as numerous other boxing greats, including: Joe Louis, Rocky Marciano, Sugar Ray Robinson, Willie Pep, Emile Griffith, George Foreman, Roberto Duran, Oscar De La Hoya, Sugar Ray Leonard, Lennox Lewis, Roy Jones, Jr., Mike Tyson, Evander Holyfield, Miguel Cotto and Wladimir Klitschko. In recent years, boxing’s top fighters have called The Garden home, including unified
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lightweight world champion Teofimo Lopez, former three weight class champion Vasyl Lomachenko and super middleweight Edgar Berlanga.
Since the return of professional mixed martial arts in New York State in 2016, The Garden regularly hosts top UFC events and Bellator MMA events. The Professional Fighters League has also held events at Hulu Theater at Madison Square Garden, including its inaugural World Championships.
College sports have been a mainstay at The Garden for decades, with college basketball being featured at The World’s Most Famous Arena for nearly 90 years. The Garden hosted the annual Big East Tournament in March 2021 for the 39th straight year. It is the longest-running conference tournament at one site in all of college basketball and will celebrate its 40th anniversary at The Garden in March 2022. In addition, St. John’s University has called The Garden its “home away from home” for decades. The Garden also continues to build its college hockey tradition, with a popular biennial event featuring Cornell University vs. Boston University, as well as visits from top national teams such as Boston College, North Dakota, Harvard, Yale, Michigan and Minnesota.
Other world-class sporting events have included the NBA All-Star Game in 2015, and the NCAA Division I Men’s Basketball East Regional Finals, which The Garden hosted in 2014 and 2017.
Our Productions
One of the Company’s core properties, the Christmas Spectacular — created for Radio City Music Hall and featuring the world-famous Rockettes — has been performed at the Music Hall for 87 years. This production has become a tradition for many, creating a holiday touchstone that generations of fans want to return to time and again. The show’s enduring popularity is driven by the incomparable Radio City Rockettes, the longest-running precision dance company in America, admired for their iconic style of dance, talent and athleticism, as well as their unity both on and off the stage.
Despite the cancellation of the 2020 Christmas Spectacular production due to the COVID-19 pandemic, the Rockettes continued to serve as a source of joy and inspiration during the holiday season. In keeping with decades-long traditions, the celebrated dance troupe performed in the Macy’s Thanksgiving Day Parade and the Rockefeller Center Tree Lighting, and NBC aired an hour-long television special – the Christmas Spectacular Starring the Radio City Rockettes – At Home Holiday Special – introducing millions of potential new fans to the iconic production. In addition, through weekly dance classes on Instagram Live, the Rockettes connected with fans across the globe to provide a creative, athletic outlet at home – an effort that was honored with both a Shorty Award for “Best Use of Instagram Live” and Time Out New York’s “Quar Wellness Award for best health offering.”
We acquired the rights to the Christmas Spectacular in 1997, and those rights are separate from, and do not depend on the continuation of, our lease of Radio City Music Hall. We also hold rights to the Rockettes brand in the same manner. We lease Radio City Music Hall pursuant to a long-term lease agreement. See “ — Our Performance Venues — Radio City Music Hall.”
The Company believes it has a significant and unique asset in the Rockettes and continues to strengthen and broaden the Rockettes brand by targeting the most prominent and effective vehicles that elevate their visibility and underscore their reputation as beloved American cultural icons. The Rockettes have appeared or performed at high-profile events and award shows, including Presidential Inaugurations, Macy’s Thanksgiving Day Parade, Macy’s 4th of July Fireworks event, the Rockefeller Center Tree Lighting, New Year’s Eve Times Square Ball Drop, Tony Awards, MTV Video Music Awards, World Pride events, and television shows and holiday specials (America’s Got Talent; Project Runway; The Kacey Musgraves Christmas Show; The Today Show; Live with Kelly and Ryan and The Tonight Show Starring Jimmy Fallon), among many others.
We continue to pursue opportunities to generate greater brand awareness, including through television and public appearances and dance education offerings. We are also committed to ensuring that the best dancers from all backgrounds, cultures, races, religions and ethnicities can become Rockettes, and are actively strengthening our relationships within the dance community, expanding where we hold auditions and scouting sessions, and eliminating financial barriers to entry, including the cost of our Dancer Development Program.
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Our Festival Offering
The Company owns a controlling interest in BCE, the entertainment production company known for successfully creating and operating New England’s premier music festival — Boston Calling, which celebrated its 10th edition in 2019. The three-day festival takes place over Memorial Day weekend at the Harvard Athletic Complex and features performances from marquee headliners along with a diverse array of musicians, bands and comedians. The festival also showcases a variety of food and drink offerings featuring the best of Boston’s restaurants, world-famous breweries and award-winning chefs. After canceling its 2020 and 2021 festivals due to the pandemic, BCE announced that the Boston Calling Music Festival will take place in 2022 over Memorial Day Weekend with Foo Fighters and Rage Against the Machine leading a lineup of over 50 performers.
Our Performance Venues
The Company operates a mix of iconic performance venues that continue to build on their historic prominence as destinations for unforgettable experiences and events.
We own or operate under long-term leases a total of five venues in New York City and Chicago. These venues are: The Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre in New York City; and The Chicago Theatre. The Company is also building a new venue in Las Vegas, MSG Sphere at The Venetian and, in 2018, we purchased land in Stratford, London which we expect will become home to a future MSG Sphere.
The Garden
The Garden has been a celebrated center of New York life since it first opened its doors in 1879. Over its 140-year history, there have been four Garden buildings, each known for showcasing the best of the era’s live sports and entertainment offerings. We believe that The Garden has come to epitomize the power and passion of live sports and entertainment to people around the world, with an appearance at The Garden often representing a pinnacle of an athlete’s or performer’s career. Known as “The World’s Most Famous Arena,” The Garden has been the site of some of the most memorable events in sports and entertainment, and, together with Hulu Theater at Madison Square Garden, has hosted hundreds of events and millions of visitors each year. In 2009, Billboard magazine ranked The Garden the number-one venue of the decade in its respective class based upon gross ticket sales. Music industry subscribers to the trade magazine Pollstar have voted The Garden “Arena of the Year” 23 times since the inception of the awards in 1989. The Garden also regularly ranks as the highest-grossing entertainment venue of its size in the world based on Billboard magazine’s mid-year and year-end rankings.
Over The Garden’s history, it has been the setting for countless “big events,” inspired performances and one-of-a-kind moments that have helped define sports, entertainment and culture. Highlights include: “The Fight of the Century” between Muhammad Ali and Joe Frazier in 1971; the 1970 Knicks’ NBA Championship; the Rangers’ 1994 Stanley Cup Championship; three Democratic National Conventions and one Republican National Convention; Marilyn Monroe’s famous birthday serenade to President John F. Kennedy; Frank Sinatra’s “Main Event” concert in 1974; the only U.S. concerts from the reunited Cream; the 25th Anniversary Rock and Roll Hall of Fame concerts; the 60th Annual Grammy Awards; and Billy Joel’s record-breaking 119 total performances at The Garden (through February 2020). In September 2015, His Holiness Pope Francis celebrated Mass at The Garden as part of his successful U.S. visit, which marked the first time a current pope has visited The Garden since Pope John Paul II in 1979. The Garden has also hosted four prominent benefit concerts, which galvanized the public to respond to national and global crises, including the first of its kind, “The Concert for Bangladesh” in 1972, as well as “The Concert for New York City,” following the events of 9/11; “From the Big Apple to the Big Easy,” held after Hurricane Katrina in 2005; and “12-12-12, The Concert for Sandy Relief” in 2012. And in February 2020, To Kill a Mockingbird became the first-ever Broadway play to perform at The Garden with an entirely free performance for 18,000 New York City public school students. The Garden also continues to be home to two of MSG Sports’ professional sports franchises — the Knicks and Rangers.
The current Madison Square Garden Complex, located between 31st and 33rd Streets and Seventh and Eighth Avenues on Manhattan’s West Side, opened on February 11, 1968 with a salute to the United Service Organizations hosted by Bob Hope and Bing Crosby. From a structural standpoint, the construction of the current Garden was considered an engineering wonder for its time, including its famous circular shape and unique, cable supported ceiling, which contributes to its intimate feel. It was the first large structure built over an active railroad track. The builder, R.E. McKee, had a national reputation and was later recognized as a “Master Builder” by the construction industry. Architect Charles Luckman had one of the largest firms in the country and designed such buildings as the Prudential Tower in Boston, NASA’s flight center in Houston and the Forum in Inglewood, CA.
Following a three-year, top-to-bottom transformation, in October 2013, The Garden was fully transformed, featuring improved sightlines; additional entertainment and dining options; new concourses; upgraded hospitality areas; new technology; unique historic exhibits; and a completely transformed interior, where the intimacy of the arena bowl and The Garden’s world-famous
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ceiling were maintained. Focused on the total fan experience, the transformation was designed to benefit everyone in attendance, whether first-time visitors, season ticket subscribers, athletes, artists, suite holders or marketing partners. The Garden’s transformation ensured that attending an event at “The World’s Most Famous Arena” remained unlike anywhere else.
We own the Madison Square Garden Complex, the platform on which it is built and development rights (including air rights) above our property. Madison Square Garden sits atop Pennsylvania Station (“Penn Station”), a major commuter hub in Manhattan, which is owned by the National Railroad Passenger Corporation (Amtrak). While the development rights we own would permit us to expand in the future, any such use of development rights would require various approvals from the City of New York. The Garden seats up to approximately 21,000 spectators for entertainment and sporting events and, along with Hulu Theater at Madison Square Garden, contains approximately 1,100,000 square feet of floor space over 11 levels.
Hulu Theater at Madison Square Garden
Hulu Theater at Madison Square Garden, which has approximately 5,600 seats, opened as part of the fourth Madison Square Garden Complex in 1968 with seven nights of performances by Judy Garland. Since then, some of the biggest names in live entertainment have played at Hulu Theater at Madison Square Garden, including The Who, Bob Dylan, Diana Ross, Elton John, James Taylor, Mary J Blige, Pentatonix, John Legend, Ellie Goulding, Chris Rock, Neil Young, Bill Maher, Jerry Seinfeld, Tyler, the Creator, J Balvin, Ricky Gervais, Nicky Jam, Alejandro Sanz and Van Morrison. Hulu Theater at Madison Square Garden has also been the site for several boxing events including the inaugural World Championships of the Professional Fighters League as well as the NBA and NFL Drafts. In addition, it has hosted various product launches, upfronts, award shows, and other special events such as Wheel of Fortune and audition shows for America’s Got Talent, as well as a variety of theatrical productions and family shows, including Cirque du Soleil’s ’Twas the Night Before…, A Christmas Story, Elf The Musical, Paw Patrol Live! and Sesame Street Live!. Our Company has a multi-faceted marketing partnership with Hulu, a leading premium streaming service, that includes exclusive naming rights. Hulu Theater at Madison Square Garden regularly ranks as one of the highest-grossing entertainment venues of its size in the world, based on Billboard magazine’s mid-year and year-end rankings.
Radio City Music Hall
Radio City Music Hall has a rich history as a national theatrical and cultural mecca since it was first built by theatrical impresario S.L. “Roxy” Rothafel in 1932. Known as “The Showplace of the Nation,” it was the first building in the Rockefeller Center complex and, at the time, the largest indoor theater in the world. Radio City Music Hall, a venue with approximately 6,000 seats, hosts concerts, family shows and special events, and is home to the Christmas Spectacular. See “— Our Productions.” Over its history, entertainers who have graced the Great Stage include: Aretha Franklin, Lady Gaga, Brian Wilson, Harry Styles, Lizzo, Josh Groban, Mariah Carey, Nine Inch Nails, Christina Aguilera, Britney Spears, Tony Bennett, Billie Eilish, Sebastian Maniscalco, Jim Gaffigan, David Gilmour and Dave Chappelle. Radio City Music Hall was recognized by Pollstar magazine as Theatre of the Decade in 2021 and regularly ranks as the highest-grossing entertainment venue of its size in the world, based on Billboard magazine’s mid-year and year-end rankings.
In 1978, Radio City Music Hall was designated a New York City landmark by the NYC Landmarks Preservation Commission and a national landmark on the National Register of Historic Places. We acquired the lease in 1997, and in 1999, performed a complete restoration that returned the legendary theater to its original grandeur. The acclaimed restoration touched all aspects of the venue, including burnishing the ceilings of Radio City Music Hall with 720,000 sheets of gold and aluminum leaf, replacing the existing stage curtain with a new 112-foot wide golden silk curtain, and cleaning the three-story tall mural “The Fountain of Youth,” by Ezra Winter, which looms above the grand staircase. State-of-the-art sound systems, lighting and HDTV capabilities were also installed.
We lease Radio City Music Hall, located at Sixth Avenue and 50th Street in Manhattan, pursuant to a long-term lease agreement. In July 2021, the Company extended the term of the lease, previously set to expire in 2023, until August 31, 2038 with an option to renew for an additional 10 years by providing two years’ notice prior to expiration.
Beacon Theatre
In November 2006, we entered into a long-term lease agreement to operate the legendary Beacon Theatre, a venue with approximately 2,800 seats, which sits on the corner of Broadway and 74th Street in Manhattan. The Beacon Theatre was conceived by S. L. “Roxy” Rothafel and is considered the “older sister” to Radio City Music Hall. Designed by Chicago architect Walter Ahlschlager, the Beacon Theatre opened in 1929 as a forum for vaudeville acts, musical productions, drama, opera and movies. The Beacon Theatre was designated a New York City landmark by the NYC Landmarks Preservation Commission in 1979 and a national landmark on the National Register of Historic Places in 1982. Over its history, the Beacon Theatre has been a venerable rock and roll room for some of the greatest names in music, including: Steely Dan, Coldplay,
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Alice Cooper, Dave Matthews Band, Crosby Stills & Nash, Elton John, Hozier, Tom Petty and the Heartbreakers, Tedeschi Trucks Band, Eddie Vedder, Widespread Panic and Bob Dylan, as well as The Allman Brothers Band, which played their 238th show at the Beacon Theatre in October 2014, marking their final concert as a band. The venue has also hosted special events, such as film premieres for the Tribeca Festival and comedy events, including our Jerry Seinfeld residency, along with numerous luminaries such as His Holiness the Dalai Lama in 2009 and 2013, and President Bill Clinton in 2006, when the Rolling Stones played a private concert in honor of his 60th birthday. In Fall 2020, the Company and Trey Anastasio presented The Beacon Jams, the venue’s first-ever virtual residency which included eight weekly shows that were streamed live to hundreds of thousands of fans and raised more than $1 million for charity.
In August 2008, the Beacon Theatre was closed for a seven-month restoration project to return the theater to its original 1929 grandeur. The restoration of the Beacon Theatre focused on all historic, interior public spaces of the building, backstage and back-of-house areas, and was based on extensive historic research, as well as detailed, on-site examination of original, decorative painting techniques that had been covered by decades-old layers of paint. The Beacon Theatre has won several architectural awards recognizing its outstanding restoration. The widely acclaimed, comprehensive restoration was similar to our restoration of Radio City Music Hall, and reflects our commitment to New York City. The Beacon Theatre regularly ranks as one of the highest-grossing entertainment venues of its size in the world, based on Billboard magazine’s mid-year and year-end rankings.
Our lease on the Beacon Theatre expires in 2026.
The Chicago Theatre
In October 2007, to provide us with an anchor for content and distribution in a key market in the Midwest, we purchased the legendary The Chicago Theatre, a venue with approximately 3,600 seats. The Chicago Theatre, which features its famous six-story-high “C-H-I-C-A-G-O” marquee, was built in 1921 and designed in the French Baroque style by architects Cornelius W. Rapp and George L. Rapp. It is the oldest surviving example of this architectural style in Chicago today, and was designated a Chicago landmark building in 1983.
The Chicago Theatre has become a highly attractive destination for concerts, comedy shows and other live events, hosting a wide range of entertainers, including: Bob Dylan, Mumford & Sons, David Byrne, Neil Young, Diana Ross, Madonna, Jerry Seinfeld, Janet Jackson, Elvis Costello, Bob Weir, Jim Gaffigan, Conan O’Brien, Amy Schumer and Steely Dan. The venue has also hosted theatrical tours such as Cirque du Soleil’s ’Twas the Night Before…, A Christmas Story, The Wizard of Oz, Paw Patrol Live! and Dr. Seuss’ How The Grinch Stole Christmas! The Musical. The Chicago Theatre regularly ranks as one of the highest-grossing entertainment venues of its size in the world, based on Billboard magazine’s mid-year and year-end rankings.
MSG Sphere
The Company is progressing with its creation of the “venue of the future” with MSG Sphere, which will utilize cutting-edge technologies to create transformative, immersive experiences on an unprecedented scale. Key design features of MSG Sphere are expected to include:
•A fully-programmable LED exterior and an interior bowl that features the world’s largest and highest resolution LED screen known today — more than 160,000 square feet of display surface;
•An advanced acoustics system featuring beamforming technology that will deliver crystal clear audio;
•An infrasound haptic system that will use deep vibrations so guests can “feel” the experience; and
•An advanced architecture for connectivity that will enable a broader range of content, greater interaction among guests and more immersive entertainment experiences.
These technologies will come together to create a powerful platform, which we believe will make MSG Sphere the venue of choice for a wide variety of content — including attractions, concerts, residencies, corporate events, product launches and select sporting events.
The Company is building its first MSG Sphere in Las Vegas, a 17,500-seat venue, on land leased from Las Vegas Sands Corp. (“Sands”), which is adjacent to The Venetian Resort. Sands agreed to provide us with $75 million to help fund the construction costs, including the cost of a pedestrian bridge that links MSG Sphere to the Sands Expo Convention Center. Through June 30, 2021, Sands paid us $65 million of the amount for construction costs. Sands will receive priority access to purchase tickets to events at the venue for inclusion in hotel packages or other uses, as well as certain rent-free use of the venue to support its Sands Expo Convention Center business. The ground lease has no fixed rent; however, if certain return objectives are achieved,
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Sands will receive 25% of the after-tax cash flow in excess of such objectives. The lease is for a term of 50 years, commencing upon substantial completion of construction.
For this project, the Company began serving as construction manager in December 2020, providing it with significant transparency and control over the construction process, including direct engagement and supervision of subcontractors.
MSG Sphere in Las Vegas is a complex construction project with cutting-edge technology, which relies on subcontractors obtaining components from a variety of sources around the world. In April 2020, the Company announced that it was suspending construction of MSG Sphere due to COVID-19 related factors that were outside of its control, including supply chain issues. As the ongoing effects of the pandemic continued to impact its business operations, in August 2020, the Company disclosed that it had resumed full construction with a lengthened timetable to better preserve cash through the COVID-19 pandemic. The Company remains committed to bringing MSG Sphere to Las Vegas and expects to open the venue in calendar year 2023. See “— Item 1A. Risk Factors — General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
Because of the transformative nature of these venues, we believe there could be other markets — both domestic and international — where MSG Sphere can be successful. The design of MSG Sphere will be flexible to accommodate a wide range of sizes and capacities — from large-scale to smaller and more intimate — based on the needs of any individual market.
As we explore selectively extending the MSG Sphere network beyond MSG Sphere in Las Vegas, the Company’s intention is to utilize several options, such as non-recourse debt financing, joint ventures, equity partners and a managed venue model.
In February 2018, we announced the purchase of land in Stratford, London, which we expect will become home to a future MSG Sphere. The Company submitted a planning application to the local planning authority in March 2019 and that process, which will require various stages of review to be completed and approvals to be granted, is ongoing. Therefore, we do not have a definitive timeline at this time.
See “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — MSG Spheres.”
Tao Group Hospitality
Tao Group Hospitality develops, owns and operates many of the most successful entertainment, dining and nightlife venues in the world. Since opening its first venue in 2000, Tao Group Hospitality has been creating some of the hospitality industry’s most innovative experiences. In April 2021, Tao Group Hospitality acquired Hakkasan, creating a global leader in premium hospitality. Following the acquisition, the Company has an approximately 63% indirect controlling interest in the combined business.
Tao Group Hospitality’s portfolio features 61 venues in 23 markets across five continents – with a collection of world-renowned brands, including: Tao, Marquee, Lavo, Beauty & Essex, Cathédrale, Hakkasan, and Omnia. Its locations span across: Las Vegas (13), New York City (12), Southern California (7), London (5), Singapore (4), Los Cabos (3), Mumbai (2) and one venue in each of the following markets: Chicago, Miami, Honolulu, Connecticut, Shanghai, Marrakech, Oslo, Sydney, Bodrum, Riyadh, Qatar, Abu Dhabi, Dubai, Bengaluru, and Kolkata. Through a combination of license, management and lease agreements, Tao Group Hospitality has a vast network of partners that provide the company with additional opportunities for expansion and brand development both domestically and internationally.
Tao Group Hospitality is continuing to actively develop opportunities to expand in select markets both domestically and internationally. Since September 2018, Tao Group Hospitality has opened Tao Asian Bistro & Lounge at Mohegan Sun in Connecticut, Tao Chicago, along with new entertainment dining and nightlife venues as part of the Moxy Chelsea, Moxy East Village and Moxy Times Square in New York City. It also debuted three new venues in Singapore — Marquee, Avenue, and Koma — at the Marina Bay Sands.
The Company employs Tao Group Hospitality’s expertise to create new and innovative premium hospitality experiences that can be integrated across the Entertainment segment’s live offerings, driving value and growth across the Company. This includes at The Garden, where Tao Group Hospitality is playing an increasingly larger role in the food and hospitality offerings. In addition, Tao Group Hospitality operates, in partnership with the Company, Suite Sixteen at The Garden - a members-only suite that combines Tao-style luxury with top sports and entertainment events to deliver a unique premium experience for fans. Tao Group Hospitality is also a strategic partner with the Company in Las Vegas, where it is helping to create a world-class guest experience for MSG Sphere at The Venetian. Tao Group Hospitality has a more than 15-year history in the Las Vegas market, where — with the acquisition of Hakkasan — it now has 13 venues.
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MSG Networks
MSG Networks, which the Company acquired in July 2021, is an industry leader in sports production, content development and distribution. It includes two award-winning regional sports and entertainment networks, MSG Network and MSG+, a companion streaming service, MSG GO, and other digital properties.
Debuting as the first regional sports network in the country on October 15, 1969, MSG Networks has been a pioneer in regional sports programming for more than 50 years, setting a standard of excellence, creativity and technological innovation. Today, MSG Networks’ exclusive, award-winning programming continues to be a valuable differentiator for viewers, advertisers and the cable, satellite, telephone and other platforms (“Distributors”) that distribute its networks. MSG Networks is widely distributed throughout all of New York State and significant portions of New Jersey and Connecticut, as well as parts of Pennsylvania. MSG GO allows subscribers to access MSG Network and MSG+ and on demand content from a subscriber’s geographic region on their smartphones, tablets, and computers and is currently available to subscribers of all MSG Networks major distributors. MSG Networks is also carried nationally by certain Distributors on sports tiers or in similar packages.
Throughout its history, MSG Networks has been at the forefront of the industry, pushing the boundaries of regional sports coverage. In the process, its networks have become a powerful platform for some of the world’s greatest athletes and entertainers. MSG Networks’ commitment to programming excellence has earned it a reputation for best-in-class programming, production, marketing, and technical innovation. It has won more New York Emmy Awards for live sports and original programming over the past 10 years than any other station or network in the region.
The foundation of MSG Networks’ programming is its professional sports coverage. MSG Network and MSG+ feature a wide range of compelling sports content, including exclusive live local games and other programming of the Knicks, Rangers, Islanders, Devils and Sabres; as well as significant coverage of the New York Giants and Buffalo Bills. MSG Networks also showcases a wide array of other sports and entertainment programming, which includes New York Red Bulls soccer; Westchester Knicks basketball; and New York Riptide lacrosse; as well as horse racing, poker, tennis, mixed martial arts, and boxing programs.
MSG Network and MSG+ collectively air hundreds of live professional games each year, along with a comprehensive lineup of other sporting events and original programming designed to give fans behind-the-scenes access and insight into the teams and players they love. This content includes pre- and post-game coverage throughout the seasons, along with team-related programming that features coaches, players and more, all of which capitalizes on the enthusiasm for the teams featured on MSG Network and MSG+.
In addition, MSG Networks offers an evolving slate of content to appeal to existing audiences as well as new viewers. This includes “MSG Shorts,” a programming block which features short-form content targeted to a younger audience, that is suited for its linear networks as well as digital and social platforms.
MSG Networks continues to build on its long history of innovation. For example, MSG Networks was the first RSN to integrate live stats and interactive games into its MSG GO streaming app, which encourages fans to play along with the actual game broadcast for a chance to win prizes. MSG Networks also recently became the first RSN to offer a standalone app for free-to-play pick ‘em-style contests - MSG Networks Pick ‘Em.
Intellectual Property
We create, own and license intellectual property in the countries in which we operate, and it is our practice to protect our trademarks, brands, copyrights, inventions and other original and acquired works. We have registered many of our trademarks, and have filed for patent protection, in the United States and other countries where we operate or plan to operate, including trademarks and inventions associated with Madison Square Garden, the Radio City Rockettes, MSG Sphere and Tao Group Hospitality brands. We believe our ability to maintain and monetize our intellectual property rights, including the technology and content being developed for MSG Sphere and our brand logos, are important to our business, our brand-building efforts and the marketing of our products and services. We cannot predict, however, whether steps taken by us to protect our proprietary rights will be adequate to prevent misappropriation of these rights or protect against the vulnerability to cancellation actions due to non-use. See “— Item 1A. Risk Factors — Risks Related to Cybersecurity and Intellectual Property — We May Become Subject to Infringement or Other Claims Relating to Our Content or Technology” and “— Item 1A. Risk Factors — Risks Related to Cybersecurity and Intellectual Property — Theft of Our Intellectual Property May Have a Material Negative Effect on Our Business and Results of Operations.”
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Other Investments
Our Company explores investment opportunities that strengthen its existing position within the entertainment landscape and/or allow us to exploit our assets and core competencies for growth.
In July 2018, the Company acquired a 30% interest in SACO Technologies Inc. (“SACO”), a global provider of high-performance LED video lighting and media solutions. The Company is utilizing SACO as a preferred display technology provider for MSG Sphere and is benefiting from agreed-upon commercial terms. In addition, the Company also has other investments in various entertainment, hospitality companies and related technology companies, accounted for under the equity method.
Our Community
The Company actively engages with and supports the communities we serve through a variety of important initiatives.
We are proud to play a leadership role organizing extraordinary events such as opening The Garden’s doors in February 2020 to 18,000 New York City public school students for an exclusive, free performance of the Broadway production of To Kill a Mockingbird, and the “12-12-12” benefit concert organized post-Superstorm Sandy, which raised more than $50 million for hurricane victims. In addition to these events, the Company provides funding annually to various non-profit organizations across the country, as well as in-kind contributions such as tickets, promotional items, and food to schools, charities and community-based organizations in the local area. During the COVID-19 pandemic, the Company worked with dozens of local restaurants and charities to donate over 100,000 meals to families in need. In addition, the Company is a long-time supporter of the Lustgarten Foundation for Pancreatic Cancer Research, the nation’s largest private supporter of pancreatic cancer research, which has directed more than $200 million to research and assembled the best scientific minds to help find a cure.
Our Company also has a close association with The Garden of Dreams Foundation (the “Foundation”), a non-profit charity dedicated to bringing life changing opportunities to young people in need. In partnership with MSG Sports, the Foundation provides young people in our communities with access to educational and skills opportunities; mentoring programs; and memorable experiences that enhance their lives, help shape their futures and create lasting joy. Specific initiatives include the Inspire Scholarship program, which provides high school seniors with financial assistance, and “MSG Classroom,” an Emmy award-winning educational initiative that teaches high school students about the media industry through hands-on learning opportunities in areas such as broadcasting, script writing and production. All of the Foundation’s activities target young people facing illness or financial challenges, as well as children of uniformed personnel who have been lost or injured while serving our communities. Since its inception in 2006, the Foundation has impacted nearly 400,000 young people and their families.
Regulation
The rules, regulations, policies and procedures affecting our business are subject to change. The following paragraphs describe the existing legal and regulatory requirements that are most significant to our business today; they do not purport to describe all present and proposed laws and regulations affecting our business.
Our Entertainment and Tao Group Hospitality businesses are subject to the general powers of federal, state and local government, as well as foreign governmental authorities, to deal with matters of health and public safety.
Venue Licenses
Our venues, like all public spaces, are subject to building and health codes and fire regulations imposed by the state and local governments in the jurisdictions in which they are located. Our venues are also subject to zoning and outdoor advertising regulations, and, with respect to Radio City Music Hall, the Beacon Theatre and The Chicago Theatre, landmark regulations which restrict us from making certain modifications to our facilities as of right or from operating certain types of businesses. Our venues also require a number of licenses to operate, including occupancy permits, exhibition licenses, food and beverage permits, liquor licenses and other authorizations and, with respect to The Garden, a zoning special permit granted by the New York City Planning Commission. In the jurisdictions in which these venues are located, the operator is subject to statutes that generally provide that serving alcohol to a visibly intoxicated or minor guest is a violation of the law and may provide for strict liability for certain damages arising out of such violations. In addition, our venues are subject to the federal Americans with Disabilities Act (and related state and local statutes), which requires us to maintain certain accessibility features at each of our facilities. We and our venues are also subject to environmental laws and regulations. See “— Item 1A. Risk Factors — Economic and Operational Risks — We Are Subject to Extensive Governmental Regulation and Our Failure to Comply with These Regulations May Have a Material Negative Effect on Our Business and Results of Operations.”
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Labor
Our Entertainment and Tao Group Hospitality businesses are also subject to regulation regarding working conditions, overtime and minimum wage requirements. See “— Item 1A. Risk Factors — Economic and Operational Risks — Organized Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations.”
Ticket Sales
Our Entertainment business is subject to legislation governing the sale and resale of tickets and consumer protection statutes generally.
Data and Privacy
We are subject to data privacy and protection laws, regulations, policies and contractual obligations that apply to the collection, transmission, storage, processing and use of personal information or personal data, which among other things, impose certain requirements relating to the privacy and security of personal information. The variety of laws and regulations governing data privacy and protection, and the use of the internet as a commercial medium are rapidly evolving, extensive and complex, and may include provisions and obligations that are inconsistent with one another or uncertain in their scope or application.
The data protection landscape is rapidly evolving in the United States. For example, California has passed a comprehensive data privacy law, the California Consumer Privacy Act of 2018 (the “CCPA”), and other states including Virginia and Colorado have also passed similar laws. Additionally, the California Privacy Rights Act (the “CPRA”) was recently passed, which will impose additional data protection obligations on covered businesses, including additional consumer rights procedures and obligations, limitations on data uses, new audit requirements for higher risk data, and constraints on certain uses of sensitive data. The majority of the CPRA provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required. Further, there are several legislative proposals in the United States, at both the federal and state level, that could impose new privacy and security obligations.
In addition, governmental authorities and private litigants continue to bring actions against companies for online collection, use, dissemination and security practices that are unfair or deceptive.
International Operations
Our international operations are subject to laws and regulations of the countries in which they operate, as well as international bodies, such as the European Union. We are subject to laws and regulations relating to, among other things, foreign privacy and data protection, such as the E.U. General Data Protection Regulation, currency and repatriation of funds, anti-bribery, anti-money laundering and anti-corruption, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. These laws and regulations apply to the activities of the Company and, in some cases, to individual directors, officers and employees of the Company and agents acting on our behalf. Certain of these laws impose stringent requirements on how we can conduct our foreign operations and could place restrictions on our business and partnering activities.
FCC Regulations
Our MSG Networks business is also subject to regulation by the Federal Communications Commission (the “FCC”). The FCC imposes regulations directly on programming networks and also on certain Distributors that affect programming networks indirectly.
Closed Captioning
Our programming networks must provide closed captioning of video programming for the hearing impaired and meet certain captioning quality standards. The FCC and certain of our affiliation agreements require us to certify compliance with such standards. We are also required to provide closed captioning on certain video content delivered via the Internet.
Commercial Loudness
FCC rules require multichannel video programming distributors (“MVPDs”) to ensure that all commercials comply with specified volume standards, and certain of our affiliation agreements require us to certify compliance with such standards.
Advertising Restrictions on Children’s Programming
Any programming intended primarily for children 12 years of age and under and associated Internet websites that we may offer must comply with certain limits on commercial matter.
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Obscenity Restrictions
Distributors are prohibited from transmitting obscene programming, and certain of our affiliation agreements require us to refrain from including such programming on our networks.
Program Carriage
The FCC has made changes to the program carriage rules, which prohibit Distributors from favoring their affiliated programming networks over unaffiliated similarly situated programming networks in the rates, terms and conditions of carriage agreements between programming networks and cable operators or other MVPDs. Some of these changes could make it more difficult for our programming networks to challenge a Distributor’s decision to decline to carry one of our programming networks or to discriminate against one of our programming networks.
Packaging and Pricing
The FCC periodically considers examining whether to adopt rules regulating how programmers package and price their networks, such as whether programming networks require Distributors to purchase and carry undesired programming in return for the right to carry desired programming and, if so, whether such arrangements should be prohibited.
Effect of “Must-Carry” and Retransmission Consent Requirements
The FCC’s implementation of the statutory “must-carry” obligations requires cable and satellite Distributors to give broadcasters preferential access to channel space, and the implementation of “retransmission consent” requirements allow broadcasters to extract compensation, whether monetary or mandated carriage of affiliated content, in return for permission to carry their networks. These rules may reduce the amount of channel space that is available for carriage of our programming networks and the amount of funds that Distributors have to pay us for our networks.
Website and Mobile Application Requirements
Our Entertainment and MSG Networks businesses are also subject to certain regulations applicable to our Internet websites and mobile applications. We maintain various websites and mobile applications that provide information and content regarding our business, offer merchandise and tickets for sale, make available sweepstakes and/or contests and offer hospitality services. The operation of these websites and applications may be subject to third-party application store requirements, as well as a range of federal, state and local laws including those related to privacy and protection of personal information, accessibility for persons with disabilities and consumer protection regulations. In addition, to the extent any of our websites seek to collect information from children under 13 years of age, they may be subject to the Children’s Online Privacy Protection Act (“COPPA”), which places restrictions on websites’ and online services’ collection and use of personally identifiable information online from children under age 13 without parental consent.
Competition
Competition in Our Entertainment Business
Our Entertainment business competes, in certain respects and to varying degrees, with other live performances, sporting events, movies, home entertainment (including the Internet and online services, social media and social networking platforms, television, video and gaming devices), and the large number of other entertainment and public attraction options available to members of the public. Our Entertainment businesses typically represent alternative uses for the public’s entertainment dollars. The primary geographic area in which we operate, New York City, is among the most competitive entertainment markets in the world, with the world’s largest live theater industry and extensive performing arts venues, 12 major professional sports teams, numerous museums, galleries and other attractions, and numerous movie theaters available to the public. We also expect to have significant operations in Las Vegas. Our venues and live offerings outside of New York City similarly compete with other entertainment options in their respective markets and elsewhere. We compete with these other entertainment options on the basis of the quality of our offerings, the public’s interest in our content and the price of our tickets.
We compete for bookings with a large number of other venues both in the cities in which our venues are located and in alternative locations capable of booking the same productions and events. Generally, we compete for bookings on the basis of the size, quality, expense and nature of the venue required for the booking. Some of our competitors may have a larger network of venues and/or greater financial resources.
In addition to competition for bookings and ticket sales, we also compete to varying degrees with other productions and sporting events for advertising and sponsorship dollars.
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Competition in Our MSG Networks Business
Distribution of Programming Networks
The business of distributing programming networks is highly competitive. Our programming networks face competition from other programming networks, including other regional sports and entertainment networks, for the right to be carried by a particular Distributor, and for the right to be carried on the service tier(s) that will attract the most subscribers. Once a programming network of ours is carried by a Distributor, that network competes for viewers not only with the other programming networks available through the Distributor, but also with pay-per-view programming and video on demand offerings, as well as Internet and online streaming and on demand services, mobile applications, social media and social networking platforms, radio, print media, motion picture theaters, home video, and other sources of information, sporting events and entertainment. Each of the following competitive factors is important to our networks: the prices we charge for our programming networks, the variety, quantity and quality (in particular, the performance of the sports teams whose media rights we control), of the programming offered on our networks, and the effectiveness of our marketing efforts.
Our ability to successfully compete with other programming networks for distribution may be hampered because the Distributors may be affiliated with other programming networks. In addition, because such affiliated Distributors may have a substantial number of subscribers, the ability of such competing programming networks to obtain distribution on affiliated Distributors may lead to increased subscriber and advertising revenue for such networks because of their increased penetration compared to our programming networks. Even if such affiliated Distributors carry our programming networks, there is no assurance that such Distributors will not place their affiliated programming network on more desirable tier(s) or otherwise favor their affiliated programming network, thereby giving the affiliated programming network a competitive advantage over our own.
New or existing programming networks that are owned by or affiliated with broadcast networks such as NBC, ABC, CBS or Fox may have a competitive advantage over our networks in obtaining distribution through the “bundling” of agreements to carry those programming networks with the agreement giving the Distributor the right to carry a broadcast station owned by or affiliated with the network.
In addition, content providers (such as certain broadcast and cable networks) and new content developers, Distributors and syndicators are distributing programming directly to consumers on an “over-the-top” (“OTT”) basis. In addition to existing direct-to-consumer streaming services such as Amazon Prime, Hulu, Netflix, Apple TV+, Disney+, HBO Max and Peacock, additional services have launched and more will likely launch in the near term. Such direct-to-consumer OTT distribution of content has contributed to consumers eliminating or downgrading their pay television subscription, which results in certain consumers not receiving our programming networks.
See “— Item 1A. Risk Factors — General Risk Factors — All of Our Businesses Face Intense and Wide-Ranging Competition That May Have a Material Negative Effect on Our Business and Results of Operations.” and “— Item 1A. Risk Factors — Risks Related to Our MSG Networks Business — We May Not Be Able to Adapt to New Content Distribution Platforms and to Changes in Consumer Behavior Resulting From Emerging Technologies, Which May Have a Material Negative Effect on Our Business and Results of Operations.” See also “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Overview — Merger with MSG Networks Inc.”
Sources of Programming
We also compete with other networks and other distribution outlets to secure desired programming, including sports-related programming. Competition for programming increases as the number of programming networks and distribution outlets, including, but not limited to, streaming outlets, increases. Other programming networks, or distribution outlets, that are affiliated with or otherwise have larger relationships with programming sources such as sports teams or leagues, movie or television studios, or film libraries may have a competitive advantage over us in this area.
Competition for Sports Programming Sources
Because the loyalty of the sports viewing audience to a sports programming network is primarily driven by loyalty to a particular team or teams, access to adequate sources of sports programming is particularly critical to our networks. In connection with the spinoff of MSG Sports (formerly The Madison Square Garden Company) from MSG Networks in September 2015 (the “2015 Sports Distribution”), MSG Networks entered into long-term media rights agreements with the Knicks and Rangers providing MSG Networks with the exclusive media rights to their games. MSG Networks also has multi-year media rights agreements with the Islanders, Devils and Sabres. Our rights with respect to these professional teams may be limited in certain circumstances due to rules imposed by the leagues in which they compete. Our programming networks compete for telecast rights for teams or events principally with national or regional programming networks that specialize in or
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carry sports programming; local and national commercial broadcast television networks; independent syndicators that acquire and resell such rights nationally, regionally and locally; streaming outlets and other Internet and mobile-based distributors of programming. Some of our competitors may own or control, or are owned or controlled by, sports teams, leagues or sports promoters, which gives them an advantage in obtaining telecast rights for such teams or sports. For example, two professional sports teams located in New York have ownership interests in programming networks featuring the games of their teams. Distributors may also contract directly with the sports teams in their local service areas for the right to distribute games on their platforms.
The increasing amount of sports programming available on a national basis, including pursuant to national media rights arrangements (e.g., NBA on ABC, ESPN, and TNT and NHL on NBC and NBC Sports Network (which will be replaced by ABC, ESPN, ESPN+ and TNT beginning with the 2021-22 NHL season)), as part of league-controlled sports programming networks (e.g., NBA TV and NHL Network), in out-of-market packages (e.g., NBA League Pass and NHL Center Ice), league and other websites, mobile applications and streaming outlets, may have an adverse impact on our competitive position as our programming networks compete for distribution and for viewers.
Competition for Advertising Revenue
The level of our advertising revenue depends in part upon unpredictable and volatile factors beyond our control, such as viewer preferences, the quality and appeal of the competing programming and the availability of other entertainment activities. See “— Item 1A. Risk Factors — Risks Related to Our MSG Networks Business — We Derive Substantial Revenues From the Sale of Advertising Time and Those Revenues Are Subject to a Number of Factors, Many of Which Are Beyond Our Control.”
Competition in Our Tao Group Hospitality Business
Our Tao Group Hospitality business competes with other restaurants and nightlife venues in 23 markets across five continents. Two of the primary geographic areas in which we operate, New York City and Las Vegas, are among the most competitive markets in the world, with thousands of restaurants and nightlife venues. We also have significant operations in Southern California and London. Our restaurants and nightlife venues outside of New York City and Las Vegas similarly compete with other dining and nightlife options in their respective markets and elsewhere. We compete with these other options on the basis of the quality, location and atmosphere, including the nature and condition of the setting, of our venues, our service, the price, quality and presentation of our food and the overall experience we provide.
Human Capital Resources
We believe the strength of our workforce is one of the significant contributors to our success. Our key human capital management objectives are to invest in and support our employees in order to attract, develop and retain a high performing and diverse workforce.
Diversity, Equity and Inclusion
We believe the diverse perspectives and experiences of our employees enhance the value of the Company and produce a more vibrant, constructive, and engaging place to work, and we are committed to fostering an inclusive workplace. To advance these efforts, the Company, together with MSG Sports, maintains a Diversity and Inclusion Council (the “D&I Council”). The D&I Council is a joint council comprised of employees from the Company and MSG Sports who have demonstrated a high level of passion and commitment to diversity and inclusion. The contributions of the D&I Council span across both the Company and MSG Sports, providing strategic guidance to senior management of each company on diversity and inclusion initiatives, serving as a resource to all employees, and working to promote environments that foster inclusivity and employee engagement and enhance communication between companies, departments, and employees.
Since its inception, several initiatives have furthered these objectives under the D&I Council’s guidance, including:
•Creation of employee resource groups such as Asian American Pacific Islander Network, Black Employee Network, LatinX Employee Network, Pride Employee Network, Women’s Employee Network, and Veterans Network to build an internal support system for employees of different backgrounds and advance efforts in attracting, developing and retaining talent by promoting leadership and encouraging diversity and inclusion among all employees;
•Facilitation of a series of employee focus groups as well as ongoing listening sessions allowing employees to candidly address topics central to diversity and inclusion;
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•Training programs with a focus on unconscious bias, including Conscious Inclusion Awareness Training and Interview Skills training, a career development tool, and a learning system with comprehensive resources and training, for employees and hiring managers;
•Focus on hiring of diverse employees including increasing the hiring of diverse Rockettes and entry level employees through external partnership programs;
•Ongoing partnerships with local and national organizations dedicated to supporting diverse communities; and
•Partnership with the D&I efforts of the Knicks and Rangers at MSG Sports to foster broader awareness-building by facilitating community-focused panels, discussions and cultural events.
Talent
As of June 30, 2021, we had approximately 2,400 full-time union and non-union employees and 3,400 part-time union and non-union employees.
We aim to attract top talent through our prestigious brands and venues, as well as through the many benefits we offer. We aim to retain and develop our talent by emphasizing our competitive rewards; offering opportunities that support employees both personally and professionally; and our commitment to fostering career development in a positive corporate culture.
Our performance management practice includes ongoing feedback and conversations between managers and team members, and talent reviews designed to identify potential future leaders and inform succession plans. We value continuous learning and development opportunities for our employees, which include: a career development tool; leadership development programs; a learning platform; and tuition assistance.
Our benefit offerings are designed to meet the range of needs of our diverse workforce and include: domestic partner coverage; an employee assistance program which also provides assistance with child and elder care resources; legal support; pet insurance; wellness programs and financial planning seminars. These resources are intended to support the physical, emotional and financial well-being of our employees.
As of June 30, 2021, approximately 33% of our employees were represented by unions. Approximately 52% of such union employees are subject to collective bargaining agreements (“CBAs”) that expired as of June 30, 2021 and approximately 11% are subject to CBAs that will expire by June 30, 2022 if they are not extended prior thereto. Labor relations can be volatile, though our current relationships with our unions taken as a whole are positive. We have from time to time faced labor action or had to make contingency plans because of threatened or potential labor actions.
COVID-19
The health and safety of our employees, contractors, performing artists, athletes and guests at our venues is our top priority. In response to COVID-19, measures have been taken to ensure that health and safety protocols are in place and enforced throughout our offices and our venues. We also supported our employees through our relief fund, wellness programming and remote working capabilities. We believe we have been able to resume our business operations without sacrificing this commitment to keeping our employees and contractors safe while working on-site.
Financial Information about Segments and Geographic Areas
Substantially all revenues and assets of the Company’s reportable segments are attributed to or located in the United States. A majority of the Company’s revenues and assets are concentrated in the New York City metropolitan area. Tao Group Hospitality, in which the Company has a controlling interest, operates globally with 61 entertainment dining and nightlife venues spanning 23 markets across five continents. Financial information by business segments for each of the years ended June 30, 2021, 2020, and 2019 is set forth in “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II — Item 8. Financial Statements and Supplementary Data — Consolidated and Combined Financial Statements — Notes to Consolidated and Combined Financial Statements — Note 21. Segment Information.”
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Item 1A. Risk Factors
Summary of Risk Factors
The following is a summary of the principal risks that could adversely affect our business, operations and financial results. For a more complete discussion of the material risks facing our business, please see below.
General Risk Factors
•Our operations and operating results have been, and continue to be, materially impacted by the COVID-19 pandemic and actions taken in response by governmental authorities and certain professional sports leagues.
•All of our businesses face intense and wide-ranging competition that may have a material negative effect on our business and results of operations.
Risks Related to Our Entertainment Business
•The success of our Entertainment business depends on the continued popularity of our live productions, particularly the Christmas Spectacular, and the sporting events we host at our venues, the decline of which could have a material negative effect on our business and results of operations.
•The Company is moving forward with its MSG Sphere initiative and is building and plans to operate its first state-of-the-art venue in Las Vegas, while pursuing a potential venue in London. MSG Sphere will use cutting-edge technologies and will require significant capital investments by the Company. There can be no assurance that MSG Sphere will be successful.
•Our Entertainment business strategy includes the development of new content, productions, attractions and other events which could require us to make considerable investments for which there can be no guarantee of success.
•We depend on licenses from third parties for the performance of musical works at our venues, the loss of which or renewal of which on less favorable terms may have a negative effect on our business and results of operations.
•Our properties are subject to, and benefit from, certain easements, the availability of which may not continue on terms favorable to us or at all. In addition, a change to or withdrawal of a New York City real estate tax exemption for the Madison Square Garden Complex may have a material negative effect on our business and results of operations.
Risks Related to Our MSG Networks Business
•The success of our MSG Networks business depends on affiliation fees we receive under our affiliation agreements, the loss of which or renewal of which on less favorable terms may have a material negative effect on our business and results of operations.
•Given that we depend on a limited number of distributors for a significant portion of our MSG Networks revenues, further industry consolidation could adversely affect our business and results of operations.
•We may not be able to adapt to new content distribution platforms and to changes in consumer behavior resulting from emerging technologies, which may have a material negative effect on our business and results of operations.
•If the rate of decline in the number of subscribers to traditional MVPDs services increases or these subscribers shift to other services or bundles that do not include the Company’s programming networks, there may be a material negative effect on the Company’s affiliation revenues.
•We derive substantial revenues from the sale of advertising time and those revenues are subject to a number of factors, many of which are beyond our control. In addition, our media rights agreements with various professional sports teams have varying durations and terms and we may be unable to renew those agreements on acceptable terms or such rights may be lost for other reasons.
•Our business is substantially dependent on the popularity of the NBA and NHL teams whose media rights we control; the actions of the NBA and NHL may have a material negative effect on our MSG Networks business and results of operations.
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Risks Related to Our Tao Group Hospitality Business
•Tao Group Hospitality’s revenue growth depends upon its strategy of adding new venues and Tao Group Hospitality plans to add a significant number of new venues. This will require additional capital and there can be no guarantee of success.
•A lack of availability of suitable locations for new Tao Group Hospitality venues or a decline in the quality of the locations of current Tao Group Hospitality venues may have a material negative effect on our business and results of operations.
•Negative publicity with respect to any of the existing or future Tao Group Hospitality brands could reduce sales at one or more of the existing or future Tao Group Hospitality venues and make the Tao Group Hospitality brands less valuable, which could have a material negative effect on our business and results of operations.
Economic and Operational Risks
•We do not own all of our venues and our failure to renew our leases on economically attractive terms may have a material negative effect on our business and results of operations.
•The geographic concentration of our businesses could subject us to greater risk than our competitors and have a material negative effect on our business and results of operations.
•Our business has been adversely impacted and may, in the future, be materially adversely impacted by an economic downturn and financial instability or changes in consumer tastes and preferences.
•Our business could be adversely affected by terrorist activity or the threat of terrorist activity, weather and other conditions that discourage congregation at prominent places of public assembly.
•We are subject to extensive governmental regulation and our failure to comply with these regulations may have a material negative effect on our business and results of operations.
•We face continually evolving cybersecurity and similar risks, which could result in loss, disclosure, theft, destruction or misappropriation of, or access to, our confidential information and cause disruption of our business, damage to our brands and reputation, legal exposure and financial losses.
Risks Related to Our Indebtedness and Financial Condition
•We have substantial indebtedness and are highly leveraged, which could adversely affect our business.
•We may require additional financing to fund our planned construction of MSG Sphere in Las Vegas, as well as certain of our obligations, ongoing operations, and capital expenditures, the availability of which is uncertain.
•We have incurred substantial operating losses, negative adjusted operating income and negative cash flow and there is no assurance we will have operating income, positive adjusted operating income or positive cash flow in the future.
Risks Related to Governance and Our Controlled Ownership
•We are materially dependent on MSG Sports’ performance under various agreements.
•We are controlled by the Dolan family. As a result of their control, the Dolan family has the ability to prevent or cause a change in control or approve, prevent or influence certain actions by the Company.
•We share certain key directors and officers with MSG Sports and/or AMC Networks, which means those officers do not devote their full time and attention to our affairs and the overlap may give rise to conflicts. Our overlapping directors and officers with MSG Sports and/or AMC Networks may result in the diversion of corporate opportunities to MSG Sports and/or AMC Networks and other conflicts and provisions in our amended and restated certificate of incorporation may provide us no remedy in that circumstance.
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General Risk Factors
Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.
For the majority of Fiscal Year 2021, substantially all of the Entertainment business operations were suspended and Tao Group Hospitality was operating at significantly reduced capacity and demand. While operations have started to resume, it is not clear when we will fully return to normal operations and increases in COVID-19 cases generally may result in the imposition of restrictions that had been previously lifted.
As a result of government-mandated assembly limitations and closures, all of our performance venues were closed beginning in mid-March 2020. Use of The Garden resumed for Knicks and Rangers home games without fans in December 2020 and January 2021, respectively, and, beginning on February 23, 2021, The Garden was permitted to host fans at games at 10% seating capacity with certain safety protocols, such as proof of full vaccination or a negative COVID-19 test and social distancing. Starting April 1, 2021, our other New York performance venues, Hulu Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre, were also permitted to reopen at 10% capacity with certain safety protocols. Although live events were permitted at our venues, government-mandated capacity restrictions and other safety requirements made it economically unfeasible to do so for most events at that time. Effective May 19, 2021, all of our New York venues were permitted to host guests at full capacity, subject to certain restrictions, and effective June 2021, The Chicago Theatre was permitted to host events without restrictions. As a result, The Garden hosted three Knicks playoff games with approximately 15,000-16,000 fans in attendance per game during Fiscal Year 2021. Capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. Our New York venues hosted their first ticketed events with 100% capacity at the end of Fiscal Year 2021 with: Tribeca Festival’s closing night film, Untitled: Dave Chappelle Documentary at Radio City Music Hall on June 19, 2021; the Foo Fighters at The Garden on June 20, 2021; Trey Anastasio at The Beacon Theatre for a two-night run starting on June 22, 2021; and a boxing/hip-hop event at the Hulu Theater at Madison Square Garden on August 3, 2021. For all events hosted at our New York venues with 100% capacity prior to August 17, 2021, guests were required to provide proof of full vaccination or a negative COVID-19 test, depending on the requirements of that venue and/or preference of the performer. Effective August 17, 2021 all workers and customers in New York City indoor dining, indoor fitness and indoor entertainment facilities are required to show proof of at least one vaccination shot. In addition, effective August 20, 2021, face coverings are required for all individuals in indoor public spaces in Chicago, including our venues. For Fiscal Year 2021, the majority of ticketed events at our venues were postponed or canceled and, while live events are permitted to be held at all of our performance venues as of the date of this filing and we are continuing to host and book new events, due to the lead-time required to book touring acts and artists, which is the majority of our business, we expect that our bookings will continue to be impacted through the 2021 calendar year. We continue to actively pursue one-time or multi-night performances at our venues as the touring market ramps up.
The impact to our operations also included the cancellation of the 2020 production of the Christmas Spectacular and both the 2020 and 2021 Boston Calling Music Festivals. While the 2021 production of the Christmas Spectacular is currently on-sale, the current production is scheduled for 163 shows, as compared with 199 shows for the 2019 production, which was the last production presented prior to the impact of the COVID-19 pandemic.
Disruptions caused by the COVID-19 pandemic had a significant and negative impact on Tao Group Hospitality’s operations and financial performance for Fiscal Year 2021. Due to government actions taken in response to the COVID-19 pandemic, virtually all of Tao Group Hospitality’s venues were closed for approximately three months starting in mid-March 2020, and three venues were permanently closed: Avenue New York in April 2020; Vandal in June 2020; and Avenue Los Angeles in May 2021. Throughout Fiscal Year 2021, Tao Group Hospitality conducted limited operations at certain venues, subject to significant regulatory requirements, including capacity limits, curfews and social distancing requirements for outdoor and indoor dining. Tao Group Hospitality’s operations fluctuated throughout Fiscal Year 2021 as certain markets lifted restrictions, imposed restrictions, and changed operational requirements over time. See “ — Economic and Operational Risks — We Are Subject to Extensive Governmental Regulation and Our Failure to Comply with These Regulations May Have a Material Negative Effect on Our Business and Results of Operations” and “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business.”
MSG Networks depends on the appeal of its live programming to viewing subscribers of its networks and to its advertisers. As a result of the COVID-19 pandemic and league and government actions relating thereto, MSG Networks aired substantially fewer NBA and NHL telecasts during Fiscal Year 2021, as compared with Fiscal Year 2019 (the last full fiscal year not impacted by COVID-19), and consequently experienced a decrease in revenues, including a material decrease in advertising
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revenue. The absence of live sports games also resulted in a decrease in certain MSG Networks expenses, including rights fees, variable production expenses, and advertising sales commissions.
Even as bans on public assembly and closures are lifted, our operations have been, and we expect they will continue to be, adversely impacted by government mandated regulations (such as capacity limitations), measures we currently and may in the future voluntarily implement to promote the health and safety of customers, and the social distancing practices and health concerns of our guests and employees. Governmental regulations enacted in response to the COVID-19 pandemic may impact the revenue we derive and/or the expenses we incur from events that we choose to host such that events that were historically profitable would instead result in losses. Concerns about the COVID-19 pandemic could deter artists from touring and/or substantially decrease the use of and demand for our venues. Both the NBA and NHL determined to complete their 2019-20 seasons with games away from home arenas and conduct the majority of the 2020-21 seasons without fans in attendance, and it is possible that continuing concerns related to COVID-19 could cause professional sports teams in the United States to play games without an audience during future seasons. It is unclear how long and to what extent COVID-19 concerns will continue to impact the use of and/or demand for our entertainment and dining and nightlife venues, and demand for our sponsorship and advertising assets, or deter our employees and vendors from working at our venues (which may lead to short-staffing), even after restrictions are lifted. In addition, trends of people relocating away from densely populated cities like New York as a result of COVID-19 may negatively impact our business due to a reduction in potential guests and employees.
Our business is particularly sensitive to reductions in travel and discretionary consumer spending. Over the long-term, COVID-19 has, and will likely continue to, impede economic activity in impacted regions and globally, potentially causing a recession, leading to a further decline in discretionary spending on sports and entertainment events and other leisure activities, which could result in long-term effects on our business.
Even as our businesses resume operations, despite the implementation of additional protective measures to provide for the health and safety of our guests and employees, there can be no assurances that guests at our venues or vendors and employees working at our venues will not contract COVID-19 at one of our venues. Any such occurrence could result in litigation, legal and other costs and reputational risk that could materially and adversely impact our business and results of operations. Such an occurrence may also require the temporary closure of a venue or suspension of operations and/or quarantine of some or all of our employees at that venue.
We are building the MSG Sphere in Las Vegas. This is a complex construction project with cutting-edge technology that relies on subcontractors obtaining components from a variety of sources around the world. In April 2020, the Company announced that it was suspending construction of MSG Sphere due to COVID-19 related factors that were outside of its control, including supply chain issues.  As the ongoing effects of the pandemic continued to impact its business operations, in August 2020, the Company disclosed that it resumed full construction with a lengthened timetable in order to better preserve cash through the COVID-19 pandemic. The Company remains committed to bringing MSG Sphere to Las Vegas and expects to open the venue in calendar year 2023.
For the reasons set forth above and other reasons that may come to light as the COVID-19 pandemic and protective measures expand, we cannot reasonably estimate the impact to our future revenues, results of operations, cash flows or financial condition, but such impacts have been and will continue to be significant and could have a material adverse effect on our business, revenues, results of operations, cash flows and financial condition.
All of Our Businesses Face Intense and Wide-Ranging Competition That May Have a Material Negative Effect on Our Business and Results of Operations.
Our business competes, in certain respects and to varying degrees, with other leisure-time activities such as television, radio, motion pictures, sporting events and other live performances, restaurants and nightlife venues, the Internet, social media and social networking platforms, and online and mobile services, including sites for online content distribution, video on demand and other alternative sources of entertainment and information, in addition to competing for concerts with other event venues, and other restaurants and nightlife venues, for total entertainment dollars in our marketplace.
Entertainment business. The success of our Entertainment business is largely dependent on the continued success of the Christmas Spectacular, and the availability of, and our venues’ ability to attract, concerts, family shows, sporting events and other events, competition for which is intense, and the ability of performers to attract strong attendance at our venues. For example, The Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre all compete with other entertainment options in the New York City metropolitan area. The Chicago Theatre faces similar competition from other entertainment options in its market and elsewhere.
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In addition, our Entertainment business is highly sensitive to customer tastes and depends on our ability to attract artists and events. The success of our Entertainment business depends in part upon our ability to offer live entertainment that is popular with customers. We contract with promoters and others to provide performers and events at our venues. There may be a limited number of popular artists, groups or events that can attract audiences to our venues, and our business would suffer to the extent that we are unable to continue to attract such artists, groups and events to perform at our venues. See “— Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
In order to maintain the competitive positions of The Garden and our other venues, we must invest on a continuous basis in state-of-the-art technology. In addition, we must maintain a competitive pricing structure for events that may be held in our venues, many of which have alternative venue options available to them in New York and other cities. We invest a substantial amount in our Christmas Spectacular and in new productions to continue to attract audiences. We cannot be assured that such investments will generate revenues that are sufficient to justify our investment or even that exceed our expenses. For a discussion of substantial investments in state-of-the-art technology by the Company in connection with the MSG Sphere, see “— Risks Related to Our Entertainment Business — The Company is Moving Forward With its MSG Sphere Initiative and Is Building and Plans to Operate its First State-of-the-Art Venue in Las Vegas, While Pursuing a Potential Venue in London. MSG Sphere Will Use Cutting-Edge Technologies and Will Require Significant Capital Investment by the Company. There Can Be No Assurance That MSG Sphere Will Be Successful.”
Tao Group Hospitality business. The restaurant, nightlife and hospitality industries are intensely competitive with respect to, among other things, service, price, food quality and presentation, location, atmosphere, overall experience, and the nature and condition of the setting (including customer perception of the safety measures implemented due to the COVID-19 pandemic). Competitors of Tao Group Hospitality’s business include a large and diverse group of well-recognized upscale restaurants and nightlife venues and brands. Some of our competitors may have a larger network of venues and/or greater financial resources.
In order to maintain the competitive positions of our Tao Group Hospitality venues, we must invest on a continuous basis in maintaining the high-quality atmosphere of our venues, notable performers and promotional events, as well as maintaining and developing new guest relationships. In addition, we must maintain a competitive pricing structure for food and drinks at our venues, given the number of alternative venue options available to potential customers. We cannot be assured that such investments will generate revenues that are sufficient to justify our investment or even that exceed our expenses.
MSG Networks business. Our MSG Networks business competes, in certain respects and to varying degrees, for viewers and advertisers with other programming networks, pay-per-view, video-on-demand, online streaming or on-demand services and other content offered by Distributors and others. Additional companies, some with significant financial resources, continue to enter or are seeking to enter the video distribution market either by offering OTT streaming services or selling devices that aggregate viewing of various OTT services, which continues to put pressure on an already competitive landscape. We also compete for viewers and advertisers with content offered over the Internet, social media and social networking platforms, mobile media, radio, motion picture, home video and other sources of information and entertainment and advertising services. Important competitive factors are the prices we charge for our programming networks, the quantity, quality (in particular, the performance of the sports teams whose media rights we control), the variety of the programming offered on our networks, and the effectiveness of our marketing efforts.
New or existing programming networks that are owned by or affiliated with broadcast networks such as NBC, ABC, CBS or Fox may have a competitive advantage over our networks in obtaining distribution through the “bundling” of agreements to carry those programming networks with the agreement giving the Distributor the right to carry a broadcast station owned by or affiliated with the network. For example, regional sports and entertainment networks affiliated with broadcast networks are carried by certain Distributors that do not currently carry our networks. Our business depends, in part, upon viewer preferences and audience acceptance of the programming on our networks. These factors are often unpredictable and subject to influences that are beyond our control, such as the quality and appeal of competing programming, the performance of the sports teams whose media rights we control, general economic conditions and the availability of other entertainment options. We may not be able to successfully predict interest in proposed new programming and viewer preferences could cause new programming not to be successful or cause our existing programming to decline in popularity. If our programming does not gain or maintain the level of audience acceptance we, our advertisers or Distributors expect, it could negatively affect advertising or affiliation fee revenues. An increase in our costs associated with programming, including original programming, may materially negatively affect our business and results of operations.
The extent to which competitive programming, including NBA and NHL games, are available on other programming networks and distribution platforms can adversely affect our competitive position.
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The competitive environment in which our MSG Networks business operates may also be affected by technological developments. It is difficult to predict the future effect of technology on our competitive position. With respect to advertising services, factors affecting the degree and extent of competition include prices, reach and audience demographics, among others. Some of our competitors are large companies that have greater financial resources available to them than we do, which could impact our viewership and the resulting advertising revenues.
Risks Related to Our Entertainment Business
The Success of Our Entertainment Business Depends on the Continued Popularity of Our Live Productions, Particularly the Christmas Spectacular, and the Sporting Events We Host at Our Venues, the Decline of Which Could Have a Material Negative Effect on Our Business and Results of Operations.
The financial results of our Entertainment business are dependent on the popularity of our live productions, particularly the Christmas Spectacular, for which the 2019 production (the last production presented prior to the impact of the COVID-19 pandemic) represented 17% of our revenues in Fiscal Year 2020. Should the popularity of the Christmas Spectacular decline (including, for example, due to customer unwillingness to travel to New York City, purchase tickets to a full-capacity indoor event, comply with safety protocols or satisfy vaccination requirements to the extent applicable, all as a result of the COVID-19 pandemic), our revenues from ticket sales, and concession and merchandise sales would likely also decline, and we might not be able to replace the lost revenue with revenues from other sources.
As a result of our commercial agreements with MSG Sports, the success of our business is also impacted in part by the popularity of MSG Sports’ Knicks and Rangers franchises with their fan bases and, in varying degrees, the teams achieving on-court and on-ice success, which can generate fan enthusiasm, resulting in additional suite, sponsorship, food and beverage and merchandise sales during the teams’ regular seasons. Furthermore, success in the regular season may qualify the Knicks and Rangers for participation in post-season playoffs, which provides us with additional revenue by increasing the number of games played by the teams at The Garden, potentially helping improve attendance in subsequent seasons and increasing the popularity of our suites and sponsorships.
The Company is Moving Forward With its MSG Sphere Initiative and Is Building and Plans to Operate its First State-of-the-Art Venue in Las Vegas, While Pursuing a Potential Venue in London. MSG Sphere Will Use Cutting-Edge Technologies and Will Require Significant Capital Investment by the Company. There Can Be No Assurance That MSG Sphere Will Be Successful.
The Company is progressing with its venue strategy to create, build and operate new music and entertainment-focused venues — called MSG Sphere — that will use cutting-edge technologies to create the next generation of immersive experiences. There is no assurance that the MSG Sphere initiative will be successful. We are in the midst of building the first MSG Sphere in Las Vegas, called MSG Sphere at The Venetian. See “Part I — Item 1. Our Business — MSG Sphere.”
We expect MSG Sphere costs to be substantial. While it is always difficult to provide a definitive construction cost estimate for large-scale construction projects, it is particularly challenging for one as unique as MSG Sphere. In May 2019, the Company’s preliminary cost estimate for MSG Sphere at The Venetian was approximately $1.2 billion. This estimate was based only upon schematic designs for purposes of developing the Company’s budget and financial projections. In February 2020, we announced that our cost estimate, inclusive of core technology and soft costs, for MSG Sphere at The Venetian was approximately $1.66 billion. We then announced in May 2021 that numerous factors had impacted and will continue to impact the cost estimate, including the ongoing effects of the global pandemic and its impact on the global supply chain and associated costs of materials and labor, as well as changes to project design, scope and schedule — and that, as a result, we estimated the cost of the venue had increased by approximately 10%. As of June 2021, our cost estimate for MSG Sphere at The Venetian, inclusive of core technology and soft costs, was approximately $1.865 billion. Both our current and prior cost estimates are net of $75 million that the Sands has agreed to pay to defray certain construction costs and also excludes the impacts of changes in inflation and significant capitalized and non-capitalized costs for items such as content creation, internal labor, and furniture and equipment. Given the complexity of the project, the time remaining until the venue’s planned opening and the ongoing impact of the global pandemic, our cost estimate is subject to uncertainty.
MSG Sphere in Las Vegas is a complex construction project that relies on subcontractors obtaining components from a variety of sources around the world. The Company initially engaged Hunt Construction Group Inc. (d/b/a AECOM Hunt) (“AECOM”) to oversee and perform construction work for the project (on a cost-plus basis). In December 2020, the Company terminated its construction agreement with AECOM and assumed the role of construction manager to gain greater transparency and control over the construction process, including direct engagement and supervision of subcontractors. In our capacity as construction manager for the project we aim to aggressively manage the cost of the project in this volatile environment to minimize any potential cost increases. While we believe our decision to serve as construction manager will allow greater cost control, it may
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increase the risks of delays and higher than anticipated costs.
For more information regarding the costs of MSG Spheres, see “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — MSG Spheres.”
In light of the ambitious and unique design of MSG Sphere, including the use of technologies that have not previously been employed in major entertainment venues, the risk of delays and higher than anticipated costs are elevated. In addition to this, as the Company moves forward with the planning and construction of its Las Vegas venue, the Company may face unexpected project delays, costs and other complications. In April 2020, the Company announced that it was suspending construction of MSG Sphere in Las Vegas due to COVID-19 related factors that were outside of its control, including supply chain issues. This was followed in August 2020, by the Company disclosing that it had resumed full construction with a lengthened timetable in order to better preserve cash through the COVID-19 pandemic. The Company remains committed to bringing MSG Sphere to Las Vegas and expects to open the venue in calendar year 2023.
Our agreement with Sands to lease the land where MSG Sphere in Las Vegas is being constructed requires that we complete construction within a specified time period. In November 2020, the Company entered into a letter of agreement amending the terms of its ground lease with Sands (the “November 2020 Sands Letter Agreement”). The previous ground lease agreement required that the Company commence erection of above-grade structural steel for MSG Sphere no later than 18 months after the date of the ground lease agreement and achieve substantial completion of the project no later than three years after the construction commencement date, subject to certain permitted extensions. The November 2020 Sands Letter Agreement sets this outside completion date at September 30, 2023, subject to certain permitted extensions. If we do not achieve this outside completion date, Sands could terminate the lease.
We may also continue to explore additional domestic and international markets where these next-generation venues can be successful. The design of future MSG Spheres will be flexible to accommodate a wide range of sizes and capacities - from large-scale to smaller and more intimate - based on the needs of any individual market. In connection with the construction of the MSG Sphere venues, the Company may need to obtain additional capital beyond what is available from cash-on-hand and cash flows from operations. With regard to MSG Sphere at The Venetian, the Company plans to finance the construction of the venue from cash-on-hand and cash flows from operations. If the Company’s cash-on-hand and cash flows from operations are not sufficient to finance the remaining construction costs of MSG Sphere at The Venetian, the Company would need to access additional capital including potential incremental debt. There is no assurance that we would be able to obtain that capital. The NBA and NHL have imposed restrictions on financing transactions that require a secured interest in The Garden. While the Company plans to self-fund the construction of MSG Sphere at The Venetian, the Company’s intention for any future venues is to utilize several options, such as non-recourse debt financing, joint ventures, equity partners and a managed venue model.
In February 2018, we announced the purchase of land in Stratford, London, which we expect will become home to a future MSG Sphere. The Company submitted a planning application to the local planning authority in March 2019 and that process, which will require various stages of review to be completed and approvals to be granted, is ongoing. Therefore, we do not have a definitive timeline at this time.
MSG Sphere will employ novel and transformative technologies and new applications of existing technologies. As a result, there can be no assurance that MSG Sphere will achieve the technical, operational and artistic goals the Company is seeking. Any failure to do so could have a material negative effect on our business and results of operations.
While the Company believes that these next-generation venues will enable new experiences and innovative opportunities to engage with audiences, there can be no assurance that customers, artists, promoters, advertisers and marketing partners will embrace this new platform. The substantial cost of building MSG Sphere in Las Vegas, as well as the costs and/or financing needs with respect to MSG Sphere in London, may constrain the Company’s ability to undertake other initiatives during these multi-year construction periods.
Our Entertainment Business Strategy Includes the Development of New Content, Productions, Attractions and Other Events Which Could Require Us to Make Considerable Investments for Which There Can Be No Guarantee of Success.
As part of our Entertainment business strategy, we intend to develop new content, productions, attractions and live entertainment events, for our existing and planned venues which may include expansions or enhancements of our existing productions or relationships or the creation of entirely new productions and attractions. Expansion or enhancement of productions and/or the development of new content, productions, attractions and live entertainment events could require significant upfront expense that may never result in a viable show or attraction, as well as investment in sets, staging, creative processes, commissioning and/or licensing of intellectual property, casting and advertising and may lead to dislocation of other alternative sources of entertainment that may have played in our venues absent these productions, attractions and events. To the
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extent that any efforts at expanding or enhancing productions or creating new productions do not result in a viable live show, or to the extent that any such productions do not achieve expected levels of popularity among audiences, we may not recover the substantial expenses we previously incurred for non-capitalized investments, or may need to write-down all or a portion of capitalized investments. In addition, any delay in launching such productions or enhancements could result in the incurrence of operating costs which may not be recouped. For example, we wrote off a total of approximately $75.4 million of deferred production costs across fiscal years 2016 and 2017 related to the New York Spectacular Starring the Radio City Rockettes.
We Depend on Licenses from Third Parties for the Performance of Musical Works at Our Venues, the Loss of Which or Renewal of Which on Less Favorable Terms May Have a Negative Effect on Our Business and Results of Operations.
We are required to obtain public performance licenses from music performing rights organizations, commonly known as “PROs,” in connection with the performance of musical works at concerts and certain other live events held at our venues. In exchange for public performance licenses, PROs are paid a per-event royalty, traditionally calculated either as a percentage of ticket revenue or a per-ticket amount. The PRO royalty obligation of any individual event is generally paid by, or charged to, the promoter of the event.
If we are unable to obtain these licenses, or are unable to obtain them on favorable terms consistent with past practice, it may have a negative effect on our business and results of operations. An increase in the royalty rate and/or the revenue base on which the royalty rate is applied could substantially increase the cost of presenting concerts and certain other live events at our venues. If we are no longer able to pass all or a portion of these royalties on to promoters (or other venue licensees), it may have a negative effect on our business and results of operations.
Our Properties Are Subject to, and Benefit from, Certain Easements, the Availability of Which May Not Continue on Terms Favorable to Us or at All.
Our properties are subject to, and benefit from, certain easements. For example, the “breezeway” into the Madison Square Garden Complex from Seventh Avenue in New York City is a significant easement that we share with other property owners.
Additionally, our planned MSG Sphere in Las Vegas will have the benefit of easements with respect to the planned pedestrian bridge to the Sands Expo Convention Center. Our ability to continue to utilize these and other easements, including for advertising and promotional purposes, requires us to comply with a number of conditions. Certain adjoining property owners have easements over our property, which we are required to maintain so long as those property owners meet certain conditions. It is possible that we will be unable to continue to access or maintain any easements on terms favorable to us, or at all, which could have a material negative effect on our business and results of operations.
A Change to or Withdrawal of a New York City Real Estate Tax Exemption for the Madison Square Garden Complex May Have a Material Negative Effect on Our Business and Results of Operations.
Many arenas, ballparks and stadiums nationally and in New York City have received significant public support, such as tax exempt financing, other tax benefits, direct subsidies and other contributions, including for public infrastructure critical to the facilities such as parking lots and transit improvements. Our Madison Square Garden Complex benefits from a more limited real estate tax exemption pursuant to an agreement with the City of New York, subject to certain conditions, and legislation enacted by the State of New York in 1982. For Fiscal Year 2021, the tax exemption was $42.9 million. From time to time there have been calls to repeal or amend the tax exemption. Repeal or amendment would require legislative action by New York State.
We are party to Arena License Agreements with subsidiaries of MSG Sports that require two of MSG Sports’ professional sports teams – the Knicks and Rangers – to play all of their home games at The Garden. Under the Arena License Agreements, which each have a term of 35 years (unless extended), the Knicks and the Rangers pay an annual license fee in connection with their respective use of The Garden. In addition, the Arena License Agreements provide us with additional revenue opportunities. Under the Arena License Agreements, the teams are responsible for 100% of any real property or similar taxes applicable to The Garden.
If the tax exemption is repealed or the teams are otherwise subject to the property tax due to no fault of the teams, the revenue that we generate from team events will be reduced on a percentage basis as set forth in the Arena License Agreements. The value of any such revenue reduction could be significant but is expected to be substantially less than the property tax paid by the teams. See “— Risks Related to Governance and Our Controlled Ownership — We Are Materially Dependent on MSG Sports’ Performance Under Various Agreements.”
There can be no assurance that the tax exemption will not be amended in a manner that imposes property tax or repealed in its entirety, either of which could have a material negative effect on our business and results of operations.
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Risks Related to Our MSG Networks Business
The Success of Our MSG Networks Business Depends on Affiliation Fees We Receive Under Our Affiliation Agreements, the Loss of Which or Renewal of Which on Less Favorable Terms May Have a Material Negative Effect on Our Business and Results of Operations.
MSG Networks’ success is dependent upon the existence and terms of our agreements with Distributors. Existing affiliation agreements of our programming networks expire at various dates over the next several years. We cannot provide assurances that we will be able to renew these affiliation agreements or obtain terms as attractive as our existing agreements in the event of a renewal.
Affiliation fees constitute a significant majority of our MSG Networks revenues. Changes in affiliation fee revenues generally result from a combination of changes in rates and/or changes in subscriber counts. Reductions in the license fees that we receive per subscriber or in the number of subscribers for which we are paid, including as a result of a loss of or reduction in carriage of our programming networks, would adversely affect our affiliation fee revenue. For example, our affiliation fee revenue declined $9.7 million in the fourth quarter of Fiscal Year 2021 compared to the fourth quarter of Fiscal Year 2020. Subject to the terms of our affiliation agreements, Distributors may introduce, market and/or modify tiers of programming networks that could impact the number of subscribers that receive our programming networks, including tiers of programming that may exclude our networks. Any loss or reduction in carriage would also decrease the potential audience for our programming, which may adversely affect our advertising revenues. See “— If the Rate of Decline in the Number of Subscribers to Traditional MVPDs Services Increases or These Subscribers Shift to Other Services or Bundles That Do Not Include the Company’s Programming Networks, There May Be a Material Negative Effect on the Company’s Affiliation Revenues.”
Our affiliation agreements generally require us to meet certain content criteria, such as minimum thresholds for professional event telecasts throughout the calendar year on our networks. If we do not meet these criteria, remedies may be available to our Distributors, such as fee reductions, rebates or refunds and/or termination of these agreements in some cases. For example, we recorded $14.7 million in Fiscal Year 2021 for affiliate rebates.
In addition, under certain circumstances, an existing affiliation agreement may expire and we and the Distributor may not have finalized negotiations of either a renewal of that agreement or a new agreement for certain periods of time. In certain of these circumstances, Distributors may continue to carry the service(s) until the execution of definitive renewal or replacement agreements (or until we or the Distributor determine that carriage should cease).
Occasionally we may have disputes with Distributors over the terms of our affiliation agreements. If not resolved through business discussions, such disputes could result in litigation and/or actual or threatened termination of an existing agreement.
Our business is dependent upon affiliation relationships with a limited number of Distributors. The loss of any of our significant Distributors, the failure to renew on terms as attractive as our existing agreements (or to do so in a timely manner) or disputes with our counterparties relating to the interpretation of their agreements with us could materially negatively affect our business and results of operations.
Given That We Depend on a Limited Number of Distributors for a Significant Portion of Our MSG Networks Revenues, Further Industry Consolidation Could Adversely Affect Our Business and Results of Operations.
The pay television industry is highly concentrated, with a relatively small number of Distributors serving a significant percentage of pay television subscribers that receive our programming networks, thereby affording the largest Distributors significant leverage in their relationship with programming networks, including ours. Substantially all of our affiliation fee revenue comes from our top five Distributors. Further consolidation in the industry could reduce the number of Distributors available to distribute our programming networks and increase the negotiating leverage of certain Distributors, which could adversely affect our revenue. In some cases, if a Distributor is acquired, the affiliation agreement of the acquiring Distributor will govern following the acquisition. In those circumstances, the acquisition of a Distributor that is a party to one or more affiliation agreements with us on terms that are more favorable to us than that of the acquirer could have a material negative impact on our business and results of operations.
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We May Not Be Able to Adapt to New Content Distribution Platforms and to Changes in Consumer Behavior Resulting From Emerging Technologies, Which May Have a Material Negative Effect on Our Business and Results of Operations.
We must successfully adapt to technological advances in our industry and the manner in which consumers watch sporting events, including the emergence of alternative distribution platforms. Our ability to exploit new distribution platforms and viewing technologies may affect our ability to maintain and/or grow our business. Emerging forms of content distribution provide different economic models and compete with current distribution methods in ways that are not entirely predictable. Such competition has reduced and could continue to reduce demand for our programming networks or for the offerings of our Distributors and, in turn, reduce our revenue from these sources. Content providers (such as certain broadcast and cable networks) and new content developers, Distributors and syndicators are distributing programming directly to consumers on an OTT basis. In addition to existing direct-to-consumer streaming services such as Amazon Prime, Hulu, Netflix, Apple TV+, Disney+, HBO Max and Peacock, additional services have launched and more will likely launch in the near term. Such direct-to-consumer OTT distribution of content has contributed to consumers eliminating or downgrading their pay television subscription, which results in certain consumers not receiving our programming networks. If we are unable to offset this loss of subscribers through incremental carriage of our networks or rate increases, our business and results of operations will be adversely affected. Gaming, television and other console and device manufacturers, Distributors and others, such as Microsoft’s Xbox, Apple and Roku, are offering and/or developing technology to offer video programming, including in some cases, various OTT platforms. Such changes have and may continue to impact the revenues we are able to generate from our traditional distribution methods, by decreasing the viewership of our programming networks and/or by making advertising on our programming networks less valuable to advertisers.
In order to respond to these developments, we may need to implement changes to our business models and strategies and there can be no assurance that any such changes will prove to be successful or that the business models and strategies we develop will be as profitable as our current business models and strategies. If we fail to adapt to emerging technologies, our appeal to Distributors and our targeted audiences might decline and there could be a material negative effect on our business and results of operations.
In addition, advertising revenues could be significantly impacted by emerging technologies, given that advertising sales are dependent on audience measurement provided by third parties, and the results of audience measurement techniques can vary independent of the size of the audience for a variety of reasons, including difficulties related to traditional statistical sampling methods, ability to measure new distribution platforms and viewing technologies, and the shifting of the marketplace to the use of measurement of different viewer behaviors, such as delayed viewing. In addition, multiplatform campaign verification is in its infancy, and viewership on tablets, smart phones and other digital devices, which continues to grow, is presently not measured by any one consistently applied method. Moreover, devices that allow users to fast forward or skip programming, including commercials, are causing changes in consumer behavior that may affect the desirability of our programming networks to advertisers. These variations and changes could have a significant effect on advertising revenues.
If the Rate of Decline in the Number of Subscribers to Traditional MVPD Services Increases or These Subscribers Shift to Other Services or Bundles That Do Not Include the Company’s Programming Networks, There May Be a Material Negative Effect on the Company’s Affiliation Revenues.
During the last few years, the number of subscribers to traditional MVPD services in the U.S. has been declining, and the rate of decline has increased in recent periods. In addition, Distributors have introduced, marketed and/or modified tiers or bundles of programming that have impacted the number of subscribers that receive our programming networks, including tiers or bundles of programming that exclude our programming networks. As a result of these factors, the Company has experienced a decrease in subscribers in each of the last several fiscal years, which has adversely affected our operating results.
If traditional MVPD service offerings are not attractive to consumers due to pricing, increased competition from OTT services, increased dissatisfaction with the quality of traditional MVPD services, poor economic conditions or other factors, more consumers may (i) cancel their traditional MVPD service subscriptions or choose not to subscribe to traditional MVPD services, (ii) elect to instead subscribe to OTT services, which in some cases may be offered at a lower price-point and may not include our programming networks or (iii) elect to subscribe to smaller bundles of programming which may not include our programming networks. If the rate of decline in the number of traditional MVPD service subscribers increases or if subscribers shift to OTT services or smaller bundles of programming that do not include the Company’s programming networks, this may have a material negative effect on the Company’s revenues. See “— General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
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We Derive Substantial Revenues From the Sale of Advertising Time and Those Revenues Are Subject to a Number of Factors, Many of Which Are Beyond Our Control.
Advertising revenues depend on a number of factors, many of which are beyond our control, such as: (i) the health of the economy in the markets our businesses serve and in the nation as a whole; (ii) general economic trends in the advertising industry; (iii) team performance; (iv) whether live sports games are being played; (v) the popularity of our programming; (vi) the activities of our competitors, including increased competition from other forms of advertising-based media (such as Internet, mobile media, other programming networks, radio and print media); (vii) shifts in consumer viewing patterns, including consumers watching more ad-free content, non-traditional and shorter-form video content online, and the increased use of DVRs to skip advertisements; (viii) declining consumer tolerance for commercial interruptions; (ix) an increasing shift of advertising expenditures to digital and mobile offerings; (x) increasing audience fragmentation caused by increased availability of alternative forms of leisure and entertainment activities, such as social networking platforms and video games; (xi) consumer budgeting and buying patterns; (xii) the extent of the distribution of our networks; and (xiii) changes in the audience demographic for our programming. A decline in the economic prospects of advertisers or the economy in general could alter current or prospective advertisers’ spending priorities, which could cause our revenues and operating results to decline significantly in any given period. Even in the absence of a general recession or downturn in the economy, an individual business sector that tends to spend more on advertising than other sectors might be forced to reduce its advertising expenditures if that sector experiences a downturn. In such case, a reduction in advertising expenditures by such a sector may adversely affect our revenues. See “— General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
The pricing and volume of advertising may be affected by shifts in spending away from more traditional media toward online and mobile offerings or towards new ways of purchasing advertising, such as through automated purchasing, dynamic advertising insertion, third parties selling local advertising spots and advertising exchanges, some or all of which may not be as advantageous to the Company as current advertising methods.
In addition, we cannot ensure that our programming will achieve favorable ratings. Our ratings depend partly upon unpredictable and volatile factors, many of which are beyond our control, such as team performance, whether live sports games are being played, viewer preferences, the level of distribution of our programming, competing programming and the availability of other entertainment options. A shift in viewer preferences could cause our advertising revenues to decline as a result of changes to the ratings for our programming and materially negatively affect our business and results of operations.
Our Media Rights Agreements With Professional Sports Teams Have Varying Durations and Terms and We May Be Unable to Renew Those Agreements on Acceptable Terms or Such Rights May Be Lost for Other Reasons.
Our business is dependent upon media rights agreements with professional sports teams. Upon expiration, we may seek renewal of these agreements and, if we do, we may be outbid by competing programming networks or others for these agreements or the renewal costs could substantially exceed our costs under the current agreements. Even if we are able to renew such agreements, the Company’s results could be adversely affected if escalations in sports programming rights costs are unmatched by increases in affiliation and advertising revenues. In addition, one or more of these teams may seek to establish their own programming offering or join one of our competitor’s offerings and, in certain circumstances, we may not have an opportunity to bid for the media rights. Moreover, the value of these agreements may also be affected by various league decisions and/or league agreements that we may not be able to control, including a decision to alter the number of games played during a season. The value of these media rights can also be affected, or we could lose such rights entirely, if a team is liquidated, undergoes reorganization in bankruptcy or relocates to an area where it is not possible or commercially feasible for us to continue to distribute games. Any loss or diminution in the value of rights could impact the extent of the sports coverage offered by us and could materially negatively affect our business and results of operations. In addition, our affiliation agreements generally include certain remedies in the event our networks fail to include a minimum number of professional event telecasts, and, accordingly, any loss of rights could materially negatively affect our business and results of operations. See “— The Success of Our MSG Networks Business Depends on Affiliation Fees We Receive Under Our Affiliation Agreements, the Loss of Which or Renewal of Which on Less Favorable Terms May Have a Material Negative Effect on Our Business and Results of Operations.”
Our Business is Substantially Dependent on the Popularity of the NBA and NHL Teams Whose Media Rights We Control; the Actions of the NBA and NHL May Have a Material Negative Effect on Our MSG Networks Business and Results of Operations.
Our business has historically been, and we expect will continue to be, dependent on the popularity of the NBA and NHL teams whose local media rights we control and, in varying degrees, those teams achieving on-court and on-ice success, which can generate fan enthusiasm, resulting in increased viewership and advertising revenues. Furthermore, success in the regular season
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may qualify a team for participation in the post-season, which generates increased excitement and interest in the teams, which can improve viewership and advertising revenues. Some of our teams have not participated in the post-season for extended periods of time, and may not participate in the post-season in the future. For example, the Knicks qualified for the 2020-21 post-season for the first time since the 2012-13 NBA season and the Sabres have not qualified for the post-season since the 2010-11 NHL season. In addition, if a team declines in popularity or fails to generate fan enthusiasm, this may negatively impact the terms on which our affiliate agreements are renewed. There can be no assurance that any sports team will generate fan enthusiasm or compete in post-season play and the failure to do so could result in a material negative effect on our business and results of operations.
The governing bodies of the NBA and the NHL have imposed, and may impose in the future, various rules, regulations, guidelines, bulletins, directives, policies and agreements (collectively, “League Rules”), which could have a material negative effect on our business and results of operations. For example, each league imposes rules that define the territories in which we may distribute games of the teams in the applicable league. Changes to these rules or other League Rules, or the adoption of new League Rules, could have a material negative effect on our business and results of operations.
In addition, due to the COVID-19 pandemic and related government actions, decisions made by the NBA and NHL have affected, and in the future may continue to affect, our ability to produce and distribute live sports games on our networks. See “— General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
We May Be Unable to Obtain Programming From Third Parties on Reasonable Terms, Which Could Lead to Higher Costs.
We rely on third parties for sports and other programming for our networks. We compete with other providers of programming to acquire the rights to distribute such programming. If we fail to continue to obtain sports and other programming for our networks on reasonable terms for any reason, including as a result of competition, we could be forced to incur additional costs to acquire such programming or look for or develop alternative programming, which may have a material negative effect on our business and results of operations.
Our MSG Networks Business Depends on the Appeal of Its Programming, Which May Be Unpredictable, and Increased Programming Costs May Have a Material Negative Effect on Our Business and Results of Operations.
Our MSG Networks business depends, in part, upon viewer preferences and audience acceptance of the programming on our networks. These factors are often unpredictable and subject to influences that are beyond our control, such as the quality and appeal of competing programming, general economic conditions and the availability of other entertainment options. We may not be able to successfully predict interest in proposed new programming and viewer preferences could cause new programming not to be successful or cause our existing programming to decline in popularity. If our programming does not gain or maintain the level of audience acceptance we, our advertisers or Distributors expect, it could negatively affect advertising or affiliation fee revenues. An increase in our costs associated with programming, including original programming, may materially negatively affect our business and results of operations.
The FCC’s Changes to the Spectrum Used by Satellites to Deliver Programming Networks to Distributors, As Well As The Unavailability of Satellites, Facilities, Systems and/or Software Upon Which We Rely, May Have a Material Negative Effect on Our Business and Results of Operations.
Our MSG Networks business uses third-party satellites and other systems to transmit our programming services to Distributors. We use distribution facilities that include uplinks, communications, satellites, and downlinks. Notwithstanding certain back-up and redundant systems and facilities maintained by our third-party providers, transmissions or quality of transmissions may be disrupted, including as a result of events that impair uplinks, downlinks or transmission facilities or the impairment of satellite or terrestrial facilities. In addition, the FCC has reallocated some of the spectrum on which these satellites operate for other uses, and satellite operators have begun to transition to use the resulting smaller amount of spectrum. This change in spectrum could cause our third-party providers to change the way they transmit our programming, including by using different satellites and potentially compressing the video, which could affect quality. It will also require many of our Distributors to acquire new equipment, or modify their current equipment, to receive our programming networks. If they fail to do so, or if there are any other disruptions in the transition process including by satellite operators transitioning to new transmission systems, our Distributors and their subscribers may no longer receive our programming. Part of the spectrum on which video programming networks were previously delivered will be auctioned to wireless providers, who will offer 5G services that could cause interference with the delivery of our programming.
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Currently, there are a limited number of communications satellites, which are operated by third parties, available for the transmission of programming, and their continued availability may depend upon a variety of factors including business conditions, technology issues, further changes in law or regulation that may limit the spectrum that these satellites and facilities depend upon to operate and our ability to access such satellites on reasonable terms. In addition, we are party to an agreement with AMC Networks Inc. (“AMC Networks”), pursuant to which AMC Networks provides us with certain origination, master control and technical services which are necessary to distribute our programming networks. If a disruption occurs, we may not be able to secure alternate distribution facilities in a timely manner. In addition, we rely upon various internal and third-party systems or software in the operation of our business, including, with respect to database, human resource management, and financial systems. From time to time, certain of these arrangements may not be covered by long-term agreements. In addition, such distribution facilities and/or internal or third-party services, systems or software could be adversely impacted by cybersecurity threats including unauthorized breaches. See “— Risks Related to Cybersecurity and Intellectual Property — We Face Continually Evolving Cybersecurity and Similar Risks, Which Could Result in Loss, Disclosure, Theft, Destruction or Misappropriation of, or Access to, Our Confidential Information and Cause Disruption of Our Business, Damage to Our Brands and Reputation, Legal Exposure and Financial Losses.” The failure or unavailability of distribution facilities or these internal and third-party services, systems or software, depending upon its severity and duration, could have a material negative effect on our business and results of operations.
Risks Related to Our Tao Group Hospitality Business
Tao Group Hospitality’s Revenue Growth Depends Upon its Strategy of Adding New Venues and Tao Group Hospitality Plans to Add a Significant Number of New Venues. This Will Require Additional Capital and There Can Be No Guarantee of Success.
Tao Group Hospitality’s ability to increase its revenues depends upon opening new venues. Tao Group Hospitality has plans to open new venues both domestically and internationally. For example, in April 2021, Tao Group Hospitality acquired Hakkasan, which includes a global collection of 33 hospitality assets including restaurants, bars, lounges and nightclubs. In pursuing its expansion strategy, Tao Group Hospitality faces risks associated with cost overruns and construction delays, obtaining financing and operating in new or existing markets. In addition, Tao Group Hospitality faces the risk that new venues may not be successful and that Tao Group Hospitality may lose all or a part of its investment in such new venues, which could have a material negative effect on our business and results of operations. Tao Group Hospitality has financed its operations under the Tao Senior Credit Agreement (as defined herein), which includes a $25.0 million revolving credit facility. See “— Risks Related to Our Indebtedness and Financial Condition — Tao Group Hospitality Has Incurred or May Incur Indebtedness, and the Occurrence of an Event of Default Under Tao Group Hospitality’s Credit Facilities or Our Inability to Repay Such Indebtedness When Due Could Substantially Impair the Assets of Tao Group Hospitality; Other of Our Subsidiaries and Joint Ventures May Incur Indebtedness in the Future and the Failure of Those Entities or Other Parties to Perform as Expected, Including the Repayment of Outstanding Loans, Could Have a Negative Effect on Our Business.” As a result of COVID-19 related restrictions imposed by state and local officials, which included limiting restaurants and bars to take-out and delivery service only, and limited in-person dining (typically required to be outdoors) with capacity restrictions and social distancing requirements, and requiring the closure of nightlife establishments, Tao Group Hospitality’s business was materially impacted in Fiscal Year 2021. Concerns regarding COVID-19 may impact the use of and demand for Tao Group Hospitality’s venues even after restrictions are lifted, and Tao Group Hospitality may not have access to financing for its operations and expansion strategy. Any failure to maintain liquidity to finance its business operations could have a material adverse effect on the business and operations of Tao Group Hospitality. See “— General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
A Lack of Availability of Suitable Locations for New Tao Group Hospitality Venues or a Decline in the Quality of the Locations of Current Tao Group Hospitality Venues May Have a Material Negative Effect on Our Business and Results of Operations.
The success of the existing Tao Group Hospitality venues depends in large part on their locations. Possible declines in neighborhoods where Tao Group Hospitality venues are located or adverse economic conditions in areas surrounding those neighborhoods could result in reduced sales in those venues. Further, Tao Group Hospitality’s growth strategy is based, in part, on the expansion of Tao Group Hospitality venues into new geographic markets where its business has not previously operated. For example, in April 2021, Tao Group Hospitality acquired Hakkasan, which includes a global collection of 33 hospitality assets including restaurants, bars, lounges and nightclubs in 18 cities across four continents. Desirable locations for new openings or for the relocation of existing venues may not be available at an acceptable cost when Tao Group Hospitality identifies a particular opportunity for a new venue or relocation. In addition, the success of new Tao Group Hospitality venues tends to expand or revive interest in Tao Group Hospitality venues that have been in operation for an extended period of time.
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Thus, the inability to successfully open new Tao Group Hospitality venues could also negatively impact the existing Tao Group Hospitality business. The occurrence of one or more of these events could have a material negative effect on our business and results of operations.
The Success of Tao Group Hospitality Depends in Part Upon the Continued Retention of Certain Key Personnel.
The success of Tao Group Hospitality depends, in part, on certain key members of its management. The expertise of Tao Group Hospitality’s senior management team in developing, acquiring, reinventing, integrating and growing businesses, particularly those focused on entertainment and hospitality, has been and will continue to be a significant factor in the growth of Tao Group Hospitality’s business and the ability of Tao Group Hospitality to execute its business strategy. The loss of such key personnel could have a material negative effect on our business and results of operations.
Negative Publicity with Respect to Any of the Existing or Future Tao Group Hospitality Brands Could Reduce Sales at One or More of the Existing or Future Tao Group Hospitality Venues and Make the Tao Group Hospitality Brands Less Valuable, Which Could Have a Material Negative Effect on Our Business and Results of Operations.
The success of Tao Group Hospitality depends, in part, upon the reputation and popularity of the Tao Group Hospitality venues and brands. If customers have a poor experience at a restaurant or nightlife venue owned, operated or managed by Tao Group Hospitality, the Tao Group Hospitality venues may experience a decrease in customer traffic. Negative publicity with respect to any of the Tao Group Hospitality brands could adversely affect Tao Group Hospitality. Such publicity could relate to food quality, illness, injury or other health concerns, poor service, negative experiences or other problems and reduce demand in the Tao Group Hospitality business. For example, an outbreak or perceived outbreak of the COVID-19 pandemic connected to one or more of Tao Group Hospitality’s venues could cause negative publicity directed at any of its brands and cause customers to avoid its venues. The risk of negative publicity is exacerbated by the growing influence of social media, which can result in immediate and widespread dissemination of information (which may be false) with limited ability on our part to respond to or correct such reports.
Economic and Operational Risks
We Do Not Own All of Our Venues and Our Failure to Renew Our Leases on Economically Attractive Terms May Have a Material Negative Effect on Our Business and Results of Operations.
Our lease for Beacon Theatre expires in 2026. There is no assurance we will be able to renew this lease on economically attractive terms.
Our agreement with Sands to lease the land where MSG Sphere in Las Vegas is being constructed requires that we complete construction within specified time periods, subject to certain permitted extensions. The failure to meet these specified deadlines could result in a termination of the lease.
Our lease for Radio City Music Hall expires in August 2038. We have the option to renew the lease at fair market value (as calculated pursuant to the terms of the lease) for an additional ten years by providing two years’ notice prior to the expiration date. Fair market value would be determined after we have exercised our option to renew by agreement or by arbitration conducted by an independent real estate appraiser based on standards set forth in the lease.
MSG Entertainment Group, LLC, the entity that guarantees the lease for Radio City Music Hall, is required to maintain a certain net worth that if not maintained would require the entity to post a letter of credit or provide cash collateral.
Tao Group Hospitality operates venues under various agreements that include leases with third parties and management agreements. The long-term success of Tao Group Hospitality depends in part on the availability of real estate, the ability to lease this real estate and the ability to enter into management agreements. As many of these agreements are with third parties over whom Tao Group Hospitality has little or no control, we may be unable to renew these agreements or enter into new agreements on acceptable terms or at all, and may be unable to obtain favorable agreements with venues generally, or in response to specific needs.
Some of these agreements include conditions that, if not met, would permit the counterparty to terminate the management agreement under certain circumstances. The ability to renew these agreements and obtain new agreements on favorable terms depends on a number of other factors, many of which are beyond the control of us or Tao Group Hospitality, such as national and local business conditions and competition from other businesses. There can be no assurance that Tao Group Hospitality will be able to renew these agreements on acceptable terms or at all, or that they will be able to obtain attractive agreements with appropriate venues or real estate owners, which could have a material negative effect on our business and results of operations.
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The Geographic Concentration of Our Businesses Could Subject Us to Greater Risk Than Our Competitors and Have a Material Negative Effect on Our Business and Results of Operations.
The Company primarily operates in four markets — New York City, Las Vegas, Southern California and London — and, as a result, is subject to greater degrees of risk than competitors with more operating properties or that operate in more markets. The Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre are all located in New York City, Tao Group Hospitality operates 12 venues in New York City, including the food and beverage operations at the Dream Downtown and Dream Midtown hotels and the Moxy Chelsea, Moxy East Village and Moxy Times Square hotels and MSG Networks’ networks are widely distributed throughout all of New York State. In addition, Tao Group Hospitality operates 13 venues in Las Vegas, where the Company is constructing its first MSG Sphere. Tao Group Hospitality also operates seven venues in Southern California and five venues in London. Therefore, the Company is particularly vulnerable to adverse events (including acts of terrorism, natural disasters, epidemics, pandemics, weather conditions, labor market disruptions and government actions) and economic conditions in New York City, Las Vegas, Southern California and London and surrounding areas. For example, our operations and operating results have been, and continue to be, materially impacted by the COVID-19 pandemic. See “— General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.” and “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business.”
Our Business Has Been Adversely Impacted and May, in the Future, Be Materially Adversely Impacted by an Economic Downturn and Financial Instability or Changes in Consumer Tastes and Preferences.
Our business depends upon the ability and willingness of consumers and businesses to purchase tickets at our venues, license suites and club memberships at The Garden, spend on food and beverages and merchandise, subscribe to packages of programming that includes our networks, and drive continued advertising and sponsorship revenues, and these revenues are sensitive to general economic conditions and consumer behavior. In addition, our business depends on upon the ability and willingness of consumers and businesses to subscribe to a package of programming that includes our networks, as well as affiliation fee and advertising revenues, which are both sensitive to general economic conditions and consumer behavior. Further, the restaurant, nightlife and hospitality industries are often affected by changes in consumer tastes, national, regional and local economic conditions, discretionary spending priorities, demographic trends, traffic patterns and the type, number and location of competing businesses. As a result, instability and weakness of the U.S. and global economies, including as a result of the effects caused by disruptions to financial markets, inflation, recession, high unemployment, geopolitical events and other effects caused by the COVID-19 pandemic and the negative effects on consumers’ and businesses’ discretionary spending, have and may continue to materially negatively affect our business and results of operations. See “— General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
Our Business Could Be Adversely Affected by Terrorist Activity or the Threat of Terrorist Activity, Weather and Other Conditions That Discourage Congregation at Prominent Places of Public Assembly.
The success of our businesses is dependent upon the willingness and ability of patrons to attend events at our venues. The venues we operate, like all prominent places of public assembly, could be the target of terrorist activities, including acts of domestic terrorism, or other actions that discourage attendance. Any such activity or threatened activity at or near one of our venues or other similar venues, including those located elsewhere, could result in reduced attendance at our venues and a material negative effect on our business and results of operations. Similarly, a major epidemic or pandemic, such as the COVID-19 pandemic, or the threat or perceived threat of such an event, could adversely affect attendance at our events and venues by discouraging public assembly at our events and venues. Moreover, the costs of protecting against such incidents, including the costs of implementing additional protective measures for the health and safety of our guests, could reduce the profitability of our operations. See “— General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
Weather or other conditions, including natural disasters, in locations which we own or operate venues may affect patron attendance as well as sales of food and beverages and merchandise, among other things. Weather conditions may also require us to cancel or postpone events. Weather or other conditions may prevent us or our Distributors from providing our programming to customers or reduce advertising expenditures. Any of these events may have a material negative effect on our business and results of operations, and any such events may harm our ability to obtain or renew insurance coverage on favorable terms or at all.
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We May Pursue Acquisitions and Other Strategic Transactions and/or Investments to Complement or Expand Our Business That May Not Be Successful; We Have Significant Investments in Businesses We Do Not Control.
From time to time, we may explore opportunities to purchase or invest in other businesses, venues or assets that we believe will complement, enhance or expand our current business or that might otherwise offer us growth opportunities, including opportunities that may differ from the Company’s current businesses. Any transactions that we are able to identify and complete may involve risks, including the commitment of significant capital, the incurrence of indebtedness, the payment of advances, the diversion of management’s attention and resources from our existing business to develop and integrate the acquired or combined business, the inability to successfully integrate such business or assets into our operations, litigation or other claims in connection with acquisitions or against companies we invest in or acquire, our lack of control over certain companies, including joint ventures and other minority investments, the risk of not achieving the intended results and the exposure to losses if the underlying transactions or ventures are not successful. At times, we have had significant investments in businesses that we account for under the equity method of accounting, and we may again in the future. Certain of these investments have generated operating losses in the past and certain have required additional investments from us in the form of equity or loans. There can be no assurance that these investments will become profitable individually or in the aggregate or that they will not require material additional funding from us in the future.
We may not control the day-to-day operations of these investments. We have in the past written down and, to the extent that these investments are not successful in the future, we may write down all or a portion of such investments. Additionally, these businesses may be subject to laws, rules and other circumstances, and have risks in their operations, which may be similar to, or different from, those to which we are subject. Any of the foregoing risks could result in a material negative effect on our business and results of operations or adversely impact the value of our investments.
We Are Subject to Extensive Governmental Regulation and Our Failure to Comply with These Regulations May Have a Material Negative Effect on Our Business and Results of Operations.
Our business is subject to the general powers of federal, state and local governments, as well as foreign governmental authorities, to deal with matters of health and public safety. We are also subject to the rules, regulations and decisions of the NBA and NHL. Some FCC regulations apply to us directly and other FCC regulations, although imposed on Distributors, affect programming networks indirectly.
As a result of government mandated assembly limitations and closures implemented in response to the COVID-19 pandemic, our performance venues were unable to host events for the substantial majority of Fiscal Year 2021. Tao Group Hospitality’s business was also materially impacted by COVID-19 related restrictions imposed by state and local officials, which included limiting restaurants and bars to take-out and delivery service only, requiring the closure of nightlife establishments, limited in-person dining (typically required to be outdoors) with capacity restrictions and social distancing requirements and curfews. There can be no assurance that some or all of these restrictions will not be imposed again in the future due to increased infection rates of COVID-19 or another pandemic. For example, effective May 2021, our Tao Group Hospitality’s New York City dining venues were permitted to open without capacity or other restrictions and later, on August 3, 2021, Mayor Bill de Blasio announced a policy, effective August 17, 2021, requiring at least one vaccination shot for workers and customers in indoor dining facilities. We are unable to predict what the long-term effects of these events, including new government regulations or requirements, will be. For example, future governmental regulations adopted in response to the COVID-19 pandemic may impact the revenue we derive and/or the expenses we incur from the events that we choose to host, such that events that were historically profitable would instead result in losses. See “— General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues,” and “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business.”
Additionally, we hold liquor licenses at each of our venues and are subject to licensing requirements with respect to the sale of alcoholic beverages in the jurisdictions in which we serve those beverages. Failure to receive or retain, or the suspension of, liquor licenses or permits could interrupt or terminate our ability to serve alcoholic beverages at the applicable venue and could have a material negative effect on our business and our results of operations. Additional regulation relating to liquor licenses may limit our activities in the future or significantly increase the cost of compliance, or both. In the jurisdictions in which our venues are located, we are subject to statutes that generally provide that serving alcohol to a visibly intoxicated or minor patron is a violation of the law and may provide for strict liability for certain damages arising out of such violations. Our liability insurance coverage may not be adequate or available to cover any potential liability.
We and our venues are subject to environmental laws and regulations relating to the use, disposal, storage, emission and release of hazardous and non-hazardous substances, as well as zoning and noise level restrictions which may affect, among other
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things, the operations of our venues. Compliance with these regulations and the associated costs may be heightened as a result of the purchase, construction or renovation of a venue. Additionally, certain laws and regulations could hold us strictly, jointly and severally responsible for the remediation of hazardous substance contamination at our facilities or at third-party waste disposal sites, as well as for any personal injury or property damage related to any contamination.
Our venues are subject to zoning and building regulations including permits relating to the operation of The Garden. The Garden requires a special zoning permit, which was originally granted by the New York City Planning Commission in 1963 and renewed in July 2013 for 10 years. Certain government officials and special interest groups sought to use the renewal process to pressure us to improve Pennsylvania Station (“Penn Station”) or to relocate The Garden. There can be no assurance regarding the future renewal of the permit or the terms thereof.
Legislative enactments, court actions, and federal regulatory proceedings could materially affect our programming business by modifying the rates, terms, and conditions under which we offer our content or programming networks to Distributors and the public, or otherwise materially affect the range of our activities or strategic business alternatives. We cannot predict the likelihood, results or impact on our business of any such legislative, judicial, or regulatory actions. Furthermore, to the extent that regulations and laws, either presently in force or proposed, hinder or stimulate the growth of Distributors, our business could be affected. The U.S. Congress and the FCC currently have under consideration, and may in the future adopt, amend, or repeal, laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect our business. The regulation of Distributors is subject to the political process and has been in constant flux over the past two decades. Further material changes in the law and regulatory requirements may be proposed or adopted in the future. Our business and our results of operations may be materially negatively affected by future legislation, new regulation or deregulation.
We are subject to various data privacy and protection laws, regulations, policies and contractual obligations that apply to the collection, transmission, storage, processing and use of personal information or personal data, which among other things, impose certain requirements relating to the privacy and security of personal information. The variety of laws and regulations governing data privacy and protection, and the use of the internet as a commercial medium, are rapidly evolving, extensive and complex, and may include provisions and obligations that are inconsistent with one another or uncertain in their scope or application.
The data protection landscape is rapidly evolving in the United States. As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities. For example, California has passed a comprehensive data privacy law, the California Consumer Privacy Act of 2018 (the “CCPA”), and other states including Virginia and Colorado have also passed similar laws. Additionally, the California Privacy Rights Act (the “CPRA”) was recently passed, which will impose additional data protection obligations on covered businesses, including additional consumer rights procedures and obligations, limitations on data uses, new audit requirements for higher risk data, and constraints on certain uses of sensitive data. The majority of the CPRA provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required. Further, there are several legislative proposals in the United States, at both the federal and state level, that could impose new privacy and security obligations. We cannot yet determine the impact that these future laws and regulations may have on our business.
In addition, governmental authorities and private litigants continue to bring actions against companies for online collection, use, dissemination and security practices that are unfair or deceptive.
Our business is, and may in the future be, subject to a variety of other laws and regulations, including licensing, permitting, and historic designation and similar requirements; working conditions, labor, immigration and employment laws; health, safety and sanitation requirements; and compliance with the Americans with Disabilities Act (and related state and local statutes).
Any changes to the legal and regulatory framework applicable to our business could have an adverse impact on our businesses and our failure to comply with applicable governmental laws and regulations, or to maintain necessary permits or licenses, could result in liability or government actions that could have a material negative effect on our business and results of operations.
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Our Business Is Subject to Seasonal Fluctuations, and Our Operating Results and Cash Flow Could Vary Substantially from Period to Period.
Our revenues and expenses have been seasonal and we expect they will continue to be seasonal. For example, 17% of our revenues in Fiscal Year 2020 were derived from the Christmas Spectacular. Our revenues are highest in the second quarter of our fiscal year when these performances primarily occur. As a result, our business earns a disproportionate amount of its revenue and operating income in the second quarter of each fiscal year. Therefore, our operating results and cash flow reflect significant variation from period to period and will continue to do so in the future. Consequently, period-to-period comparisons of our operating results may not necessarily be meaningful and the operating results of one period are not indicative of our financial performance during a full fiscal year. This variability may adversely affect our business, results of operations and financial condition.
Organized Labor Matters May Have a Material Negative Effect on Our Business and Results of Operations.
Our business is dependent upon the efforts of unionized workers. As of June 30, 2021, approximately 33% of our employees are represented by unions. Approximately 52% of such union employees are subject to CBAs that were expired as of June 30, 2021 and approximately 11% are subject to CBAs that will expire by June 30, 2022 if they are not extended prior thereto. Any labor disputes, such as strikes or lockouts, with the unions with which we have CBAs could have a material negative effect on our business and results of operations (including our ability to produce or present concerts, programming, theatrical productions, sporting events and other events).
Additionally, NBA and NHL players are covered by CBAs. Both leagues have experienced labor difficulties in the past and may have labor issues in the future, such as player strikes or management lockouts. If any Knicks or Rangers games are cancelled because of any such labor difficulties, the loss of revenue, including from customers who would have attended home games at The Garden and from impacts to MSG Networks’ ability to produce or present programming would have a negative impact on our business and results of operations.
Increases in labor costs could also slow the growth of, or harm, Tao Group Hospitality, which has a substantial number of hourly employees whose compensation may be impacted by increases in government-imposed minimum wage rates. In addition, Tao Group Hospitality employs a substantial number of employees whose income is supplemented through the receipt of gratuities. In certain jurisdictions in which Tao Group Hospitality operates, the minimum hourly wage to which gratuity-eligible employees are entitled under law is lower than the minimum wage required to be paid to other employees, subject to the former’s receipt of sufficient gratuities. The difference between the two minimum rates is referred to as a “tip credit.” Governmental entities, including in New York, Las Vegas and Chicago, have acted to increase minimum wage rates in jurisdictions where Tao Group Hospitality operates or may operate in the future. In addition, governmental entities have acted to eliminate, or considered the elimination of, tip credits in the application of minimum wage laws. As minimum wage rates increase, or if tip credits are reduced or eliminated, Tao Group Hospitality may need to increase wages paid to a substantial number of employees, which could substantially increase the labor costs of Tao Group Hospitality. In addition, Tao Group Hospitality’s labor costs may increase if certain employees elect to be union represented and to collectively bargain their compensation. Tao Group Hospitality may be unable to offset these increased labor costs either through increased prices or changes to its operations, which could have a material negative effect on our business and results of operations.
The Unavailability of Systems Upon Which We Rely May Have a Material Negative Effect on Our Business and Results of Operations.
We rely upon various internal and third-party software or systems in the operation of our business, including, with respect to ticket sales, credit card processing, email marketing, point of sale transactions, database, inventory, human resource management and financial systems. From time to time, certain of these arrangements may not be covered by long-term agreements. The failure or unavailability of these internal or third-party services or systems, depending upon its severity and duration, could have a material negative effect on our business and results of operations.
There Is a Risk of Injuries and Accidents in Connection with Our Venues, Which Could Subject Us to Personal Injury or Other Claims; We Are Subject to the Risk of Adverse Outcomes in Other Types of Litigation.
There are inherent risks associated with producing and hosting events and operating, maintaining or renovating our venues and in operating our restaurant and nightlife venues. As a result, personal injuries, accidents and other incidents have occurred and may occur from time to time, which could subject us to claims and liabilities.
These risks may not be covered by insurance or could involve exposures that exceed the limits of any applicable insurance policy. Incidents in connection with events at any of our venues could also reduce attendance at our events and may have a negative impact on our revenue and results of operations. We seek to obtain contractual indemnities for events at our venues
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that we do not promote, and under the Arena License Agreements, MSG Sports and the Company have reciprocal indemnity obligations to each other in connection with the home games of the Knicks and Rangers held at The Garden. While we also maintain insurance policies that provide coverage for incidents in the ordinary course of business, there can be no assurance that such indemnities or insurance will be adequate at all times and in all circumstances.
From time to time, the Company and its subsidiaries are involved in various legal proceedings, including proceedings or lawsuits brought by governmental agencies, stockholders, customers, employees, private parties and other stakeholders, including litigation in connection with the Merger. The outcome of litigation is inherently unpredictable and, regardless of the merits of the claims, litigation may be expensive, time-consuming, disruptive to our operations, harmful to our reputation and distracting to management. As a result, we may incur liability from litigation (including in connection with settling such litigation) which could be material and for which we may not have available or adequate insurance coverage, or be subject to other forms of non-monetary relief which may adversely affect the Company. The liabilities we incur in connection with any such litigation could have an adverse effect on our business and results of operations.
We Face Risk from Doing Business Internationally.
We have operations and own property outside of the United States. As a result, our business is subject to certain risks inherent in international business, many of which are beyond our control. These risks include:
•laws and policies affecting trade and taxes, including laws and policies relating to currency, the repatriation of funds and withholding taxes, and changes in these laws;
•changes in local regulatory requirements, including restrictions on foreign ownership;
•exchange rate fluctuation;
•exchange controls, tariffs and other trade barriers;
•differing degrees of protection for intellectual property and varying attitudes towards the piracy of intellectual property;
•foreign privacy and data protection laws and regulations, such as the E.U. General Data Protection Regulation, and changes in these laws;
•the impact of Brexit, which legally took place on January 31, 2020, and the E.U.-U.K. Trade and Cooperation Agreement, which was applied provisionally from January 1, 2021 and entered into force on May 1, 2021;
•the instability of foreign economies and governments;
•war, acts of terrorism and the outbreak of epidemics or pandemics abroad;
•anti-corruption laws and regulations, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act that impose stringent requirements on how we conduct our foreign operations, and changes in these laws and regulations; and
•shifting consumer preferences regarding entertainment.
Events or developments related to these and other risks associated with international operations could have a material negative effect on our business and results of operations.
Our Historical Financial Results May Not Be Representative of Our Results as a Separate, Stand-Alone Company.
Certain of the historical financial information we have included in this Annual Report on Form 10-K has been derived from the consolidated financial statements and accounting records of MSG Sports and does not necessarily reflect what our financial position, results of operations or cash flows would have been had we been a separate, stand-alone company during the periods presented. Although MSG Sports did account for our business (other than the sports bookings business) as a separate business segment, we were not operated as a separate, stand-alone company for the historical periods presented. The historical costs and expenses reflected in our combined financial statements include an allocation for certain corporate functions historically provided by MSG Sports, including general corporate expenses and employee benefits and incentives. These allocations were based on what we and MSG Sports considered to be reasonable reflections of the historical utilization levels of these services required in support of our business. In addition, following the Entertainment Distribution, our business includes the results of the sports bookings business that were previously reported as part of MSG Sports’ Sports business segment. The historical
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information does not necessarily indicate what our results of operations, financial position, cash flows or costs and expenses will be in the future.
Risks Related to Our Indebtedness and Financial Condition
We Have Substantial Indebtedness and Are Highly Leveraged, Which Could Adversely Affect Our Business.
We are highly leveraged with a significant amount of debt and we may continue to incur additional debt in the future. In November 2020, MSG National Properties, LLC (“MSG National Properties”) and certain of our other subsidiaries entered into a five-year $650 million senior secured term loan facility to fund working capital needs, for general corporate purposes of MSG National Properties and its subsidiaries, and to make distributions to MSG Entertainment Group, LLC. In September 2019, MSG Networks incurred $100 million of debt to finance a cash tender offer for shares of its Class A common stock and entered into a credit facility consisting of (i) an initial $1,100 million term loan facility and (ii) $250 million revolving credit facility, each with a term of five years. As a result of our indebtedness, we are required to make interest and principal payments on our borrowings that are significant in relation to our revenues and cash flows. These payments reduce our earnings and cash available for other potential business purposes. In addition, the ability of MSG Networks to draw on its $250 million revolving credit facility will depend on its ability to meet certain financial covenants and other conditions. This leverage also exposes us to significant risk by limiting our flexibility in planning for, or reacting to, changes in our business (whether through competitive pressure or otherwise), the entertainment, hospitality, cable and telecommunications industries and the economy at large. Although our cash flows could decrease in these scenarios, our required payments in respect of indebtedness would not decrease.
In addition, our ability to make payments on, or repay or refinance, such debt, and to fund our operating and capital expenditures, depends largely upon our future operating performance. Our future operating performance, to a certain extent, is subject to general economic, financial, competitive, regulatory and other factors that are beyond our control. Furthermore, our interest expense could increase if interest rates increase because our indebtedness bears interest at floating rates or to the extent we have to refinance existing debt with higher cost debt.
Our Variable Rate Indebtedness Subjects Us to Interest Rate Risk, Which Could Cause Our Debt Service Obligations to Increase Significantly.
Borrowings under our facilities are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on certain of our variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
In addition, in July 2017, the United Kingdom’s Financial Conduct Authority, which regulates the London Interbank Offered Rate (“LIBOR”), announced that it will no longer persuade or compel banks to submit LIBOR rates after 2021. Although the transition period has been extended to June 2023, the United States Federal Reserve issued a statement advising banks to stop new LIBOR issuances by the end of 2021. It is unclear whether or not, at that time, a satisfactory replacement rate will be developed or if new methods of calculating LIBOR will be established such that it continues to exist after 2021. The proposed alternative, a new index that measures the cost of borrowing cash overnight, backed by U.S. Treasury securities (“SOFR”), is observed and backward-looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members. Our credit agreements provide mechanisms to adjust our base interest rates in the event that LIBOR ceases to exist, is replaced by a SOFR rate, or in certain other related circumstances, however, there can be no assurances that the transition to another benchmark rate will occur as intended. Whether or not SOFR or any other potential alternative reference rate attains market traction as a LIBOR replacement rate remains in question. The consequences of these developments with respect to LIBOR cannot be entirely predicted but may affect the level of interest payments on the portion of our indebtedness that bears interest at variable rates, which may adversely impact the amount of our interest payments under such debt.
We May Require Additional Financing to Fund Our Planned Construction of MSG Sphere in Las Vegas, as Well as Certain of Our Obligations, Ongoing Operations, and Capital Expenditures, the Availability of Which Is Uncertain.
The capital and credit markets can experience volatility and disruption. Those markets can exert extreme downward pressure on stock prices and upward pressure on the cost of new debt capital and can severely restrict credit availability for most issuers.
Our Entertainment business has been characterized by significant expenditures for properties, businesses, renovations and productions. We may require additional financing to fund our planned capital expenditures, including the construction of MSG Sphere in Las Vegas, as well as other obligations and our ongoing operations. In the future, we may engage in transactions that depend on our ability to obtain funding. For example, as we extend MSG Sphere beyond Las Vegas, our intention is to utilize
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several options, such as non-recourse debt financing, joint ventures, equity partners and a managed venue model. There is no assurance that we will be able to successfully complete these plans.
Depending upon conditions in the financial markets and/or the Company’s financial performance, we may not be able to raise additional capital on favorable terms, or at all. If we are unable to pursue our current and future spending programs, we may be forced to cancel or scale back those programs. Failure to successfully pursue our capital expenditure and other spending plans could negatively affect our ability to compete effectively and have a material negative effect on our business and results of operations.
In addition, the NBA and NHL have imposed restrictions on financing transactions that require a secured interest in The Garden.
We Have Incurred Substantial Operating Losses, Negative Adjusted Operating Income and Negative Cash Flow and There is No Assurance We Will Have Operating Income, Positive Adjusted Operating Income or Positive Cash Flow in the Future.
We incurred operating losses of $450.2 million, $59.8 million and $45.6 million in fiscal years 2021, 2020 and 2019, respectively. In addition, we have in prior periods incurred operating losses and negative cash flow and there is no assurance that we will have operating income or positive cash flow in the future. Significant operating losses may limit our ability to raise necessary financing, or to do so on favorable terms, as such losses could be taken into account by potential investors, lenders and the organizations that issue investment ratings on indebtedness. See “Part II — Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Factors Affecting Operating Results.”
Tao Group Hospitality Has Incurred or May Incur Indebtedness, and the Occurrence of an Event of Default Under Tao Group Hospitality’s Credit Facilities or Our Inability to Repay Such Indebtedness When Due Could Substantially Impair the Assets of Tao Group Hospitality; Other of Our Subsidiaries and Joint Ventures May Incur Indebtedness in the Future and the Failure of Those Entities or Other Parties to Perform as Expected, Including the Repayment of Outstanding Loans, Could Have a Negative Effect on Our Business.
Tao Group Hospitality has incurred and may incur indebtedness, which indebtedness is significant relative to the assets of Tao Group Hospitality’s business. The occurrence of an event of default under Tao Group Hospitality’s credit facilities could substantially impair the assets of Tao Group Hospitality and, as a result, have a negative effect on our business and results of operations.
Disruptions caused by the COVID-19 pandemic had, and may continue to have, a significant and negative impact on Tao Group Hospitality’s operations and financial performance during Fiscal Year 2021. In August 2020, Tao Group Hospitality amended the Tao Senior Credit Agreement, which suspended the application of certain financial covenants through December 31, 2021, modified certain restrictive covenants therein, modified the applicable interest rates, and increased the minimum liquidity requirement. In addition, in connection with the amendment, MSG Entertainment Group, LLC entered into a guarantee and reserve account agreement to guarantee the obligations of Tao Group Operating LLC (“TAOG”) under the Tao Senior Credit Agreement, establish and grant a security interest in a reserve account that will initially hold a deposit of approximately $9.8 million and maintain a minimum liquidity requirement of no less than $75 million at all times. Tao Group Hospitality will likely need to seek covenant waivers in the future. Tao Group Hospitality’s failure to obtain covenant waivers could trigger a violation of these covenants and lead to default, acceleration of all of its outstanding debt and a demand for payment under the guarantee of MSG Entertainment Group, which would negatively impact the liquidity of Tao Group Hospitality and the Company. In addition, in May 2019 we extended a $49 million subordinated loan to Tao Group Hospitality, which was amended in June 2020 to increase the subordinated loan amount by $22 million. In aggregate, $63 million remains outstanding under the subordinated loan. The occurrence of an event of default under the Tao Senior Credit Agreement and any resulting acceleration of debt thereunder would lead to an event of default under our subordinated loan to Tao Group Hospitality and could impair our ability to have the Company’s subordinated loan repaid.
In addition, we have made investments in, or otherwise extended loans to, one or more of our joint ventures or other parties and may make additional investments in, or otherwise extend loans to, one or more of such parties in the future. To the extent that such parties do not perform as expected, including with respect to repayment of such loans, it could impair such assets or create losses related to such loans, and, as a result, have a negative effect on our business and results of operations.
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Risks Related to Cybersecurity and Intellectual Property
We Face Continually Evolving Cybersecurity and Similar Risks, Which Could Result in Loss, Disclosure, Theft, Destruction or Misappropriation of, or Access to, Our Confidential Information and Cause Disruption of Our Business, Damage to Our Brands and Reputation, Legal Exposure and Financial Losses.
Through our operations, we may collect and store, including by electronic means, certain personal, proprietary and other sensitive information, including payment card information, that is provided to us through purchases, registration on our websites, mobile applications, or otherwise in communication or interaction with us. These activities require the use of online services and centralized data storage, including through third-party service providers. Data maintained in electronic form is subject to the risk of security incidents, including breach, compromise, intrusion, tampering, theft, destruction, misappropriation or other malicious activity. Cyber-attacks, denial-of-service attacks, ransomware attacks, business emails compromises, viruses and social engineering (including phishing) are continuing to occur in our industry, as well as the industries of our partners, vendors and suppliers. In addition, we may experience attacks, unavailable systems, unauthorized access or disclosure due to employee theft or misuse, sophisticated nation-state and nation-state supported actors and advanced persistent threat intrusions. Further, hardware and operating system software and applications that we produce or procure from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation of such systems. Our ability to safeguard such personal and other sensitive information, including information regarding the Company and our customers, sponsors, partners, Distributors, advertisers and employees, independent contractors and vendors, is important to our business. We take these matters seriously and take significant steps to protect our stored information, including the implementation of systems and processes to thwart malicious activity. These protections are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. In addition, changes in legislation may increase the risk of potential litigation. For example, the CCPA, which provides a private right of action (in addition to statutory damages) for California residents whose sensitive personal information is breached as a result of a business’s violation of its duty to reasonably secure such information took effect on January 1, 2020 and will be expanded by the CPRA once it takes effect in January 2023. See “— Economic and Operational Risks — We Are Subject to Extensive Governmental Regulation and Our Failure to Comply with These Regulations May Have a Material Negative Effect on Our Business and Results of Operations.”
Despite our efforts, the risks of a security incident cannot be entirely eliminated and our information technology and other systems that maintain and transmit consumer, sponsor, partner, Distributor, advertiser, Company, employee and other confidential and proprietary information may be compromised due to employee error or other circumstances such as malware or ransomware, viruses, hacking and phishing attacks or otherwise. Such compromise could affect the security of information on our network or that of a third-party service provider. Additionally, outside parties may attempt to fraudulently induce employees, vendors or users to disclose sensitive, proprietary or confidential information in order to gain access to data and systems. As a result, such sensitive, proprietary and/or confidential information may be lost, disclosed, accessed or taken without consent. For example, in November 2016, a payment card issue that affected cards used at merchandise and food and beverage locations at several of our New York venues and The Chicago Theatre was identified and addressed with the assistance of security firms. The issue was promptly fixed and enhanced security measures were implemented.
The Company also continues to review and enhance our security measures in light of the constantly evolving techniques used to gain unauthorized access to networks, data, software and systems. The Company may be required to incur significant expenses in order to address any actual or potential security incidents that arise and we may not have insurance coverage for any or all of such expenses. If we experience a security incident, our ability to conduct business may be interrupted or impaired, we may incur damage to our systems, we may lose profitable opportunities or the value of those opportunities may be diminished and we may lose revenue as a result of unlicensed use of our intellectual property. Unauthorized access to or security breaches of our systems could result in the loss of data, loss of business, severe reputational damage adversely affecting customer or investor confidence, diversion of management’s attention, regulatory investigations and orders, litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations and significant costs for remediation that may include liability for stolen or lost assets or information and repair of system damage that may have been caused, incentives offered to customers or other business partners in an effort to maintain business relationships after a breach and other liabilities. Further, an actual or perceived security incident, such as penetration of our or our third-party vendors’ networks, affecting personal or other sensitive information could subject us to business and litigation risk, including costs associated with such misappropriation or misuse, and damage our reputation, including with customers, sponsors, partners, Distributors, viewers and advertisers, which could have a material negative effect on our business and results of operations. Our insurance coverage may not be adequate to cover the costs of a data breach, indemnification obligations, or other liabilities.
In addition, in some instances, we may have obligations to notify relevant stakeholders of security breaches. Such mandatory disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our
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security measures and require us to expend significant capital and other resources to respond to or alleviate problems caused by an actual or perceived security breach.
We May Become Subject to Infringement or Other Claims Relating to Our Content or Technology.
From time to time, third parties may assert against us alleged intellectual property (e.g., copyright, trademark and patent) or other claims relating to our productions, dining and nightlife venues and brands, programming, technologies, digital content or other content or material, some of which may be important to our business. In addition, our productions and/or programming could potentially subject us to claims of defamation or similar types of allegations. Any such claims, regardless of their merit, could cause us to incur significant costs that could harm our results of operations. We may not be indemnified against, or have insurance coverage for, claims or costs of these types. In addition, if we are unable to continue use of certain intellectual property rights, our business and results of operations could be materially negatively impacted.
Theft of Our Intellectual Property May Have a Material Negative Effect on Our Business and Results of Operations.
The success of our business depends in part on our ability to maintain and monetize our intellectual property rights, including the technology being developed for MSG Sphere, our brand logos, our programming, technologies, digital content and other content that is material to our business. Theft of our intellectual property, including content, could have a material negative effect on our business and results of operations because it may reduce the revenue that we are able to receive from the legitimate sale and distribution of such intellectual property, undermine lawful distribution channels and limit our ability to control the marketing of our content and inhibit our ability to recoup or profit from the costs incurred to create such content. Litigation may be necessary to enforce our intellectual property rights or protect our trade secrets. Any litigation of this nature, regardless of the outcome, could cause us to incur significant costs.
Risks Related to Governance and Our Controlled Ownership
We Are Materially Dependent on MSG Sports’ Performance Under Various Agreements.
We have entered into various agreements with MSG Sports related to the Entertainment Distribution, including a distribution agreement, a tax disaffiliation agreement, a transition services agreement, an employee matters agreement and certain other arrangements (including other support services). These agreements include the allocation of employee benefits, taxes and certain other liabilities and obligations attributable to periods prior to, at and after the Entertainment Distribution. In connection with the Entertainment Distribution, we provided MSG Sports with indemnities with respect to liabilities arising out of our business and MSG Sports provided us with indemnities with respect to liabilities arising out of the business retained by MSG Sports.
We also entered into various agreements with MSG Sports that govern our ongoing commercial relationship subsequent to the Entertainment Distribution, including Arena License Agreements that require two of MSG Sports’ professional sports teams - the Knicks and the Rangers - to play home games at The Garden, sponsorship agency agreements in connection with the sale of sponsorships and advertising for the Knicks and Rangers, as well as MSG Sports’ other teams, and a trademark license agreement regarding the use of the “MSG” and Madison Square Garden marks for certain purposes. These agreements, other than the Arena License Agreements, are each subject to potential termination by MSG Sports in the event MSG Sports and the Company are no longer affiliates.
The Company performs certain business services for MSG Sports that were performed by MSG Sports prior to the Entertainment Distribution, such as information technology, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions. These services include the collection and storage of certain personal information regarding employees and/or customers as well as information regarding the Company, MSG Sports and our sponsors and partners. See “— Risks Related to Cybersecurity and Intellectual Property — We Face Continually Evolving Cybersecurity and Similar Risks, Which Could Result in Loss, Disclosure, Theft, Destruction or Misappropriation of, or Access to, Our Confidential Information and Cause Disruption of Our Business, Damage to Our Brands and Reputation, Legal Exposure and Financial Losses.”
In addition, MSG Networks has various agreements with MSG Sports in connection with the 2015 Sports Distribution, including a distribution agreement, a tax disaffiliation agreement, a services agreement, an employee matters agreement, and media rights agreements. These agreements include the allocation of employee benefits, taxes and certain other liabilities and obligations attributable to periods prior to the 2015 Sports Distribution. In connection with the 2015 Sports Distribution, we agreed to provide MSG Sports with indemnities with respect to liabilities arising out of our businesses and MSG Sports agreed to provide us with indemnities with respect to liabilities arising out of the businesses we transferred to MSG Sports. MSG Networks’ media rights agreements with MSG Sports provide us with the exclusive media rights to Knicks and Rangers games.
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Rights fees under these media rights agreements amounted to approximately $143 million for Fiscal Year 2021, which reflect reductions as a result of MSG Sports’ not making available the minimum number of games. The stated contractual rights fees under such rights agreements increase annually and are subject to adjustments in certain circumstances, including if MSG Sports does not make available a minimum number of games in any year.
The Company and MSG Sports each rely on the other to perform their obligations under these agreements. If MSG Sports were to breach or become unable to satisfy its material obligations under these agreements, including a failure to satisfy its indemnification or other financial obligations, or these agreements otherwise terminate or expire and we do not enter into replacement agreements, we could suffer operational difficulties and/or significant losses.
The Entertainment Distribution Could Result in Significant Tax Liability.
MSG Sports received an opinion from Sullivan & Cromwell LLP substantially to the effect that, among other things, the Entertainment Distribution qualified as a tax-free distribution under the Internal Revenue Code (the “Code”). The opinion is not binding on the IRS or the courts. Certain transactions related to the Entertainment Distribution that are not addressed by the opinion could result in the recognition of income or gain by MSG Sports The opinion relied on factual representations and reasonable assumptions, which, if incorrect or inaccurate, may jeopardize the ability to rely on such opinion.
If the Entertainment Distribution does not qualify for tax-free treatment for U.S. federal income tax purposes, then, in general, MSG Sports would recognize taxable gain in an amount equal to the excess of the fair market value of our common stock distributed in the Entertainment Distribution over MSG Sports’ tax basis therein (i.e., as if it had sold such common stock in a taxable sale for its fair market value). In addition, the receipt by MSG Sports’ stockholders of common stock of our Company would be a taxable distribution, and each U.S. holder that received our common stock in the Entertainment Distribution would be treated as if the U.S. holder had received a distribution equal to the fair market value of our common stock that was distributed to it, which generally would be treated first as a taxable dividend to the extent of such holder’s pro rata share of MSG Sports’ earnings and profits, then as a non-taxable return of capital to the extent of the holder’s tax basis in its MSG Sports’ common stock, and thereafter as capital gain with respect to any remaining value. It is expected that the amount of any such taxes to MSG Sports stockholders and MSG Sports would be substantial. See “— We May Have a Significant Indemnity Obligation to MSG Sports if the Entertainment Distribution Is Treated as a Taxable Transaction.”
We May Have a Significant Indemnity Obligation to MSG Sports if the Entertainment Distribution Is Treated as a Taxable Transaction.
We have entered into a Tax Disaffiliation Agreement with MSG Sports (the “Tax Disaffiliation Agreement”), which sets out each party’s rights and obligations with respect to federal, state, local or foreign taxes for periods before and after the Entertainment Distribution and related matters such as the filing of tax returns and the conduct of IRS and other audits. Pursuant to the Tax Disaffiliation Agreement, we are required to indemnify MSG Sports for losses and taxes of MSG Sports resulting from the breach of certain covenants and for certain taxable gain recognized by MSG Sports, including as a result of certain acquisitions of our stock or assets. If we are required to indemnify MSG Sports under the circumstances set forth in the Tax Disaffiliation Agreement, we may be subject to substantial liabilities, which could materially adversely affect our financial position.
The Tax Rules Applicable to the Distribution Restrict Us from Engaging in Certain Corporate Transactions and from Raising Equity Capital Beyond Certain Thresholds for a Period of Time After the Entertainment Distribution.
To preserve the tax-free treatment of the Entertainment Distribution to MSG Sports and its stockholders, under the Tax Disaffiliation Agreement with MSG Sports, for the two-year period following the Entertainment Distribution, we are subject to restrictions with respect to:
•entering into any transaction pursuant to which 50% or more of our shares or assets would be acquired, whether by merger or otherwise, unless certain tests are met;
•issuing equity securities, if any such issuances would, in the aggregate, constitute 50% or more of the voting power or value of our capital stock;
•certain repurchases of our common shares;
•ceasing to actively conduct our business;
•amendments to our organizational documents (i) affecting the relative voting rights of our stock or (ii) converting one class of our stock to another;
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•liquidating or partially liquidating; and
•taking any other action that prevents the Entertainment Distribution and certain related transactions from being tax-free.
These restrictions may limit our ability during such period to pursue strategic transactions of a certain magnitude that involve the issuance or acquisition of our stock or to engage in new businesses or other transactions that might increase the value of our business. These restrictions may also limit our ability to raise significant amounts of cash through the issuance of stock, especially if our stock price were to suffer substantial declines, or through the sale of certain of our assets.
MSG Networks Could Have Significant Tax Liability as a Result of the 2015 Sports Distribution.
MSG Networks obtained an opinion from Sullivan & Cromwell LLP substantially to the effect that, among other things, the 2015 Sports Distribution qualifies as a tax-free distribution under the Code. The opinion is not binding on the IRS or the courts. Additionally, MSG Networks received a private letter ruling from the IRS concluding that certain limited aspects of the 2015 Sports Distribution will not prevent the 2015 Sports Distribution from satisfying certain requirements for tax-free treatment under the Code. The opinion and the private letter ruling rely on factual representations and reasonable assumptions, which if incorrect or inaccurate may jeopardize the ability to rely on such opinion and letter ruling.
If the 2015 Sports Distribution does not qualify for tax-free treatment for U.S. federal income tax purposes, then, in general, MSG Networks would be subject to tax as if it had sold the MSG Sports common stock in a taxable sale for its fair value. MSG Sports stockholders would be subject to tax as if they had received a distribution equal to the fair value of MSG Sports common stock that was distributed to them, which generally would be treated first as a taxable dividend to the extent of MSG Networks earnings and profits, then as a non-taxable return of capital to the extent of each holder’s tax basis in its MSG Sports common stock, and thereafter as capital gain with respect to any remaining value. It is expected that the amount of any such taxes to MSG Sports stockholders and MSG Networks would be substantial.
Certain Adverse U.S. Federal Income Tax Consequences Might Apply to Non-U.S. Holders That Hold Our Class A Common Stock and Class B Common Stock If We Are Treated as a USRPHC.
The Company has not made a determination as to whether we are deemed to be a USRPHC, as defined in section 897(c)(2) of the Code. In general, we would be considered a USRPHC if 50% or more of the fair market value of our assets constitute “United States real property interests” within the meaning of the Code. However, the determination of whether we are a USRPHC turns on the relative fair market value of our United States real property interests and our other assets, and because the USRPHC rules are complex and the determination of whether we are a USRPHC depends on facts and circumstances that may be beyond our control, we can give no assurance as to our USRPHC status after the Entertainment Distribution. If we are treated as a USRPHC, certain adverse U.S. federal income tax consequences might apply to non-U.S. holders that hold our Class A Common Stock and Class B Common Stock. For more information, see the section entitled “The Distribution - Material U.S. Federal Income Tax Consequences of the Distribution” in the Company’s Information Statement, dated April 6, 2020 (the “Information Statement”), filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on April 7, 2020.
Combining Our Business with MSG Networks May be More Difficult, Costly or Time-Consuming Than Expected and We May Fail to Realize the Anticipated Benefits of the Merger, Which May Adversely Affect Our Business Results and Negatively affect the value of our common stock.
Our merger with MSG Networks involved the combination of two companies which, until the completion of the Merger, operated as separate public companies. The success of the Merger will depend on, among other things, our ability to combine those businesses in a manner that adds value to shareholders. However, there can be no assurances that these businesses can be integrated successfully, and we will be required to devote significant management attention and resources to the integration process.
Although we expect that the strategic benefits, additional income and elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses to offset incremental transaction and Merger-related costs over time, we may encounter difficulties in the integration and any net benefit may not be achieved in the near term or at all. It is possible that the integration process could take longer than originally anticipated and could result in the loss of key employees; the loss of commercial and vendor partners; the disruption of our ongoing businesses; inconsistencies in standards, controls, procedures and policies; unexpected integration issues; and higher than expected integration costs.
An inability to realize the full extent of the anticipated benefits of the Merger, as well as any delays encountered in the integration process, could have an adverse effect upon our revenues, expenses and operating results, which may adversely affect the value of our common stock.
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We Are Controlled by the Dolan Family. As a Result of Their Control, the Dolan Family Has the Ability to Prevent or Cause a Change in Control or Approve, Prevent or Influence Certain Actions by the Company.
We have two classes of common stock:
•Class A Common Stock, par value $0.01 per share (“Class A Common Stock”), which is entitled to one vote per share and is entitled collectively to elect 25% of our Board of Directors; and
•Class B Common Stock, par value $0.01 per share (“Class B Common Stock”), which is entitled to 10 votes per share and is entitled collectively to elect the remaining 75% of our Board of Directors.
As of July 31, 2021, the Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), collectively own all of our Class B Common Stock, approximately 5.1% of our outstanding Class A Common Stock (inclusive of options exercisable and restricted stock units vesting within 60 days of July 31, 2021) and approximately 72.8% of the total voting power of all our outstanding common stock. The members of the Dolan Family Group holding Class B Common Stock are parties to a Stockholders Agreement, which has the effect of causing the voting power of the holders of our Class B Common Stock to be cast as a block with respect to all matters to be voted on by holders of our Class B Common Stock. Under the Stockholders Agreement, the shares of Class B Common Stock owned by members of the Dolan Family Group (representing all the outstanding Class B Common Stock) are to be voted on all matters in accordance with the determination of the Dolan Family Committee (as defined below), except that the decisions of the Dolan Family Committee are non-binding with respect to the Class B Common Stock owned by certain Dolan family trusts that collectively own approximately 40.5% of the outstanding Class B Common Stock (“Excluded Trusts”). The “Dolan Family Committee” consists of Charles F. Dolan and his six children, James L. Dolan, Thomas C. Dolan, Patrick F. Dolan, Kathleen M. Dolan, Marianne Dolan Weber and Deborah A. Dolan-Sweeney. The Dolan Family Committee generally acts by majority vote, except that approval of a going-private transaction must be approved by a two-thirds vote and approval of a change-in-control transaction must be approved by not less than all but one vote. The voting members of the Dolan Family Committee are James L. Dolan, Thomas C. Dolan, Kathleen M. Dolan, Deborah A. Dolan-Sweeney and Marianne Dolan Weber, with each member having one vote other than James L. Dolan, who has two votes. Because James L. Dolan has two votes, he has the ability to block Dolan Family Committee approval of any Company change in control transaction. Shares of Class B Common Stock owned by Excluded Trusts will on all matters be voted on in accordance with the determination of the Excluded Trusts holding a majority of the Class B Common Stock held by all Excluded Trusts, except in the case of a vote on a going-private transaction or a change in control transaction, in which case a vote of the trusts holding two-thirds of the Class B Common Stock owned by Excluded Trusts is required.
The Dolan Family Group is able to prevent a change in control of our Company and no person interested in acquiring us would be able to do so without obtaining the consent of the Dolan Family Group. The Dolan Family Group, by virtue of its stock ownership, has the power to elect all of our directors subject to election by holders of Class B Common Stock and is able collectively to control stockholder decisions on matters on which holders of all classes of our common stock vote together as a single class. These matters could include the amendment of some provisions of our certificate of incorporation and the approval of fundamental corporate transactions.
In addition, the affirmative vote or consent of the holders of at least 66 2⁄3% of the outstanding shares of the Class B Common Stock, voting separately as a class, is required to approve:
•the authorization or issuance of any additional shares of Class B Common Stock; and
•any amendment, alteration or repeal of any of the provisions of our certificate of incorporation that adversely affects the powers, preferences or rights of the Class B Common Stock.
As a result, the Dolan Family Group has the power to prevent such issuance or amendment.
The Dolan Family Group also controls MSG Sports and AMC Networks Inc. (“AMC Networks”) and, prior to the Merger, the Dolan Family Group also controlled MSG Networks.
We Have Elected to Be a “Controlled Company” for NYSE Purposes Which Allows Us Not to Comply with Certain of the Corporate Governance Rules of NYSE.
Members of the Dolan Family Group have entered into the Stockholders Agreement relating, among other things, to the voting of their shares of our Class B Common Stock. As a result, we are a “controlled company” under the corporate governance rules of NYSE. As a controlled company, we have the right to elect not to comply with the corporate governance rules of NYSE requiring: (i) a majority of independent directors on our Board of Directors; (ii) an independent corporate governance and
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nominating committee; and (iii) an independent compensation committee. Our Board of Directors has elected for the Company to be treated as a “controlled company” under NYSE corporate governance rules and not to comply with the NYSE requirement for a majority-independent board of directors and for an independent corporate governance and nominating committee because of our status as a controlled company. Nevertheless, our Board of Directors has elected to comply with the NYSE requirement for an independent compensation committee.
Future Stock Sales, Including as a Result of the Exercise of Registration Rights by Certain of Our Stockholders, Could Adversely Affect the Trading Price of Our Class A Common Stock.
Certain parties have registration rights covering a portion of our shares.
We have entered into registration rights agreements with Charles F. Dolan, members of his family, certain Dolan family interests and the Dolan Family Foundation that provide them with “demand” and “piggyback” registration rights with respect to approximately 6.9 million shares of Class A Common Stock, including shares issuable upon conversion of shares of Class B Common Stock.
Sales of a substantial number of shares of Class A Common Stock, including sales pursuant to these registration rights agreements, could adversely affect the market price of the Class A Common Stock and could impair our future ability to raise capital through an offering of our equity securities.
We Share Certain Key Directors and Officers with MSG Sports and/or AMC Networks, Which Means Those Officers Do Not Devote Their Full Time and Attention to Our Affairs and the Overlap May Give Rise to Conflicts.
Our Executive Chairman and Chief Executive Officer, James L. Dolan, also serves as the Executive Chairman of MSG Sports and prior to the Merger served as Executive Chairman of MSG Networks, and our President, Andrew Lustgarten, also serves as the President and Chief Executive Officer of MSG Sports. As a result, not all of our executive officers devote their full time and attention to the Company’s affairs. Our Vice Chairman, Gregg G. Seibert, also serves as the Vice Chairman of MSG Sports and AMC Networks, and served as Vice Chairman of MSG Networks prior to the Merger. Furthermore, ten members of our Board of Directors (including James L. Dolan) also serve as directors of MSG Sports, nine members of our Board of Directors (including James L. Dolan) also served as directors of MSG Networks prior to the Merger, and six members of our Board of Directors (including James L. Dolan) serve as directors of AMC Networks and Charles F. Dolan serves as Chairman Emeritus of AMC Networks concurrently with his service on our Board. The overlapping officers and directors may have actual or apparent conflicts of interest with respect to matters involving or affecting each company. For example, the potential for a conflict of interest when we on the one hand, and MSG Sports and/or AMC Networks and their respective subsidiaries and successors on the other hand, look at certain acquisitions and other corporate opportunities that may be suitable for more than one of the companies. Also, conflicts may arise if there are issues or disputes under the commercial arrangements that exist between MSG Sports or AMC Networks (each referred to as an “Other Entity”) and us. In addition, certain of our directors and officers continue to own stock and/or stock options or other equity awards of an Other Entity. These ownership interests could create actual, apparent or potential conflicts of interest when these individuals are faced with decisions that could have different implications for our Company and an Other Entity. For a discussion of certain procedures we have implemented to help ameliorate such potential conflicts that may arise, see our Definitive Proxy Statement filed with the SEC on October 27, 2020.
Our Overlapping Directors and Officers with MSG Sports and/or AMC Networks May Result in the Diversion of Corporate Opportunities to MSG Sports and/or AMC Networks and Other Conflicts and Provisions in Our Amended and Restated Certificate of Incorporation May Provide Us No Remedy in That Circumstance.
The Company’s amended and restated certificate of incorporation acknowledges that directors and officers of the Company (the “Overlap Persons”) may also be serving as directors, officers, employees or agents of an Other Entity, and that the Company may engage in material business transactions with such Other Entities. The Company has renounced its rights to certain business opportunities and the Company’s amended and restated certificate of incorporation provides that no Overlap Person will be liable to the Company or its stockholders for breach of any fiduciary duty that would otherwise occur by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in our amended and restated certificate of incorporation) to one or more of the Other Entities instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the Company. These provisions in our amended and restated certificate of incorporation also expressly validate certain contracts, agreements, arrangements and transactions (and amendments, modifications or terminations thereof) between the Company and the Other Entities and, to the fullest extent permitted by law, provided that the actions of the Overlap Person in connection therewith are not breaches of fiduciary duties owed to the Company, any of its subsidiaries or their respective stockholders.
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Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We own the Madison Square Garden Complex, which includes The Garden (with a maximum capacity of approximately 21,000 seats) and Hulu Theater at Madison Square Garden (approximately 5,600 seats) in New York City, comprising approximately 1,100,000 square feet; and The Chicago Theatre (approximately 3,600 seats) in Chicago comprising approximately 72,600 square feet.
Significant properties that are leased in New York City include approximately 304,000 square feet housing Madison Square Garden Entertainment Corp.’s administrative and executive offices with approximately 47,000 square feet of space that is subleased to MSG Sports, approximately 64,000 square feet housing MSG Networks’ administrative and executive offices and approximately 18,000 square feet of studio space, approximately 577,000 square feet comprising Radio City Music Hall (approximately 6,000 seats) and approximately 57,000 square feet comprising the Beacon Theatre (approximately 2,800 seats). We also lease storage space in various other locations. For more information on our venues, see “Item 1. Business — Our Business — Our Performance Venues.”
We also lease property in Las Vegas, Nevada and own property in Stratford, London, where we are currently building and expect to build new venues — known as “MSG Sphere.” See “Item 1. Business — Our Business — Our Performance Venues — MSG Sphere.” In addition, we lease approximately 174,000 square feet in Burbank, California, where MSG Sphere Studios, a creative studio that brings together expertise from across the entertainment industry to develop, record and produce content for the MSG Sphere, has (or is constructing) office space, as well as studio space, and content creation and testing facilities.
Our Madison Square Garden Complex is subject to and benefits from various easements, including over the “breezeway” into Madison Square Garden from Seventh Avenue in New York City (which we share with other property owners). Additionally, our planned MSG Sphere in Las Vegas will have the benefit of easements with respect to the planned pedestrian bridge to the Sands Expo Convention Center. Our ability to continue to utilize these and other easements requires us to comply with certain conditions. Moreover, certain adjoining property owners have easements over our property, which we are required to maintain so long as those property owners meet certain conditions.
In addition, Tao Group Hospitality is engaged in the management and operation of restaurants, nightlife and hospitality venues primarily in New York City, Las Vegas, Southern California, and London, of which 28 venues are leased properties (including seven venues in New York City, seven venues in Las Vegas, five venues in London, three venues in Los Angeles, three venues in San Diego, one venue in Santa Monica, one venue in Chicago and one venue in Hawaii). The size of Tao Group Hospitality’s leased venues ranges from approximately 6,500 to 77,000 square feet and totals approximately 419,000 square feet. Tao Group Hospitality also manages 33 venues (including six venues in Las Vegas, five venues in New York, four venues in India, four venues in Singapore, three venues in Mexico, two venues in the United Arab Emirates, one venue in Miami, one venue in Connecticut, one venue in Australia, one venue in China, one venue in Saudi Arabia, one venue in Qatar, one venue in Turkey, one venue in Morocco and one venue in Norway) that are not owned or leased properties.
Item 3. Legal Proceedings
Fourteen complaints were filed in connection with the Merger by purported stockholders of the Company and MSG Networks.
Nine of these complaints involved allegations of materially incomplete and misleading information set forth in the joint proxy statement/prospectus filed by the Company and MSG Networks in connection with the Merger. As a result of supplemental disclosures made by the Company and MSG Networks on July 1, 2021, all of these actions were voluntarily dismissed with prejudice prior to or shortly following the consummation of the Merger.
On May 27, 2021, a complaint captioned Hollywood Firefighters’ Pension Fund et al. v. James Dolan, et al., 2021-0468-KSJM, was filed in the Court of Chancery of the State of Delaware by purported stockholders of the Company against the Company, the Company’s Board of Directors (the “Board”), certain Dolan family stockholders and MSG Networks. The complaint purported to allege derivative claims on behalf of the Company and claims on behalf of a putative class of Company stockholders concerning the Merger. Plaintiffs alleged, among other things, that the Merger is a business combination with an interested stockholder that is not allowed under Section 203 of the Delaware General Corporation Law (the “DGCL”), that the Board members and majority stockholders violated their fiduciary duties in agreeing to the Merger, and that the disclosures relating to the Merger are misleading or incomplete. Plaintiffs sought, among other relief, declaratory and preliminary and permanent injunctive relief enjoining the stockholder vote and consummation of the Merger, and an award of damages in the event the transaction is consummated and plaintiffs’ attorneys’ fees. On June 15, 2021, plaintiffs filed a brief in support of its motion seeking a preliminary injunction enjoining the Company’s stockholder vote and consummation of the Merger, which the defendants opposed. The Court of Chancery denied the plaintiffs’ preliminary injunction motion on July 2, 2021.
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On June 9, 2021, a complaint captioned Timothy Leisz v. MSG Networks Inc. et al., 2021-0504-KSJM, was filed in the Court of Chancery of the State of Delaware by a purported stockholder of MSG Networks against MSG Networks, the MSG Networks board, certain Dolan family stockholders and the Company. The complaint purports to allege claims on behalf of a putative class of MSG Networks stockholders concerning the Merger. The MSG Networks plaintiff alleged, among other things, that the Merger is a business combination with an interested stockholder that is not allowed under Section 203 of the DGCL, that the MSG Networks board members and majority stockholders violated their fiduciary duties in agreeing to the Merger, and that the disclosures relating to the merger are misleading or incomplete. Plaintiff sought, among other relief, declaratory and preliminary and permanent injunctive relief enjoining the stockholder vote and consummation of the Merger, and an award of damages in the event the transaction is consummated and plaintiff’s attorneys’ fees. On June 21, 2021, plaintiff filed a brief in support of his motion seeking a preliminary injunction enjoining the MSG Networks stockholder vote and consummation of the Merger, which defendants have opposed. The Court of Chancery denied the plaintiff’s preliminary injunction motion on July 2, 2021.
On July 6, 2021, a complaint captioned Stevens et al. v. Dolan et al., 2021-575, was filed in the Court of Chancery of the State of Delaware by purported stockholders of MSG Networks against the MSG Networks board. The complaint purports to allege claims on behalf of a putative class of MSG Networks stockholders concerning the Merger. The plaintiffs allege, among other things, that the MSG Networks board members and majority stockholders violated their fiduciary duties in agreeing to the Merger and that the disclosures relating to the merger are misleading or incomplete. Plaintiffs sought, among other relief, an order rescinding the merger and rescinding any severance paid to James Dolan in connection with the Merger, an award of damages in the event the transaction is consummated, and plaintiffs’ attorneys’ fees.
On July 6, 2021, a complaint captioned The City of Boca Raton Police and Firefighters’ Retirement System v. MSG Networks Inc., 2021-0578, was filed in the Court of Chancery of the State of Delaware by purported shareholders of MSG Networks against MSG Networks. The complaint purported to seek to enforce plaintiff’s right to inspect certain of MSG Networks’ books and records under Section 220 of the DGCL. The complaint was voluntarily dismissed on August 10, 2021.
On August 11, 2021,a stockholder derivative complaint captioned City of Miramar Retirement Plan and Trust Fund for General Employees et al. v. Dolan et al., 2021-0692 was filed in the Court of Chancery of the State of Delaware by purported stockholders of the Company. The complaint purports to allege derivative claims on behalf of the Company and direct claims on behalf of a putative class of Company stockholders. Plaintiffs allege that the Board and the Company’s majority stockholders violated their fiduciary duties by failing to protect the Company’s interest in connection with the Merger. Plaintiffs seek, among other relief, an award of damages to the purported class and Company including interest, and plaintiffs’ attorneys’ fees.
We are currently unable to determine a range of potential liability, if any, with respect to these Merger-related claims. Accordingly, no accrual for these matters has been made in our consolidated financial statements.
The Company is a defendant in various other lawsuits. Although the outcome of these matters cannot be predicted with certainty, management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our Class A common stock, par value $0.01 per share (“Class A Common Stock”), is listed on the New York Stock Exchange (“NYSE”) under the symbol “MSGE.” The Company’s Class A Common Stock began “regular way” trading on the NYSE on April 20, 2020.
Performance Graph
The following graph compares the relative performance of our Class A Common Stock, the Russell 3000 Index and the Bloomberg Americas Entertainment Index. This graph covers the period from April 20, 2020 through June 30, 2021. The comparison assumes an investment of $100 on April 20, 2020 and reinvestment of dividends. The stock price performance included in this graph is not necessarily indicative of future stock performance. The Russell 3000 Index and the Bloomberg Americas Entertainment Index are included for comparative purposes only. They do not necessarily reflect management’s opinion that such indices are an appropriate measure of the relative performance of the stock involved and they are not intended to forecast or be indicative of possible future performance of our common stock.
MSG-20210630_G2.JPG
Base Period 4/20/20 6/30/20 6/30/21
Madison Square Garden Entertainment Corp.
$ 100.00  $ 114.80  $ 128.53 
Russell 3000 Index
100.00  111.76  161.11 
Bloomberg Americas Entertainment Index
100.00  123.07  283.23 
This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
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As of June 30, 2021, there were 590 holders of record of our Class A Common Stock. There is no public trading market for our Class B common stock, par value $.01 per share (“Class B Common Stock”). As of June 30, 2021, there were 17 holders of record of our Class B Common Stock.
We did not pay any dividend on our common stock during Fiscal Year 2021 and do not have any current plans to pay a cash dividend on our common stock for the foreseeable future.
Issuer Purchases of Equity Securities
On March 31, 2020, the Company’s Board of Directors authorized, effective following the Entertainment Distribution, a share repurchase program to repurchase up to $350 million of the Company’s Class A Common Stock. Under the authorization, shares of Class A Common Stock may be purchased from time to time in open market transactions, in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. No shares have been repurchased to date.
Securities Authorized for Issuance Under Equity Compensation Plans
The information required by this Item is incorporated by reference to the definitive Proxy Statement for our 2021 Annual Meeting of Stockholders, which is expected to be filed with the SEC within 120 days of our fiscal year end.
Item 6. [RESERVED]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this MD&A, there are statements concerning the future operating and future financial performance of Madison Square Garden Entertainment Corp. and its direct and indirect subsidiaries (collectively, “we,” “us,” “our,” “MSG Entertainment,” or the “Company”), including the impact of the COVID-19 pandemic on our future operations, the success of the merger with MSG Networks Inc. (“MSG Networks”) and our ability to realize the benefits of the merger, our anticipated operational cash burn on a go-forward basis, cost-cutting measures the Company may or may not pursue to preserve cash and financial flexibility, the potential for future impairment charges, the timing and costs of new venue construction and our plans to pursue additional debt financing and negotiate amendments to the National Properties Term Loan Facility or Tao Group Hospitality’s credit facility. Words such as “expects,” “anticipates,” “believes,” “estimates,” “may,” “will,” “should,” “could,” “potential,” “continue,” “intends,” “plans,” and similar words and terms used in the discussion of future operating and future financial performance identify forward-looking statements. Investors are cautioned that such forward-looking statements are not guarantees of future performance, results or events and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. Factors that may cause such differences to occur include, but are not limited to:
•our ability to effectively manage the impacts of the COVID-19 pandemic and the actions taken in response by governmental authorities and certain professional sports leagues, including ensuring compliance with rules and regulations imposed upon our venues as they are permitted to reopen;
•risks related to the Merger, as defined herein, with MSG Networks, including, but not limited to: failure to realize the expected benefits of the Merger, business disruption following the Merger and the risk of any litigation relating to the Merger;
•the extent to which attendance at our venues following their reopening will be suppressed due to government actions and continuing health concerns by potential attendees;
•the impact on the payments we receive under the Arena License Agreements as a result of government-mandated capacity restrictions, league restrictions and/or social-distancing or vaccination requirements at Knicks and Rangers games;
•the level of our expenses and our operational cash burn rate, including our corporate expenses as a stand-alone publicly traded company;
•our ability to successfully design, construct, finance and operate new entertainment venues in Las Vegas and other markets, and the investments, costs and timing associated with those efforts, including the impact of the temporary suspension of construction and any other construction delays and/or cost overruns;
•the level of our revenues, which depends in part on the popularity of the Christmas Spectacular Starring the Radio City Rockettes (“Christmas Spectacular”), the sports teams whose games are played at The Garden and broadcast on our networks and other entertainment and other events which are presented in our venues or broadcast on our networks;
•the demand for our MSG Networks programming among cable, satellite, telephone and other platforms (“Distributors”) and the subscribers thereto, and our ability to enter into and renew affiliation agreements with Distributors, or to do so on favorable terms, as well as the impact of consolidation among Distributors;
•the ability of our Distributors to maintain, or minimize declines in, subscriber levels;
•the impact of subscribers selecting Distributors’ packages that do not include our networks or Distributors that do not carry our networks at all;
•the security of our MSG Networks program signal and electronic data;
•the on-ice and on-court performance of the professional sports teams whose games we broadcast on our networks and host in our venues;
•the level of our capital expenditures and other investments;
•general economic conditions, especially in the New York City, Las Vegas, Chicago and London metropolitan areas where we have (or plan to have) significant business activities;
•the demand for sponsorship arrangements and advertising and viewer ratings for our networks;
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•competition, for example, from other venues and other sports and entertainment and nightlife options and other regional sports and entertainment networks, including the construction of new competing venues;
•the relocation or insolvency of professional sports teams with which we have a media rights agreement;
•our ability to maintain, obtain or produce content, together with the cost of such content;
•our ability to renew or replace our media rights agreements with professional sports teams through MSG Networks;
•changes in laws, guidelines, bulletins, directives, policies and agreements, and regulations under which we operate;
•any economic, social or political actions, such as boycotts, protests, work stoppages or campaigns by labor organizations, including the National Basketball Association (“NBA”), National Hockey League (“NHL”), or other work stoppage due to COVID-19 or otherwise;
•seasonal fluctuations and other variations in our operating results and cash flow from period to period;
•the successful development of new live productions or attractions, enhancements or changes to existing productions and the investments associated with such development, enhancements, or changes, as well as investment in personnel, content and technology for MSG Sphere;
•business, reputational and litigation risk if there is a security incident resulting in loss, disclosure or misappropriation of stored personal information, disruption of our Networks business or disclosure of confidential information or other breaches of our information security;
•activities or other developments (such as pandemics, including the COVID-19 pandemic) that discourage or may discourage congregation at prominent places of public assembly, including our venues;
•the continued popularity and success of Tao Group Hospitality dining and nightlife venues, as well as its existing brands, and the ability to successfully open and operate new entertainment dining and nightlife venues;
•the ability of Boston Calling Events, LLC (“BCE”) to attract attendees and performers to its future festivals;
•the acquisition or disposition of assets or businesses and/or the impact of, and our ability to successfully pursue, acquisitions or other strategic transactions;
•our ability to successfully integrate acquisitions, new venues or new businesses into our operations, including the Merger with MSG Networks and our acquisition of Hakkasan through Tao Group Hospitality;
•the operating and financial performance of our strategic acquisitions and investments, including those we do not control;
•the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured, including litigation or other claims against companies we invest in or acquire;
•the impact of governmental regulations or laws, changes in how those regulations and laws are interpreted, including with respect to the legalization of sports gaming, as well as the continued benefit of certain tax exemptions and the ability to maintain necessary permits or licenses;
•the impact of any government plans to redesign New York City’s Pennsylvania Station;
•the impact of sports league rules, regulations and/or agreements and changes thereto;
•the substantial amount of debt incurred, and any default, by our subsidiaries under their respective credit facilities;
•financial community and rating agency perceptions of our business, operations, financial condition and the industries in which we operate;
•the ability of our investees and others to repay loans and advances we have extended to them;
•the tax-free treatment of the Entertainment Distribution (as defined below);
•our ability to achieve the intended benefits of the Entertainment Distribution and the Merger with MSG Networks;
•the performance by MSG Sports of its obligations under various agreements with the Company related to the Entertainment Distribution and ongoing commercial arrangements;
•lack of operating history as an operating company and costs associated with being an independent public company; and
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•the additional factors described under “Part I — Item 1A. Risk Factors” included in this Annual Report on Form 10-K.
We disclaim any obligation to update or revise the forward-looking statements contained herein, except as otherwise required by applicable federal securities laws.
All dollar amounts included in the following MD&A are presented in thousands, except as otherwise noted.
Introduction
This MD&A is provided as a supplement to, and should be read in conjunction with, the audited consolidated and combined financial statements and footnotes thereto included in Item 8 of this Annual Report on Form 10-K to help provide an understanding of our financial condition, changes in financial condition and results of operations. Unless the context otherwise requires, all references to “we,” “us,” “our,” “MSG Entertainment,” or the “Company” refer collectively to Madison Square Garden Entertainment Corp., a holding company, and its direct and indirect subsidiaries through which substantially all of our operations are conducted. Through the period ended April 17, 2020, the Company operated and reported financial information as one reportable segment. Following the Entertainment Distribution on April 17, 2020, the Company has two segments (the Entertainment business and the Tao Group Hospitality business). See Note 21 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further discussion of the Company’s segment reporting. Following the Merger with MSG Networks, the Company has a third segment related to that business. Although we have included selected information related to that business herein, because the Merger was completed after the fiscal year end, we will not begin fully reporting on the MSG Networks segment until the first quarter of Fiscal Year 2022.
Our MD&A is organized as follows:
Business Overview. This section provides a general description of our business, as well as other matters that we believe are important in understanding our results of operations and financial condition and in anticipating future trends.
Results of Operations. This section provides an analysis of our results of operations for the years ended June 30, 2021 and 2020 on both a (i) consolidated and combined basis and (ii) segment basis. Our reportable segments during these periods were Entertainment and Tao Group Hospitality.
Liquidity and Capital Resources. This section provides a discussion of our financial condition and liquidity, as well as an analysis of our cash flows for the years ended June 30, 2021 and 2020. The discussion of our financial condition and liquidity includes summaries of our primary sources of liquidity, our contractual obligations and off balance sheet arrangements that existed at June 30, 2021.
Seasonality of Our Business. This section discusses the seasonal performance of our Entertainment and Tao Group Hospitality segments.
Recently Issued Accounting Pronouncements and Critical Accounting Policies. This section includes a discussion of accounting policies considered to be important to our financial condition and results of operations and which require significant judgment and estimates on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are discussed in the notes to our consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K.
Business Overview
MSG Entertainment is a leader in live entertainment comprised of iconic venues; marquee entertainment brands; regional sports and entertainment networks; popular dining and nightlife offerings; and a premier music festival. We manage our business through the following operating segments:
Entertainment: This segment includes our portfolio of the following venues: Madison Square Garden (“The Garden”), Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. In addition, the Company has unveiled its vision for state-of-the-art venues, called MSG Sphere, and its currently building its first venue in Las Vegas. Also included in this segment is the original production, the Christmas Spectacular, as well as the Company’s controlling interest in BCE, the entertainment production company that owns and operates the Boston Calling Music Festival. The Entertainment segment also includes our booking business, which features a variety of live entertainment and sports experiences.
Tao Group Hospitality: This segment features the Company’s controlling interest in Tao Group Hospitality, a hospitality group with globally-recognized entertainment dining and nightlife brands including: Tao, Marquee, Lavo, Beauty & Essex, Cathédrale, Hakkasan, and Omnia. Tao Group Hospitality operates 61 entertainment dining and nightlife venues spanning 23 markets across five continents. On April 27, 2021, in connection with Tao Group Hospitality’s venue expansion plans, Tao
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Group Sub-Holdings LLC, a subsidiary of Tao Group Hospitality and an indirect subsidiary of the Company, entered into a Transaction Agreement pursuant to which Tao Group Sub-Holdings LLC acquired the business (“Hakkasan”) of Hakkasan USA, Inc. (“Hakkasan Parent”). Pursuant to the Transaction Agreement, Hakkasan Parent contributed its interest in the Hakkasan to Tao Group Sub-Holdings LLC in exchange for approximately 18% of the common equity interests in Tao Group Sub-Holdings LLC. Hakkasan consists of a global collection of 33 hospitality assets including restaurants, bars, lounges, and nightclubs that spans four continents and over 20 major cities.
The Company also owned and operated the Forum in Inglewood, CA until May 2020. See Note 3 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further discussion related to the disposition of the Forum.
Merger with MSG Networks Inc.
On July 9, 2021, the Company completed its previously announced acquisition of MSG Networks pursuant to that certain Agreement and Plan of Merger, dated as of March 25, 2021 (the “Merger Agreement”), among the Company, Broadway Sub Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and MSG Networks. Merger Sub merged with and into MSG Networks (the “Merger”), with MSG Networks surviving and continuing as the surviving corporation in the Merger as a wholly-owned subsidiary of the Company. On July 9, 2021, at the effective time of the Merger (the “Effective Time”), (i) each share of Class A common stock, par value $0.01 per share, of MSG Networks (“MSGN Class A Common Stock”) issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive a number of shares of Class A common stock, par value $0.01 per share, of the Company (“Class A Common Stock”) such that each holder of record of shares of MSGN Class A Common Stock has the right to receive, in the aggregate, a number of shares of Class A Common Stock equal to the total number of shares of MSGN Class A Common Stock held of record immediately prior to the Effective Time multiplied by 0.172, with such product rounded up to the next whole share and (ii) each share of Class B common stock, par value $0.01 per share, of MSG Networks (“MSGN Class B Common Stock” and, together with MSGN Class A Common Stock, “MSGN Common Stock”) issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive a number of shares of Class B common stock, par value $0.01 per share, of the Company (“Class B Common Stock” and, together with Class A Common Stock, “Common Stock”) such that each holder of record of shares of MSGN Class B Common Stock has the right to receive, in the aggregate, a number of shares of Class B Common Stock equal to the total number of shares of MSGN Class B Common Stock held of record immediately prior to the Effective Time multiplied by 0.172, with such product rounded up to the next whole share, in each case except for Excluded Shares (as defined in the Merger Agreement).
Beginning with the fiscal quarter ending September 30, 2021, the Merger will be accounted for as a transaction between entities under common control as the Company and MSG Networks were, prior to the Merger, each controlled by the Dolan Family Group (as defined herein). Upon the closing of the Merger, the net assets of MSG Networks will be combined with those of the Company at their historical carrying amounts and the companies will be presented on a combined basis for all historical periods that the companies were under common control. As this transaction represents a change in reporting entity, the financial statements in future filings will be materially different since they will represent the combined operations of both commonly-controlled entities.
MSG Networks, including MSG Network (“MSGN”) and MSG+, and its companion streaming service, MSG GO, is an industry leader in sports production, and content development and distribution. The networks are widely distributed throughout all of New York State and significant portions of New Jersey and Connecticut, as well as parts of Pennsylvania. In addition, MSG GO is currently available to subscribers of all our major Distributors. MSGN and MSG+ are widely carried by major Distributors in our region, with an average combined reach of approximately 5.5 million viewing subscribers (as of the most recent available monthly information) in our Regional Territory. MSG Networks features a wide range of compelling sports content, including exclusive live local games and other programming of the New York Knicks (the “Knicks”) of the National Basketball Association (“NBA”); the New York Rangers (the “Rangers”), New York Islanders (the “Islanders”), New Jersey Devils (the “Devils”) and Buffalo Sabres (the “Sabres”) of the National Hockey League (“NHL”); as well as significant coverage of the New York Giants (the “Giants”) and Buffalo Bills (the “Bills”) of the National Football League (“NFL”) as well as other programming such as New York Red Bulls soccer; Westchester Knicks basketball; and New York Riptide lacrosse; as well as horse racing, poker, tennis, mixed martial arts, and boxing programs.
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Results of Operations from MSG Networks Inc.
The following section provides key highlights of the MSG Networks’ results of operations for Fiscal Year 2021 as compared to Fiscal Year 2020.
Years Ended June 30, Change
2021 2020 Amount Percentage
Revenues $ 647,510  $ 685,797  $ (38,287) (6) %
Direct operating expenses 262,859  282,837  (19,978) (7) %
Selling, general and administrative expenses 115,339  100,829  14,510  14  %
Depreciation and amortization 7,335  7,163  172  2  %
Operating income (loss) $ 261,977  $ 294,968  $ (32,991) (11) %
MSG Networks generates revenues principally from affiliation fees charged to Distributors for the right to carry its networks, as well as from the sale of advertising. For Fiscal Year 2021, MSG Networks reported revenue of $647,510, as compared to $685,797 in Fiscal Year 2020, a decrease of $38,287, or approximately 6%, primarily due to decreases in affiliation fee revenue of $44,031, partially offset by an increase in advertising revenue of $5,096. The decrease in affiliation fee revenue was primarily due to (i) a less than 8% decrease in subscribers (excluding the impact of the previously disclosed non-renewal with a small Connecticut-based distributor as of October 1, 2020), (ii) a net unfavorable affiliate adjustment of approximately $17,500, inclusive of approximately $14,700 for affiliate rebates recorded in Fiscal Year 2021, and, to a lesser extent, (iii) the impact of the aforementioned non-renewal. These decreases were partially offset by the impact of higher affiliation rates. Based on current facts and circumstances, MSG Networks expects to record similar accruals for potential affiliate rebates in each of the next two quarters to what MSG Networks recorded on average per quarter during Fiscal Year 2021.
MSG Networks’ direct operating expenses primarily include the cost of professional team rights acquired under media rights agreements to telecast various sporting events on its networks, and other direct programming and production costs of its networks. For Fiscal Year 2021, MSG Networks’ direct operating expenses were $262,859, as compared to $282,837 in Fiscal Year 2020, a decrease of $19,978 or approximately 7%. The decrease was primarily due to lower rights fees expense of $15,345 and, to a lesser extent, a decrease in other programming and production-related costs of $4,633. The decline in rights fees expense was primarily due to the impact of fewer NHL and NBA games made available for exclusive broadcast by MSG networks during the NHL and NBA’s shortened 2020-21 regular seasons and, to a lesser extent, a reduction in media rights fees related to the 2019-20 NHL season recorded in Fiscal Year 2021. This was partially offset by the impact of the cancellation of games during the 2019-20 NBA and NHL seasons recorded in the Fiscal Year 2020 and, to a lesser extent, the impact of annual contractual stated rate increases under MSG Networks’ media rights agreements relating to NBA and NHL teams. The decrease in other programming and production-related costs was primarily related to fewer NHL and NBA telecasts in Fiscal 2021.

MSG Networks’ selling, general and administrative expenses primarily consist of administrative costs, including employee compensation and related benefits, professional fees, as well as advertising sales commissions and advertising and marketing costs. For Fiscal Year 2021, MSG Networks’ selling general and administrative expenses were $115,339, as compared to $100,829 in Fiscal Year 2020, an increase of $14,510 or approximately 14%. The increase was primarily due to (i) higher employee compensation and related benefits of $7,824 (inclusive of share-based compensation expense), (ii) approximately $4,500 of professional fees related to the Merger recorded in the Fiscal Year 2021, and (iii) higher advertising and marketing expenses of $3,397, partially offset by other decreases.
For Fiscal Year 2021, MSG Networks’ operating income was $261,977, as compared to $294,968 for Fiscal Year 2020, a decrease of $32,991, or 11%. The decrease was primarily due to the decrease in revenues and higher selling, general and administrative expenses (inclusive of share-based compensation expense), partially offset by the decrease in direct operating expenses, as discussed above.
The key financial measure used by MSG Networks to evaluate its performance is adjusted operating income, which is consistent with the measure used by the Company with the exception of the treatment in the amortization for capitalized cloud computing arrangement costs. See “— Results of Operations — Consolidated and Combined Results of Operations — Adjusted operating income” for further details.
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The following is a reconciliation of MSG Networks operating income to adjusted operating income:  
Years Ended June 30, Change
2021 2020 Amount Percentage
Operating income $ 261,977  $ 294,968  $ (32,991) (11) %
Share-based compensation 17,667  19,235 
Depreciation and amortization 7,335  7,163 
Adjusted operating income $ 286,979  $ 321,366  $ (34,387) (11) %
MSG Networks’ adjusted operating income was $286,979 for Fiscal Year 2021, as compared to $321,366 in Fiscal Year 2020, a decrease of $34,387, or 11%, primarily due to the decrease in revenues and increase in selling, general and administrative expenses (excluding share-based compensation expense), partially offset by the decrease in direct operating expenses.
Impact of the COVID-19 Pandemic on Our Business
For the majority of Fiscal Year 2021, substantially all of the Entertainment business operations were suspended and Tao Group Hospitality was operating at significantly reduced capacity and demand. While operations have started to resume, it is not clear when we will fully return to normal operations.
As a result of government-mandated assembly limitations and closures, all of our performance venues were closed beginning in mid-March 2020. Use of The Garden resumed for Knicks and Rangers home games without fans in December 2020 and January 2021, respectively, and, beginning on February 23, 2021, The Garden was permitted to host fans at games at 10% seating capacity with certain safety protocols, such as proof of full vaccination or a negative COVID-19 test and social distancing. Starting April 1, 2021, our other New York performance venues, Hulu Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre, were also permitted to reopen at 10% capacity with certain safety protocols. Although live events were permitted at our venues, government-mandated capacity restrictions and other safety requirements made it economically unfeasible to do so for most events at that time. Effective May 19, 2021, all of our New York venues were permitted to host guests at full capacity, subject to certain restrictions, and effective June 2021, The Chicago Theatre was permitted to host events without restrictions. As a result, The Garden hosted three Knicks playoff games with approximately 15,000-16,000 fans in attendance per game during Fiscal Year 2021, and we welcomed the Foo Fighters on June 20, 2021 for the first live event at The Garden with 100% capacity since our venues were shut down in March 2020. In addition, on June 19, 2021, Radio City Music Hall opened its doors for the first time in over a year to host the Tribeca Festival’s closing night film, Untitled: Dave Chappelle Documentary, with 100% capacity. The Beacon Theatre hosted its first ticketed event, at 100% capacity, on June 22, 2021 with the first of two shows from Trey Anastasio, and Hulu Theater at Madison Square Garden hosted its first ticketed event, at 100% capacity, with a boxing/hip-hop event on August 3, 2021. For all events hosted at our New York venues with 100% capacity prior to August 17, 2021, guests were required to provide proof of full vaccination or a negative COVID-19 test, depending on the requirements of that venue and/or preference of the performer. Effective August 17, 2021, all workers and customers in New York City indoor dining, indoor fitness and indoor entertainment facilities are required to show proof of at least one vaccination shot. In addition, effective August 20, 2021, face coverings are required for all individuals in indoor public spaces in Chicago, including our venues. For Fiscal Year 2021, the majority of ticketed events at our venues were postponed or canceled and, while live events are permitted to be held at all of our performance venues as of the date of this filing and we are continuing to host and book new events, due to the lead-time required to book touring acts and artists, which is the majority of our business, we expect that our bookings will continue to be impacted through the 2021 calendar year. We continue to actively pursue one-time or multi-night performances at our venues as the touring market ramps up.
The impact to our operations also included the cancellation of the 2020 production of the Christmas Spectacular and both the 2020 and 2021 Boston Calling Music Festivals. While the 2021 production of the Christmas Spectacular is currently on-sale, the current production is scheduled for 163 shows, as compared with 199 shows for the 2019 production, which was the last production presented prior to the impact of the COVID-19 pandemic.
The Company has long-term arena license agreements (the “Arena License Agreements”) with MSG Sports that require the Knicks and Rangers to play their home games at The Garden.
As discussed above, capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. On July 1, 2021, the Knicks and Rangers began paying the full amounts provided for under their respective Arena License Agreements. The NBA and NHL have each announced that they intend to return to traditional October to April regular season schedule, with full 82-game regular seasons, for the 2021-22 season.
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Disruptions caused by the COVID-19 pandemic had a significant and negative impact on Tao Group Hospitality’s operations and financial performance for Fiscal Year 2021. Due to government actions taken in response to the COVID-19 pandemic, virtually all of Tao Group Hospitality’s venues were closed for approximately three months starting in mid-March 2020, and Avenue and Vandal in New York were permanently closed in April 2020 and June 2020, respectively. In addition, Avenue in Los Angeles was permanently closed in May 2021. Throughout Fiscal Year 2021, Tao Group Hospitality conducted limited operations at certain venues, subject to significant regulatory requirements, including capacity limits, curfews and social distancing requirements for outdoor and indoor dining. Tao Group Hospitality’s operations fluctuated throughout Fiscal Year 2021 as certain markets lifted restrictions, imposed restrictions, and changed operational requirements over time.
As of June 30, 2021, 51 of Tao Group Hospitality’s venues were open for outdoor dining, limited or full capacity indoor dining (depending on the market), and delivery/takeout (23 legacy Tao Group Hospitality venues and 28 Hakkasan venues acquired in connection with the April 27, 2021 transaction), inclusive of Tao Asian Bistro & Lounge at Mohegan Sun, a new venue that first opened its doors in March 2021, while 10 venues remained closed (five legacy Tao Group Hospitality venues and five Hakkasan venues). Of the 51 Tao Group Hospitality venues currently operating, 29 are U.S.-based and operating without capacity restrictions (21 Tao Group Hospitality legacy venues and eight Hakkasan venues) and 22 are international (two Tao Group Hospitality legacy venues and 20 Hakkasan venues) and operating under various governmental safety protocols such as curfews, capacity limitations and social distancing. Effective August 17, 2021, workers and customers in New York City indoor dining facilities are required to show proof of at least one vaccination shot. In addition, certain U.S. jurisdictions have reinstated safety protocols, such as the mask mandates in Nevada and Chicago, but not otherwise limiting capacity.
MSG Networks depends on the appeal of its live programming to viewing subscribers of its networks and to its advertisers. As a result of the COVID-19 pandemic and league and government actions relating thereto, MSG Networks aired substantially fewer NBA and NHL telecasts during Fiscal Year 2021, as compared with Fiscal Year 2019 (the last full fiscal year not impacted by COVID-19), and consequently experienced a decrease in revenues, including a material decrease in advertising revenue. The absence of live sports games also resulted in a decrease in certain MSG Networks expenses, including rights fees, variable production expenses, and advertising sales commissions.
During Fiscal Year 2021, the COVID-19 pandemic materially impacted our revenues, most significantly because, for the majority of the year, we were not generating revenue from (i) ticketed events at The Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre, (ii) suite licenses, (iii) the 2020 production of the Christmas Spectacular and (iv) the 2021 Boston Calling Music Festival. In addition, we generated substantially reduced revenue in connection with (i) sponsorship and advertising, (ii) payments under the Arena License Agreements, (iii) food and beverage concessions and catering services at Knicks and Rangers games and (iv) non-ticketed events such as the Big East Tournament in March 2021.
As a result of the material impact COVID-19 had on our revenues during Fiscal Year 2021, we took several actions to improve our financial flexibility, reduce operating costs and preserve liquidity, including (i) revising our construction schedule for MSG Sphere, with an anticipated opening date of calendar year 2023, (ii) making significant cuts in both venue and corporate headcounts, and (iii) having our wholly-owned subsidiary, MSG National Properties, LLC (“MSG National Properties”) enter into a five-year $650,000 senior secured term loan facility (“National Properties Term Loan Facility”). See Note 14 to the audited consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further details on the National Properties Term Loan Facility.
In August 2020, Tao Group Hospitality entered into an amendment to the Tao Senior Credit Agreement, which suspended certain financial covenants through December 31, 2021 and increased the minimum liquidity requirement. In addition, in connection with the amendment, our wholly owned subsidiary MSG Entertainment Group, LLC (“MSG Entertainment Group”) entered into a guarantee agreement, which also included a minimum liquidity requirement for MSG Entertainment Group. See Note 14 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for more information regarding the amendment to the Tao Senior Credit Agreement. Tao Group Hospitality will likely need to seek covenant waivers in the future. Tao Group Hospitality's failure to obtain debt covenant waivers could trigger a violation of these covenants and lead to default, acceleration of all of its outstanding debt and a demand for payment under the guarantee of MSG Entertainment Group, which would negatively impact the liquidity of Tao Group Hospitality and the Company.
The Company is building its first MSG Sphere in Las Vegas. This is a complex construction project with cutting-edge technology, which relies on subcontractors obtaining components from a variety of sources around the world. In April 2020, the Company announced that it was suspending construction of MSG Sphere due to COVID-19 related factors that were outside of its control, including supply chain issues. As the ongoing effects of the pandemic continued to impact its business operations, in August 2020, the Company disclosed that it had resumed full construction with a lengthened timetable to better preserve cash through the COVID-19 pandemic. The Company remains committed to bringing MSG Sphere to Las Vegas and expects to open the venue in calendar year 2023.
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A subsidiary of the Company is party to the Arena License Agreements with subsidiaries of MSG Sports that require the Knicks and the Rangers to play their home games at The Garden. Under the Arena License Agreements, the Knicks and the Rangers pay an annual license fee in connection with their respective use of The Garden. For each, the license fee for the initial contract year ending June 30, 2020 was to be prorated based on the number of games scheduled to be played at The Garden between the Entertainment Distribution Date and the end of that contract year. The license fee for the first full contract year ending June 30, 2021 was approximately $22,500 for the Knicks and approximately $16,700 for the Rangers, and then for each subsequent year, the license fees will be 103% of the license fees for the immediately preceding contract year. The teams are not required to pay the license fee during a period in which The Garden is unavailable for home games due to a force majeure event (including when events at The Garden were suspended by government mandate as a result of the COVID-19 pandemic). As a result, we did not receive any license fee payments under the Arena License Agreements from the period following the Entertainment Distribution through November 2020. If, due to a force majeure event, capacity at The Garden is limited to 1,000 or fewer attendees, the teams may schedule and play home games at The Garden with amounts payable to the Company under the Arena License Agreements reduced by 80%. If, due to a force majeure event, capacity at The Garden is limited to less than full capacity but over 1,000 attendees, rent payments due under the Arena License Agreements are payable by the Knicks and the Rangers and payments may be reduced in accordance with terms of the Arena License Agreements or as otherwise agreed by the parties. As discussed above, capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. The Company recorded $21,345 of revenues under Arena License Agreements for Fiscal Year 2021. On July 1, 2021, the Knicks and Rangers began paying the full license fee payments provided for under their respective Arena License Agreements.
For more information about the risks to the Company as a result of the COVID-19 pandemic and its impact on our operating results, see “Part I — Item 1A. Risk Factors — General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
Additionally, as a result of operating disruptions due to the COVID-19 pandemic, the Company’s projected cash flows were directly impacted. These disruptions along with the deteriorating macroeconomic conditions and industry and market considerations, were considered a “triggering event” for the Tao Group Hospitality reporting unit, which required the Company to assess the carrying value of Tao Group Hospitality’s intangible assets, long-lived assets and goodwill for impairment. Based on this evaluation, the Company recorded a total impairment charge of $105,817 in Fiscal Year 2020. See “— Results of Operations — Comparison of the Year Ended June 30, 2021 versus the Year Ended June 30, 2020 — Consolidated and Combined Results of Operations — Business Segment Results — Tao Group Hospitality — Impairment for intangibles, long-lived assets, and goodwill” for further details on the impairment charges recorded for Fiscal Year 2020.
There has been no indicator of impairment identified by the Company for the Entertainment reporting unit due to the COVID-19 pandemic. However, the duration and impact of the COVID-19 pandemic may result in future impairment charges that management will evaluate as facts and circumstances evolve over time.
Description of Our Segments
Entertainment
Our Entertainment segment, which represented approximately 45% of our consolidated revenues for Fiscal Year 2021, is one of the country’s leaders in live entertainment. Entertainment produces, presents and hosts live entertainment events, including (i) concerts, (ii) other live events such as family shows, performing arts events and special events and (iii) sports events, in our diverse collection of venues. Those venues include The Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre. The scope of our collection of venues enables us to showcase acts that cover a wide spectrum of genres and popular appeal.
Although we primarily license our venues to third-party promoters for a fee, we also promote or co-promote shows. If we serve as promoters or co-promoters of a show, we have economic risk relating to the event.
Our Entertainment segment also creates, produces and/or presents live productions that are performed in the Company’s venues. This includes the Christmas Spectacular, which is the top grossing live holiday family show in North America, featuring the Rockettes. The Christmas Spectacular has been performed at Radio City Music Hall for 87 years.
In July 2016, the Company acquired a controlling interest in BCE, the entertainment production company that owns and operates the Boston Calling Music Festival. This company is part of the Entertainment segment. In November 2017, the Company acquired a 100% controlling interest in Obscura, a creative studio, recognized for its work in designing and
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developing next-generation immersive experiences. Revenues generated by Obscura’s third-party production business (and related costs) are reflected in the Entertainment segment. In Fiscal Year 2019, the Company decided to wind down this third-party productions business to focus on MSG Sphere development.
Revenue Sources - Entertainment
The Company’s Entertainment segment earns revenue from several primary sources: ticket sales to our audiences for live events that we produce or promote/co-promote, license fees for our venues paid by third-party promoters or licensees in connection with events that we do not produce or promote/co-promote, facility and ticketing fees, concessions, sponsorships and signage, suite license fees at The Garden, merchandising and tours at certain of our venues. The amount of revenue and expense recorded by the Company for a given event depends to a significant extent on whether the Company is promoting or co-promoting the event or is licensing a venue to a third-party or MSG Sports. See “Venue License Fees” section below for further discussion of our venue licensing arrangements with MSG Sports.
Ticket Sales and Suite Licenses
For our productions and for entertainment events in our venues that we promote, we recognize revenues from the sale of tickets to our audiences. We sell tickets to the public through our box office, via our websites and ticketing agencies and through group sales. The amount of revenue we earn from ticket sales depends on the number of shows and the mix of events that we promote, the capacity of the venue used, the extent to which we can sell to fully utilize the capacity and our ticket prices. During Fiscal Year 2017, we implemented significant changes to how we sell Christmas Spectacular tickets. By eliminating block sales to third party brokers, we brought a significant number of tickets back in-house, which created the opportunity for more customers to buy tickets to the production directly from us. 
The Garden has 21 Event Level suites, 58 Lexus Madison Level suites, 18 Signature Level suites, the Madison Club, Suite Sixteen and The Loft. Suite licenses at The Garden are generally sold to corporate customers with the majority being multi-year licenses. The Company licenses Suite Sixteen to Tao Group Hospitality in exchange for license fee payments.
Under standard suite licenses, the licensees pay an annual license fee, which varies depending on the location of the suite. The license fee includes, for each seat in the suite, tickets for events at The Garden for which tickets are sold to the general public, subject to certain exceptions. In addition, suite holders separately pay for food and beverage service in their suites at The Garden. Revenues from the sale of suite licenses are shared between the Company and MSG Sports. Revenues for the Company’s suite license arrangements are recorded on a gross basis, as the Company is the principal in such transactions and controls the related goods or services until transfer to the customer. MSG Sports’ share of the Company’s suite license revenue is recognized in the consolidated and combined statements of operations as a component of direct operating expenses. The revenue sharing expense recognized by the Company for MSG Sports’ share of suite license revenue at The Garden is based on a 67.5% allocation to MSG Sports pursuant to the Arena License Agreements.
Venue License Fees
For entertainment events held at our venues that we do not produce, promote or co-promote, we typically earn revenue from venue license fees charged to the third-party promoter or producer of the event. The amount of license fees we charge varies by venue, as well as by the size of the production and the number of days utilized, among other factors. Our fees typically include both the cost of renting space in our venues and costs for providing event staff, such as front-of-house and back-of-house staff, including stagehands, electricians, laborers, box office staff, ushers and security as well as production services such as staging, lighting and sound.
In connection with the Entertainment Distribution, the Company entered into Arena License Agreements with MSG Sports that, among other things, require the Knicks and the Rangers to play their home games at The Garden in exchange for fixed monthly license fees over the term of the agreement.  The Company accounts for these license fees as operating lease revenue given that the Company provides MSG Sports with the right to direct the use of and obtain substantially all of the economic benefit from The Garden during Knicks and Rangers home games. Operating lease revenue is recognized on a straight-line basis over the term of the Arena License Agreements. In the case of the Arena License Agreements, the terms relate to non-consecutive periods of use when MSG Sports uses the Arena generally for their preseason and regular season home games, and operating lease revenue will therefore be recognized ratably as events occur.
The Arena License Agreements allow for certain reductions in the license fees during periods when The Garden is not available for use due to a force majeure event. As a result of the government-mandated suspension of events at The Garden due to the impact of the COVID-19 pandemic, at the beginning of Fiscal Year 2021, The Garden was not available for use. Starting December 2020, The Garden reopened for games of the Knicks and the Rangers but initially fans were not permitted to attend
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due to governmental restrictions. The restrictions were partially lifted during February 2021 with limited fans permitted to attend (10% capacity).
Facility and Ticketing Fees
For all public and ticketed events held in our venues aside from MSG Sports home games, we also earn additional revenues on substantially all tickets sold, whether we promote/co-promote the event or license the venue to a third party. These revenues are earned in the form of certain fees and assessments, including the facility fees we charge, and vary by venue.
Concessions
We sell food and beverages during substantially all events held at our venues. In addition to concession-style sales of food and beverages, which represent the majority of our concession revenues, we also generate revenue from catering for our suites at The Garden. In connection with the Entertainment Distribution, the Company and MSG Sports entered into the Arena License Agreements related to the use of The Garden by MSG Sports, under which the Company will share with MSG Sports revenues and related expenses associated with sales of food and beverages (including suite catering) during Knicks and Rangers games at The Garden.
Revenue generated from in-venue food and beverage sales at MSG Sports’ events is recognized by the Company on a gross basis, with a corresponding revenue sharing expense for MSG Sports’ share of such sales recorded within direct operating expense. The Arena License Agreements require the Company to pay 50% of the net proceeds generated from in-venue food and beverage sales to MSG Sports.
Merchandise
We earn revenues from the sale of merchandise relating to our proprietary productions and other live entertainment events that take place at our venues. The majority of our merchandise revenues are generated through on-site sales during performances of our productions and other live events. We also generate revenues from the sales of our Christmas Spectacular merchandise, such as ornaments and apparel, through traditional retail channels. Revenues associated with Christmas Spectacular merchandise are generally recorded on gross basis (as principal). Typically, revenues from our merchandise sales at our non-proprietary events relate to sales of merchandise provided by the artist, the producer or promoter of the event and are generally subject to a revenue sharing arrangement, and are generally recorded on net basis (as agent).
As a result of the Arena License Agreements entered in connection with the Entertainment Distribution, the Company receives 30% of revenues, net of taxes and credit card fees, recorded on a net basis (agent), from the sale of MSG Sports teams merchandise sold at The Garden.
Venue Signage and Sponsorship
We earn revenues through the sale of signage space and sponsorship rights in connection with our venues, productions and other live entertainment events. Signage revenues generally involve the sale of advertising space at The Garden during entertainment events and otherwise in our venues.
Sponsorship agreements may require us to use the name, logos and other trademarks of sponsors in our advertising and in promotions for our venues, productions and other live entertainment events. Sponsorship arrangements may be exclusive within a particular sponsorship category or non-exclusive and generally permit a sponsor to use the name, logos and other trademarks of our productions, events and venues in connection with their own advertising and in promotions in our venues or in the community.
Prior to the Entertainment Distribution, revenue was generally recorded on a gross basis as the Company is the principal in such arrangements and controls the related goods or services until transfer to the customer for sponsorship agreements entered into by the Company or that have performance obligations satisfied solely by the Company. MSG Sports’ share of the Company’s sponsorship and signage revenue is recognized in the combined statements of operations as a component of direct operating expenses. The revenue sharing expense has been specifically identified where possible, with the remainder allocated proportionally based upon revenue.
In connection with the Entertainment Distribution, under the Arena License Agreements, the Company shares certain sponsorship and signage revenues with MSG Sports. Under these agreements MSG Sports has the rights to sponsorship and signage revenue that is specific to Knicks and Rangers events. In addition, in connection with the Entertainment Distribution, the Company and MSG Sports entered into sponsorship sales representation agreements, under which the Company has the right and obligation to sell and service sponsorships for the sports teams of MSG Sports, in exchange for a commission.
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Advertising Sales (“Ad Sales”) Commission
In addition to the advertising sponsorship sales representation agreements with MSG Sports discussed above, the Company and MSG Networks are parties to an advertising sales representation agreement. Pursuant to the agreement, the Company has the exclusive right and obligation to sell advertising availabilities of MSG Networks. The Company is entitled to and earns commission revenue on such sales. The expense associated with advertising personnel is recognized in selling, general and administrative expenses. For Fiscal Year 2021 and Fiscal Year 2020, the Company recognized approximately $13,700 and $12,600 of revenues, respectively, under the advertising sales representation agreement with MSG Networks. In connection with the Merger with MSG Networks, these revenues will be eliminated retrospectively on a consolidated basis beginning Fiscal Year 2022.
Expenses - Entertainment
Our Entertainment segment’s principal expenses are payments made to performers of our productions, staging costs and day-of-event costs associated with events, and advertising costs. In addition, expenses in our Entertainment segment include costs associated with the ownership, lease, maintenance and operation of our venues, along with our corporate and other supporting functions. Depreciation expense on property and equipment related to the Company’s performing venues and offices is also included in the Entertainment segment’s results.
Performer Payments
Our proprietary productions are performed by talented actors, dancers, singers, musicians and entertainers. In order to attract and retain this talent, we are required to pay our performers an amount that is commensurate with both their abilities and the demand for their services from other entertainment companies. Our productions typically feature ensemble casts (such as the Rockettes), where most of our performers are paid based on a standard “scale,” pursuant to collective bargaining agreements we negotiate with the performers’ unions. Certain performers, however, have individually negotiated contracts.
Staging Costs
Staging costs for our proprietary events as well as other events that we promote include the costs of sets, lighting, display technologies, special effects, sound and all of the other technical aspects involved in presenting a live entertainment event. These costs vary substantially depending on the nature of the particular show, but tend to be highest for large-scale theatrical productions, such as the Christmas Spectacular. For concerts we promote, the performer usually provides a fully-produced show. Along with performer salaries, the staging costs associated with a given production are an important factor in the determination of ticket prices.
Day-of-Event Costs
For days in which our Entertainment segment stages its productions, promotes an event or provides one of our venues to a third-party promoter under a license fee arrangement, the event is charged the variable costs associated with such event, including box office staff, stagehands, ticket takers, ushers, security, and other similar expenses. In situations where we provide our venues to a third-party promoter under a license fee arrangement, day-of-event costs are typically included in the license fees charged to the promoter. In connection with the Entertainment Distribution, the Company and MSG Sports entered into the Arena License Agreements related to the use of The Garden by MSG Sports, under which the Company is reimbursed for day-of-event costs (as defined under the Arena License Agreements). The Company records such reimbursements as reductions to direct operating expenses.
Venue Usage
The Company’s consolidated and combined financial statements include expenses associated with the ownership, maintenance and operation of The Garden, which the Company and MSG Sports use in their respective operations. Historically, the Company did not charge rent expense to MSG Sports for use of The Garden. However, for purposes of the Company’s combined financial statements, a portion of the historical depreciation expense as well as other non-event related venue operations costs have been allocated to MSG Sports, in order to properly burden all business units comprising MSG Sports’ historical operations related to use of The Garden. This allocation was based on event count and revenue, which the Company’s management believes is a reasonable allocation methodology. This allocation is reported as a reduction of direct operating expense in the combined statements of operations.
In connection with the Entertainment Distribution, the Company and MSG Sports entered into Arena License Agreements related to the use of The Garden by MSG Sports as discussed under Venue License Fees.
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Revenue Sharing Expenses
As discussed above, MSG Sports’ share of the Company’s suites licenses, venue signage and certain sponsorship and concessions revenue is reflected within direct operating expense as revenue sharing expenses. For periods prior to the Entertainment Distribution, such amounts were either specifically identified where possible or allocated proportionally within the combined financial statements.
Marketing and Advertising Costs
We incur significant costs promoting our productions and other events through various advertising campaigns, including advertising on outdoor platforms and in newspapers, on television and radio, and on social and digital platforms. In light of the intense competition for entertainment events, such expenditures are a necessity to drive interest in our productions and encourage members of the public to purchase tickets to our shows.
Tao Group Hospitality
Our Tao Group Hospitality segment, which represented approximately 55% of our consolidated revenues for Fiscal Year 2021, consists of our controlling interest in Tao Group Hospitality (including Hakkasan since the acquisition in April 2021), which strengthened the Company’s portfolio of live offerings with a complementary hospitality group with widely-recognized brands that include: Tao, Marquee, Lavo, Beauty & Essex, Cathédrale, Hakkasan and Omnia.
Revenue Sources - Tao Group Hospitality
Revenues earned from dining, nightlife and hospitality offerings through Tao Group Hospitality are recognized when food, beverages and/or services are provided to the customer as that is the point at which the related performance obligation is satisfied. In addition, management fee revenues which are earned in accordance with specific venue management agreements are recorded over the period in which the management services are performed as that reflects the measure of progress toward satisfaction of the Company’s venue management performance obligations.
Expenses - Tao Group Hospitality
Entertainment Dining and Nightlife Offerings Costs
The Tao Group Hospitality restaurants and nightlife and hospitality venues incur costs for providing food and beverage as well as banquet hosting services to customers. Dining and nightlife offering costs primarily include the following:
•labor costs, consisting of restaurant management salaries, hourly staff payroll and other payroll-related items, including taxes and fringe benefits;
•food and beverage costs;
•operating costs, consisting of entertainment and performers, maintenance, utilities, bank and credit card charges, and any other restaurant-level expenses; and
•occupancy costs, consisting of both fixed and variable portions of rent, common area maintenance charges, insurance premiums and taxes.
Other Expenses
The Company’s selling, general and administrative expenses primarily consist of administrative costs, including compensation, professional fees, as well as sales and marketing costs, including non-event related advertising expenses. Operating expenses in the Company’s Entertainment segment also include corporate overhead costs and venue operating expenses. Venue operating expenses include the non-event related costs of operating the Company’s performance venues, and include such costs as rent for the Company’s leased venues, real estate taxes, insurance, utilities, repairs and maintenance, and labor related to the overall management of the venues. Depreciation expense on property and equipment related to The Garden, Hulu Theater at Madison Square Garden and the Forum (prior to its sale in May 2020) is reported in the Entertainment segment. In addition, the Company incurs non-capitalizable content development and technology costs associated with the Company’s MSG Sphere initiative and these costs are reported in the Entertainment segment.
Factors Affecting Operating Results
In addition to the discussion under the section “Impact of the COVID-19 Pandemic on Our Business” above, the operating results of our segments are largely dependent on our ability to: attract concerts and other events to our venues, as well as
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customers to our entertainment and nightlife offerings; revenues under various agreements entered with MSG Sports in connection with the Entertainment Distribution; the continuing popularity of the Christmas Spectacular at Radio City Music Hall; the affiliation agreements MSG Networks negotiates with Distributors; the number of subscribers of certain Distributors; and the advertising rates we charge advertisers. Certain of these factors in turn depend on the popularity and/or performance of the professional sports teams whose games we broadcast on our networks and host in our venues.
Our Company’s future performance is dependent in part on general economic conditions and the effect of these conditions on our customers. Weak economic conditions may lead to lower demand for our entertainment and nightlife offerings and programming content, suite licenses and tickets to our live productions, concerts, family shows and other events, which would also negatively affect concession and merchandise sales, lower levels of sponsorship and venue signage and decrease advertising revenues. These conditions may also affect the number of concerts, family shows and other events that take place in the future. An economic downturn could adversely affect our business and results of operations.
The Company continues to explore additional opportunities to expand our presence in the entertainment industry. Any new investment may not initially contribute to operating income, but is intended to become operationally profitable over time. Our results will also be affected by investments in, and the success of, new productions.
Disruptions caused by the COVID-19 pandemic had a significant and negative impact on Tao Group Hospitality’s operations and financial performance for Fiscal Year 2021. See “— Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business” for more information.
Factors Affecting Comparability
On April 27, 2021, Tao Group Hospitality acquired a controlling interest in Hakkasan, a global business in the hospitality industry that includes a collection of restaurants, bars, lounges, and nightclubs resulting in approximately two months of Fiscal Year 2021 operations that were absent in the prior year.
On July 9, 2021, the Merger with MSG Networks was completed. Beginning with the fiscal quarter ending September 30, 2021, the Merger will be accounted for as a transaction between entities under common control as the Company and MSG Networks were, prior to the Merger, each controlled by the Dolan Family Group (as defined herein). Upon the closing of the Merger, the net assets of MSG Networks will be combined with those of the Company at their historical carrying amounts and the companies will be presented on a combined basis for all historical periods that the companies were under common control. As this transaction represents a change in reporting entity, the financial statements in future filings will be materially different since they will represent the combined operations of both commonly-controlled entities. See “— Item 8 Financial Statements and Supplementary Data — Consolidated and Combined Financial Statements — Notes to Consolidated and Combined Financial Statements — Note 1. Description of Business and Basis of Presentation” for more information regarding the Merger.
Due to these factors and the impact of COVID-19 Pandemic discussed above, Fiscal Year 2021 results are not comparable to the prior year and are not indicative of future results.
Purchase Accounting Adjustments
In connection with the acquisitions completed in fiscal years 2018 and 2017, as well as the Hakkasan acquisition through Tao Group Hospitality in Fiscal Year 2021, the Company recorded certain fair value adjustments related to acquired assets and liabilities in accordance with ASC Topic 805, Business Combinations. For the Company’s acquisitions, the Company recognized fair value adjustments primarily for (i) recognition of intangible assets such as trade names, venue management contracts, favorable leases, and festival rights, (ii) step-up of property and equipment, (iii) step-up of inventory, (iv) unfavorable lease obligation, (v) goodwill, and (vi) internally-developed software. The aforementioned fair value adjustments, except for goodwill, will be expensed as incremental non-cash expenses in the Company’s consolidated and combined statements of operations based on their estimated useful lives (“Purchase Accounting Adjustments”). With the exception of impairment of goodwill, the Company does not allocate any Purchase Accounting Adjustments to the reporting segments and reports any Purchase Accounting Adjustments as reconciliation items in reporting segment operating results. See “— Item 8 Financial Statements and Supplementary Data — Consolidated and Combined Financial Statements — Notes to Consolidated and Combined Financial Statements — Note 21. Segment Information” for more information on the presentation of Purchase Accounting Adjustments.
Investments in Nonconsolidated Affiliates
In July 2018, the Company acquired a 30% interest in SACO, a global provider of high-performance LED video lighting and media solutions for a total consideration of approximately $47,244. The Company is utilizing SACO as a preferred display technology provider for MSG Sphere and is benefiting from agreed upon commercial terms.
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In addition, the Company also has other investments in various entertainment, hospitality companies and related technology companies, accounted for under the equity method. See Note 8 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for more information on our investments in nonconsolidated affiliates.
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Results of Operations
Comparison of the Year Ended June 30, 2021 versus the Year Ended June 30, 2020
Consolidated and Combined Results of Operations
The table below sets forth, for the periods presented, certain historical financial information. 
Years Ended June 30,
Change (a)
2021 2020 Amount Percentage
Revenues $ 180,401  $ 762,936  $ (582,535) (76) %
Direct operating expenses 171,924  508,122  (336,198) (66) %
Selling, general and administrative expenses (“SG&A”) 322,714  344,637  (21,923) (6) %
Depreciation and amortization 114,664  104,899  9,765  9  %
Impairment for intangibles, long-lived assets, and goodwill
—  105,817  (105,817) (100) %
Gain on disposal of assets held for sale and associated settlements (b)
—  (240,783) 240,783  100  %
Restructuring charges (b)
21,299  —  21,299  NM
Operating loss (450,200) (59,756) (390,444) NM
Other income (expense):
Loss in equity method investments (6,858) (4,433) (2,425) (55) %
Interest income (expense), net (33,825) 15,693  (49,518) NM
Miscellaneous income, net 51,062  38,855  12,207  31  %
Loss from operations before income taxes (439,821) (9,641) (430,180) NM
Income tax benefit (expense) 9,371  (5,046) 14,417  NM
Net loss (430,450) (14,687) (415,763) NM
Less: Net loss attributable to redeemable noncontrolling interests
(16,269) (30,387) 14,118  46  %
Less: Net loss attributable to nonredeemable noncontrolling interests
(2,099) (1,534) (565) (37) %
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders
$ (412,082) $ 17,234  $ (429,316) NM
        
NM — Percentage is not meaningful

(a)The consolidated statements of operations for Fiscal Year 2021 and the activities from April 18, 2020 to June 30, 2020 included on the statement of operations for Fiscal Year 2020 are presented on a consolidated basis, as the Company became a standalone public company on April 17, 2020. The financial information for the period of July 1, 2019 to April 17, 2020 that is included in the Company’s combined statements of operations for Fiscal Year 2020 was prepared on a standalone basis derived from the consolidated financial statements and accounting records of the Company’s former parent, MSG Sports, and is presented on the basis of carve-out financial statements as the Company was not a standalone public company prior to the Entertainment Distribution. In addition, the Company’s operating results were materially impacted during Fiscal Year 2021 and part of Fiscal Year 2020 by the COVID-19 pandemic and government actions taken in response. See “— Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business” for more information.
(b)See “Business Segment Results - Entertainment” for a more detailed discussion of the company’s gain on disposal of assets held for sale and associated settlements and impairment for intangibles, long-lived assets, and goodwill in Fiscal Year 2020.


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The following is a summary of changes in segments’ operating results for Fiscal Year 2021 as compared to Fiscal Year 2020.
Changes attributable to Revenues
Direct
operating
expenses (b)
SG&A (c)
Depreciation
and
amortization 		Impairment for intangibles, long-lived assets, and goodwill Gain on disposal of assets held for sale and associated settlements Restructuring charges Operating loss
Entertainment segment(a)
$ (502,927) $ (285,554) $ (13,338) $ (4,147) $ —  $ 240,783  $ 21,299  $ (461,970)
Tao Group Hospitality segment (a)
(80,035) (50,047) (9,015) 799  (94,946) —  —  73,174 
Purchase accounting adjustments —  (1,027) (6) 13,113  (10,871) —  —  (1,209)
Inter-segment eliminations 427  430  436  —  —  —  —  (439)
$ (582,535) $ (336,198) $ (21,923) $ 9,765  $ (105,817) $ 240,783  $ 21,299  $ (390,444)
        
(a)See “Business Segment Results” for a more detailed discussion of the operating results of our segments.
(b)Direct operating expenses primarily include:
◦event costs related to the presentation, production and marketing of our events;
◦revenue sharing expenses associated with the venue-related signage, sponsorship and suite license fee revenues that are attributable to MSG Sports;
◦venue lease, maintenance and other operating expenses, net of recovery charges for venue usage from MSG Sports for hosting the home games of the Knicks and Rangers at The Garden;
◦the cost of concessions, merchandise and food and beverage sold at our venues; and
◦restaurant operating expenses, inclusive of labor costs.
(c)SG&A primarily consist of administrative costs, including compensation, professional fees, sales and marketing costs, including non-event related advertising expenses, and business development costs, as well as costs associated with the development of MSG Sphere, including technology and content development costs.
Depreciation and amortization
Depreciation and amortization for Fiscal Year 2021 increased $9,765, or 9%, to $114,664 as compared to Fiscal Year 2020 primarily due to (i) $14,280 of accelerated amortization expense recorded during the third quarter of Fiscal Year 2021 for certain Tao Group Hospitality venue management contracts that were converted to operating leases, and (ii) higher depreciation expense of $3,820 for equipment used in the development of the MSG Sphere. The increase was partially offset by the full depreciation and amortization of certain assets in The Garden of $3,013 and lower depreciation and amortization of $5,827 associated with the Forum as the recording of depreciation ceased on March 24, 2020 when the venue was classified as assets held for sale.
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Impairment for intangibles, long-lived assets, and goodwill
At the onset of the COVID-19 pandemic in Fiscal Year 2020, the disruptions caused by the pandemic directly impacted the Company’s projected cash flows resulting in operating disruptions. These disruptions along with the deteriorating macroeconomic conditions and industry/market considerations, were considered a “triggering event” for the Company’s Tao Group Hospitality reporting unit, which required the Company to assess the carrying value of its goodwill for that reporting unit for impairment. In connection with the goodwill impairment test, the Company also evaluated the intangibles and long-lived assets for the Tao Group Hospitality reporting unit for impairment. Based on this evaluation, the Company recorded a non-cash impairment charge of $105,817 for Fiscal Year 2020, which consisted of the following:
Tao Group Hospitality Segment Purchase accounting adjustments Total
Intangibles $ —  $ 3,541  $ 3,541 
Long-lived assets 6,363  7,330  13,693 
Goodwill 88,583  —  88,583 
$ 94,946  $ 10,871  $ 105,817 
Loss in equity method investments
Loss in equity method investments for Fiscal Year 2021 increased $2,425, or 55%, to $6,858 as compared to a loss of $4,433 in Fiscal Year 2020. The year-over-year increase is primarily due to higher loss in an investment held by Tao Group Hospitality, primarily as a result of an impairment charge recorded by the investee. In addition, the loss in equity method investments in the current year reflected higher inter-entity profit eliminations recorded in connection with the capital expenditure purchases for MSG Sphere.
Interest income (expense), net
Interest expense, net for Fiscal Year 2021 was $33,825 as compared to net interest income of $15,693 in Fiscal Year 2020, a decrease of net interest income of $49,518. The decrease in net interest income in the current year was primarily due to (i) higher interest expense in the current year associated with the National Properties Term Loan Facility of $33,481, (ii) lower interest income of $16,720 as the Company shifted its investments into U.S. Treasury Bills, money market funds, and time deposits, which yield a lower interest rate, and, to a lesser extent, the absence of interest income earned on a loan extended to The Azoff Company as compared to prior year since the loan was repaid during the second quarter of Fiscal Year 2020.
Miscellaneous income, net
Miscellaneous income, net for Fiscal Year 2021 increased $12,207, or 31%, to $51,062 as compared to $38,855 in Fiscal Year 2020. The increase was primarily due to the net realized and unrealized gains recognized on the Company’s investment in DraftKings Inc. (“DraftKings”) and Townsquare Media, Inc. (“Townsquare”) of 13,550. See Note 8 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further discussion.
Income taxes
Income tax benefit for Fiscal Year 2021 of $9,371 differs from income tax benefit derived from applying the statutory federal rate of 21% to the pretax loss primarily due to (i) increase in valuation allowance of $121,216, (ii) tax expense of $5,311 related to nondeductible officers’ compensation, and (iii) tax expense of $3,857 relating to noncontrolling interests, partially offset by state income tax benefit of $44,848. See Note 19 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further details on the components of income tax and a reconciliation of the statutory federal rate to the effective tax rate.
Income tax expense for Fiscal Year 2020 of $5,046 differs from income tax benefit derived from applying the statutory federal rate of 21% to the pretax loss primarily due to (i) state income tax expense of $4,016, (ii) tax expense of $6,704 relating to noncontrolling interests, (iii) tax expense of $6,961 relating to nondeductible transaction costs, and (iv) tax expense of $4,407 related to nondeductible officers’ compensation, partially offset by a decrease in valuation allowance of $14,220.
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Adjusted operating income
The Company evaluates segment performance based on several factors, of which the key financial measure is their operating income (loss) before (i) adjustments to remove the impact of non-cash straight-line leasing revenue associated with the Arena License Agreements with MSG Sports, (ii) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (iii) amortization for capitalized cloud computing arrangement costs (see Note 2. Summary of Significant Accounting Policies to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further details), (iv) share-based compensation expense or benefit, (v) restructuring charges or credits, and (vi) gains or losses on sales or dispositions of businesses and associated settlements, which is referred to as adjusted operating income (loss), a non-GAAP measure. In addition to excluding the impact of items discussed above, the impact of purchase accounting adjustments related to business acquisitions is also excluded in evaluating the Company’s consolidated and combined adjusted operating income (loss). See Note 21. Segment Information to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further discussion on the definition of adjusted operating income (loss). The Company has presented the components that reconcile operating income (loss) to adjusted operating income (loss).
Management believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the various operating units of the Company’s business without regard to the settlement of an obligation that is not expected to be made in cash. In addition, the Company believes that given the length of the arena license agreements and resulting magnitude of the difference in leasing revenue recognized and cash revenue received, the exclusion of non-cash leasing revenue provides investors with a clearer picture of the Company's operating performance.
The Company believes adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of its business segments and the Company on a consolidated basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze the Company’s performance. The Company uses revenues and adjusted operating income (loss) measures as the most important indicators of its business performance, and evaluates management’s effectiveness with specific reference to these indicators.
Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. The Company has presented the components that reconcile operating income (loss), the most directly comparable GAAP financial measure, to adjusted operating income (loss).
The following is a reconciliation of operating loss to adjusted operating loss:  
Years Ended June 30, Change
2021 2020 Amount Percentage
Operating loss $ (450,200) $ (59,756) $ (390,444) NM
Non-cash portion of arena license fees from MSG Sports (13,026) — 
Share-based compensation 52,917  42,190 
Depreciation and amortization (a)
114,664  104,899 
Restructuring charges 21,299  — 
Impairment of intangibles, long-lived assets and goodwill
—  105,817 
Gain on disposal of assets held for sale and associated settlements —  (240,783)
Other purchase accounting adjustments 3,334  4,367 
Adjusted operating loss $ (271,012) $ (43,266) $ (227,746) NM
________________
NM — Percentage is not meaningful
(a)Depreciation and amortization included purchase accounting adjustments of $25,567 and $12,454 for the years ended June 30, 2021 and 2020, respectively. The increase in purchase accounting adjustments related depreciation and amortization for Fiscal Year 2021 include $14,280 of accelerated amortization expense for certain Tao Group Hospitality venue management contracts that were converted to operating leases.
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Adjusted operating loss for Fiscal Year 2021 increased $227,746 to adjusted operating loss of $271,012 as compared to Fiscal Year 2020. The net increase was attributable to the following:
Increase in adjusted operating loss of the Entertainment segment $ 210,655 
Increase in adjusted operating loss of the Tao Group Hospitality segment 16,652 
Inter-segment eliminations 439 
$ 227,746 
Net loss attributable to redeemable and nonredeemable noncontrolling interests

For Fiscal Year 2021, the Company recorded a net loss attributable to redeemable noncontrolling interests of $16,269 and a net loss attributable to nonredeemable noncontrolling interests of $2,099 as compared to net loss attributable to redeemable noncontrolling interests of $30,387 and net loss attributable to nonredeemable noncontrolling interests of $1,534 for Fiscal Year 2020. These amounts represent the share of net loss of Tao Group Hospitality and BCE that is not attributable to the Company. In addition, the net loss attributable to redeemable and nonredeemable noncontrolling interests includes a proportional share of expenses related to purchase accounting adjustments.
Business Segment Results
Entertainment
The table below sets forth, for the periods presented, certain historical financial information and a reconciliation of operating income (loss) to adjusted operating loss for the Company’s Entertainment segment. 
Years Ended June 30, Change
2021 2020 Amount Percentage
Revenues $ 82,281  $ 585,208  $ (502,927) (86) %
Direct operating expenses 103,089  388,643  (285,554) (73) %
Selling, general and administrative expenses 268,705  282,043  (13,338) (5) %
Depreciation and amortization 80,142  84,289  (4,147) (5) %
Restructuring charges 21,299  —  21,299  NM
Gain on disposal of assets held for sale and associated settlements
—  (240,783) 240,783  NM
Operating income (loss) $ (390,954) $ 71,016  $ (461,970) NM
Reconciliation to adjusted operating loss:
Non-cash portion of arena license fees from MSG Sports (13,026) — 
Share-based compensation 47,633  41,227 
Depreciation and amortization 80,142  84,289 
Restructuring charges 21,299  — 
Gain on disposal of assets held for sale and associated settlements —  (240,783)
Adjusted operating loss $ (254,906) $ (44,251) $ (210,655) NM
—————
NM — Percentage is not meaningful
Factors Affecting Results of Operations
Carve-out Financial Statements
The consolidated statement of operations for Fiscal Year 2021 and the activities from April 18, 2020 to June 30, 2020 included on the statement of operations for Fiscal Year 2020 are prepared on a consolidated basis, as the Company became a standalone public company on April 17, 2020. The Company's financial information for the period of July 1, 2019 to April 17, 2020 that is included in the results of operations for Fiscal Year 2020 were prepared on a standalone basis derived from the consolidated financial statements and accounting records of the Company’s former parent, MSG Sports, and are presented as carve-out financial statements as the Company was not a standalone public company prior to the Entertainment Distribution.
The financial information for the period of July 1, 2019 to April 17, 2020 that is included in the results of operations for Fiscal Year 2020, include allocations for certain support functions that were provided on a centralized basis and not historically recorded at the business unit level by MSG Sports, such as expenses related to executive management, finance, legal, human resources,
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government affairs, information technology, and venue operations among others. As part of the Entertainment Distribution, certain corporate and operational support functions were transferred to the Company and therefore, charges were reflected in order to properly burden all business units comprising MSG Sports’ historical operations. These expenses were allocated on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of combined revenues, headcount or other measures of the Company and MSG Sports.
Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses, are reasonable. Nevertheless, the combined financial statements may not include all of the actual expenses that would have been incurred by the Company and may not reflect its combined results of operations, financial position and cash flows had it been a separate, standalone company during the periods presented. Actual costs that would have been incurred if the Company had been a separate, standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.
Impact of the COVID-19 Pandemic
The Entertainment segment operations and operating results have been, and continue to be, materially impacted by the COVID-19 pandemic and actions taken in response by governmental authorities and certain professional sports leagues. See “— Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business” for more information.
Revenues
Revenues for Fiscal Year 2021 decreased $502,927, or 86%, to $82,281 as compared to Fiscal Year 2020. The net decrease was attributable to the following: 
Decrease in event-related revenues, as discussed below $ (212,899)
Decrease in revenues from the Christmas Spectacular due to the cancellation of the 2020 holiday season production as a result of the COVID-19 pandemic
(128,488)
Decrease in suite license fee revenues due to the government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic.
(85,900)
Decrease in venue-related signage and sponsorship revenues due to the impact of carve-out financial statement assumptions in Fiscal Year 2020 as well as the impact of government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic (65,196)
Absence of revenues from the Forum due to its disposition in May 2020 (45,719)
Increase in arena license fees from MSG Sports pursuant to the Arena License Agreements, as discussed below 21,345 
Increase in revenues from Sponsorship Sales and Service Representation Agreements with MSG Sports, as discussed below 11,280 
Other net increases 2,650 
$ (502,927)
The decrease in event-related revenues reflects (i) lower revenues from concerts of $158,580 during Fiscal Year 2021 and (ii) lower revenues from other live entertainment and sporting events of $54,319 during Fiscal Year 2021. Both of these declines were due to government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic. See “— Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business” for more information.
The arena license fee revenues from MSG Sports in Fiscal Year 2021 were due to The Garden reopening for the Knicks games in December 2020 and the Rangers games in January 2021 with limited or no fans. There were no arena license fees recorded prior to the Entertainment Distribution.
The increase in revenues from the Company’s Sponsorship Sales and Service Representation Agreements and Arena License Agreements with MSG Sports reflects the impact of entering into these agreements in connection with, and effective as of, the Entertainment Distribution.
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Direct operating expenses
Direct operating expenses for Fiscal Year 2021 decreased $285,554, or 73%, to $103,089 as compared to Fiscal Year 2020. The net decrease was attributable to the following: 
Decrease in event-related direct operating expenses from (i) concerts of $85,449 during Fiscal Year 2021 and (ii) other live entertainment and sporting events of $39,057, both due to government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic $ (124,506)
Decrease in direct operating expenses associated with suite license operations primarily due to the impact of lower revenue sharing expenses with MSG Sports corresponding to the lower suite revenue during Fiscal Year 2020 due to government-mandated closures and restrictions on the use of our venues beginning in March 2020 as a result of the COVID-19 pandemic (58,096)
Decrease in direct operating expenses associated with venue-related signage and sponsorship primarily due to the impact of lower revenue sharing expense with MSG Sports of $52,052 as a part of carve-out financial assumptions in Fiscal Year 2020. (53,392)
Decrease in direct operating expenses associated with the Christmas Spectacular due to the cancellation of the 2020 holiday season production as a result of the COVID-19 pandemic
(50,714)
Decrease in direct operating expenses associated with the Forum due to its disposition in May 2020 (26,576)
Increase in direct operating expenses associated with hosting the Knicks and the Rangers games, including expenses not reimbursable by MSG Sports pursuant to the Arena License Agreements 3,118 
Other net increases, primarily due to the absence of venue operating costs carve-out adjustments in Fiscal Year 2020 24,612 
$ (285,554)
Selling, general and administrative expenses
Selling, general and administrative expenses for Fiscal Year 2021 decreased $13,338, or 5%, to $268,705 as compared to Fiscal Year 2020. The decrease was primarily due to (i) a net decrease in employee compensation and related benefits of $34,835, primarily as a result of the Company’s full-time workforce reduction in August 2020, and (ii) lower net professional fees of $25,368 associated with litigation, MSG Sphere content development and corporate development. The decrease was partially offset by an incremental expense for share-based compensation of $11,129 associated with the cancellation of certain awards pursuant to a settlement agreement and other net increases, and $15,614 of professional fees associated with the Company’s merger with MSG Networks and the impact of the Company's spin-off from MSG Sports, which impacted the year-over-year comparability of certain results since the prior year operating results were prepared under a carve-out basis.
See “— Restructuring charges” below for further discussion on the Company’s full-time workforce reduction in August 2020. See Note 16 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further discussion of the Company’s reversal of share-based compensation expenses in the second quarter of Fiscal Year 2021.
Depreciation and amortization
Depreciation and amortization decreased $4,147, or 5%, to $80,142 as compared to Fiscal Year 2020 primarily due to certain assets in The Garden being fully depreciated and amortized of $3,013 and lower depreciation and amortization of $5,827 associated with the Forum as the recording of depreciation ceased on March 24, 2020 when the venue was classified as assets held for sale, partially offset by higher depreciation expense for equipment of $3,820 used in the development of MSG Sphere.
Restructuring charges
The Company’s operations have been disrupted since March 2020 due to the COVID-19 pandemic. As a direct response to this disruption, the Company implemented cost savings initiatives in order to streamline operations and preserve liquidity. For Fiscal Year 2021, the Company recorded total restructuring charges of $21,299 related to termination benefits provided to employees associated with a full-time workforce reduction of approximately 350 employees in August 2020 and 10 employees in November 2020.
Gain on disposal of assets held for sale and associated settlement
In May 2020, pursuant to a Membership Interest Purchase Agreement (the “MIPA”) that a subsidiary of the Company entered into on March 24, 2020, the Company sold the Forum, and the parties settled related litigation for cash consideration in the amount of $400,000. In connection with this transaction, the Company recorded a gain of $240,783 in the fourth quarter of Fiscal Year 2020, which included $140,495 attributable to the Forum associated settlement.
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Operating income (loss)
Operating loss for Fiscal Year 2021 increased $461,970 to $390,954 as compared to operating income of $71,016 in Fiscal Year 2020. The increase in operating loss was primarily due to a decrease in revenues and the impact of restructuring charges, partially offset by lower direct operating expenses and selling, general and administrative expenses, as discussed above.
Adjusted operating loss
Adjusted operating loss for Fiscal Year 2021 increased $210,655 to $254,906 as compared to Fiscal Year 2020. The increase in adjusted operating loss was less than the increase in operating loss of $461,970 primarily due to (i) the gain on disposal of the Forum in Inglewood and associated settlement of $240,783 being excluded in the calculation of adjusted operating loss.
Tao Group Hospitality
The table below sets forth, for the periods presented, certain historical financial information and a reconciliation of operating loss to adjusted operating income (loss) for the Company’s Tao Group Hospitality segment. 
Years Ended June 30, Change
2021 2020 Amount Percentage
Revenues $ 100,166  $ 180,201  $ (80,035) (44) %
Direct operating expenses 66,591  116,638  (50,047) (43) %
Selling, general and administrative expenses 54,034  63,049  (9,015) (14) %
Depreciation and amortization 8,955  8,156  799  10  %
Impairment for intangibles, long-lived assets, and goodwill
—  94,946  (94,946) (100) %
Operating loss $ (29,414) $ (102,588) $ 73,174  71  %
Reconciliation to adjusted operating income (loss):
Share-based compensation 5,284  963 
Depreciation and amortization 8,955  8,156 
Impairment for intangibles, long-lived assets, and goodwill
—  94,946 
Adjusted operating income (loss) $ (15,175) $ 1,477  $ (16,652) NM
Factors Affecting Results of Operations
Disruptions caused by the COVID-19 pandemic had a significant and negative impact on Tao Group Hospitality’s operations and financial performance for Fiscal Year 2021. See “— Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business” for more information.
Revenues
Revenues for Fiscal Year 2021 decreased $80,035, or 44%, to $100,166 as compared to the prior year. The net decrease was attributable to the following: 
Decrease in revenues due to the closure of certain venues as a result of the COVID-19 pandemic $ (57,874)
Decrease in revenues due to capacity restrictions at re-opened venues (36,743)
Decrease in revenues associated with the permanent closing of Vandal and Avenue in New York (12,619)
Increase in revenues due to the Hakkasan acquisition in April 2021 27,604 
Other net decreases (403)
$ (80,035)
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Direct operating expenses
Direct operating expenses for Fiscal Year 2021 decreased $50,047, or 43%, to $66,591 as compared to the prior year. The net decrease was attributable to the following: 
Decrease in employee compensation and related benefits as a result of (i) a reduction in headcount at re-opened venues, (ii) the elimination of venue line staff and manager positions at closed venues, and (iii) the permanent closure of Vandal and Avenue, all as a result of the COVID-19 pandemic $ (24,916)
Decrease in (i) costs of food and beverage, and (ii) costs of venue entertainment, both as a result of the closure of certain venues, capacity restrictions at re-opened venues and the permanent closure of Vandal and Avenue, all due to the COVID-19 pandemic (23,370)
Decrease in direct operating expenses associated with rent expense, primarily due to rent concessions received and the permanent closure of Vandal and Avenue (7,514)
Increase in direct operating expenses due to the Hakkasan acquisition in April 2021 12,278 
Other net decreases, due to lower credit card fees (6,525)
$ (50,047)
Selling, general and administrative expenses
Selling, general and administrative expenses for Fiscal Year 2021 decreased $9,015, or 14%, to $54,034 as compared to Fiscal Year 2020 primarily due to (i) lower restaurant expenses and supplies, public relations costs, repairs and maintenance, utilities, and general liability insurance of $8,894, (ii) lower marketing costs of $8,255, (iii) various other decreases, primarily related to temporary office closure and the absence of bad debt expense incurred in the prior year, and (iv) employee compensation and related benefits, inclusive of an increase in share-based compensation, of $981. These decreases were partially offset by Hakkasan selling, general and administrative expenses of $8,019 incurred since the acquisition in April 2021 and professional fees, primarily related to the acquisition of Hakkasan, of $3,686.
Depreciation and amortization
Depreciation and amortization for Fiscal Year 2021 increased $799, or 10%, to $8,955 as compared to Fiscal Year 2020 primarily due to an increase in venues due to the Hakkasan acquisition in April 2021, as well as capital expenditures.
Impairment for intangibles, long-lived assets, and goodwill
In the prior year, the disruptions caused by the COVID-19 pandemic directly impacted the Company’s projected cash flows resulting in operating disruptions. This disruption along with the deteriorating macroeconomic conditions and industry/market considerations, were considered a “triggering event” for the Company’s Tao Group Hospitality reporting unit, which required the Company to assess the carrying value of Tao Group Hospitality’s intangible assets, long-lived assets and goodwill for impairment. Based on this evaluation, the Company recorded a non-cash impairment charge of $94,946 during the third and fourth quarters of Fiscal Year 2020, which included (i) an impairment charge of $88,583 related to goodwill and (ii) impairment charges associated with Vandal and Avenue in New York of $6,363 for certain long-lived assets (including net impact of right-of-use assets and liabilities associated with leases).
In addition, during Fiscal Year 2020, the Company also recorded a non-cash impairment charge of $10,871 under purchase price adjustment primarily associated with right-of-use lease assets and a tradename. See Note 21 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further detail.
Operating loss
Operating loss for Fiscal Year 2021 decreased $73,174, or 71% , to $29,414 as compared to Fiscal Year 2020 was primarily due to the absence of the prior year impairment of intangibles, long-lived assets and goodwill, as well as decreases in direct operating expenses and selling, general and administrative expenses, partially offset by lower revenues, as discussed above.
Adjusted operating income (loss)
Adjusted operating loss for Fiscal Year 2021 was $15,175 as compared to adjusted operating income of $1,477 in the prior year period, a decrease of $16,652. The increase in adjusted operating loss was higher as compared to the decrease in operating loss primarily due to the impairment charges of $94,946 for certain long-lived assets and goodwill in the prior year, partially offset by the increase in share-based compensation as discussed above.
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Comparison of the Year Ended June 30, 2020 versus the Year Ended June 30, 2019
The Company has applied the Securities and Exchange Commission’s recently adopted FAST Act Modernization and Simplification of Regulation S-K, which permits the discussion to be limited to the two most recent fiscal years. The aforementioned discussion and analysis deals with comparisons of material changes in the consolidated financial statements for Fiscal Year 2021 and Fiscal Year 2020. For the comparison of Fiscal Year 2020 and Fiscal Year 2019, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our 2020 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on August 31, 2020.
Liquidity and Capital Resources
Overview
Our operations and operating results have been, and continue to be, materially impacted by the COVID-19 pandemic and actions taken in response by governmental authorities and certain professional sports leagues. For the majority of Fiscal Year 2021, substantially all of the Entertainment business operations were suspended and Tao Group Hospitality was operating at significantly reduced capacity and demand. Although operations are resuming, it is not clear when we will fully return to normal operations.
As a result of government-mandated assembly limitations and closures, all of our performance venues were closed beginning in mid-March 2020. Use of The Garden resumed for Knicks and Rangers home games without fans in December 2020 and January 2021, respectively, and, beginning on February 23, 2021, The Garden was permitted to host fans at games at 10% seating capacity with certain safety protocols, such as proof of full vaccination or a negative COVID-19 test and social distancing. Starting April 1, 2021, our other New York performance venues, Hulu Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre, were also permitted to reopen at 10% capacity with certain safety protocols. Although live events were permitted at our venues, government-mandated capacity restrictions and other safety requirements made it economically unfeasible to do so for most events at that time. Effective May 19, 2021, all of our New York venues were permitted to host guests at full capacity, subject to certain restrictions, and effective June 2021, The Chicago Theatre was permitted to host events without restrictions. As a result, The Garden hosted three Knicks playoff games with approximately 15,000-16,000 fans in attendance per game during Fiscal Year 2021, and we welcomed the Foo Fighters on June 20, 2021 for the first live event at The Garden with 100% capacity since our venues were shut down in March 2020. In addition, on June 19, 2021, Radio City Music Hall opened its doors for the first time in over a year to host the Tribeca Festival’s closing night film, Untitled: Dave Chappelle Documentary, with 100% capacity. The Beacon Theatre hosted its first ticketed event, at 100% capacity, on June 22, 2021 with the first of two shows from Trey Anastasio, and Hulu Theater at Madison Square Garden hosted its first ticketed event, at 100% capacity, with a boxing/hip-hop event on August 3, 2021. For all events hosted at our New York venues with 100% capacity prior to August 17, 2021, guests were required to provide proof of full vaccination or a negative COVID-19 test, depending on the requirements of that venue and/or preference of the performer. Effective August 17, 2021, all workers and customers in New York City indoor dining, indoor fitness and indoor entertainment facilities are required to show proof of at least one vaccination shot. In addition, effective August 20, 2021, face coverings are required for all individuals in indoor public spaces in Chicago, including our venues. For Fiscal Year 2021, the majority of ticketed events at our venues were postponed or canceled and, while live events are permitted to be held at all of our performance venues as of the date of this filing and we are continuing to host and book new events, due to the lead-time required to book touring acts and artists, which is the majority of our business, we expect that our bookings will continue to be impacted through the 2021 calendar year. We continue to actively pursue one-time or multi-night performances at our venues as the touring market ramps up.
The impact to our operations also included the cancellation of the 2020 production of the Christmas Spectacular and both the 2020 and 2021 Boston Calling Music Festivals. While the 2021 production of the Christmas Spectacular is currently on-sale, the current production is scheduled for 163 shows, as compared with 199 shows for the 2019 production, which was the last production presented prior to the impact of the COVID-19 pandemic.
The Company has long-term arena license agreements (the “Arena License Agreements”) with MSG Sports that require the Knicks and Rangers to play their home games at The Garden.
As discussed above, capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. On July 1, 2021, the Knicks and Rangers began paying the full amounts provided for under their respective Arena License Agreements. The NBA and NHL have each announced that they intend to return to traditional October to April regular season schedule, with full 82-game regular seasons, for the 2021-22 season.
Disruptions caused by the COVID-19 pandemic had a significant and negative impact on Tao Group Hospitality’s operations and financial performance for Fiscal Year 2021. Due to government actions taken in response to the COVID-19 pandemic, virtually
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all of Tao Group Hospitality’s venues were closed for approximately three months starting in mid-March 2020, and Avenue and Vandal in New York were permanently closed in April 2020 and June 2020, respectively. In addition, Avenue in Los Angeles was permanently closed in May 2021. Throughout Fiscal Year 2021, Tao Group Hospitality conducted limited operations at certain venues, subject to significant regulatory requirements, including capacity limits, curfews and social distancing requirements for outdoor and indoor dining. Tao Group Hospitality’s operations fluctuated throughout Fiscal Year 2021 as certain markets lifted restrictions, imposed restrictions, and changed operational requirements over time. As of June 30, 2021, 51 of Tao Group Hospitality’s venues were open for outdoor dining, limited or full capacity indoor dining (depending on the market), and delivery/takeout (23 legacy Tao Group Hospitality venues and 28 Hakkasan venues acquired in connection with the April 27, 2021 transaction), inclusive of Tao Asian Bistro & Lounge at Mohegan Sun, a new venue that first opened its doors in March 2021, while 10 venues remained closed (five legacy Tao Group Hospitality venues and five Hakkasan venues). Of the 51 Tao Group Hospitality venues currently operating, 29 are U.S.-based and operating without capacity restrictions (21 Tao Group Hospitality legacy venues and eight Hakkasan venues) and 22 are international (two Tao Group Hospitality legacy venues and 20 Hakkasan venues) and operating under various governmental safety protocols such as curfews, capacity limitations and social distancing. Effective August 17, 2021, workers and customers in New York City indoor dining facilities are required to show proof of at least one vaccination shot. In addition, certain U.S. jurisdictions have reinstated safety protocols, such as the mask mandates in Nevada and Chicago, but not otherwise limiting capacity.
MSG Networks depends on the appeal of its live programming to viewing subscribers of its networks and to its advertisers. As a result of the COVID-19 pandemic and league and government actions relating thereto, MSG Networks aired substantially fewer NBA and NHL telecasts during Fiscal Year 2021, as compared with Fiscal Year 2019 (the last full fiscal year not impacted by COVID-19), and consequently experienced a decrease in revenues, including a material decrease in advertising revenue. The absence of live sports games also resulted in a decrease in certain MSG Networks expenses, including rights fees, variable production expenses, and advertising sales commissions.
For more information about the impacts and risks to the Company as a result of the COVID-19 pandemic, see “— Introduction — Business Overview — Impact of the COVID-19 Pandemic on Our Business” and “Part I — Item 1A. Risk Factors — General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues.”
As a result of the material impact COVID-19 had on our revenues during Fiscal Year 2021, we took several actions to improve our financial flexibility, reduce operating costs and preserve liquidity, including (i) revising our construction schedule for MSG Sphere, with an anticipated opening date of calendar year 2023, (ii) making significant cuts in both venue and corporate headcounts, and (iii) having our wholly-owned subsidiary, MSG National Properties, LLC (“MSG National Properties”) enter into a five-year $650,000 senior secured term loan facility (“National Properties Term Loan Facility”). See Note 14 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for further details on the National Properties Term Loan Facility.
In August 2020, Tao Group Hospitality entered into an amendment to the Tao Senior Credit Agreement, which suspended certain financial covenants through December 31, 2021 and increased the minimum liquidity requirement. In addition, in connection with the amendment, our wholly owned subsidiary MSG Entertainment Group, LLC (“MSG Entertainment Group”) entered into a guarantee agreement, which also included a minimum liquidity requirement for MSG Entertainment Group. See Note 14 for more information regarding the amendment to the Tao Senior Credit Agreement. Tao Group Hospitality will likely need to seek covenant waivers in the future. Tao Group Hospitality's failure to obtain debt covenant waivers could trigger a violation of these covenants and lead to default, acceleration of all of its outstanding debt and a demand for payment under the guarantee of MSG Entertainment Group, which would negatively impact the liquidity of Tao Group Hospitality and the Company.
Our primary sources of liquidity are cash and cash equivalents, cash flows from the operations of our businesses and available borrowing capacity under our MSGN Credit Agreement (as defined herein). Our principal uses of cash include working capital-related items (including funding our operations), capital spending (including our construction of a large-scale venue in Las Vegas), debt service, investments and related loans and advances that we may fund from time to time, and mandatory purchases from prior acquisitions. We may also use cash to repurchase our common stock. Our decisions as to the use of our available liquidity will be based upon the ongoing review of the funding needs of the business, the optimal allocation of cash resources, and the timing of cash flow generation. To the extent that we desire to access alternative sources of funding through the capital and credit markets, challenging U.S. and global economic and market conditions could adversely impact our ability to do so at that time.
We regularly monitor and assess our ability to meet our net funding and investing requirements. We believe we have sufficient liquidity, including approximately $1,169,000 in cash and cash equivalents as of June 30, 2021, to fund our operations, service the National Properties Term Loan Facility and the MSGN Credit Agreement, and pursue the development of the new venues discussed below over the next 12 months. In addition, MSG Networks had approximately $348,000 in cash and cash equivalents
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as of June 30, 2021. See “Contractual Obligations” section below for further detail on our off-balance sheet and on-balance sheet commitments. Our cash and cash equivalents include approximately $233,000 in advance cash proceeds - primarily related to suites, tickets, and, to a lesser extent, sponsorships — all of which would be addressed, to the extent necessary, through credits, make-goods, refunds and/or rescheduled dates.
On March 31, 2020, the Company’s Board of Directors authorized, effective following the Entertainment Distribution, a share repurchase program to repurchase up to $350,000 of the Company’s Class A Common Stock. Under the authorization, shares of Class A Common Stock may be purchased from time to time in open market transactions, in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. No shares have been repurchased to date.
Tao Group Hospitality’s principal uses of cash include working capital related-items (including funding its operations), investments in new venues, tax-related cash distributions, interest expense payments and repayment of debt. Tao Group Hospitality plans to continue to grow its business through the opening of new venues and acquisitions. Tao Group Hospitality’s operations have been materially impacted by COVID-19. See “— Introduction —Business Overview — Impact of the COVID-19 Pandemic on Our Business.” We expect that the Company will increase the availability under its subordinated loan with Tao Group Hospitality, which will provide additional capital necessary, together with cash-on-hand, Tao Group Hospitality’s revolving credit facility and existing committed capital from the Company, to fund Tao Group Hospitality’s operations and service its debt obligations over the next 12 months.
MSG Spheres
The Company has made significant progress on MSG Sphere at The Venetian, its state-of-the-art entertainment venue under construction in Las Vegas. See “Part I — Item 1. Our Business — Our Performance Venues — MSG Sphere.”
The Company expects the venue to have a number of significant revenue streams, including a wide variety of content such as attractions, concert residencies, corporate and select sporting events, as well as sponsorship and premium hospitality opportunities. As a result, we anticipate that MSG Sphere at The Venetian will generate substantial revenue and adjusted operating income on an annual basis.
Our cost estimate, as of June 2021, inclusive of core technology and soft costs, for MSG Sphere at The Venetian is approximately $1,865,000. This cost estimate is net of $75,000 that the Sands has agreed to pay to defray certain construction costs and also excludes the impacts of changes in inflation and significant capitalized and non-capitalized costs for items such as content creation, internal labor, and furniture and equipment. Relative to our cost estimate above, our actual construction costs for MSG Sphere at The Venetian incurred through June 30, 2021 were approximately $850,000, which is net of $65,000 received from Sands during Fiscal Year 2021. In addition, the amount of construction costs incurred as of June 30, 2021 includes approximately $98,000 of accrued expenses that were not yet paid as of that date. As with any major construction project, the construction of MSG Sphere is subject to potential unexpected delays, costs or other complications.
MSG Sphere at The Venetian is a complex construction project with cutting-edge technology that relies on subcontractors obtaining components from a variety of sources around the world. In April 2020, the Company announced that it was suspending construction of MSG Sphere due to COVID-19 related factors that were outside of its control, including supply chain issues. As the ongoing effects of the pandemic continued to impact its business operations, in August 2020, the Company disclosed that it resumed full construction with a lengthened timetable in order to better preserve cash through the COVID-19 pandemic. The Company remains committed to bringing MSG Sphere to Las Vegas and expects to open the venue in calendar year 2023.
In December 2020, the Company terminated its construction agreement with AECOM and assumed the role of construction manager to gain greater transparency and control over the construction process, including direct engagement and supervision of subcontractors. AECOM continues to support MSG Sphere at The Venetian through a services agreement that facilitates their ongoing involvement through MSG Sphere’s completion. As the construction manager of the project, we aim to aggressively manage the cost of the project in this volatile environment to minimize any potential cost increases.
With regard to MSG Sphere at The Venetian, the Company plans to finance the construction of the venue from cash-on-hand and cash flows from operations. If the Company’s cash-on-hand and cash flows from operations are not sufficient to finance the remaining construction costs of MSG Sphere at The Venetian, the Company would need to access additional capital including potential incremental debt. There is no assurance that the Company will be able to obtain such capital.
While the Company plans to self-fund the construction of MSG Sphere at The Venetian, under the right terms it would consider third-party financing alternatives. The Company’s intention for any future venues is to utilize several options, such as non-recourse debt financing, joint ventures, equity partners and a managed venue model.
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For additional information regarding the Company’s capital expenditures related to MSG Sphere, see Note 21 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K.
In February 2018, we announced the purchase of land in Stratford, London, which we expect will become home to a future MSG Sphere. The Company submitted a planning application to the local planning authority in March 2019 and that process, which will require various stages of review to be completed and approvals to be granted, is ongoing. Therefore, we do not have a definitive timeline at this time.
We will continue to explore additional domestic and international markets where we believe next-generation venues such as the MSG Sphere can be successful.
Financing Agreements
National Properties Term Loan Facility
On November 12, 2020, MSG National Properties, an indirect, wholly-owned subsidiary of the Company, MSG Entertainment Group, LLC (“MSG Entertainment Group”) and certain subsidiaries of MSG National Properties entered into a five-year $650,000 senior secured term loan facility (the “National Properties Term Loan Facility”). The proceeds of the National Properties Term Loan Facility may be used to fund working capital needs, for general corporate purposes of MSG National Properties and its subsidiaries, and to make distributions to MSG Entertainment Group.
The National Properties Term Loan Facility includes a minimum liquidity covenant, pursuant to which MSG National Properties and its restricted subsidiaries are required to maintain a specified minimum level of average daily liquidity, consisting of cash and cash equivalents and available revolving commitments, over the last month of each quarter. From the closing date until the first anniversary of the National Properties Term Loan Facility, the minimum liquidity threshold is $450,000, which is reduced each quarter by the amount of cash usage, subject to a minimum liquidity floor of $200,000. After the first anniversary, the minimum liquidity level is reduced to $200,000. If at any time the total leverage ratio of MSG National Properties and its restricted subsidiaries is less than 5.00 to 1.00 as of the end of any four consecutive fiscal quarter periods or MSG National Properties obtains an investment grade rating, the minimum liquidity level is permanently reduced to $50,000.
The principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments in an aggregate amount equal to 1.00% per annum (0.25% per quarter), with the balance due at the maturity of the facility. The National Properties Term Loan Facility will mature on November 12, 2025. Borrowings under the National Properties Term Loan Facility bear interest at a floating rate, which at the option of MSG National Properties may be either (i) a base rate plus a margin of 5.25% per annum or (ii) LIBOR, with a floor of 0.75%, plus a margin of 6.25% per annum. The interest rate on the National Properties Term Loan Facility as of June 30, 2021 was 7.00%. During Fiscal Year 2021, MSG National Properties made principal payments of $3,250 under the National Properties Term Loan Facility
All obligations under the National Properties Term Loan Facility are guaranteed by MSG Entertainment Group and MSG National Properties’ existing and future direct and indirect domestic subsidiaries, other than the subsidiaries that own The Garden, BCE and certain other excluded subsidiaries (the “Subsidiary Guarantors”). All obligations under the National Properties Term Loan Facility, including the guarantees of those obligations, are secured by certain of the assets of MSG National Properties and the Subsidiary Guarantors (collectively, “Collateral”) including, but not limited to, a pledge of some or all of the equity interests held directly or indirectly by MSG National Properties in each Subsidiary Guarantor. The Collateral does not include, among other things, any interests in The Garden or the leasehold interests in Radio City Music Hall and the Beacon Theatre. Under certain circumstances, MSG National Properties is required to make mandatory prepayments on loans outstanding, including prepayments in an amount equal to a specified percentage of excess cash flow in any fiscal year and prepayments in an amount equal to the net cash proceeds of certain sales of assets or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights), in each case subject to certain exceptions.
In addition to the minimum liquidity covenant, the National Properties Term Loan Facility and the related security agreement contain certain customary representations and warranties, affirmative and negative covenants and events of default. The National Properties Term Loan Facility contains certain restrictions on the ability of MSG National Properties and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the National Properties Term Loan Facility, including the following: (i) incur additional indebtedness; (ii) create liens on certain assets; (iii) make investments, loans or advances in or to other persons; (iv) pay dividends and distributions or repurchase capital stock (which will restrict the ability of MSG National Properties to make cash distributions to the Company); (v) repay, redeem or repurchase certain indebtedness; (vi) change its lines of business; (vii) engage in certain transactions with affiliates; (viii) amend their respective organizational documents; (ix) merge or consolidate; and (x) make certain dispositions. As of June 30, 2021, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Term Loan Facility.
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Tao Credit Facilities
On May 23, 2019, Tao Group Intermediate Holdings LLC (“TAOIH” or “Intermediate Holdings”) and Tao Group Operating LLC (“TAOG” or “Senior Borrower”), entered into a credit agreement (the “Tao Senior Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and a letter of credit issuer, and the lenders party thereto. Together the Tao Senior Credit Agreement and a $49,000 intercompany subordinated credit agreement that matures in August 2024 (the “Tao Subordinated Credit Agreement”) between a subsidiary of the Company and Tao Group Sub-Holdings LLC, a subsidiary of Tao Group Hospitality, replaced the Senior Borrower’s prior credit agreement dated January 31, 2017 (“2017 Tao Credit Agreement”). On June 15, 2020, the Company entered into the second amendment to the Tao Subordinated Credit Agreement, which provided an additional $22,000 of intercompany loan borrowing availability under the Tao Subordinated Credit Agreement. The net intercompany loan outstanding balances under the Tao Subordinated Credit Agreement, as amended, were $63,000 and $49,000 as of June 30, 2021 and 2020, respectively. The balances and interest-related activities pertaining to the Tao Subordinated Credit Agreement, as amended, have been eliminated in the consolidated and combined financial statements in accordance with ASC Topic 810, Consolidation.
Disruptions caused by the COVID-19 pandemic have had, and are likely to continue to have, a significant and negative impact on Tao Group Hospitality’s operations and financial performance. On August 6, 2020, TAOG and TAOIH entered into an amendment to the Tao Senior Credit Agreement, which suspended the application of the financial maintenance covenants thereunder, modified certain restrictive covenants therein through December 31, 2021, modified the applicable interest rates and increased the minimum liquidity requirement for the outstanding balance of $33,750 under the Tao Term Loan Facility and for the $25,000 availability under the Tao Revolving Credit Facility. In addition, in connection with the amendment, the Company, through its direct wholly owned subsidiary, MSG Entertainment Group, entered into a guarantee and reserve account agreement (i) to guarantee the obligations of TAOG under the Tao Senior Credit Agreement, (ii) to establish and grant a security interest in a reserve account that initially held a deposit of approximately $9,800 and (iii) with a covenant to maintain a minimum liquidity requirement of no less than $75,000 at all times. The balance held in the reserve account was approximately $4,800 as of June 30, 2021. As of June 30, 2021, TAOG, TAOIH and the restricted subsidiaries were in compliance with the covenants of the Tao Senior Credit Agreement.
If recovery from the pandemic takes longer than currently estimated, Tao Group Hospitality will likely need to seek covenant waivers in the future. Tao Group Hospitality’s failure to obtain covenant waivers could trigger a violation of these covenants and lead to default, acceleration of all of its outstanding debt and a demand for payment under the guarantee of MSG Entertainment Group, which would negatively impact the liquidity of Tao Group Hospitality and the Company.
On May 23, 2019, MSG Entertainment Holdings LLC, a subsidiary of the Company, and Tao Group Sub Holdings LLC, a subsidiary of Tao Group Hospitality, entered into a Credit Agreement providing for a credit facility of $49,000 that matures on August 22, 2024 (the “Tao Subordinated Credit Agreement”). On June 15, 2020, the Tao Subordinated Credit Agreement was amended to provide an additional $22,000 of borrowing capacity. As of June 30, 2021, the outstanding balance under the Tao Subordinated Credit Agreement was $63,000. The balances and interest-related activities pertaining to the Tao Subordinated Credit Agreement have been eliminated in the consolidated and combined financial statements in accordance with ASC Topic 810, Consolidation. During Fiscal Year 2021, Tao Group Hospitality made principal payments of $5,000 under the Tao Senior Credit Agreement.
See Note 14 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for additional information such as repayments of $8,250 made in Fiscal Year 2021 and scheduled repayment requirement of $12,750 in Fiscal Year 2022 on the National Properties Term Loan Facility and Tao Senior Secured Credit Facilities.
MSGN Credit Facility
On September 28, 2015, MSGN Holdings, L.P. (“MSGN L.P.”), an indirect wholly-owned subsidiary of MSG Networks, MSGN Eden, LLC, an indirect subsidiary of MSG Networks and the general partner of MSGN L.P., Regional MSGN Holdings LLC, a direct subsidiary of MSG Networks and the limited partner of MSGN L.P. (collectively with MSGN Eden, LLC, the “Holdings Entities”), and certain subsidiaries of MSGN L.P. entered into a credit agreement (the “Former Credit Agreement”) with a syndicate of lenders.
MSGN L.P., the Holdings Entities and certain subsidiaries of MSGN L.P. amended and restated the Former Credit Agreement effective October 11, 2019 (the “MSGN Credit Agreement”). The MSGN Credit Agreement provides MSGN L.P. with senior secured credit facilities consisting of: (i) an initial $1,100,000 term loan facility (the “MSGN Term Loan Facility”) and (ii) a $250,000 revolving credit facility (the “MSGN Revolving Credit Facility”), each with a term of five years.
MSG Networks has made principal repayments aggregating to $52,250 through June 30, 2021 under the MSGN Credit Agreement. The MSGN Term Loan Facility amortized quarterly in accordance with its terms. As of June 30, 2021, there was
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$1,047,750 outstanding under the MSGN Term Loan Facility, and no borrowings under the MSGN Revolving Credit Facility. As of June 30, 2021, the Holdings Entities and MSGN L.P. and its restricted subsidiaries on a consolidated basis were in compliance with the financial covenants of the MSGN Credit Agreement. The scheduled repayment for Fiscal Year 2022 is $49,500.
Letters of Credit
The Company uses letters of credit to support its business operations. As of June 30, 2021, the Company had a total of $4,226 of letters of credit outstanding, which included two outstanding letters of credit for an aggregate of $750 issued under the Tao Revolving Credit Facility.
Cash Flow Discussion
As of June 30, 2021, cash, cash equivalents and restricted cash totaled $1,191,744, as compared to $924,304 as of June 30, 2020 and $1,092,065 as of June 30, 2019. The following table summarizes the Company’s cash flow activities for the years ended June 30, 2021 and 2020:
Years Ended June 30,
2021 2020
Net loss $ (430,450) $ (14,687)
Adjustments to reconcile net loss to net cash provided by operating activities 132,793  122,357 
Subtotal $ (297,657) $ 107,670 
Changes in working capital assets and liabilities 8,177  (11,639)
Net cash provided by (used in) operating activities $ (289,480) $ 96,031 
Net cash used in investing activities (84,440) (389,657)
Net cash provided by financing activities 633,333  122,938 
Effect of exchange rates on cash, cash equivalents and restricted cash 8,027  2,927 
Net increase (decrease) in cash, cash equivalents and restricted cash $ 267,440  $ (167,761)
Operating Activities
Net cash used in operating activities for Fiscal Year 2021 increased by $385,511 to $289,480 as compared to the prior year primarily due to a higher operating loss in the current year and changes in working capital assets and liabilities, which included higher collections due to promoters, partially offset by lower cash receipts from collections of accounts receivables and payments for certain prepaid insurance.
Investing Activities
Net cash used in investing activities for Fiscal Year 2021 decreased by $305,217 to $84,440 as compared to the prior year primarily due to the absence of cash used to purchase short-term investments in the prior year period, as well as higher proceeds from the maturity of short-term investments in the current year.
Financing Activities
Net cash provided by financing activities for Fiscal Year 2021 increased by $510,395 to $633,333 as compared to the prior year due to the proceeds received in the current year from (i) the National Properties Term Loan Facility, (ii) a cash contribution received from non-controlling interest owner from the Hakkasan acquisition in April 2021, and (iii) borrowings under the Tao Revolving Credit Facility, partially offset by the absence of net transfers from MSG Sports and its subsidiaries prior to the Entertainment Distribution.

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Contractual Obligations
As of June 30, 2021, the approximate future payments under our contractual obligations of the type described in the table below are as follows:
  Payments Due by Period
  Total     Year    
1 		Years    
2-3 		Years    
4-5 		More Than
5 Years
Leases (a)
$ 410,377  $ 71,346  $ 124,559  $ 63,999  $ 150,473 
Debt repayments (b)
691,137  12,750  51,137  627,250  — 
Other (c) (d)
120,425  120,132  236  57  — 
$ 1,221,939  $ 204,228  $ 175,932  $ 691,306  $ 150,473 
_________________
(a)Includes contractually obligated minimum lease payments for operating leases having an initial noncancelable term in excess of one year for the Company’s venues, including the Tao Group Hospitality venues and various corporate offices. These commitments are presented exclusive of the imputed interest used to reflect the payment’s present value. See Note 10 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for more information. Lease liabilities as of June 30, 2021 above did not include $293,458 of lease payments, of which $1,125 is expected to be due in Fiscal Year 2022, for additional lease obligations related to the amendment and extension of the Radio City Music Hall lease agreement in July 2021 and a new lease in Burbank, California for premises that the Company has not taken possession of yet.
(b)See Note 14 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for more information surrounding the principal repayments required under the Tao Senior Secured Credit Facilities and a note with respect to a $637 loan received by BCE from its noncontrolling interest holder that is due in April 2023.
(c)Includes accrued expense of approximately $98,000 associated with the development and construction of MSG Sphere in Las Vegas, all due within Fiscal Year 2022.
(d)Pension obligations have been excluded from the table above as the timing of the future cash payments is uncertain. See Note 14 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for more information on the future funding requirements under our pension obligations.
Tao Group Hospitality equityholders have the right to put their equity interests in Tao Group Hospitality to a subsidiary of the Company. The purchase price is at fair market value subject, in certain cases, to a floor. Consideration paid upon the exercise of such put right shall be, at the Company’s option, in cash, debt, or our Class A Common Stock, subject to certain limitations. In addition, Hakkasan USA, Inc., a minority interest holder in Tao Group Sub-Holdings LLC, a subsidiary of Tao Group Hospitality, following the Hakkasan acquisition, has the right to put its equity interest in Tao Group Sub-Holdings LLC to Tao Group Hospitality for fair market value (subject to a floor value determined based upon a multiple of trailing EBITDA) beginning in 2026 and each second year thereafter by providing notice during a 30 day window starting June 1, 2025 (and each second June 1 thereafter). Consideration paid upon exercise of the put right shall be, at the option of Tao Group Hospitality, in cash, debt, or stock of the Company or its successor, subject to certain limitations. Additionally, Tao Group Hospitality may elect to satisfy this put obligation through a sale of Tao Group Sub-Holdings LLC or a going public transaction with respect to Tao Group Sub-Holdings LLC.
Off Balance Sheet Arrangements
The Company’s off balance sheet arrangements primarily include (i) commitments of approximately $1,025,000 related to MSG Sphere in Las Vegas, for which the timing of future cash payments is uncertain and may change as the development and construction progresses, (ii) $60,310 of commitments for capital expenditures, equipment purchases, and services agreements, of which, approximately $46,777 will incur in Fiscal Year 2022, and (iii) letters of credit of $4,226 obtained by the Company as collateral for lease agreements of the Company and Tao Group Hospitality.
In addition, the Company and a subsidiary of the Las Vegas Sands Corp. entered into a 50-year ground lease in Las Vegas pursuant to which the Company has agreed to construct a large-scale venue.  Under the ground lease agreement, Sands will receive priority access to purchase tickets to events at the venue for inclusion in hotel packages or other uses, as well as certain rent-free use of the venue to support its Expo Convention Center business. The ground lease has no fixed rent, however, if certain return objectives are achieved, Sands will receive 25% of the after-tax cash flow in excess of such objectives. See “Part I — Item 1. Business — Our Business — Our Performance Venues — MSG Sphere.”
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Seasonality of Our Business
The dependence on revenues from the Christmas Spectacular generally means the Company’s Entertainment segment earns a disproportionate share of its revenues and operating income in the second quarter of the Company’s fiscal year. As a result of COVID-19, the Company canceled the 2020 production of the Christmas Spectacular, and accordingly, such seasonality is not indicative for Fiscal Year 2021.
Recently Issued Accounting Pronouncements and Critical Accounting Policies
Recently Issued Accounting Pronouncements
See Note 2 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for discussion of recently issued accounting pronouncements.
Critical Accounting Policies
The preparation of the Company’s consolidated and combined financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Management believes its use of estimates in the consolidated and combined financial statements to be reasonable. The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:
Arrangements with Multiple Performance Obligations
The Company enters into arrangements with multiple performance obligations, such as multi-year sponsorship agreements which may derive revenues for both the Company as well as MSG Sports within a single arrangement. The Company also derives revenue from similar types of arrangements which are entered into by MSG Sports. Payment terms for such arrangements can vary by contract, but payments are generally due in installments throughout the contractual term. The performance obligations included in each sponsorship agreement vary and may include advertising and other benefits such as, but not limited to, signage at The Garden and the Company’s other venues, digital advertising, and event or property specific advertising, as well as non-advertising benefits such as suite licenses and event tickets. To the extent the Company’s multi-year arrangements provide for performance obligations that are consistent over the multi-year contractual term, such performance obligations generally meet the definition of a series as provided for under the accounting guidance. If performance obligations are concluded to meet the definition of a series, the contractual fees for all years during the contract term are aggregated and the related revenue is recognized proportionately as the underlying performance obligations are satisfied.
The timing of revenue recognition for each performance obligation is dependent upon the facts and circumstances surrounding the Company’s satisfaction of its respective performance obligation. The Company allocates the transaction price for such arrangements to each performance obligation within the arrangement based on the estimated relative standalone selling price of the performance obligation. The Company’s process for determining its estimated standalone selling prices involves management’s judgment and considers multiple factors including company specific and market specific factors that may vary depending upon the unique facts and circumstances related to each performance obligation. Key factors considered by the Company in developing an estimated standalone selling price for its performance obligations include, but are not limited to, prices charged for similar performance obligations, the Company’s ongoing pricing strategy and policies, and consideration of pricing of similar performance obligations sold in other arrangements with multiple performance obligations.
The Company may incur costs such as commissions to obtain its multi-year sponsorship agreements. The Company assesses such costs for capitalization on a contract by contract basis. To the extent costs are capitalized, the Company estimates the useful life of the related contract asset which may be the underlying contract term or the estimated customer life depending on the facts and circumstances surrounding the contract. The contract asset is amortized over the estimated useful life.
Impairment of Long-Lived and Indefinite-Lived Assets
The Company elected to adopt ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment in the third quarter of Fiscal Year 2020. ASU No. 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment is now the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.
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The Company’s long-lived and indefinite-lived assets accounted for approximately 63% of the Company’s consolidated total assets as of June 30, 2021 and consisted of the following:

Goodwill $ 77,687 
Indefinite-lived intangible assets 63,801 
Amortizable intangible assets, net of accumulated amortization 171,451 
Property and equipment, net 2,099,347 
Right-of-use lease assets 268,568 
$ 2,680,854 
In assessing the recoverability of the Company’s long-lived and indefinite-lived assets when there is an indicator of potential impairment, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized and also the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. These estimates are subjective in nature and involve significant uncertainties and judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. If these estimates or material related assumptions change in the future, the Company may be required to record impairment charges related to its long-lived and/or indefinite-lived assets.
Goodwill
Goodwill is tested annually for impairment as of August 31st and at any time upon the occurrence of certain events or substantive changes in circumstances. The Company performs its goodwill impairment test at the reporting unit level, which is one level below the operating segment level. As of June 30, 2021, the Company has two operating and reportable segments, Entertainment and Tao Group Hospitality, consistent with the way management makes decisions and allocates resources to the business.
The goodwill balance reported on the Company’s consolidated balance sheet as of June 30, 2021 by reporting unit was as follows:
Entertainment $ 74,309 
Tao Group Hospitality 3,378 
$ 77,687 
The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. If the Company can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would not need to perform a quantitative impairment test for that reporting unit. If the Company cannot support such a conclusion or the Company does not elect to perform the qualitative assessment, the first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The estimates of the fair value of the Company’s reporting units are primarily determined using discounted cash flows, comparable market transactions or other acceptable valuation techniques, including the cost approach. These valuations are based on estimates and assumptions including projected future cash flows, discount rates, cost-based assumptions, determination of appropriate market comparables and the determination of whether a premium or discount should be applied to comparables. Significant judgments inherent in a discounted cash flow analysis include the selection of the appropriate discount rate, the estimate of the amount and timing of projected future cash flows and identification of appropriate continuing growth rate assumptions. The discount rates used in the analysis are intended to reflect the risk inherent in the projected future cash flows. The amount of an impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.
The Company elected to perform the qualitative assessment of impairment for the Company’s Entertainment reporting unit for Fiscal Year 2021 impairment test. These assessments considered factors such as:
•macroeconomic conditions;
•industry and market considerations;
•cost factors;
•overall financial performance of the reporting unit;
•other relevant company-specific factors such as changes in management, strategy or customers; and
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•relevant reporting unit specific events such as changes in the carrying amount of net assets.
During the first quarter of Fiscal Year 2021, the Company performed its most recent annual impairment test of goodwill and determined that there was no impairment of goodwill identified for its Entertainment reporting unit as of the impairment test date. Based on the impairment test, the Company’s Entertainment reporting unit had a sufficient safety margin, representing the excess of the estimated fair value of the reporting unit, derived from the most recent quantitative assessment, less its carrying value (including goodwill allocated to the reporting unit). The Company believes that if the fair value of the reporting unit exceeds its carrying value by greater than 10%, a sufficient safety margin has been realized.
Amortizable intangible assets and other long-lived assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are independent from cash flows from other assets and liabilities. In determining whether an impairment of long-lived assets has occurred, the Company considers both qualitative and quantitative factors. The quantitative analysis involves estimating the undiscounted future cash flows directly related to that asset group and comparing the resulting value against the carrying value of the asset group. If the carrying value of the asset group is greater than the sum of the undiscounted future cash flows, an impairment loss is recognized for the difference between the carrying value of the asset group and its estimated fair value.
For the interim impairment test, the Company estimated the fair value of the Tao Group Hospitality reporting unit based on a discounted cash flow model (income approach). This approach relied on numerous assumptions and judgments that were subject to various risks and uncertainties. Principal assumptions utilized, all of which are considered Level III inputs under the fair value hierarchy (see Note 11 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K), include the Company’s estimates of future revenue and terminal growth rates, margin assumptions and the discount rate applied to estimate future cash flows. The assumptions utilized were subject to a high degree of judgment and complexity, particularly in light of economic and operational uncertainty that existed as a result of the COVID-19 pandemic.
Based upon the results of the Company’s interim quantitative impairment test, the Company concluded that the carrying value of the Tao Group Hospitality reporting unit exceeded its estimated fair value as of the interim testing date. Based on the evaluation of amortizable intangible assets and other long-lived assets performed as of the interim testing date, as well as evaluation of subsequent activity in the fourth quarter of Fiscal Year 2020, the Company recorded non-cash impairment charges of $8,047 $5,646, and $3,541, for property and equipment assets, right-of-use assets net of related lease liabilities, and a tradename, respectively, which were associated with two venues within the Tao Group Hospitality reportable segment. In addition, the Company recorded a non-cash goodwill impairment charge of $88,583 for the Tao Group Hospitality reportable segment. The goodwill impairment charge was calculated as the amount that the adjusted carrying value of the reporting unit, including any goodwill, exceeded its fair value as of the interim testing date. See “Part I — Item 1A. Risk Factors — General Risk Factors — Our Operations and Operating Results Have Been, and Continue to be, Materially Impacted by the COVID-19 Pandemic and Actions Taken in Response by Governmental Authorities and Certain Professional Sports Leagues” for more information about the risks to the Company’s business operations as a result of the COVID-19 pandemic.
Identifiable Indefinite-Lived Intangible Assets
Identifiable indefinite-lived intangible assets are tested annually for impairment as of August 31st and at any time upon the occurrence of certain events or substantive changes in circumstances. The following table sets forth the amount of identifiable indefinite-lived intangible assets reported in the Company’s consolidated balance sheet as of June 30, 2021: 
Trademarks $ 61,881 
Photographic related rights 1,920 
$ 63,801 
The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. In the qualitative assessment, the Company must evaluate the totality of qualitative factors, including any recent fair value measurements, that impact whether an indefinite-lived intangible asset other than goodwill has a carrying amount that more likely than not exceeds its fair value. The Company must proceed to conducting a quantitative analysis, if the Company (i) determines that such an impairment is more likely than not to exist, or (ii) forgoes the qualitative assessment entirely. Under the quantitative assessment, the impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. For all periods presented, the Company elected to perform the qualitative assessment of impairment for the photographic related rights and the trademarks. These assessments considered the events and circumstances that could affect the significant inputs used to determine the fair value of the intangible asset. Examples of such events and circumstances include:
•cost factors;
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•financial performance;
•legal, regulatory, contractual, business or other factors;
•other relevant company-specific factors such as changes in management, strategy or customers;
•industry and market considerations; and
•macroeconomic conditions.
The Company performed its most recent annual impairment test of identifiable indefinite-lived intangible assets during the first quarter of Fiscal Year 2021, and there were no impairments identified. Based on these impairment tests, the Company’s indefinite-lived intangible assets had sufficient safety margins, representing the excess of each identifiable indefinite-lived intangible asset’s estimated fair value over its respective carrying value. The Company believes that if the fair value of an indefinite-lived intangible asset exceeds its carrying value by greater than 10%, a sufficient safety margin has been realized.
Other Long-Lived Assets
For other long-lived assets, including right-of-use lease assets and intangible assets that are amortized, the Company evaluates assets for recoverability when there is an indication of potential impairment. If the undiscounted cash flows from a group of assets being evaluated is less than the carrying value of that group of assets, the fair value of the asset group is determined and the carrying value of the asset group is written down to fair value.
The estimated useful lives and net carrying values of the Company’s intangible assets subject to amortization as of June 30, 2021 are as follows:
Estimated
Useful Lives 		Net Carrying
Value
Trade names 2 years to 25 years $ 95,395 
Venue management contracts 5.67 years to 20 years 68,182 
Non-compete agreements 5.75 years 2,087 
Festival rights 15 years 5,384 
Other intangibles 15 years 403 
$ 171,451 
The Company has recognized intangible assets for trade names, venue management contracts, favorable lease assets, non-compete agreements, festival rights and other intangibles as a result of purchase accounting. The Company has determined that these intangible assets have finite lives.
The useful lives of the Company’s long-lived assets are based on estimates of the period over which the Company expects the assets to be of economic benefit to the Company. In estimating the useful lives, the Company considers factors such as, but not limited to, risk of obsolescence, anticipated use, plans of the Company, and applicable laws and permit requirements. In light of these facts and circumstances, the Company has determined that its estimated useful lives are appropriate.
Leases
The Company accounts for leases, in which it is the lessee, as either finance leases or operating leases. Leases with a term exceeding twelve months are recorded on the balance sheet, including those leases classified as operating leases under previous accounting guidance, through the recognition of right-of-use assets and corresponding lease liabilities.
Upon adoption of the initial lease standard, the Company applied a package of practical expedients intended to ease transition for existing leases by not requiring the Company to reassess (i) its initial lease classification conclusions for existing or expired leases, (ii) whether an existing or expired contract is a lease or contains an embedded lease, and (iii) the capitalization of initial direct costs for existing or expired leases. In addition, the Company elected not to use “hindsight” in accordance with ASC Subtopic 842-10-65-1-(g) in assessing lease terms and impairment of right-of-use (“ROU”) assets for existing or expired leases under the new standard.
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Defined Benefit Pension Plans and Other Postretirement Benefit Plan
The Company utilizes actuarial methods to calculate pension and other postretirement benefit obligations and the related net periodic benefit cost which are based on actuarial assumptions. Key assumptions, the discount rates and the expected long-term rate of return on plan assets, are important elements of the plans’ expense and liability measurement and we evaluate these key assumptions annually. Other assumptions include demographic factors, such as mortality, retirement age and turnover. The actuarial assumptions used by the Company may differ materially from actual results due to various factors, including, but not limited to, changing economic and market conditions. Differences between actual and expected occurrences could significantly impact the actual amount of net periodic benefit cost and the benefit obligation recorded by the Company. Material changes in the costs of the plans may occur in the future due to changes in these assumptions, changes in the number of the plan participants, changes in the level of benefits provided, changes in asset levels and changes in legislation. Our assumptions reflect our historical experience and our best estimate regarding future expectations.
Accumulated and projected benefit obligations reflect the present value of future cash payments for benefits. We use the Willis Towers Watson U.S. Rate Link: 40-90 Discount Rate Model (which is developed by examining the yields on selected highly rated corporate bonds) to discount these benefit payments on a plan by plan basis, to select a rate at which we believe each plan’s benefits could be effectively settled. Additionally, the Company measures service and interest costs by applying the specific spot rates along that yield curve to the plans’ liability cash flows (“Spot Rate Approach”). The Company believes the Spot Rate Approach provides a more accurate measurement of service and interest costs by improving the correlation between projected benefit cash flows and their corresponding spot rates on the yield curve.
Lower discount rates increase the present value of benefit obligations and will usually increase the subsequent year’s net periodic benefit cost. The weighted-average discount rates used to determine benefit obligations as of June 30, 2021 for the Company’s Pension Plans and Postretirement Plan were 2.87% and 2.17%, respectively. A 25 basis point decrease in each of these assumed discount rates would increase the projected benefit obligations for the Company’s Pension Plans and Postretirement Plan at June 30, 2021 by $5,070 and $50, respectively. The weighted-average discount rates used to determine service cost, interest cost and the projected benefit obligation components of net periodic benefit cost were 3.20%, 1.92% and 2.84%, respectively, for Fiscal Year 2021 for the Company’s Pension Plans. The weighted-average discount rates used to determine service cost, interest cost and the projected benefit obligation components of net periodic benefit cost were 2.15%, 1.23% and 2.09%, respectively, for Fiscal Year 2021 for the Company’s Postretirement Plan. A 25 basis point decrease in these assumed discount rates would increase the total net periodic benefit cost for the Company’s Pension Plans by $20 and would result in no impact to the net periodic benefit cost for the Company’s Postretirement Plan for Fiscal Year 2021.
The expected long-term return on plan assets is based on a periodic review and modeling of the plans’ asset allocation structures over a long-term horizon. Expectations of returns for each asset class are the most important of the assumptions used in the review and modeling, and are based on comprehensive reviews of historical data, forward-looking economic outlook, and economic/financial market theory. The expected long-term rate of return was selected from within the reasonable range of rates determined by (a) historical real returns, net of inflation, for the asset classes covered by the investment policy, and (b) projections of inflation over the long-term period during which benefits are payable to plan participants. The expected long-term rate of return on plan assets for the Company’s funded pension plans was 4.02% for Fiscal Year 2021.
Performance of the capital markets affects the value of assets that are held in trust to satisfy future obligations under the Company’s funded plans. Adverse market performance in the future could result in lower rates of return for these assets than projected by the Company which could increase the Company’s funding requirements related to these plans, as well as negatively affect the Company’s operating results by increasing the net periodic benefit cost. A 25 basis point decrease in the long-term return on pension plan assets assumption would increase net periodic pension benefit cost by $380 for Fiscal Year 2021.
Another important assumption for our Postretirement Plan is healthcare cost trend rates. We developed our estimate of the healthcare cost trend rates through examination of the Company’s claims experience and the results of recent healthcare trend surveys.
Assumptions for healthcare cost trend rates used to determine the net periodic benefit cost and benefit obligation for our Postretirement Plan as of and for Fiscal Year 2021 are as follows:
Net Periodic
Benefit Cost 		Benefit
Obligation
Healthcare cost trend rate assumed for next year 6.50% 6.25%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.00% 5.00%
Year that the rate reaches the ultimate trend rate 2027 2027
GAAP includes mechanisms that serve to limit the volatility in the Company’s earnings that otherwise would result from
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recording changes in the value of plan assets and benefit obligations in our consolidated and combined financial statements in the periods in which those changes occur. For example, while the expected long-term rate of return on the plans’ assets should, over time, approximate the actual long-term returns, differences between the expected and actual returns could occur in any given year. These differences contribute to the deferred actuarial gains or losses, which are then amortized over time.
See Note 15 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for more information on our pension plans and other postretirement benefit plan.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
There were no material changes to the disclosures regarding market risks in connection with our pension and postretirement plans, interest rate risk exposure, and foreign currency exchange rate risk exposure. For sensitivity analysis and other information regarding market risks we face in connection with our Pension Plans and Postretirement Plan, see “— Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recently Issued Accounting Pronouncements and Critical Accounting Policies — Critical Accounting Policies — Defined Benefit Pension Plans and Other Postretirement Benefit Plan,” which information is incorporated by reference herein.
Potential Interest Rate Risk Exposure:
The Company, through its subsidiary MSG National Properties and the consolidation of Tao Group Hospitality, has potential interest rate risk exposure related to borrowings incurred under the Tao Senior Secured Credit Facilities. In addition, MSG Networks had $1,047,750 outstanding as of June 30, 2021 under the MSGN Credit Facility. Changes in interest rates may increase interest expense payments with respect to any borrowings incurred under these credit facilities.
Borrowings under the National Properties Term Loan Facility and Tao Senior Secured Credit Facilities incur interest, depending on election by MSG National Properties and TAOG, at a floating rate based upon LIBOR, the U.S. Federal Funds Rate or the U.S. Prime Rate, plus, in the case of TAOG, an additional spread which is dependent upon the total leverage ratio at the time for Tao Senior Secured Credit Facilities. In addition, borrowings under the MSGN Credit Facility bear interest at a floating rate, which at the option of MSGN L.P. may be either (i) a base rate plus an additional rate ranging from 0.25% to 1.25% per annum (determined based on a total net leverage ratio), or (ii) a Eurodollar rate plus an additional rate ranging from 1.25% to 2.25% per annum (determined based on a total net leverage ratio). Accordingly, the MSGN Credit Facility, the National Properties Term Loan Facility and the Tao Senior Secured Credit Facilities are subject to interest rate risk with respect to the tenor of any borrowings incurred. See Note 14 to the consolidated and combined financial statements included in Item 8 of this Annual Report on Form 10-K for more information on the Tao Credit Facilities and National Properties Term Loan Facility. Also see “— Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Financing Agreements — MSGN Credit Facility” for more information. For Fiscal Year 2021, the interest rate on the Tao Senior Secured Credit Facilities ranged from 2.58% to 3.25% and it was approximately 2.60% as of June 30, 2021. The interest rate on National Properties Term Loan Facility was 7.00% and has been unchanged since inception. For Fiscal Year 2021, the interest rate on the MSGN Credit Facility ranged from 1.59% to 1.68% and was approximately 1.60% as of June 30, 2021. The effect of a hypothetical 100 basis point increase in floating interest rate prevailing as of June 30, 2021 and continuing for a full year would increase interest expense of the amount outstanding on the Tao Senior Secured Credit Facilities by approximately $12,966.
Foreign Currency Exchange Rate Exposure:
The Company is exposed to market risk resulting from foreign currency fluctuations, primarily to the British pound sterling through our net investment position initiated with our acquisition of land in London in the second quarter of Fiscal Year 2018 for future MSG Sphere development and through cash and invested funds which will be deployed in the construction of our London venue. We may evaluate and decide, to the extent reasonable and practical, to reduce the translation risk of foreign currency fluctuations by entering into foreign currency forward exchange contracts with financial institutions. If we were to enter into such hedging transactions, the market risk resulting from foreign currency fluctuations is unlikely to be entirely eliminated. We do not plan to enter into derivative financial instrument transactions for foreign currency speculative purposes. During Fiscal Year 2021, the GBP/USD exchange rate ranged from 1.2470 to 1.4218 as compared to GBP/USD exchange rate of 1.3836 as of June 30, 2021, a fluctuation of ranging from 4% to 14%. As of June 30, 2021, a uniform hypothetical 9% fluctuation in the GBP/USD exchange rate would have resulted in a change of approximately $16,157 in the Company’s net asset value.
Item 8. Financial Statements and Supplementary Data
The Financial Statements required by this Item 8 appear beginning on page F-1 of this Annual Report on Form 10-K, and are incorporated by reference herein.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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As previously reported on our Current Report on Form 8-K filed with the SEC on November 24, 2020 (the “prior 8-K”), on November 18, 2020, we dismissed our former independent registered public accounting firm and appointed Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2021. For more information, please refer to the prior 8-K.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2021 the Company’s disclosure controls and procedures were effective.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In conducting the Company’s assessment of the effectiveness of its internal control over financial reporting, management elected to exclude the operations of Hakkasan within the Tao Group Hospitality segment, which was acquired by Tao Group Hospitality in the fourth quarter of Fiscal Year 2021. Hakkasan represented $165.5 million of the consolidated total assets as of June 30, 2021 (including $47.2 million of related intangibles and $3.4 million of goodwill which were included within the scope of the assessment) and $27.6 million of the consolidated total revenues for Fiscal Year 2021. Based on the results of this evaluation, our management concluded that our internal control over financial reporting was effective as of June 30, 2021. The effectiveness of our internal control over financial reporting as of June 30, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information
On August 18, 2021, Andrew Lustgarten, President of the Company, entered into certain amended and restated aircraft time sharing agreements (the “Time Sharing Agreements”) pursuant to which Mr. Lustgarten may lease various Company-owned or leased aircraft for limited personal use. For any flight taken under the Time Sharing Agreements, Mr. Lustgarten will pay for the actual expenses of the flight as listed in the applicable agreement, but not to exceed the maximum amount permitted under Federal Aviation Administration rules.
The above description of the Time Sharing Agreements are qualified in their entirety by reference to those agreements which are attached hereto as Exhibit 10.54, Exhibit 10.55, Exhibit 10.56 and Exhibit 10.57, respectively, and are incorporated into this Item 9B by reference.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information relating to our directors, executive officers and corporate governance will be included in the proxy statement for the 2021 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference.
Item 11. Executive Compensation
Information relating to executive compensation will be included in the proxy statement for the 2021 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information relating to the beneficial ownership of our common stock will be included in the proxy statement for the 2021 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information relating to certain relationships and related transactions and director independence will be included in the proxy statement for the 2021 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
Information relating to principal accountant fees and services will be included in the proxy statement for the 2021 annual meeting of the Company’s stockholders, which is expected to be filed within 120 days of our fiscal year end, and is incorporated herein by reference.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
Page
No.
The following documents are filed as part of this report:
1.
The financial statements as indicated in the index set forth on page
F- 1
2. Financial statement schedule:
Schedule supporting consolidated and combined financial statements:
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Schedules other than that listed above have been omitted, since they are either not applicable, not required or the information is included elsewhere herein.
3. Exhibits:
The following documents are filed as exhibits hereto:
EXHIBIT NO. DESCRIPTION
2.1
2.2
2.3
3.1
3.2
4.1
4.2
4.3
4.4
4.5
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EXHIBIT NO. DESCRIPTION
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EXHIBIT NO. DESCRIPTION
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EXHIBIT NO. DESCRIPTION
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EXHIBIT NO. DESCRIPTION
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EXHIBIT NO. DESCRIPTION
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EXHIBIT NO. DESCRIPTION
101 The following materials from Madison Square Garden Entertainment Corp. Annual Report on Form 10-K for the year ended June 30, 2021, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) consolidated balance sheets, (ii) consolidated and combined statements of operations, (iii) consolidated and combined statements of comprehensive income (loss), (iv) consolidated and combined statements of cash flows, (v) consolidated and combined statements of equity and redeemable noncontrolling interests, and (vi) notes to consolidated and combined financial statements.
104 The cover page form the Company’s Annual Report on Form 10-K for the year ended June 30, 2021 formatted in Inline XBRL and contained in Exhibit 101.
_________________
†    This exhibit is a management contract or a compensatory plan or arrangement.
+    Certain confidential information - identified by bracketed asterisks “[*****]” - has been omitted from this exhibit pursuant to Item 601(b)(10) of Regulation S-K because it is both (i) not material and (ii) would be competitively harmful to the Registrant if publicly disclosed.
Item 16. Form 10-K Summary
The Company has elected not to provide summary information.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
(Additions) / Deductions
Balance at
Beginning
of Period 		Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at
End of
Period
Year ended June 30, 2021
Allowance for doubtful accounts / credit losses $ (9,135) $ (468) $ — 

$ 4,026  $ (5,577)
(a)
Deferred tax valuation allowance (34,646) (123,011) (3,929) —  (161,586)
$ (43,781) $ (123,479) $ (3,929) $ 4,026  $ (167,163)
Year ended June 30, 2020
Allowance for doubtful accounts / credit losses $ (1,814) $ (9,945) $ —  $ 2,624  $ (9,135)
Deferred tax valuation allowance (117,679) 13,352  69,681 
(b)
—  (34,646)
$ (119,493) $ 3,407  $ 69,681  $ 2,624  $ (43,781)
Year ended June 30, 2019
Allowance for doubtful accounts / credit losses $ (777) $ (1,456) $ —  $ 419  $ (1,814)
Deferred tax valuation allowance (131,104) (375) 13,800  —  (117,679)
$ (131,881) $ (1,831) $ 13,800  $ 419  $ (119,493)
_________________
(a)Allowance for credit losses as of June 30, 2021 did not include balances associated with the acquisition of Hakkasan in April 2021 in accordance with ASC 805-20-30-4.
(b)Prior to the Entertainment Distribution, the Company’s collections for ticket sales, sponsorships and suite rentals in advance were recorded as deferred revenue and were recognized as revenues when earned for both accounting and tax purposes. The tax recognition on most of these deferred revenues was accelerated to the date of the Entertainment Distribution and is the responsibility of MSG Sports. The Company will not reimburse MSG Sports for such taxes. At the time of the Entertainment Distribution, the Company recorded a deferred tax asset of $57,230 and a corresponding valuation allowance of $57,230 with regard to the deferred revenue acceleration for income tax purposes.
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SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 23rd day of August 2021.
Madison Square Garden Entertainment Corp.
By: /s/    MARK H. FITZPATRICK
Name: Mark H. FitzPatrick
Title: Executive Vice President and Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Andrew Lustgarten, Mark H. FitzPatrick, and Scott S. Packman, and each of them, as such person’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person in such person’s name, place and stead, in any and all capacities, to sign this report, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons in the capacities and on the dates indicated.
Name Title Date
/s/ JAMES L. DOLAN Executive Chairman and Chief Executive Officer
 (Principal Executive Officer) and Director 		August 23, 2021
James L. Dolan
/s/ MARK H. FITZPATRICK
Executive Vice President and
Chief Financial Officer (Principal Financial Officer) 		August 23, 2021
Mark H. FitzPatrick
/s/ JOSEPH F. YOSPE
Senior Vice President, Controller and
Principal Accounting Officer 		August 23, 2021
Joseph F. Yospe
/s/ MARTIN BANDIER
Director August 23, 2021
Martin Bandier
/s/ MATTHEW C. BLANK Director August 23, 2021
Matthew C. Blank
/s/ CHARLES F. DOLAN
Director August 23, 2021
Charles F. Dolan
/s/ CHARLES P. DOLAN
Director August 23, 2021
Charles P. Dolan
/s/ KRISTIN A. DOLAN
Director August 23, 2021
Kristin A. Dolan
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Name Title Date
/s/ MARIANNE DOLAN WEBER
Director August 23, 2021
Marianne Dolan Weber
/s/ PAUL J. DOLAN Director August 23, 2021
Paul J. Dolan
/s/ QUENTIN F. DOLAN Director August 23, 2021
Quentin F. Dolan
/s/ RYAN T. DOLAN Director August 23, 2021
Ryan T. Dolan
/s/ THOMAS C. DOLAN
Director August 23, 2021
Thomas C. Dolan
/s/ JOSEPH J. LHOTA
Director August 23, 2021
Joseph J. Lhota
/s/ JOEL M. LITVIN
Director August 23, 2021
Joel M. Litvin
/s/ FREDERIC V. SALERNO
Director August 23, 2021
Frederic V. Salerno
/s/ BRIAN G. SWEENEY Director August 23, 2021
Brian G. Sweeney
/s/ JOHN L. SKYES
Director August 23, 2021
John L. Sykes
/s/ VINCENT TESE Director August 23, 2021
Vincent Tese
/s/ ISIAH L. THOMAS III
Director August 23, 2021
Isiah L. Thomas III

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INDEX TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
  Page  
F- 2
F- 7
F- 9
F- 10
F- 11
F- 13
F- 16
F - 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of Madison Square Garden Entertainment Corp.:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Madison Square Garden Entertainment Corp. and its subsidiaries (the “Company”) as of June 30, 2021, the related consolidated statements of operations, comprehensive loss, cash flows, and stockholders’ equity and redeemable noncontrolling interests for the year ended June 30, 2021, and the related notes and the financial statement Schedule II listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021, and the results of its operations and its cash flows for the year ended June 30, 2021, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 23, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Related Party Transactions — Refer to Note 20 to the financial statements
Critical Audit Matter Description
The Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the Dolan Family Group), as of June 30, 2021, is the majority beneficial owner of the Company, Madison Square Garden Sports Corp., MSG Networks Inc., AMC Networks Inc., and other related entities. In addition, there are certain overlapping directors and executive officers between the companies. Each of these entities has been identified as a related party at June 30, 2021. The Company has entered into a number of transactions with related parties, including, but not limited to agreements for use of the Madison Square Garden Arena, sponsorship, and advertising sales and service representation, team sponsorship allocation agreements, and service agreements, which include certain shared executive support costs for the Company’s Executive Chairman and Chief Executive Officer, President, and the Company’s Vice Chairman.
We identified the evaluation of the Company’s identification of related parties and related party transactions as a critical audit matter. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s procedures performed to identify related parties and related party transactions of the Company.
F - 2

How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s identification of related parties and related party transactions included the following, among others:
•We tested the operating effectiveness of internal controls over the Company’s related party process, including controls over the identification of the Company’s related party relationships and transactions, the authorization and approval of transactions with related parties, the allocation of revenues and operating expenses among related parties, and the accounting for and disclosure of relationships and transactions with related parties in the financial statements;
•Inquired with executive officers including the Company’s internal legal counsel, key members of management, and the Audit Committee of the Board of Directors regarding related party transactions;
•Read agreements and contracts with and between related parties and, in certain cases third parties, and evaluated whether authorization and approvals were obtained and the terms and other information about transactions are consistent with explanations from inquiries and other audit evidence obtained about the business purpose of the transactions;
•With the assistance of our data specialists, we analyzed the general ledger detail to identify potential additional transactions with related parties;
•Compared the Company’s reconciliation of applicable accounts to related parties’ records of transactions and balances;
•For new or amended revenue arrangements among related parties, evaluated the reasonableness of management’s allocation of the transaction price to each performance obligation identified in the arrangement;
•Received confirmations from related parties and, in certain cases third parties, and compared responses to the Company’s records;
•Performed the following procedures to identify information related to potential additional transactions between the Company and related parties that may also involve third parties:
◦Read the Company’s minutes from meetings of the Board of Directors and related committees of the Board of Directors;
◦Inspected annual compliance questionnaires completed by the Company’s directors and officers;
◦Read publicly available sources including the Company’s public filings and press releases as well as certain analyst and industry reports; and
◦Listened to or read transcripts of the Company’s quarterly investor relations calls.
Acquisition of Hakkasan Business — Refer to Note 3 to the financial statements
Critical Audit Matter Description
Tao Group Sub-Holdings LLC (“Tao”), a subsidiary of Tao Group Hospitality and an indirect subsidiary of the Company, entered into a Transaction Agreement (the “Transaction Agreement”) on April 27, 2021, pursuant to which Tao Group Sub-Holdings LLC acquired the business (“Hakkasan”) of Hakkasan USA, Inc., a Delaware corporation (“Hakkasan Parent”). Pursuant to the Transaction Agreement, Hakkasan Parent contributed its interest in Hakkasan to Tao Group Sub-Holdings LLC in exchange for approximately 18% of the common equity interests in Tao Group Sub-Holdings LLC. After the closing date, Tao Group Hospitality, which owned all of the issued and outstanding common equity interests in Tao before the closing date, owns approximately 82% of the common equity interests in Tao.
Determining the fair value of the equity of Tao, inclusive of Hakkasan (the “combined entity”), is necessary to derive the allocation of the purchase price for the acquisition, to recognize the assets acquired and liabilities assumed at their fair values on the acquisition date, in applying the purchase method of accounting.
The development of the fair value of the equity of the combined entity is an estimate, requires judgment, and is subjective based on assumptions, the most significant being the combined entity’s revenue projections within its future cash flows, and the discount rate and the long-term growth rate applied within the discounted cash flow model of the combined entity.
F - 3

We identified the fair value of the equity of the combined entity as a critical audit matter because of the significant estimates and management assumptions utilized in projecting revenue within future cash flows and selecting an appropriate discount rate and a long-term growth rate in the valuation of the combined entity. This required a high degree of auditor judgment and an increased extent of audit effort, including the need to involve our fair value specialists when performing audit procedures to evaluate the reasonableness of management’s valuation methodology and the selection of inputs to the valuation.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the fair value of the equity of the combined entity, including projections of revenue within future cash flows and the selection of the discount rate and the long-term growth rate included the following, among others:
•We tested the operating effectiveness of internal controls over the valuation of the combined entity, including management’s internal controls over the selection and review of key assumptions used in projected financial information;
•We assessed the reasonableness of management's revenue projections by comparing the projections to historical results and market data;
•We evaluated whether the revenue projections in the valuation were consistent with projections used by the Company through evidence obtained in other areas of the audit;
•With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and key valuation inputs utilized in the analysis including the selected discount rate and the long-term growth rate by:
◦Developing a range of independent estimates of the discount rate and long-term growth rate and comparing those to the rates selected by management;
◦Testing the reasonableness of the valuation inputs against observable market data and generally accepted valuation methodologies; and
◦Testing the mathematical accuracy of the calculations.


/s/ Deloitte & Touche LLP

New York, New York
August 23, 2021
We have served as the Company’s auditor since 2020.
F - 4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Madison Square Garden Entertainment Corp.:
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Madison Square Garden Entertainment Corp. and subsidiaries (the “Company”) as of June 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2021 of the Company, and our report dated August 23, 2021, expressed an unqualified opinion on those consolidated financial statements.
As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Hakkasan USA, Inc., which was acquired on April 27, 2021, and whose financial statements constitute 4% of total assets and 15% of revenues of the consolidated financial statement amounts as of and for the year ended June 30, 2021. Accordingly, our audit did not include the internal control over financial reporting at Hakkasan, USA Inc.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
        
/s/ Deloitte & Touche LLP
New York, New York
August 23, 2021
We have served as the Company's auditor since 2020.
F - 5

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Madison Square Garden Entertainment Corp.:

Opinion on the Consolidated and Combined Financial Statements
We have audited the accompanying consolidated balance sheet of Madison Square Garden Entertainment Corp. and subsidiaries (the “Company”) as of June 30, 2020, the related consolidated and combined statements of operations, comprehensive income (loss), cash flows, and equity and redeemable noncontrolling interests for the year ended June 30, 2020, and the combined statement of operations, comprehensive income (loss), cash flows, and equity and redeemable noncontrolling interests for the year ended June 30, 2019, and the related notes and financial statement schedule II (collectively, the “consolidated and combined financial statements”). In our opinion, the consolidated and combined financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2020, in conformity with U.S. generally accepted accounting principles.
Change in Accounting Principle
As described in Note 2 to the consolidated and combined financial statements, effective July 1, 2019, the Company changed its method of accounting for leases due to the adoption of ASC Topic 842, Leases.
Basis for Opinion
These consolidated and combined financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated and combined financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated and combined financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated and combined financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated and combined financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated and combined financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We served as the Company’s auditor from 2019 to 2020.
New York, New York
August 28, 2020
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Table of Contents

MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
June 30,
2021 2020
ASSETS
Current Assets:
Cash and cash equivalents $ 1,168,760  $ 906,555 
Restricted cash 22,984  17,749 
Short-term investments —  337,192 
Accounts receivable, net 85,955  57,184 
Net related party receivables 36,378  23,062 
Prepaid expenses 60,493  62,127 
Other current assets 37,779  22,633 
Total current assets 1,412,349  1,426,502 
Investments in nonconsolidated affiliates 45,969  52,622 
Property and equipment, net 2,099,347  1,646,115 
Right-of-use lease assets 268,568  220,328 
Amortizable intangible assets, net 171,451  150,426 
Indefinite-lived intangible assets 63,801  63,801 
Goodwill 77,687  74,309 
Other assets 128,169  85,103 
Total assets $ 4,267,341  $ 3,719,206 
See accompanying notes to consolidated and combined financial statements.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands, except per share data)
June 30,
2021 2020
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current Liabilities:
Accounts payable $ 23,933  $ 17,258 
Net related party payables, current 57,616  18,418 
Current portion of long-term debt, net of deferred financing costs 5,728  5,429 
Accrued liabilities:
Employee related costs 68,242  68,837 
Other accrued liabilities 181,636  125,452 
Operating lease liabilities, current 68,544  53,388 
Collections due to promoters 37,877  31,879 
Deferred revenue 209,501  189,308 
Total current liabilities 653,077  509,969 
Long-term debt, net of deferred financing costs 655,093  28,126 
Operating lease liabilities, noncurrent 224,729  174,219 
Defined benefit and other postretirement obligations 28,847  26,132 
Other employee related costs 15,629  15,591 
Collections due to promoters, noncurrent 6,625  — 
Deferred tax liabilities, net 11,972  12,450 
Other liabilities 73,790  78,279 
Total liabilities 1,669,762  844,766 
Commitments and contingencies (see Note 12)
Redeemable noncontrolling interests 137,834  20,600 
Madison Square Garden Entertainment Corp. Stockholders’ Equity:
Class A common stock, par value $0.01, 120,000 shares authorized; 19,618 and 19,493 shares outstanding as of June 30, 2021 and 2020, respectively
196  195 
Class B common stock, par value $0.01, 30,000 shares authorized; 4,530 shares outstanding as of June 30, 2021 and 2020
45  45 
Preferred stock, par value $0.01, 15,000 shares authorized; none outstanding as of June 30, 2021 and 2020
—  — 
Additional paid-in capital 2,744,866  2,751,318 
Retained earnings (accumulated deficit) (270,146) 141,936 
Accumulated other comprehensive loss (27,120) (51,857)
Total Madison Square Garden Entertainment Corp. stockholders’ equity 2,447,841  2,841,637 
Nonredeemable noncontrolling interests 11,904  12,203 
Total equity 2,459,745  2,853,840 
Total liabilities, redeemable noncontrolling interests and equity $ 4,267,341  $ 3,719,206 

See accompanying notes to consolidated and combined financial statements.
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Table of Contents

MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
  Years Ended June 30,
2021 2020 2019
Revenues (a)
$ 180,401  $ 762,936  $ 1,048,909 
Operating expenses:
Direct operating expenses (b)
171,924  508,122  670,641 
Selling, general and administrative expenses (c)
322,714  344,637  314,522 
Depreciation and amortization 114,664  104,899  109,343 
Impairment for intangibles, long-lived assets, and goodwill —  105,817  — 
Gain on disposal of assets held for sale and associated settlements —  (240,783) — 
Restructuring charges 21,299  —  — 
Operating loss (450,200) (59,756) (45,597)
Other income (expense):
Earnings (loss) in equity method investments (6,858) (4,433) 7,062 
Interest income (d)
1,273  17,993  30,163 
Interest expense (35,098) (2,300) (15,262)
Miscellaneous income (expense), net (e)
51,062  38,855  (6,061)
10,379  50,115  15,902 
Loss from operations before income taxes (439,821) (9,641) (29,695)
Income tax benefit (expense) 9,371  (5,046) (443)
Net loss (430,450) (14,687) (30,138)
Less: Net loss attributable to redeemable noncontrolling interests (16,269) (30,387) (7,299)
Less: Net loss attributable to nonredeemable noncontrolling interests (2,099) (1,534) (4,945)
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders $ (412,082) $ 17,234  $ (17,894)
Basic earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders (f)
$ (17.39) $ 0.72  $ (0.75)
Diluted earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders (f)
$ (17.39) $ 0.72  $ (0.75)
Weighted-average number of common shares outstanding:
Basic (f)
24,205  23,998  23,992 
Diluted (f)
24,205  24,017  23,992 
_________________
(a)Includes revenues from related parties of $49,969, $18,408 and $18,259 for the years ended June 30, 2021, 2020 and 2019, respectively.
(b)Includes net charges from (to) related parties of $(9,866), $57,741 and $94,014 for the years ended June 30, 2021, 2020 and 2019, respectively.
(c)Includes net charges to related parties of $(41,935), $(119,389) and $(119,666) for the years ended June 30, 2021, 2020 and 2019, respectively.
(d)Interest income includes interest income from nonconsolidated affiliates of $3,105 for the year ended June 30, 2019.
(e)Miscellaneous income (expense), net includes charges to related parties of $(178) and $(451) for the years ended June 30, 2020 and 2019, respectively.
(f)On April 17, 2020 (the “Entertainment Distribution Date”), 23,992 shares of common stock were distributed to stockholders of Madison Square Garden Sports Corp. (“MSG Sports,” formerly known as The Madison Square Garden Company) as of April 13, 2020. This share amount is being utilized for the calculation of basic and diluted earnings (loss) per share for both the years ended June 30, 2019 and for the period prior to April 17, 2020 in the year ended June 30, 2020 because Madison Square Garden Entertainment Corp. was a wholly-owned subsidiary of MSG Sports. prior to the Entertainment Distribution Date.
See accompanying notes to consolidated and combined financial statements.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
Years Ended June 30,
2021 2020 2019
Net loss $ (430,450) $ (14,687) $ (30,138)
Other comprehensive income (loss), before income taxes:
Pension plans and postretirement plan:
Net unamortized losses arising during the period
$ —  $ (45) $ (2,565)
Amounts reclassified from accumulated other comprehensive loss:
Amortization of net actuarial loss included in net periodic benefit cost
1,191  1,342  1,286 
Amortization of net prior service credit included in net periodic benefit cost
(5,168) —  (7)
Curtailments 156  —  — 
Settlement loss 870  (2,951) 67  1,364  52  (1,234)
Cumulative translation adjustments
27,688  (7,692) (4,341)
Other comprehensive income (loss), before income taxes
24,737  (6,328) (5,575)
Income tax expense related to items of other comprehensive income
—  —  — 
Other comprehensive income (loss), net of income taxes 24,737  (6,328) (5,575)
Comprehensive loss (405,713) (21,015) (35,713)
Less: Comprehensive loss attributable to redeemable noncontrolling interests
(16,269) (30,387) (7,299)
Less: Comprehensive loss attributable to nonredeemable noncontrolling interests
(2,099) (1,534) (4,945)
Comprehensive income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders $ (387,345) $ 10,906  $ (23,469)

See accompanying notes to consolidated and combined financial statements.

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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended June 30,
2021 2020 2019
Cash flows from operating activities:
Net loss $ (430,450) $ (14,687) $ (30,138)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 114,664  104,899  109,343 
Impairment of intangibles, long-lived assets and goodwill —  105,817  — 
Share-based compensation expense 52,917  42,190  35,401 
Amortization of deferred financing costs 4,656  310  1,212 
(Earnings) loss in equity method investments, net of income distributions 6,858  4,433  (6,312)
Benefit from deferred income taxes (480) (10,521) (371)
Unrealized and realized (gain) loss on equity investment with readily determinable fair value
(51,178) (37,628) 3,496 
Provision for doubtful accounts / credit losses 468  9,945  1,456 
Gain on sale of the Forum, excluding associated settlement —  (100,288) — 
Other non-cash adjustments 4,888  3,200  727 
Change in assets and liabilities, net of acquisitions:
Accounts receivable, net (25,032) 15,392  (345)
Net related party receivables 25,882  (20,596) 4,387 
Prepaid expenses and other assets (29,057) (21,816) (11,325)
Accounts payable (5,268) (6,316) (4,311)
Accrued and other liabilities 3,454  51,783  2,790 
Collections due to promoters 12,623  (35,333) (22,301)
Deferred revenue 15,356  52  3,775 
Operating lease right-of-use assets and lease liabilities 10,219  5,195  4,240 
Net cash provided by (used in) operating activities $ (289,480) $ 96,031  $ 91,724 
Cash flows from investing activities:
Capital expenditures, net of acquisitions (452,154) (452,426) (184,002)
Purchase of short-term investments —  (443,154) (112,693)
Proceeds from maturity of short-term investment 339,110  208,204  — 
Proceeds from sale of Forum, excluding associated settlement —  210,521  — 
Proceeds from sale of equity securities 22,079  7,659  — 
Investments in nonconsolidated affiliates —  (1,050) (52,707)
Proceeds from sales of nonconsolidated affiliates —  18,000  125,750 
Loan repayment received from subordinated debt —  58,735  4,765 
Cash received (paid) for notes receivable 6,328  3,378  (9,176)
Other investing activities 197  476  — 
Net cash used in investing activities $ (84,440) $ (389,657) $ (228,063)
See accompanying notes to consolidated and combined financial statements.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Continued)
(in thousands)
Years Ended June 30,
2021 2020 2019
Cash flows from financing activities:
Proceeds from issuance of term loan, net of issuance discount $ 630,500  $ —  $ 40,000 
Proceeds from revolving credit facility 15,000  —  15,000 
Taxes paid in lieu of shares issued for equity-based compensation (6,060) —  — 
Noncontrolling interest holders’ capital contributions 18,537  4,300  6,310 
Distributions to noncontrolling interest holders —  (4,062) (2,186)
Loans from noncontrolling interest holders —  —  606 
Distribution to related parties associated with the settlement of certain share-based awards granted prior to the Entertainment Distribution (1,771) —  — 
Repayment of revolving credit facility —  (15,000) — 
Repayment on long-term debt (8,250) (6,250) (109,312)
Payments for extinguishment of debt —  —  (1,151)
Payments for financing costs (14,623) —  (1,488)
Net transfers from Madison Square Garden Sports Corp. and its subsidiaries —  143,950  43,600 
Net cash provided by (used in) financing activities $ 633,333  $ 122,938  $ (8,621)
Effect of exchange rates on cash, cash equivalents and restricted cash 8,027  2,927  4,669 
Net increase (decrease) in cash, cash equivalents and restricted cash 267,440  (167,761) (140,291)
Cash, cash equivalents and restricted cash at beginning of period 924,304  1,092,065  1,232,356 
Cash, cash equivalents and restricted cash at end of period $ 1,191,744  $ 924,304  $ 1,092,065 
Non-cash investing and financing activities:
Non-cash redemption of redeemable noncontrolling interests $ —  $ 37,715  $ — 
Non-cash (contribution) received from noncontrolling interests (59,763) —  — 
Capital expenditures incurred but not yet paid 106,574  78,508  31,938 
Tenant improvement paid by landlord —  195  14,528 
Share-based compensation capitalized in property and equipment 5,467  5,051  3,946 

See accompanying notes to consolidated and combined financial statements.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY
AND REDEEMABLE NONCONTROLLING INTERESTS
(in thousands)
Common
Stock
Issued 		MSG Sports Corp.’s Investment Additional
Paid-In
Capital 		Retained Earnings (Accumulated Deficit) Accumulated
Other
Comprehensive
Loss
Total Madison Square Garden Entertainment Corp. Stockholders’ Equity
Nonredeemable
Noncontrolling
Interests 		Total Equity Redeemable Noncontrolling Interests
Balance as of June 30, 2018 $ —  $ 2,525,031  $ —  $ —  $ (46,918) $ 2,478,113  $ 11,505  $ 2,489,618  $ 76,684 
Adoption of ASU No. 2016-01 —  (5,570) —  —  5,570  —  —  —  — 
Adoption of ASC 606 —  33,669  —  —  —  33,669  —  33,669  — 
Net loss —  (17,894) —  —  —  (17,894) (4,945) (22,839) (7,299)
Other comprehensive loss —  —  —  —  (5,575) (5,575) —  (5,575) — 
Comprehensive loss —  —  —  —  —  (23,469) (4,945) (28,414) (7,299)
Net increase in Madison Square Garden Sports Corp. Investment —  82,947  —  —  —  82,947  —  82,947  — 
Contributions from noncontrolling interest holders —  —  —  —  —  —  8,446  8,446  — 
Distributions to noncontrolling interest holders —  —  —  —  —  —  (428) (428) (1,758)
Adjustments to noncontrolling interests —  788  —  —  —  788  (788) —  — 
Balance as of June 30, 2019 $ —  $ 2,618,971  $ —  $ —  $ (46,923) $ 2,572,048  $ 13,790  $ 2,585,838  $ 67,627 
See accompanying notes to consolidated and combined financial statements.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY
AND REDEEMABLE NONCONTROLLING INTERESTS (Continued)
(in thousands)
Common
Stock
Issued 		MSG Sports Corp.’s Investment Additional
Paid-In
Capital 		Retained Earnings Accumulated
Other
Comprehensive
Loss
Total Madison Square Garden Entertainment Corp. Stockholders’ Equity
Nonredeemable
Noncontrolling
Interests 		Total Equity Redeemable Noncontrolling Interests
Balance as of June 30, 2019 $ —  $ 2,618,971  $ —  $ —  $ (46,923) $ 2,572,048  $ 13,790  $ 2,585,838  $ 67,627 
Net loss —  (124,702) —  141,936  —  17,234  (1,534) 15,700  (30,387)
Other comprehensive loss —  —  —  —  (6,328) (6,328) —  (6,328) — 
Comprehensive income (loss) —  —  —  —  —  10,906  (1,534) 9,372  (30,387)
Share-based compensation —  —  12,430  —  —  12,430  —  12,430  — 
Accretion of put options —  —  —  —  —  —  —  —  489 
Tax withholding associated with shares issued for equity-based compensation —  —  (165) —  —  (165) —  (165) — 
Net increase in Madison Square Garden Sports Corp. Investment —  178,280  —  —  —  178,280  —  178,280  — 
Redeemable noncontrolling interest adjustment to redemption fair value —  (16,939) (3,647) —  —  (20,586) —  (20,586) 20,586 
Adjustments related to the transfer of certain assets and liabilities as a result of the Entertainment Distribution —  49,615  —  —  1,394  51,009  —  51,009  — 
Conversion of Madison Square Garden Sports Corp. Investment 240  (2,742,940) 2,742,700  —  —  —  —  —  — 
Distributions to noncontrolling interest holders —  —  —  —  —  —  (4,062) (4,062) — 
Noncontrolling interests from acquisition —  37,715  —  —  —  37,715  —  37,715  (37,715)
Contribution from noncontrolling interest holders —  —  —  —  —  —  4,009  4,009  — 
Balance as of June 30, 2020 $ 240  $ —  $ 2,751,318  $ 141,936  $ (51,857) $ 2,841,637  $ 12,203  $ 2,853,840  $ 20,600 
See accompanying notes to consolidated and combined financial statements.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
CONSOLIDATED AND COMBINED STATEMENTS OF EQUITY
AND REDEEMABLE NONCONTROLLING INTERESTS (Continued)
(in thousands)
Common
Stock
Issued 		MSG Sports Corp.’s Investment Additional
Paid-In
Capital 		Retained Earnings (Accumulated Deficit) Accumulated
Other
Comprehensive
Loss
Total Madison Square Garden Entertainment Corp. Stockholders’ Equity
Nonredeemable
Noncontrolling
Interests 		Total Equity Redeemable Noncontrolling Interests
Balance as of June 30, 2020 $ 240  $ —  $ 2,751,318  $ 141,936  $ (51,857) $ 2,841,637  $ 12,203  $ 2,853,840  $ 20,600 
Net loss —  —  —  (412,082) —  (412,082) (2,099) (414,181) (16,269)
Other comprehensive income —  —  —  —  24,737  24,737  —  24,737  — 
Comprehensive loss —  —  —  —  —  (387,345) (2,099) (389,444) (16,269)
Redeemable noncontrolling interests, non-cash acquisition —  —  —  —  —  —  —  —  76,500 
Redeemable noncontrolling interest adjustment to redemption fair value
—  —  (46,425) —  —  (46,425) —  (46,425) 46,425 
Share-based compensation
—  —  56,035  —  —  56,035  —  56,035  — 
Accretion of put options —  —  —  —  —  —  —  —  2,348 
Tax withholding associated with shares issued for equity-based compensation
1  —  (6,061) —  —  (6,060) —  (6,060) — 
Distribution to related parties associated with the settlement of certain share-based awards granted prior to the Entertainment Distribution —  —  (1,273) —  —  (1,273) —  (1,273) (498)
Adjustment of redeemable noncontrolling interest to redemption value —  —  (8,728) —  —  (8,728) —  (8,728) 8,728 
Contributions from noncontrolling interest holders
—  —  —  —  —  —  1,800  1,800  — 
Balance as of June 30, 2021 $ 241  $ —  $ 2,744,866  $ (270,146) $ (27,120) $ 2,447,841  $ 11,904  $ 2,459,745  $ 137,834 
See accompanying notes to consolidated and combined financial statements.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
All amounts included in the following Notes to Consolidated and Combined Financial Statements are presented in thousands, except per share data or as otherwise noted.
Note 1. Description of Business and Basis of Presentation
Description of Business
Madison Square Garden Entertainment Corp. (together with its subsidiaries, the “Company” or “MSG Entertainment”), is a leader in live experiences comprised of iconic venues; marquee entertainment content; popular dining and nightlife offerings; and a premier music festival. Utilizing the Company’s powerful brands and live entertainment expertise, the Company delivers unique experiences that set the standard for excellence and innovation while forging deep connections with diverse and passionate audiences. As of June 30, 2021, the Company was comprised of two reportable segments: Entertainment and Tao Group Hospitality. The Entertainment segment’s portfolio of venues includes: Madison Square Garden (“The Garden”), Hulu Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre in New York City, and The Chicago Theatre in Chicago. Until its sale on May 1, 2020, the Company’s venues also included the Forum in Inglewood, CA, which was sold on May 1, 2020. In addition, the Company is constructing a state-of-the-art venue, MSG Sphere, in Las Vegas and plans to build a second MSG Sphere in London, pending necessary approvals. The Entertainment segment portfolio also includes the original production, the Christmas Spectacular Starring the Radio City Rockettes (“Christmas Spectacular”), as well as Boston Calling Events, LLC (“BCE”), the entertainment production company that owns and operates the Boston Calling Music Festival. Additionally, Tao Group Holdings LLC (“Tao Group Hospitality”), our other reportable segment, which includes the business of Hakkasan (as defined herein) acquired in April 2021, is a hospitality group with globally-recognized entertainment, dining, and nightlife brands, which consists of a collection of 61 hospitality assets including restaurants, bars, lounges, and nightclubs that it owns, manages or licenses. The brand portfolio of Tao Group Hospitality spans five continents and over 22 markets.
The Company conducts a significant portion of its operations at venues that it either owns or operates under long-term leases. The Company owns The Garden and Hulu Theater at Madison Square Garden and The Chicago Theatre and leases Radio City Music Hall and the Beacon Theatre in New York City. In July 2021, the Company extended the term of the lease, previously set to expire in 2023, until August 31, 2038 with an option to renew for an additional ten years by providing two years’ notice prior to expiration. See Note 23 for additional information. Additionally, Tao Group Hospitality operates various restaurants, nightlife and hospitality venues under long-term leases and management contracts in New York, Las Vegas, Los Angeles, Chicago, San Diego, Santa Monica, Miami, Uncasville in Connecticut, Mexico, United Kingdom, Norway, Morocco, Saudi Arabia, Qatar, United Arab Emirates, India, China, Australia, and Singapore.
The Company, formerly named MSG Entertainment Spinco, Inc., was incorporated on November 21, 2019 as a direct, wholly owned subsidiary of Madison Square Garden Sports Corp. (“MSG Sports” or “Former Parent”), formerly known as The Madison Square Garden Company. On March 31, 2020, MSG Sports’ board of directors approved the distribution of all the outstanding common stock of MSG Entertainment to MSG Sports’ stockholders (the “Entertainment Distribution”), which occurred on April 17, 2020 (the “Entertainment Distribution Date”). In the Entertainment Distribution, stockholders of MSG Sports received (a) one share of the Company’s Class A common stock, par value $0.01 per share (“Class A Common Stock”), for every share of MSG Sports Class A common stock, par value $0.01 per share, held of record as of the close of business, New York City time, on April 13, 2020 (the “Record Date”), and (b) one share of the Company’s Class B common stock, par value $0.01 per share (“Class B Common Stock”), for every share of MSG Sports Class B common stock, par value $0.01 per share, held of record as of the close of business, New York City time, on the Record Date.
Following the Entertainment Distribution on April 17, 2020, the Company has two segments (the Entertainment business and the Tao Group Hospitality business) as a result of certain changes in the financial information that is provided to its Chief Operating Decision Maker (“CODM”). Additionally, as part of the Entertainment Distribution, the Company entered into various agreements with MSG Sports as detailed in Note 20.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Merger with MSG Networks Inc.
On July 9, 2021, the Company completed its previously announced acquisition of MSG Networks Inc., a Delaware corporation (“MSG Networks”), pursuant to that certain Agreement and Plan of Merger, dated as of March 25, 2021 (the “Merger Agreement”), among the Company, Broadway Sub Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and MSG Networks. Merger Sub merged with and into MSG Networks (the “Merger”), with MSG Networks surviving and continuing as the surviving corporation in the Merger as a wholly-owned subsidiary of the Company. On July 9, 2021, at the effective time of the Merger (the “Effective Time”), (i) each share of Class A common stock, par value $0.01 per share, of MSG Networks (“MSGN Class A Common Stock”) issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive a number of shares of Class A common stock, par value $0.01 per share, of the Company (“Class A Common Stock”) such that each holder of record of shares of MSGN Class A Common Stock has the right to receive, in the aggregate, a number of shares of Class A Common Stock equal to the total number of shares of MSGN Class A Common Stock held of record immediately prior to the Effective Time multiplied by 0.172, with such product rounded up to the next whole share and (ii) each share of Class B common stock, par value $0.01 per share, of MSG Networks (“MSGN Class B Common Stock” and, together with MSGN Class A Common Stock, “MSGN Common Stock”) issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive a number of shares of Class B common stock, par value $0.01 per share, of the Company (“Class B Common Stock” and, together with Class A Common Stock, “Common Stock”) such that each holder of record of shares of MSGN Class B Common Stock has the right to receive, in the aggregate, a number of shares of Class B Common Stock equal to the total number of shares of MSGN Class B Common Stock held of record immediately prior to the Effective Time multiplied by 0.172, with such product rounded up to the next whole share, in each case except for Excluded Shares (as defined in the Merger Agreement).
Beginning with the fiscal quarter ending September 30, 2021, the Merger will be accounted for as a transaction between entities under common control as the Company and MSG Networks were, prior to the Merger, each controlled by the Dolan Family Group (as defined herein). Upon the closing of the Merger, the net assets of MSG Networks will be combined with those of the Company at their historical carrying amounts and the companies will be presented on a combined basis for all historical periods that the companies were under common control. As this transaction represents a change in reporting entity, the financial statements in future filings will be materially different since they will represent the combined operations of both commonly-controlled entities.
Basis of Presentation
The Company reports on a fiscal year basis ending on June 30th. In these consolidated and combined financial statements, the years ended on June 30, 2021, 2020, and 2019 are referred to as “Fiscal Year 2021,” “Fiscal Year 2020,” and “Fiscal Year 2019,” respectively, and the year ending June 30, 2022 is referred to as “Fiscal Year 2022”.
Subsequent to the Entertainment Distribution, the Company’s financial statements as of June 30, 2021, as of June 30, 2020, for Fiscal Year 2021, and from April 18, 2020 to June 30, 2020 included in Fiscal Year 2020, are presented on a consolidated basis, as the Company became a standalone public company on April 17, 2020. The Company’s combined financial statements as of June 30, 2019 and for Fiscal Year 2019, as well as the financial information from July 1, 2019 through April 17, 2020 that is included in the results of operations for Fiscal Year 2020, were prepared on a standalone basis derived from the consolidated financial statements and accounting records of Former Parent and are presented as carve-out financial statements as the Company was not a standalone public company prior to the Entertainment Distribution. These combined financial statements reflect the combined historical results of operations, financial position and cash flows of Former Parent’s sports and entertainment businesses, as well as its venues and joint ventures (“combined financial statements”), in accordance with U.S. generally accepted accounting principles (“GAAP”) and Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin Topic 1-B, Allocation of Expenses and Related Disclosure in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity. References to GAAP issued by the Financial Accounting Standards Board (“FASB”) in these footnotes are to the FASB Accounting Standards Codification, also referred to as the “Codification” or “ASC.”
Historically, separate financial statements were not prepared for the Company as it had not operated as a stand-alone business separate from MSG Sports. The combined financial statements include certain assets and liabilities that were historically held by MSG Sports or by other MSG Sports subsidiaries but were specifically identifiable or otherwise attributable to the Company. All significant intercompany transactions between MSG Sports and the Company have been included as components of MSG Sports Corp. Investment in the combined financial statements, as they were considered effectively settled upon effectiveness of the Entertainment Distribution. The combined financial statements have been reflected on a historical cost
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

basis. As immediately prior to the Entertainment Distribution, all of the assets and liabilities presented were wholly-owned by MSG Sports and were transferred to the Company at a carry-over basis.
The financial information from July 1, 2019 through April 17, 2020 that is included in the results of operations for Fiscal Year 2020 and the combined statements of operations for Fiscal Year 2019 include allocations for certain support functions that were provided on a centralized basis and not historically recorded at the business unit level by MSG Sports, such as expenses related to executive management, finance, legal, human resources, government affairs, information technology, and venue operations, among others. As part of the Entertainment Distribution, certain corporate and operational support functions were transferred to the Company and therefore, charges were reflected in order to properly burden all business units comprising MSG Sports’ historical operations. These expenses have been allocated to MSG Sports on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of combined revenues, headcount or other measures of the Company or MSG Sports, which are recorded as a reduction of either direct operating expenses or selling, general and administrative expense. In addition, certain of the Company’s contracts with its customers for suite license, sponsorship, and venue signage arrangements contain performance obligations that are fulfilled by both the Company and MSG Sports. Revenue sharing expenses attributable to MSG Sports have primarily been recorded on the basis of specific identification where possible, with the remainder allocated proportionately as a component of direct operating expenses within the combined statements of operations.
Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses, are reasonable. Nevertheless, the combined financial statements may not include all of the actual expenses that would have been incurred by the Company and may not reflect its combined results of operations, financial position, and cash flows had it been a stand-alone company during the periods presented. Actual costs that would have been incurred if the Company had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. The Company is unable to quantify the amounts that it would have recorded during the historical periods on a stand-alone basis as it is not practicable to do so. See Note 21 for more information regarding allocations of certain costs from the Company to MSG Sports.
After the Entertainment Distribution, the Company has been providing certain of these services to MSG Sports through a transition services agreement (“TSA”). As part of the Entertainment Distribution, certain employees providing support functions were transferred to the Company.
MSG Sports uses a centralized approach to cash management and financing of operations. Cash is managed centrally with net earnings reinvested and working capital requirements met from existing liquid funds. The Company’s and MSG Sports’ cash was available for use and was regularly “swept” historically. Most of the cash and cash equivalents held at the corporate level by MSG Sports were attributed to the Company for each of the periods presented, and as such, cash was held in accounts legally owned by the Company. Therefore, such amounts were attributed to the combined balance sheets for each period presented. Transfers of cash both to and from MSG Sports are included as components of the MSG Sports Corp. Investment in the accompanying combined statements of divisional equity and redeemable noncontrolling interests. In connection with the Entertainment Distribution, the Company received $816,896 of cash and cash equivalents from MSG Sports.
MSG Sports’ net investment in the Company has been presented as a component of divisional equity in the combined financial statements. Distributions made by MSG Sports to the Company or to MSG Sports from the Company are recorded as transfers to and from MSG Sports, and the net amount is presented on the combined statements of cash flows as “Net transfers to/from MSG Sports and MSG Sports subsidiaries.”
As of the Entertainment Distribution date, MSG Sports’ net investment in the Company was contributed to Former Parent’s stockholders through the distribution of all the common stock of the Company. The par value of the Company’s stock was recorded as a component of common stock, with the remaining balance recorded as additional paid-in capital in the consolidated and combined balance sheet on the Entertainment Distribution Date.
For purposes of the combined financial statements, income tax expense has been recorded as if the Company filed tax returns on a standalone basis separate from Former Parent. This separate return methodology applies to accounting guidance for income taxes in the combined financial statements as if the Company was a standalone public company for the periods prior to the Entertainment Distribution. Therefore, cash tax payments and items of current and deferred taxes may not be reflective of the Company’s actual tax balances prior to or subsequent to the Entertainment Distribution. Prior to the Entertainment Distribution, the Company's operating results were included in Former Parent’s consolidated U.S. federal and state income tax returns. Pursuant to rules promulgated by the Internal Revenue Service and various state taxing authorities, the Company
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

expects to file its initial U.S. income tax return for the period from April 18, 2020 through June 30, 2020. The calculation of the Company’s income taxes involves considerable judgment and use of both estimates and allocations.
Impact of the COVID-19 Pandemic
The Company’s operations and operating results have been, and continue to be, materially impacted by the COVID-19 pandemic and actions taken in response by governmental authorities and certain professional sports leagues. For the majority of Fiscal Year 2021, substantially all of the Entertainment business operations were suspended and Tao Group Hospitality was operating at significantly reduced capacity and demand. While operations have started to resume, it is not clear when we will fully return to normal operations.
As a result of government-mandated assembly limitations and closures, all of our performance venues were closed beginning in mid-March 2020. Use of The Garden resumed for Knicks and Rangers home games without fans in December 2020 and January 2021, respectively, and, beginning on February 23, 2021, The Garden was permitted to host fans at games at 10% seating capacity with certain safety protocols, such as proof of full vaccination or a negative COVID-19 test and social distancing. Starting April 1, 2021, our other New York performance venues, Hulu Theater at Madison Square Garden, Radio City Music Hall and the Beacon Theatre, were also permitted to reopen at 10% capacity with certain safety protocols. Although live events were permitted at our venues, government-mandated capacity restrictions and other safety requirements made it economically unfeasible to do so for most events at that time. Effective May 19, 2021, all of our New York venues were permitted to host guests at full capacity, subject to certain restrictions, and effective June 2021, The Chicago Theatre was permitted to host events without restrictions. As a result, The Garden hosted three Knicks playoff games with approximately 15,000-16,000 fans in attendance per game during Fiscal Year 2021, and we welcomed the Foo Fighters on June 20, 2021 for the first live event at The Garden with 100% capacity since our venues were shut down in March 2020. In addition, on June 19, 2021, Radio City Music Hall opened its doors for the first time in over a year to host the Tribeca Festival’s closing night film, Untitled: Dave Chappelle Documentary, with 100% capacity. The Beacon Theatre hosted its first ticketed event, at 100% capacity, on June 22, 2021 with the first of two shows from Trey Anastasio, and Hulu Theater at Madison Square Garden hosted its first ticketed event, at 100% capacity, with a boxing/hip-hop event on August 3, 2021. For all events hosted at our New York venues with 100% capacity prior to August 17, 2021, guests were required to provide proof of full vaccination or a negative COVID-19 test, depending on the requirements of that venue and/or preference of the performer. Effective August 17, 2021, all workers and customers in New York City indoor dining, indoor fitness and indoor entertainment facilities are required to show proof of at least one vaccination shot. In addition, effective August 20, 2021, face coverings are required for all individuals in indoor public spaces in Chicago, including our venues. For Fiscal Year 2021, the majority of ticketed events at our venues were postponed or canceled and, while live events are permitted to be held at all of our performance venues as of the date of this filing and we are continuing to host and book new events, due to the lead-time required to book touring acts and artists, which is the majority of our business, we expect that our bookings will continue to be impacted through the 2021 calendar year. We continue to actively pursue one-time or multi-night performances at our venues as the touring market ramps up.
The impact to our operations also included the cancellation of the 2020 production of the Christmas Spectacular and both the 2020 and 2021 Boston Calling Music Festivals. While the 2021 production of the Christmas Spectacular is currently on-sale, the current production is scheduled for 163 shows, as compared with 199 shows for the 2019 production, which was the last production presented prior to the impact of the COVID-19 pandemic.
The Company has long-term arena license agreements (the “Arena License Agreements”) with MSG Sports that require the Knicks and Rangers to play their home games at The Garden.
As discussed above, capacity restrictions, use limitations and social distancing requirements were in place for the entirety of the Knicks and Rangers 2020-21 regular seasons, which materially impacted the payments we received under the Arena License Agreements for Fiscal Year 2021. On July 1, 2021, the Knicks and Rangers began paying the full amounts provided for under their respective Arena License Agreements. The NBA and NHL have each announced that they intend to return to traditional October to April regular season schedule, with full 82-game regular seasons, for the 2021-22 season.
Disruptions caused by the COVID-19 pandemic had a significant and negative impact on Tao Group Hospitality’s operations and financial performance for Fiscal Year 2021. Due to government actions taken in response to the COVID-19 pandemic, virtually all of Tao Group Hospitality’s venues were closed for approximately three months starting in mid-March 2020, and Avenue and Vandal in New York were permanently closed in April 2020 and June 2020, respectively. In addition, Avenue in Los Angeles was permanently closed in May 2021. Throughout Fiscal Year 2021, Tao Group Hospitality conducted limited
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

operations at certain venues, subject to significant regulatory requirements, including capacity limits, curfews and social distancing requirements for outdoor and indoor dining. Tao Group Hospitality’s operations fluctuated throughout Fiscal Year 2021 as certain markets lifted restrictions, imposed restrictions, and changed operational requirements over time. As of June 30, 2021, 51 of Tao Group Hospitality’s venues were open for outdoor dining, limited or full capacity indoor dining (depending on the market), and delivery/takeout (23 legacy Tao Group Hospitality venues and 28 Hakkasan venues acquired in connection with the April 27, 2021 transaction), inclusive of Tao Asian Bistro & Lounge at Mohegan Sun, a new venue that first opened its doors in March 2021, while 10 venues remained closed (five legacy Tao Group Hospitality venues and five Hakkasan venues). Of the 51 Tao Group Hospitality venues currently operating, 29 are U.S.-based and operating without capacity restrictions (21 Tao Group Hospitality legacy venues and eight Hakkasan venues) and 22 are international (two Tao Group Hospitality legacy venues and 20 Hakkasan venues) and operating under various governmental safety protocols such as curfews, capacity limitations and social distancing. Effective August 17, 2021, workers and customers in New York City indoor dining facilities are required to show proof of at least one vaccination shot. In addition, certain U.S. jurisdictions have reinstated safety protocols, such as the mask mandates in Nevada and Chicago, but not otherwise limiting capacity.
MSG Networks depends on the appeal of its live programming to viewing subscribers of its networks and to its advertisers. As a result of the COVID-19 pandemic and league and government actions relating thereto, MSG Networks aired substantially fewer NBA and NHL telecasts during Fiscal Year 2021, as compared with Fiscal Year 2019 (the last full fiscal year not impacted by COVID-19), and consequently experienced a decrease in revenues, including a material decrease in advertising revenue. The absence of live sports games also resulted in a decrease in certain MSG Networks expenses, including rights fees, variable production expenses, and advertising sales commissions.
During Fiscal Year 2021, the COVID-19 pandemic materially impacted our revenues, most significantly because, for the majority of the year, we were not generating revenue from (i) ticketed events at The Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre, (ii) suite licenses, (iii) the 2020 production of the Christmas Spectacular and (iv) the 2021 Boston Calling Music Festival. In addition, we generated substantially reduced revenue in connection with (i) sponsorship and advertising, (ii) payments under the Arena License Agreements, (iii) food and beverage concessions and catering services at Knicks and Rangers games and (iv) non-ticketed events such as the Big East Tournament in March 2021.
Additionally, as a result of operating disruptions due to the COVID-19 pandemic, the Company’s projected cash flows were directly impacted. These disruptions along with the deteriorating macroeconomic conditions and industry/market considerations, were considered a “triggering event” for the Tao Group Hospitality reporting unit during Fiscal Year 2020, which required the Company to assess the carrying value of Tao Group Hospitality’s intangible assets, long-lived assets and goodwill, in that order in accordance with ASC Subtopic 350-30, for impairment. Based on this evaluation, the Company recorded a non-cash goodwill impairment charge of $88,583 during Fiscal Year 2020 for the Tao Group Hospitality reporting unit. In addition, during the year ended June 30, 2020, the Company recorded non-cash impairment charges of $8,047, $5,646, and $3,541, for property and equipment assets, right-of-use assets net of related lease liabilities, and a tradename, respectively, which were associated with two venues within the Company’s Tao Group Hospitality reportable segment. In connection with the COVID-19-related shutdown of its venues, Tao Group Hospitality negotiated rent concessions with landlords for certain of its leased venues. The Company has elected to apply the temporary practical expedient to account for such rent abatement concessions as if they were contemplated as part of the existing venue lease contracts. Accordingly, the Company accounted for such concessions as negative variable lease cost in the amount of the rent abatement concessions received.
There were no indicators of impairment identified by the Company for the Entertainment reporting unit during Fiscal Year 2021 and Fiscal Year 2020. However, the duration and impact of the COVID-19 pandemic may result in additional future impairment charges that management will evaluate as facts and circumstances evolve over time. Refer to Note 11 for further detail.
As a result of the material impact COVID-19 had on our revenues during Fiscal Year 2021, we took several actions to improve our financial flexibility, reduce operating costs and preserve liquidity, including (i) revising our construction schedule for MSG Sphere, with an anticipated opening date of calendar year 2023, (ii) making significant cuts in both venue and corporate headcounts, and (iii) having our wholly-owned subsidiary, MSG National Properties, LLC (“MSG National Properties”) enter into a five-year $650,000 senior secured term loan facility (“National Properties Term Loan Facility”). See Note 14 for further details of National Properties Term Loan Facility.
In August 2020, Tao Group Hospitality entered into an amendment to the Tao Senior Credit Agreement, which suspended certain financial covenants through December 31, 2021 and increased the minimum liquidity requirement. In addition, in
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

connection with the amendment, our wholly owned subsidiary MSG Entertainment Group, LLC (“MSG Entertainment Group”) entered into a guarantee agreement, which also included a minimum liquidity requirement for MSG Entertainment Group. See Note 14 for more information regarding the amendment to the Tao Senior Credit Agreement. Tao Group Hospitality will likely need to seek covenant waivers in the future. Tao Group Hospitality's failure to obtain debt covenant waivers could trigger a violation of these covenants and lead to default, acceleration of all of its outstanding debt and a demand for payment under the guarantee of MSG Entertainment Group, which would negatively impact the liquidity of Tao Group Hospitality and the Company.
Note 2. Summary of Significant Accounting Policies
Principles of Consolidation and Combination
For the periods prior to the Entertainment Distribution, the combined financial statements included assets and liabilities that were historically held at Former Parent’s corporate level but were specifically identifiable or otherwise attributable to the Company. All intercompany transactions between the Company and Former Parent have been included in the combined financial statements as components of MSG Sports Corp.’s investment. All significant intracompany transactions and accounts within the Company’s financial statements have been eliminated. In addition, expenses related to corporate allocations prior to the Entertainment Distribution were considered to be effectively settled in the combined financial statements at the time the transaction was recorded, with the offset recorded against MSG Sports’ investment.
After the Entertainment Distribution, the consolidated financial statements of the Company include the accounts of Madison Square Garden Entertainment Corp. and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.
Business Combinations and Noncontrolling Interests
The acquisition method of accounting for business combinations requires management to use significant estimates and assumptions, including fair value estimates, as of the business combination date and to refine those estimates as necessary during the measurement period (defined as the period, not to exceed one year, in which the Company is allowed to adjust the provisional amounts recognized for a business combination).
Under the acquisition method of accounting, the Company recognizes separately from goodwill the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree, generally at the acquisition date fair value. The Company measures goodwill as of the acquisition date as the excess of consideration transferred, which is also measured at fair value if the consideration is non-cash, over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. Costs that the Company incurs to complete a business combination such as investment banking, legal, and other professional fees are not considered part of consideration and the Company charges these costs to selling, general and administrative expense as they are incurred. In addition, the Company recognizes measurement-period adjustments in the period in which the amount is determined, including the effect on earnings of any amounts the Company would have recorded in previous periods if the accounting had been completed at the acquisition date.
Interests held by third parties in consolidated majority-owned subsidiaries are presented as noncontrolling interests, which represent the noncontrolling stockholders’ interests in the underlying net assets of the Company’s consolidated majority-owned subsidiaries. Noncontrolling interests that are not redeemable are reported in the equity section of the consolidated and combined balance sheets. Noncontrolling interests, where the Company may be required to repurchase the noncontrolling interest under put options or other contractual redemption requirements that are not solely within the Company’s control, are reported in the consolidated and combined balance sheets between liabilities and equity, as redeemable noncontrolling interests.
In addition, the consolidated and combined financial statements of the Company include accounts from Tao Group Hospitality (including the acquisition of Hakkasan in April 2021, see Note 3 for further details) and BCE, in which the Company has controlling voting interests. The Company’s consolidation criteria are based on authoritative accounting guidance for voting interest, controlling interest or variable interest entities. Tao Group Hospitality and BCE are consolidated with the equity owned by other shareholders shown as redeemable or nonredeemable noncontrolling interests in the accompanying combined balance sheets, and the other shareholders’ portion of net earnings (loss) and other comprehensive income (loss) shown as net income (loss) or comprehensive income (loss) attributable to redeemable or nonredeemable noncontrolling interests in the accompanying consolidated and combined statements of operations and consolidated and combined statements of comprehensive income (loss), respectively.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

On January 31, 2017, the Company acquired a controlling interest in Tao Group Hospitality. In accordance with FASB ASC Topic 805, Business Combinations (“ASC Topic 805”), and ASC Topic 810, Consolidation (“ASC Topic 810”) the financial position of Tao Group Hospitality has been consolidated with the Company’s consolidated balance sheets as of June 30, 2021 and 2020.
The Merger with MSG Networks was completed on July 9, 2021. The accounting treatment and details surrounding the Merger are discussed under Note 1.
Use of Estimates
The preparation of the accompanying consolidated and combined financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the provision for credit losses, valuation of investments, goodwill, intangible assets, other long-lived assets, tax accruals and other liabilities. In addition, estimates are used in revenue recognition, income tax expense, performance and share-based compensation, depreciation and amortization, litigation matters and other matters, as well as in the valuation of contingent consideration and noncontrolling interests resulting from business combination transactions. Management believes its use of estimates in the financial statements to be reasonable.
Management evaluates its estimates on an ongoing basis using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and as such these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s financial statements in future periods.
Revenue Recognition
See Note 4 for details of accounting policies related to revenue recognition and other disclosures required under ASC Topic 606, Revenue from Contracts with Customers.
Direct Operating Expenses
Direct operating expenses include, but are not limited to, event costs related to the presentation and production of the Company’s live entertainment and sporting events, revenue sharing expenses associated with signage, sponsorship and suite license fee revenue and in-venue food and beverage sales that are attributable to MSG Sports and venue lease, maintenance, and other operating expenses. In addition, for periods prior to the Entertainment Distribution Date, the direct operating expenses also included revenue sharing expenses associated with the venue-related signage, sponsorship, and suite license fee revenues that are attributable to MSG Sports (See Note 4 for further details) and an allocation of charges for venue usage to MSG Sports for hosting home games of the Knicks and the Rangers at The Garden.
Direct operating expenses for Tao Group Hospitality primarily include the cost of food and beverage sales, nightlife venue entertainment expenses, and costs of venues’ labor and occupancy.
Production Costs for the Company’s Original Productions
The Company defers certain costs of productions such as creative design, scenery, wardrobes, rehearsal and other related costs for the Company’s proprietary shows. Deferred production costs are amortized on a straight-line basis over the course of a production’s performance period using the expected life of a show’s assets. Deferred production costs are subject to recoverability assessments whenever there is an indication of potential impairment. The Company recorded $6,577 and $6,683 of net deferred production costs associated with the Christmas Spectacular within other current assets and other assets in the accompanying consolidated balance sheets as of June 30, 2021 and 2020, respectively.
Allocation of Charges for Venue Usage to MSG Sports
For periods prior to the Entertainment Distribution Date, the Company’s combined financial statements included expenses associated with the ownership, maintenance, and operation of The Garden, which the Company and MSG Sports use in their respective operations. The Knicks and Rangers are the primary recurring occupants of The Garden, playing their home games at The Garden. The number of home games increases if the Knicks and Rangers qualify for the playoffs. Historically, the Company did not charge rent expense to MSG Sports for use of The Garden. However, for purposes of the Company’s
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

combined financial statements, the Company allocated expenses to MSG Sports for the usage of The Garden, which were reported as a reduction of direct operating expense in the accompanying combined statements of operations. This allocation was based on a combination of event count and revenue, which the Company’s management believes is a reasonable allocation methodology. The venue usage charge allocated to MSG Sports was $45,358 for the period of July 1, 2019 to April 17, 2020 in Fiscal Year 2020 and $47,093 in Fiscal Year 2019.
In connection with the Entertainment Distribution, the Company entered into Arena License Agreements with MSG Sports (see Note 10 for further discussion). Fees recognized by the Company under the Arena License Agreements with MSG Sports for use of The Garden are reported as operating lease revenues in accordance with ASC Topic 842, Leases. With The Garden closed by government mandate, the Company did not recognize operating lease revenue under the Arena License Agreements in Fiscal Year 2020. During Fiscal Year 2021, the use of The Garden for Knicks and Rangers home games resumed under the government-mandated capacity restrictions and safety protocols accordingly, the Company recognized $21,345 of revenues under the Arena License Agreements.
Revenue Sharing Expenses
As discussed above, prior to the Entertainment Distribution Date, MSG Sports’ share of the Company’s suites license, venue signage and sponsorship revenue, and in-venue food and beverage sales has been reflected within direct operating expense as revenue sharing expenses, where such amounts were either specifically identified where possible or allocated proportionally.
After the Entertainment Distribution Date, such revenue sharing expenses are determined based on contractual agreements between the Company and MSG Sports, primarily related to suite license, certain internal signage and in-venue food and beverage sales.
Advertising Expenses
Advertising costs are typically charged to expense when incurred, however, advertising for productions and other live entertainment events are generally deferred within interim periods and expensed over the run of the show, but by no later than the end of the fiscal year. Total advertising costs classified in direct operating and selling, general and administrative expenses were $1,008, $10,579 and $13,106 for the years ended June 30, 2021, 2020 and 2019, respectively.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC Topic 740”). The Company’s provision for income taxes is based on current period income, changes in deferred tax assets and liabilities, and changes in estimates with regard to uncertain tax positions. Deferred tax assets are subject to an ongoing assessment of realizability. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow for the realization of its deductible temporary differences. If such estimates and related assumptions change in the future, the Company may be required to record valuation allowances against its deferred tax assets, resulting in additional income tax expense in the Company’s consolidated statements of operations.
Interest and penalties, if any, associated with uncertain tax positions are included in income tax expense.
Share-based Compensation
For periods prior to the Entertainment Distribution Date, the Company’s employees participated in MSG Sports’ share-based compensation plans. Share-based compensation expense has been attributed to the Company based on the awards and terms previously granted to MSG Sports’ employees. For purposes of the combined financial statements, an allocation of share-based compensation expense related to corporate employees was recorded in addition to the expense attributed to the Company’s direct employees. The allocated expense includes both directors and corporate executives of MSG Sports, allocated using a proportional allocation method which management has deemed to be reasonable.
Following the Entertainment Distribution, the Company measures the cost of employee services received in exchange for an award of equity-based instruments based on the grant date fair value of the award. Share-based compensation cost is recognized in earnings over the period during which an employee is required to provide service in exchange for the award, except for restricted stock units granted to non-employee directors which, unless otherwise provided under the applicable award agreement, are fully vested, and are expensed at the grant date.
The Company accounts for forfeitures as they occur, rather than estimating expected forfeitures.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Earnings (Loss) Per Common Share
On the Entertainment Distribution Date, 23,992 shares of the Company’s Class A Common Stock were distributed to MSG Sports’ stockholders as of the Record Date and were outstanding as of April 17, 2020. This share amount was being utilized for the calculation of basic earnings (loss) per common share (“EPS”) for the periods prior to the Entertainment Distribution because the Company was a wholly-owned subsidiary of MSG Sports prior to the Entertainment Distribution Date. In addition, the computation of diluted earnings per share equals the basic earnings (loss) per common share calculation since there was no stock trading information available to compute the dilutive effect of shares issuable under share-based compensation plans needed under the treasury method in accordance with ASC Topic 260, Earnings Per Share.
In connection with the Entertainment Distribution, the Company entered into amended employment agreements with the redeemable noncontrolling interest holders of Tao Group Hospitality in the fourth quarter of Fiscal Year 2020, which provided the noncontrolling interest holders with put rights that could require the Company to purchase the remaining noncontrolling interest. In addition, in accordance with the transaction agreement related to the acquisition of Hakkasan in April 2021, the noncontrolling interest holders of the acquiree are provided with put rights that could require the Company to purchase the remaining noncontrolling interest. Upon the exercise of the put rights by the noncontrolling interest holders, the price to be paid for redeemable noncontrolling interests is the current fair market value of the redeemable noncontrolling interest, subject to a minimum price (“floor”). In accordance with ASC 480, Distinguishing Liabilities From Equity, the Company elected to apply the Equity Classification — Entire Adjustment Method which treats the entire adjustment for the redeemable noncontrolling interests to an amount other than fair value using retained earnings (or additional paid-in capital in absence of retained earnings). The adjustments to retained earnings are not a component of net income attributable to the Company’s common stockholders, rather than the adjustment to the control number (numerator) of the EPS computation. See Note 6 for the adjustment of redeemable noncontrolling interest to redemption value in the computation of earnings per share.
For the periods after the Entertainment Distribution Date, basic EPS attributable to the Company’s common stockholders is based upon net income (loss) attributable to the Company’s common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the effect of the assumed vesting of restricted stock units and exercise of stock options (see Note 16) only in the periods in which such effect would have been dilutive. For the periods when a net loss is reported, the computation of diluted EPS equals the basic EPS calculation since common stock equivalents were antidilutive due to losses from continuing operations.
Cash and Cash Equivalents
The Company considers the balance of its investment in funds that substantially hold highly liquid securities that mature within three months or less from the date the fund purchases these securities to be cash equivalents. The carrying amount of cash and cash equivalents either approximates fair value due to the short-term maturity of these instruments or is at fair value. Checks outstanding in excess of related book balances are included in accounts payable in the accompanying consolidated balance sheets. The Company presents the change in these book cash overdrafts as cash flows from operating activities.
Restricted Cash
The Company’s restricted cash includes cash deposited in escrow accounts. For example, the Company has deposited cash in an interest-bearing escrow account as credit support and collateral to its workers compensation and general liability insurance obligations.
The carrying amount of restricted cash approximates fair value due to the short-term maturity of these instruments. Changes in restricted cash are reflected on the accompanying consolidated and combined statement of cash flows in accordance with ASU No. 2016-18, Statement of Cash Flows (Topic 230), which is included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the Company’s consolidated and combined statements of cash flows.
In addition, the restricted cash balance as of June 30, 2021 included a deposit in a reserve account of approximately $4,800 associated with credit facilities of Tao Group Hospitality. See Note 14 for further details on the amendment to the Tao Senior Credit Agreement in August 2020.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Short-Term Investments
Short-term investments as of June 30, 2020 consisted of investments that (i) had original maturities of greater than three months and (ii) the Company had the ability to convert into cash within one year. The Company classified its short-term investments at the time of purchase as “held-to-maturity” and re-evaluated its classification quarterly based on whether the Company had the intent and ability to hold until maturity. Short-term investments, which were recorded at cost and adjusted for accrued interest, approximate fair value. Cash inflows and outflows related to the sale and purchase of short-term investments are classified as investing activities in the Company’s consolidated and combined statements of cash flows.
Accounts Receivable
Accounts receivable is recorded at net realizable value. The Company maintains an allowance for credit losses to reserve for potentially uncollectible receivables. The allowance for credit losses is estimated based on the Company’s analysis of receivables aging, specific identification of certain receivables that are at risk of not being paid, past collection experience and other factors. The Company’s allowance for credit losses was $5,577 and $9,135 as of June 30, 2021 and 2020, respectively.
Investments in to Nonconsolidated Affiliates and Equity Securities
The Company’s investments in nonconsolidated affiliates are primarily accounted for using the equity method of accounting and are carried at cost, plus or minus the Company’s share of net earnings or losses of the investment, subject to certain other adjustments. The cost of equity method investments includes transaction costs of the acquisition. As required by GAAP, to the extent that there is a basis difference between the cost and the underlying equity in the net assets of an equity investment, companies are required to allocate such differences between tangible and intangible assets. The Company’s share of net earnings or losses of the investment, inclusive of amortization expense for intangible assets associated with the investment, is reflected in equity in earnings (loss) of nonconsolidated affiliates on the Company’s consolidated and combined statements of operations. Dividends received from the investee reduce the carrying amount of the investment. Due to the timing of receiving financial information from its nonconsolidated affiliates, the Company records its share of net earnings or losses of such affiliates on a three-month lag basis, with the exception of the amortization expense of intangible assets which are recorded currently.
In addition to the equity method investments, the Company also has other equity investments with and without readily determinable fair values. The Company measures equity investments without readily determinable fair values at cost, less any impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Changes in observable price are reflected within Miscellaneous income (expense), net in the accompanying consolidated and combined statement of operations. For equity investments with readily determinable fair values, changes in the fair value of those investments are measured monthly and are recorded within Miscellaneous income (expense), net in the accompanying consolidated and combined statement of operations.
Impairment of Investments
The Company reviews its investments at least quarterly to determine whether a decline in fair value below the cost basis is other-than-temporary. The primary factors the Company considers in its determination are the length of time that the fair value of the investment is below the Company’s carrying value; future prospects of the investee; and the Company’s intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. In addition, the Company considers other factors such as general market conditions, industry conditions, and analysts’ ratings. If the decline in fair value is deemed to be other-than-temporary, the cost basis of the investment is written down to fair value and the loss is realized as a component of net income. See Note 8 for further discussion of impairments of investments.
Long-Lived and Indefinite-Lived Assets
The Company’s long-lived and indefinite-lived assets consist of property and equipment, right-of-use assets, goodwill, indefinite-lived intangible assets, and amortizable intangible assets.
Property and equipment is stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets or, with respect to leasehold improvements, amortized over the shorter of the lease term or the asset’s estimated useful life. The useful lives of the Company’s long-lived assets are based on estimates of the period over which the Company expects the assets to be of economic benefit to the Company. In estimating the useful lives, the Company considers factors such as, but not limited to, risk of obsolescence, anticipated use, plans of the Company, and applicable laws and permit requirements. In July 2013, the permit for The Garden was renewed for ten years and these financial statements have been prepared assuming further renewal of that permit.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Identifiable intangible assets with finite useful lives are amortized on a straight-line basis over their respective estimated useful lives. Goodwill and identifiable intangible assets that have indefinite useful lives are not amortized.
Impairment of Long-Lived and Indefinite-Lived Assets
In assessing the recoverability of the Company’s long-lived and indefinite-lived assets, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized as well as the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. These estimates are subjective in nature and involve significant uncertainties and judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. If these estimates or material related assumptions change in the future, the Company may be required to record impairment charges related to its long-lived and/or indefinite-lived assets.
Goodwill is tested annually for impairment as of August 31st and at any time upon the occurrence of certain events or changes in circumstances. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. If the Company can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would not need to perform a quantitative impairment test for that reporting unit. If the Company cannot support such a conclusion or the Company does not elect to perform the qualitative assessment, the first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company generally determines the fair value of a reporting unit using an income approach, such as the discounted cash flow method, or other acceptable valuation techniques, including the cost approach, in instances when it does not perform the qualitative assessment of goodwill. Subsequent to the adoption of ASU No. 2017-04 in the third quarter of Fiscal Year 2020, the amount of an impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value determined in step one, not to exceed the carrying amount of goodwill. Prior to the adoption of ASU No. 2017-04, if the carrying amount of a reporting unit exceeded its fair value, the second step of the goodwill impairment test was performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compared the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeded the implied fair value of that goodwill, an impairment loss was recognized in an amount equal to that excess. The implied fair value of goodwill was determined in the same manner as the amount of goodwill that would be recognized in a business combination. 
The Company performs its goodwill impairment test at the reporting unit level, which is one level below the operating segment level. The Company has two operating and reportable segments, Entertainment and Tao Group Hospitality, consistent with the way management makes decisions and allocates resources to the business. For Fiscal Years 2021 and 2020, the Company had two reporting units for goodwill impairment testing purposes: Entertainment and Tao Group Hospitality. During the first quarter of Fiscal Year 2021, the Company performed its annual impairment test of goodwill and determined that there were no impairments of goodwill identified for any of its reporting units as of the impairment test date. As a result of operating disruptions due to the COVID-19 pandemic beginning in the third quarter of Fiscal Year 2020, the Company’s projected cash flows were directly impacted. These disruptions along with the deteriorating macroeconomic conditions and industry/market considerations, were considered a “triggering event” for the Tao Group Hospitality reporting unit at the end of the third quarter of Fiscal Year 2020, which required the Company to assess the carrying value of Tao Group Hospitality’s intangible assets, long-lived assets and goodwill, in that order, in accordance with ASC Subtopic 350-30, for impairment. Based on this evaluation, the Company recorded a non-cash goodwill impairment charge of $88,583 during Fiscal Year 2020 for the Tao Group Hospitality reporting unit. See Note 11 for more information regarding the changes of the Company’s goodwill.
Identifiable indefinite-lived intangible assets are tested annually for impairment as of August 31st and at any time upon the occurrence of certain events or substantive changes in circumstances. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. In the qualitative assessment, the Company must evaluate the totality of qualitative factors, including any recent fair value measurements, that impact whether an indefinite-lived intangible asset other than goodwill has a carrying amount that more likely than not exceeds its fair value. The Company must proceed to conducting a quantitative analysis if the Company (i) determines that such an impairment is more likely than not to exist, or (ii) foregoes the qualitative assessment entirely. Under the quantitative assessment, the impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, then an impairment loss is recognized in an amount equal to that excess. The Company generally determines the fair value of an indefinite-lived intangible asset using an income approach, such as the relief from royalty method, in instances when it does not perform the qualitative assessment of the intangible asset.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

For other long-lived assets, including property and equipment, right-of-use lease assets and intangible assets that are amortized, the Company evaluates assets for recoverability when there is an indication of potential impairment. If the undiscounted cash flows from a group of assets being evaluated is less than the carrying value of that group of assets, the fair value of the asset group is determined and the carrying value of the asset group is written down to fair value. The Company generally determines the fair value of a finite-lived intangible asset using an income approach, such as the discounted cash flow method. As a result of operating disruptions due to the COVID-19 pandemic, the Company recorded non-cash impairment charges of $8,047, $5,646, and $3,541, for property and equipment assets, right-of-use assets net of related lease liabilities, and certain intangible assets during Fiscal Year 2020, respectively, which were associated with two venues within the Company’s Tao Group Hospitality reportable segment.
Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Contingent Consideration
Some of the Company’s acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future operating targets.
The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, the Company estimates the fair value of contingent earn-out payments as part of the initial purchase price and records the estimated fair value of contingent consideration that the Company expects to pay to the former owners as a liability in “Other accrued liabilities” and “Other liabilities” on the consolidated balance sheets.
The Company measures its contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level III of the fair value hierarchy, which can result in a significantly higher or lower liability with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings as operating expense.
Defined Benefit Pension Plans and Other Postretirement Benefit Plan

As more fully described in Note 15, certain employees of the Company participate in defined benefit pension plans (“Shared Plans”) sponsored by the Company, which also have historically included participants of MSG Sports. The Company accounted for the Shared Plans under the guidance of ASC 715, Compensation — Retirement Benefits. Accordingly, the Company recorded an asset or liability to recognize the funded status of the Shared Plans (other than multiemployer plans), as well as a liability only for any required contributions to the Shared Plans that were accrued and unpaid at the balance sheet date. The related pension expenses attributed to the Company were based primarily on pension-eligible compensation of active participants. For the Shared Plans’ liabilities, the combined financial statements reflected the full impact of such plans on both the combined statements of operations and combined balance sheets. The pension expense related to employees of MSG Sports participating in any of the Shared Plans is reflected as a contributory credit from the Company to MSG Sports, resulting in a decrease to the expense recognized in the combined statements of operations.
The plan that was sponsored by the Company and did not include participants of MSG Sports (“Direct Plan”) was accounted for as a defined benefit pension plan. Accordingly, the funded and unfunded position of the Direct Plan was recorded in the Company’s combined balance sheets, as well as all costs related to the Direct Plan which are recorded in the combined statements of operations for periods prior to the Entertainment Distribution Date.
Actuarial gains and losses that have not yet been recognized through the consolidated and combined statements of operations are recorded in accumulated other comprehensive income (loss) until they are amortized as a component of net periodic benefit cost through other comprehensive income (loss).
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

After the Entertainment Distribution Date, the Company has both funded and unfunded defined benefit plans, as well as a contributory other postretirement benefit plan, covering certain full-time employees and retirees. The expense recognized by the Company is determined using certain assumptions, including the expected long-term rate of return and discount rates, among others. The Company recognizes the funded status of its defined benefit pension and other postretirement plans (other than multiemployer plans) as an asset or liability in the consolidated balance sheets and recognizes changes in the funded status in the year in which the changes occur through other comprehensive income (loss).
Fair Value Measurements
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: 
•Level I — Quoted prices for identical instruments in active markets.
•Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
•Level III — Instruments whose significant value drivers are unobservable.
Foreign Currency Translations
The consolidated and combined financial statements are presented in U.S. Dollars. Assets and liabilities of non-U.S. subsidiaries and the Company’s foreign-based equity method investments that operate in a local currency environment, where that local currency is the functional currency, are translated to U.S. Dollars at exchange rates in effect at the balance sheet date. Operating results of non-U.S. subsidiaries are translated at weighted-average exchange rates during the year which approximate the rates in effect at the transaction dates. For the Company’s foreign-based equity method investments, the proportionate share of the investee’s income is translated into U.S. dollars at the average exchange rate for the period and the investment is translated using the exchange rate as of the end of the reporting period. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) as changes in cumulative translation adjustments in the accompanying consolidated balance sheets.
Recently Issued Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments — Credit Losses. ASU No. 2016-13 replaced the incurred loss impairment methodology in previous GAAP with a methodology that requires the reflection of expected credit losses and consideration of a broader range of reasonable and supportable information to determine credit loss estimates at inception. In May 2019, the FASB issued ASU No. 2019-05, Targeted Transition Relief, which amends ASC Topic 326 to provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. In November 2019, FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, to provide clarification guidance in a number of areas, including: (i) expected recoveries for purchased financial assets with credit deterioration, (ii) transition relief for troubled debt restructuring, (iii) disclosures related to accrued interest receivables, and (iv) financial assets secured by collateral maintenance provisions. For most financial instruments, the standard requires the use of a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which will generally result in the earlier recognition of credit losses on financial instruments. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments — Credit Losses and Leases, which includes amendments pursuant to SEC Staff Accounting Bulletin No. 119. This standard was adopted by the Company in the first quarter of Fiscal Year 2021. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements and certain disclosures.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement as part of the FASB’s broader disclosure framework project. ASU No. 2018-13 removes, modifies and adds certain disclosures providing greater focus on requirements that clearly communicate the most important information to the users of the financial statements with respect to fair value measurements. Most of the disclosure requirements in ASU No. 2018-13 are required to be applied on a retrospective basis except for the guidance related
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(Continued)

to (i) unrealized gains and losses included in other comprehensive income, (ii) disclosure related to range and weighted average Level 3 unobservable inputs and (iii) narrative disclosure requirements on measurement uncertainty, which are required to be applied on a prospective basis. This standard was adopted by the Company in the first quarter of Fiscal Year 2021. The adoption of the standard did not have an impact on the Company’s disclosures in its consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans — General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans. ASU No. 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and adds additional disclosures. This standard was adopted by the Company in the first quarter of Fiscal Year 2021. The adoption of the standard did not have an impact on the Company’s disclosures in its consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles — Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance also specifies that the balance sheet, income statement, and statement of cash flows presentation of capitalized implementation costs and the related amortization should align with the presentation of the hosting (service) element of the arrangement. This standard was adopted by the Company in the first quarter of Fiscal Year 2021. The adoption of the standard did not have an impact on the Company’s consolidated financial statements. However, to the extent future costs incurred in a cloud computing arrangement are capitalizable, the corresponding amortization will be included in “Direct operating expenses” or “Selling, general and administrative expenses” in the consolidated statements of operations depending on the nature of the related arrangement, rather than “Depreciation and amortization.”
In November 2018, the FASB issued ASU No. 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities. ASU No. 2018-17 amends the variable interest entities (“VIE”) guidance to align the evaluation of a decision maker’s or service provider’s fee in assessing a variable interest with the guidance in the primary beneficiary test. Specifically, indirect interests held by a related party that is under common control are to be considered on a proportionate basis, rather than in their entirety, when assessing whether the fee qualifies as a variable interest. The proportionate basis approach is consistent with the treatment of indirect interests held by a related party under common control when evaluating the primary beneficiary of a VIE. When a decision maker or service provider has an interest in a related party, regardless of whether they are under common control, they consider that related party’s interest in a VIE on a proportionate basis throughout the VIE model, for both the assessment of a variable interest and the determination of a primary beneficiary. This standard was adopted by the Company in the first quarter of Fiscal Year 2021. The adoption of the standard did not have an impact on the Company’s consolidated financial statements.
In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. ASU No. 2018-18 clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC Topic 606 when the counterparty is a customer. In addition, ASU No. 2018-18 precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. This standard was adopted by the Company in the first quarter of Fiscal Year 2021. The adoption of the standard did not have an impact on the Company’s consolidated financial statements.
In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825 — Financial Instruments. This ASU provides narrow-scope amendments to help apply these recent standards. This standard was adopted by the Company in the first quarter of Fiscal Year 2021 in connection with the adoption of ASU No. 2016-13 discussed above. The adoption of the standard did not have an impact on the Company’s consolidated financial statements.
In November 2019, the FASB issued ASU No. 2019-08, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements — Share-Based Consideration Payable to a Customer. This ASU requires that share-based payment awards issued to a customer in connection with a revenue arrangement be recorded as a reduction of the transaction price in revenue. The amount recorded as a reduction of the transaction price is measured using the grant-date fair value of the award and is classified in accordance with ASC Topic 718. Changes in the measurement of the share-based payments after the grant date that are due to the form of the consideration are not included in the transaction price and are recorded elsewhere in the statement of operations. The award is measured and classified under ASC Topic 718 for its entire life, unless the award is modified after it vests and the grantee is no longer a customer. This standard was adopted by the
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Company in the first quarter of Fiscal Year 2021. The adoption of the standard did not have an impact on the Company’s consolidated financial statements.
In January 2020, the FASB issued ASU No. 2020-01, Investments — Equity Securities (Topic 321), Investments — Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with ASC Topic 321 immediately before applying or upon discontinuing the equity method. In addition, the amendments clarify the accounting for certain forward contracts and purchased options accounted for under ASC Topic 815. This standard was adopted by the Company in the first quarter of Fiscal Year 2021. The adoption of the standard did not have an impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU eliminates certain exceptions to the general approach in ASC Topic 740 and includes methods of simplification to the existing guidance. The new guidance is effective for the Company in the first quarter of Fiscal Year 2022, with early adoption permitted. The adoption of the standard is not expected to have a material impact on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate and other interbank offered rates to alternative reference rates. In January 2021, the FASB issued ASU 2021-01, which refines the scope of Topic 848 and clarifies some of its guidance as part of the FASB’s monitoring of global reference rate activities. The new guidance was effective upon issuance, and the Company is allowed to elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.
Note 3. Acquisition and Disposition
Acquisition of Hakkasan
In connection with Tao Group Hospitality’s venue expansion plans, Tao Group Sub-Holdings LLC, a subsidiary of Tao Group Hospitality and an indirect subsidiary of the Company, entered into a Transaction Agreement (the “Transaction Agreement”) on April 27, 2021 (the “Closing Date”), pursuant to which Tao Group Sub-Holdings LLC acquired the business (“Hakkasan”) of Hakkasan USA, Inc., a Delaware corporation (“Hakkasan Parent”). Hakkasan consists of a global collection of 37 hospitality venues including restaurants, bars, lounges, and nightclubs. Its brand portfolio spans four continents and over 21 major cities. Pursuant to the Transaction Agreement, Hakkasan Parent contributed its interest in Hakkasan to Tao Group Sub-Holdings LLC in exchange for approximately 18% of the common equity interests in Tao Group Sub-Holdings LLC. In addition, Hakkasan Parent and Tao Group Hospitality have provided each other with certain customary representations, warranties and indemnities that are protective in nature. After the Closing Date, Tao Group Hospitality, which owned all of the issued and outstanding common equity interests in Tao Group Sub-Holdings LLC before the Closing Date, owns approximately 82% of the common equity interests in Tao Group Sub-Holdings LLC. The ownership percentages are subject to potential post-closing adjustments for closing working capital and net debt against agreed upon targets. After the Closing Date, the Company continues to own a 77.5% controlling interest in Tao Group Hospitality, which, before any post-closing adjustments, translates to an approximately 63% indirect controlling interest in Tao Group Sub-Holdings LLC. Tao Group Hospitality’s results will continue to be consolidated in the financial results of the Company.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The Company’s purchase price allocation (“PPA”) for the Hakkasan acquisition is preliminary pending finalization of a working capital adjustment and deferred taxes (see explanation below) and could be subject to further revision if additional information related to the fair value of the identifiable net assets and nonredeemable noncontrolling interests becomes available. In addition, the initial determination of approximately 18% noncontrolling interest ownership of common equity interests in Tao Group Sub-Holdings LLC is subject to customary working capital adjustments. The carrying value is recognized under the Tao Group Hospitality reporting segment, whereas the step-up to fair value is reported separately under Purchase Accounting Adjustments as distinguished within Note 21. The preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of April 27, 2021 is presented below:
Fair Value (a)
Cash and cash equivalents $ 16,737 
Property and equipment, net 33,393 
Right-of-use lease assets 44,818 
Amortizable intangible assets, net 47,170 
Other assets 12,641 
Accrued expenses and other current liabilities (15,957)
Operating lease liabilities (52,025)
Other liabilities (13,655)
Total identifiable net assets acquired 73,122 
Goodwill (a)
3,378 
Redeemable noncontrolling interests (b)
$ (76,500)
_________________
(a)Primarily represents expected synergies from combining operations of Hakkasan and Tao Group Hospitality, and is not deductible for income tax purposes.
(b)Hakkasan Parent has the right to put its equity interest in Tao Group Sub-Holdings LLC to Tao Group Hospitality for fair market value (subject to a floor value determined based upon a multiple of trailing EBITDA) beginning in 2026 and each second year thereafter by providing notice during a 30 day window starting June 1, 2025 (and each second June 1 thereafter). Consideration paid upon exercise of the put right shall be, at the option of Tao Group Hospitality, in cash, debt, or stock of the Company or its successor, subject to certain limitations. Additionally, Tao Group Hospitality may elect to satisfy this put obligation through a sale of Tao Group Sub-Holdings or a going public transaction with respect to Tao Group Sub-Holdings.
Amortizable intangible assets, goodwill, inventory, property and equipment, and redeemable noncontrolling interests that arose from this acquisition were classified within Level III of the fair value hierarchy as they were valued using unobservable inputs, reflecting the Company’s best estimate of what hypothetical market participants would use to determine the value of acquired assets at the reporting date based on the best information available in the circumstances.
The amounts of revenues and net income (primarily excluding the impact of various amortization of purchase price accounting adjustments of $1,070) attributable to Hakkasan since the acquisition date included in the Tao Group Hospitality segment within the Company’s consolidated statements of operations for Fiscal Year 2021 were $27,604 and $2,896, respectively.
Pro forma result of operations have not been presented because the effect of the acquisition was not material to the Company’s consolidated statement of operations for Fiscal Year 2021, due to significant business disruptions resulting from the COVID-19 pandemic prior to the acquisition date.
For the year ended June 30, 2021, the Company’s Tao Group Hospitality segment recognized $3,686 of acquisition-related expenses in connection with the Hakkasan acquisition within selling, general and administrative expenses in the accompanying consolidated statements of operations.
The deferred taxes calculated relied on estimates of tax basis that would be allocable to the Company and reflect management’s best estimates and assumptions as of the reporting date and are considered preliminary pending finalization.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Tao Group Hospitality Additional Interest Acquisition in Fiscal Year 2020
The Tao Group Hospitality purchase agreement entered into January 2017 contains a put option to require the Company to purchase the other owners’ equity interests under certain circumstances. The noncontrolling interest combined with the put option is classified as redeemable noncontrolling interest in the consolidated balance sheet, separate from equity. The relevant amounts attributable to investors other than the Company are reflected under “Redeemable noncontrolling interests,” “Net income (loss) attributable to redeemable noncontrolling interests” and “Comprehensive income (loss) attributable to redeemable noncontrolling interests” on the accompanying consolidated balance sheets, consolidated and combined statements of operations and consolidated and combined statements of comprehensive income (loss), respectively. The put option can be settled, at the Company’s option, in cash, debt or shares of the Company’s Class A Common Stock. The ultimate amount paid upon the exercise of the put option will likely be different from the estimated fair value, given the calculation required pursuant to the Tao Group Hospitality operating agreement.
On January 22, 2020, the Company acquired an additional 15% of common equity interest in Tao Group Hospitality from its noncontrolling interest holders through a pre-Entertainment Distribution issuance of 102 shares of MSG Sports Class A common stock. Following this acquisition, the Company now owns approximately 78% of common equity interest in Tao Group Hospitality. In connection with the acquisition of the additional 15% of common equity interest in Tao Group Hospitality, the Company recorded a decrease of $37,715 in the carrying value of the redeemable noncontrolling interests and an offset of the same amount in the MSG Sports Corp. Investment in the accompanying consolidated and combined statements of equity and redeemable noncontrolling interests.
In connection with the Entertainment Distribution, the Company entered into amended employment agreements with two noncontrolling interest holders in the fourth quarter of Fiscal Year 2020, which provided the noncontrolling interest holders put rights exercisable that require the Company to purchase the remaining equity interest. Upon the exercise of the put options by the noncontrolling interest holders, the price to be paid for the redeemable noncontrolling interest is the then-current fair market value of the redeemable noncontrolling interest, subject to a minimum price (“floor”).
See accompanying consolidated and combined statement of equity and redeemable controlling interest for various adjustments associated with the adjustment to redemption or fair value as well as the accretion of put options recorded in Fiscal year 2021 and Fiscal Year 2020. As discussed in Note 2, the Company elected to treat the adjustment to the non fair value redemption floor as an adjustment to the control number (numerator) of the EPS computation. See Note 6 for the adjustment of redeemable noncontrolling interest to redemption value in the computation of earnings per share.
Disposition of The Forum in Fiscal Year 2020
On March 24, 2020, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) pursuant to which the Company agreed to sell the Forum in Inglewood, CA and settle related litigation for cash consideration in the amount of $400,000, subject to regulatory and other customary closing conditions. The transaction subsequently closed on May 1, 2020, resulting in a total gain on sale of $240,783, net of transaction costs of $50,806 during the year ended June 30, 2020 of which $140,495 was attributable to the settlement of the related litigation. The transaction cost included a fee of $48,742 to The Azoff Company Holdings (“Azoff Music”), in connection with an agreement made by the Former Parent when the remaining 50% interest of Azoff Music was sold on December 5, 2018. The Forum meets the definition of a business under SEC Regulation S-X Rule 11-01(d)-1 and FASB ASC Topic 805 — Business Combinations. This disposition does not represent a strategic shift with a major effect on the Company’s operations, and as such, has not been reflected as a discontinued operation under FASB ASC Subtopic 205-20 — Discontinued Operations. The gain of disposition of the Forum was reported under the Entertainment segment. See Note 21 for further details.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Note 4. Revenue Recognition
Contracts with Customers
For the years ended June 30, 2021, 2020 and 2019, all revenue recognized in the consolidated and combined statements of operations is considered to be revenue from contracts with customers in accordance with ASC Topic 606 except for $24,325 of revenues from (i) Arena License Agreements, (ii) leases, and (iii) subleases, which are accounted for in accordance with ASC Topic 842 for Fiscal Year 2021. In Fiscal Year 2021, the Company did not have any material provision for credit losses on receivables or contract assets arising from contracts with customers. The allowance for credit losses associated with contracts with customers was $5,577 and $9,135 as of June 30, 2021 and 2020, respectively. The net decrease in allowance for credit losses in Fiscal Year 2021 was due to a net accounts receivable write off of $4,026, partially offset by an increase in provisions for credit losses of $468.
The Company recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of promised goods or services are transferred to customers. Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services (“transaction price”). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and the determination of whether to include such estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excludes these amounts from revenues.
In addition, the Company defers certain costs to fulfill the Company’s contracts with customers to the extent such costs relate directly to the contracts, are expected to generate resources that will be used to satisfy the Company’s performance obligations under the contracts and are expected to be recovered through revenue generated under the contracts. Contract fulfillment costs are expensed as the Company satisfies the related performance obligations.
In connection with the Entertainment Distribution, the Company entered into Arena License Agreements with MSG Sports that require the Knicks and the Rangers to play their home games at The Garden. These agreements also provide for the provision of certain services by the Company to MSG Sports in connection with MSG Sports events that are held at The Garden and include revenue-sharing provisions for certain agreements entered into by the Company and MSG Sports. The Arena License Agreements contain both lease and non-lease components. The revenue to be recognized with respect to the lease components of the Arena License Agreements is accounted for as operating lease revenue in accordance with ASC 842 - Leases. The non-lease components are accounted for in accordance with ASC Topic 606 as further discussed below.
Arrangements with Multiple Performance Obligations
The Company enters into arrangements with multiple performance obligations, such as multi-year sponsorship agreements which may derive revenues for both the Company as well as MSG Sports within a single arrangement. The Company also derives revenue from similar types of arrangements which are entered into by MSG Sports. Payment terms for such arrangements can vary by contract, but payments are generally due in installments throughout the contractual term. The performance obligations included in each sponsorship agreement vary and may include advertising and other benefits such as, but not limited to, signage at The Garden and the Company’s other venues, digital advertising, event or property specific advertising, as well as non-advertising benefits such as suite licenses and event tickets. To the extent the Company’s multi-year arrangements provide for performance obligations that are consistent over the multi-year contractual term, such performance obligations generally meet the definition of a series as provided for under the accounting guidance. If performance obligations are concluded to meet the definition of a series, the contractual fees for all years during the contract term are aggregated and the related revenue is recognized proportionately as the underlying performance obligations are satisfied.
The timing of revenue recognition for each performance obligation is dependent upon the facts and circumstances surrounding the Company’s satisfaction of its respective performance obligation. The Company allocates the transaction price for such arrangements to each performance obligation within the arrangement based on the estimated relative standalone selling price of the performance obligation. The Company’s process for determining its estimated standalone selling prices involves management’s judgment and considers multiple factors including company specific and market specific factors that may vary depending upon the unique facts and circumstances related to each performance obligation. Key factors considered by the
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Company in developing an estimated standalone selling price for its performance obligations include, but are not limited to, prices charged for similar performance obligations, the Company’s ongoing pricing strategy and policies, and consideration of pricing of similar performance obligations sold in other arrangements with multiple performance obligations.
The Company may incur costs such as commissions to obtain its multi-year sponsorship agreements. The Company assesses such costs for capitalization on a contract by contract basis. To the extent costs are capitalized, the Company estimates the useful life of the related contract asset which may be the underlying contract term or the estimated customer life depending on the facts and circumstances surrounding the contract. The contract asset is amortized over the estimated useful life.
Principal versus Agent Revenue Recognition
The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service before transfer to the customer. When the Company concludes that it controls the good or service before transfer to the customer, the Company is considered a principal in the transaction and records revenue on a gross basis. When the Company concludes that it does not control the good or service before transfer to the customer but arranges for another entity to provide the good or service, the Company acts as an agent and records revenue on a net basis in the amount it earns for its agency service.
Revenue for the Company’s suite license arrangements is recorded on a gross basis, as the Company is the principal in such transactions and controls the related goods or services before transfer to the customer. MSG Sports is entitled to a share of the Company’s suite license revenue pursuant to the terms of the Arena License Agreements, which is recognized in the consolidated and combined statements of operations as a component of direct operating expenses.
For sponsorship agreements entered into by the Company or by MSG Sports that contain performance obligations satisfied solely by the Company, revenue is generally recorded on a gross basis as the Company is the principal with respect to such performance obligations and controls the related goods or services before transfer to the customer. In accordance with the Arena License Agreements, MSG Sports is entitled to a share of the revenue generated from certain signage performance obligations where the Company is the principal. The Company records this signage revenue on a gross basis and MSG Sports’ share of such revenue as a component of direct operating expenses within the combined statement of operations.
For Fiscal Years 2021, 2020 and 2019, the Company recorded revenue-sharing expense of $1,025, $110,002, and $145,723, respectively, for MSG Sports’ share of the Company’s revenues from (i) suite license, (ii) certain signage and sponsorship, and (iii) food and beverage based upon the provisions of the underlying contractual arrangements for the period subsequent to the Entertainment Distribution, and on the basis of direct usage when specifically identified or allocated proportionally for all prior periods.
In connection with the Entertainment Distribution, the Company entered into advertising sales representation agreements with certain subsidiaries of MSG Sports. Pursuant to these agreements, the Company has the exclusive right and obligation to sell sponsorship assets on behalf of the respective subsidiaries of MSG Sports. The Company is entitled to both fixed and variable commissions under the terms of these agreements. The Company recognizes the fixed component ratably over the term of the arrangement which corresponds with the Company’s satisfaction of its service-based performance obligations. Variable commissions are earned and recognized as the related sponsorship performance obligations are satisfied by MSG Sports. The Company is not the principal in such arrangements as it does not control the related goods or services prior to transfer to the customer. Since the Company acts as an agent under these arrangements, the Company recognizes the advertising commission revenue on a net basis.
The Company is also party to an advertising sales representation agreement with MSG Networks. Pursuant to the agreement, the Company has the exclusive right and obligation to sell advertising on behalf of MSG Networks. The Company is entitled to and earns commission revenue as the advertisements are aired on MSG Networks. Since the Company acts as an agent, the Company recognizes the advertising commission revenue on a net basis. In connection with the Merger with MSG Networks, these revenues will be eliminated retrospectively on a consolidated basis beginning Fiscal Year 2022.
The Company’s revenue recognition policies that summarize the nature, amount, timing and uncertainty associated with each of the Company’s revenue sources are discussed further in each respective segment discussion below.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Entertainment Segment
The Company earns event related revenues principally from the sale of tickets for events that the Company produces or promotes/co-promotes, and from venue license fees charged to third-party promoters for events held at the Company’s venues that the Company does not produce or promote/co-promote. The Company’s performance obligations with respect to event-related revenues from the sale of tickets, venue license fees from third-party promoters, sponsorships, concessions and merchandise are satisfied at the point of sale or as the related event occurs. As a result of the agreements entered into in connection with the Entertainment Distribution, the Company also earns revenue from the provision of various event-related services that are incremental to MSG Sports’ general use of The Garden. The Company’s performance obligations with respect to these event-related services are satisfied as the related event occurs.
The Company’s revenues also include revenue from the license of The Garden’s suites. Suite license arrangements are generally multi-year fixed-fee arrangements that include annual fee increases. Payment terms for suite license arrangements can vary by contract, but payments are generally due in installments prior to each license year. The Company’s performance obligations under such arrangements is to provide the licensee with access to the suite when events occur at The Garden. The population of events generally includes both the Company’s events as well as MSG Sports’ events. The Company accounts for the performance obligation under these types of arrangements as a series and, as a result, the related suite license fees for all years during the license term are aggregated and revenue is recognized proportionately over the license period as the Company satisfies the related performance obligation. Progress toward satisfaction of the Company’s annual suite license performance obligations is measured as access to the suite is provided to the licensee for each event throughout the contractual term of the license.
The Company also earns revenues from the sale of advertising in the form of venue signage and other forms of sponsorship, which are not related to any specific event of the Company or MSG Sports. The Company’s performance obligations with respect to this advertising are satisfied as the related benefits are delivered over the term of the respective agreements.
The Company’s advertising sales representation commissions are reported within the Entertainment segment.
Amounts collected in advance of the Company’s satisfaction of its contractual performance obligations are recorded as a contract liability within deferred revenue and are recognized as the Company satisfies the related performance obligations. Amounts collected in advance of events for which the Company is not the promoter or co-promoter do not represent contract liabilities and are recorded as collections due to promoters on the accompanying consolidated and combined balance sheet.
Tao Group Hospitality Segment
Revenues from dining, nightlife and hospitality offerings through Tao Group Hospitality are recognized when food, beverages and/or services are provided to the customer as that is the point in which the related performance obligation is satisfied. In addition, management fee revenues which are earned in accordance with specific venue management agreements are recorded over the period in which the management services are performed as that reflects the measure of progress toward satisfaction of the Company’s venue management performance obligations.
Disaggregation of Revenue
The following table disaggregates the Company’s revenue by major source and reportable segment based upon the timing of transfer of goods or services to the customer, in accordance with ASC Subtopic 606-10-50-5, for the years ended June 30, 2021, 2020 and 2019:
Year ended June 30, 2021
Entertainment Tao Group Hospitality Eliminations Total
Event-related and entertainment dining and nightlife offerings (a)
$ 14,062  $ 84,325  $ (1,522) $ 96,865 
Sponsorship, signage and suite licenses (b)
16,308  4,736  (207) 20,837 
Other (c)
27,586  11,105  (317) 38,374 
Total revenues from contracts with customers $ 57,956  $ 100,166  $ (2,046) $ 156,076 
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Year ended June 30, 2020
Entertainment Tao Group Hospitality Eliminations Total
Event-related and entertainment dining and nightlife offerings (a)
$ 390,691  $ 161,663  $ (507) $ 551,847 
Sponsorship, signage and suite licenses (b)
176,798  1,640  (1,091) 177,347 
Other (c)
17,719  16,898  (875) 33,742 
Total revenues from contracts with customers $ 585,208  $ 180,201  $ (2,473) $ 762,936 

Year ended June 30, 2019
Entertainment Tao Group Hospitality Eliminations Total
Event-related and entertainment dining and nightlife offerings (a)
$ 529,737  $ 234,205  $ (852) $ 763,090 
Sponsorship, signage and suite licenses (b)
243,843  1,788  (873) 244,758 
Other (c)
23,478  17,658  (75) 41,061 
Total revenues from contracts with customers $ 797,058  $ 253,651  $ (1,800) $ 1,048,909 
_________________
(a)Consists of (i) ticket sales and other ticket-related revenues, (ii) Tao Group Hospitality’s entertainment dining and nightlife offerings, (iii) venue license fees from third-party promoters, and (iv) food, beverage and merchandise sales. Event-related revenues and entertainment, dining and nightlife offerings are recognized at a point in time. As such, these revenues have been included in the same category in the table above.
(b)See sections “— Contracts with Customers — Arrangements with Multiple Performance Obligations”, “— Contracts with Customers — Principal versus Agent Revenue Recognition” and “— Contracts with Customers — Entertainment Segment” for further details on the pattern of recognition of sponsorship, signage and suite license revenues.
(c)Primarily consists of (i) revenues from sponsorship sales and representation agreements with MSG Sports, (ii) advertising commission revenue from MSG Networks, and (ii) Tao Group Hospitality’s managed venue revenues.
In addition to the disaggregation of the Company’s revenue by major source based upon the timing of transfer of goods or services to the customer disclosed above, the following table disaggregates the Company’s combined revenues by type of goods or services in accordance with the required entity-wide disclosure requirements of FASB ASC Subtopic 280-10-50-38 to 40 and the disaggregation of revenue required disclosures in accordance with ASC Subtopic 606-10-50-5 for the years ended June 30, 2021, 2020 and 2019.
Year ended June 30, 2021
Entertainment (d)
Tao Group Hospitality Eliminations
Total (d)
Ticketing and venue license fee revenues (a)
$ 8,311  $ —  $ —  $ 8,311 
Sponsorship and signage, suite, and advertising commission revenues (b)
43,723  —  (207) 43,516 
Revenues from entertainment dining and nightlife offerings (c)
—  100,166  (1,839) 98,327 
Food, beverage and merchandise revenues 3,078  —  —  3,078 
Other 2,844  —  —  2,844 
Total revenues from contracts with customers $ 57,956  $ 100,166  $ (2,046) $ 156,076 

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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Year ended June 30, 2020
Entertainment Tao Group Hospitality Eliminations Total
Ticketing and venue license fee revenues (a)
$ 310,971  $ —  $ —  $ 310,971 
Sponsorship and signage, suite, and advertising commission revenues (b)
200,092  —  (1,091) 199,001 
Revenues from entertainment dining and nightlife offerings (c)
—  180,201  (1,382) 178,819 
Food, beverage and merchandise revenues 62,341  —  —  62,341 
Other 11,804  —  —  11,804 
Total revenues from contracts with customers $ 585,208  $ 180,201  $ (2,473) $ 762,936 

Year ended June 30, 2019
Entertainment Tao Group Hospitality Eliminations Total
Ticketing and venue license fee revenues (a)
$ 420,285  $ —  $ —  $ 420,285 
Sponsorship and signage, suite, and advertising commission revenues (b)
266,204  —  (873) 265,331 
Revenues from entertainment dining and nightlife offerings (c)
—  253,651  (927) 252,724 
Food, beverage and merchandise revenues 83,307  —  —  83,307 
Other 27,262  —  —  27,262 
Total revenues from contracts with customers $ 797,058  $ 253,651  $ (1,800) $ 1,048,909 
_________________
(a)Amounts include ticket sales, including other ticket-related revenue, and venue license fees from the Company’s events such as (i) concerts, (ii) the presentation of the Christmas Spectacular, and (iii) other live entertainment and sporting events.
(b)Beginning in Fiscal Year 2021, Sponsorship and signage, suite, and advertising commission revenues include revenues from sponsorship sales and representation agreements with MSG Sports.
(c)Primarily consist of revenues from (i) entertainment dining and nightlife offerings and (ii) venue management agreements.
(d)In addition to the various types of revenues disclosed above, total revenues of $180,401 in Fiscal Year 2021 include $24,325 of lease-related revenues recognized under ASC 842 within the Entertainment segment. See “— Lessor Arrangements” under Note 10 for further details.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Contract Balances
The timing of revenue recognition, billings and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheet. For Fiscal Year 2021, the Company did not have any material impairment losses on contract assets arising from contracts with customers. The following table provides information about the opening and closing contract balances from the Company’s contracts with customers as of June 30, 2021, 2020 and 2019.
June 30,
2021 2020 2019
Receivables from contracts with customers, net (a)
$ 86,454  $ 59,828  $ 81,170 
Contract assets, current (b)
7,052  3,850  6,873 
Deferred revenue, including non-current portion (c)
210,037  193,112  197,047 
_________________
(a)Receivables from contracts with customers, which are reported in Accounts receivable, net and Net related party receivables in the Company’s consolidated balance sheets, represent the Company’s unconditional rights to consideration under its contracts with customers. As of June 30, 2021, 2020 and 2019. the Company’s receivables from contracts with customers above included $4,848, $2,644 and $126, respectively, related to various related parties. See Note 20 for further details on these related party arrangements.
(b)Contract assets, which are reported as Other current assets in the Company’s consolidated balance sheets, primarily relate to the Company’s rights to consideration for goods or services transferred to the customer, for which the Company does not have an unconditional right to bill as of the reporting date. Contract assets are transferred to accounts receivable once the Company’s right to consideration becomes unconditional.
(c)Deferred revenue primarily relates to the Company’s receipt of consideration from a customer in advance of the Company’s transfer of goods or services to that customer. Deferred revenue is reduced and the related revenue is recognized once the underlying goods or services are transferred to the customer. Revenue recognized for the year ended June 30, 2021 and relating to the deferred revenue balance as of June 30, 2020 was $11,204.
Transaction Price Allocated to the Remaining Performance Obligations
The following table depicts the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2021. This primarily relates to performance obligations under sponsorship and suite license agreements that have original expected durations longer than one year and the considerations are not variable. In developing the estimated revenue, the Company applies the allowable practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
Fiscal year ending June 30, 2022 $ 101,393 
Fiscal year ending June 30, 2023 96,749 
Fiscal year ending June 30, 2024 77,948 
Fiscal year ending June 30, 2025 55,945 
Fiscal year ending June 30, 2026 43,180 
Thereafter 57,245 
$ 432,460 
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Note 5. Restructuring Charges
The Company’s operations have been disrupted since March 2020 due to the COVID-19 pandemic. As a direct response to this disruption, on August 4, 2020, the Company implemented cost savings initiatives in order to streamline operations and preserve liquidity. These measures included a reduction in full-time workforce of approximately 350 employees in August and 10 employees in November for a total expense of $21,299 for the year ended June 30, 2021 primarily related to termination benefits provided to employees in the Entertainment reportable segment. These expenses are reported under the caption Restructuring charges in the accompanying consolidated and combined statements of operations.
The Company’s restructuring accrual activity through June 30, 2021 is as follows:
June 30, 2020 $ — 
Restructuring charges 21,299 
Payments (21,118)
June 30, 2021 $ 181 
Note 6. Computation of Earnings (Loss) per Common Share
On the Entertainment Distribution Date, 23,992 shares of the Company’s Class A Common Stock were distributed to MSG Sports stockholders as of the Record Date and were outstanding as of April 17, 2020. This share amount was being utilized for the calculation of basic earnings (loss) per share for the periods prior to the Entertainment Distribution because the Company was a wholly-owned subsidiary of MSG Sports prior to the Entertainment Distribution Date. In addition, the computation of diluted earnings per share equals the basic earnings (loss) per common share calculation since there was no stock trading information available to compute dilutive effect of shares issuable under share-based compensation plans needed under the treasury method in accordance with ASC Topic 260, Earnings Per Share. The following table presents a reconciliation of weighted-average shares used in the calculations of basic and diluted earnings (loss) per common share attributable to the Company’s stockholders.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

  Years Ended June 30,
  2021 2020 2019
Net income (loss) available to Madison Square Garden Entertainment Corp.’s stockholders (numerator):
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders per statement of operations $ (412,082) $ 17,234  $ (17,894)
Adjustment of redeemable noncontrolling interest to redemption value (8,728) —  — 
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders for EPS: $ (420,810) $ 17,234  $ (17,894)
Weighted-average shares (denominator):
Weighted-average shares for basic EPS (a)
24,205  23,998  23,992 
Dilutive effect of shares issuable under share-based compensation plans (a)
—  19  — 
Weighted-average shares for diluted EPS (a)
24,205  24,017  23,992 
Weighted-average anti-dilutive shares (b)
—  522  — 
EPS:
Basic earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders $ (17.39) $ 0.72  $ (0.75)
Diluted earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders $ (17.39) $ 0.72  $ (0.75)
_________________
(a)See the Consolidated and Combined Statements of Operations for how the weighted-average shares were derived for Fiscal Year 2019 prior to the Entertainment Distribution in Fiscal Year 2020. In addition, weighted-average anti-dilutive shares information for Fiscal Year 2019 was not provided since there was no stock price information and the Company did not have stand-alone restricted stock units and stock options available to compute during that period until the Entertainment Distribution occurred on April 17, 2020.
(b)For Fiscal Year 2021, all restricted stock units and stock options were excluded from the above table because the Company reported a net loss for the periods presented and, therefore, their impact on reported loss per share would have been antidilutive. See Note 16 for further detail.
Note 7. Cash, Cash Equivalent and Restricted Cash

The following table provides a summary of the amounts recorded as cash, cash equivalents and restricted cash.
As of
June 30,
2021 		June 30,
2020 		June 30,
2019 		June 30,
2018
Captions on the consolidated and combined balance sheets:
Cash and cash equivalents $ 1,168,760  $ 906,555  $ 1,082,055  $ 1,225,645 
Restricted cash 22,984  17,749  10,010  6,711 
Cash, cash equivalents and restricted cash on the consolidated and combined statements of cash flows
$ 1,191,744  $ 924,304  $ 1,092,065  $ 1,232,356 
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Note 8. Investments in Nonconsolidated Affiliates
The Company’s investments in nonconsolidated affiliates which are accounted for under the equity method of accounting and equity investments without readily determinable fair values in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures and ASC Topic 321, Investments - Equity Securities, respectively, consisted of the following:
Ownership Percentage Investment
June 30, 2021
Equity method investments:
SACO Technologies Inc. (“SACO”) 30% $ 36,265 
Others 6,204 
Equity investments without readily determinable fair values (a)
3,500 
Total investments in nonconsolidated affiliates $ 45,969 
June 30, 2020
Equity method investments:
SACO 30% $ 40,461 
Others 8,661 
Equity investments without readily determinable fair values (a) (b) (c)
3,500 
Total investments in nonconsolidated affiliates $ 52,622 
_________________
(a)In accordance with the ASC Topic 321, Investments - Equity Securities, the Company applies the measurement alternative to its equity investments without readily determinable fair values. Under the measurement alternative, equity securities without readily determinable fair values are accounted for at cost, adjusted for impairment and changes resulting from observable price fluctuations in orderly transactions for the identical or a similar investment of the same issuer. For Fiscal Year 2021, the Company did not have impairment charges or change in carrying value recorded to its equity securities without readily determinable fair values. For Fiscal Year 2020, the Company recorded an impairment charge of $533. For Fiscal Year 2019, the Company recorded a $3,738 increase in carrying value from observable price fluctuations and an impairment charge of $398.
(b)As of June 30, 2019, the Company’s equity investment in equity without readily determinable fair value included a $9,834 investment in DraftKings Inc. (“DraftKings”). DraftKings became a publicly traded company in April 2020. Accordingly, the Company began accounting for its investment in DraftKings as an equity investment with a readily determinable fair value in accordance the ASC Topic 321, Investments - Equity Securities. See section “Equity Investment with Readily Determinable Fair Values” below for further discussion.
(c)The following tables summarize the changes in the Company’s equity investments without readily determinable fair values for which the Company has used Level III inputs to determine fair value and a reconciliation to the opening and closing balances as of June 30, 2021, and 2020:
June 30,
2021 2020
Balance, beginning of period $ 3,500  $ 13,867 
Transfer out of Level III to Level I for investment in DraftKings —  (9,834)
Impairment charge —  (533)
Balance, end of period $ 3,500  $ 3,500 

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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Equity Method Investments
The Company determined that it has the ability to exert significant influence over the investee and therefore accounts for these investments under the equity method of accounting in accordance with ASC Topic 323. For investments in limited liability companies in which the Company has an ownership interests that exceeds 3% to 5%, the Company also accounts for such investments under the equity method of accounting.
SACO
In July 2018, the Company acquired a 30% interest in SACO, a global provider of high-performance LED video lighting and media solutions, for a total consideration of approximately $47,244. The Company is utilizing SACO as a preferred display technology provider for MSG Sphere based upon commercial terms. The total consideration consisted of a $42,444 payment at closing and a $4,800 deferred payment, which was made in October 2018. As of the acquisition date, the carrying amount of the investment was greater than the Company’s equity interest in the underlying net assets of SACO. As such, the Company allocated the difference to amortizable intangible assets of $25,350 and is amortizing these intangible assets on a straight-line basis over the expected useful lives ranging from 6 years to 12 years.
In addition, the Company also has other investments in various entertainment, hospitality companies and related technology companies, accounted for under the equity method.
Equity Investment with Readily Determinable Fair Value
As of June 30, 2021, the Company holds investments of (i) 583 shares of the Class A common stock of Townsquare Media, Inc. (“Townsquare”), (ii) 2,625 shares of the Class C common stock of Townsquare, and (iii) 869 shares of Class A common stock of DraftKings. Townsquare is a community-focused digital media, digital marketing solutions and radio company that has its Class A common stock listed on the New York Stock Exchange (“NYSE”) under the symbol “TSQ”. DraftKings is a digital sports entertainment and gaming company that is listed on the NASDAQ Stock Market (“NASDAQ”) under the symbol “DKNG”. The fair value of the Company’s investments in Class A common stock of Townsquare and Class A common stock of DraftKings are determined based on quoted market prices in active markets on the NYSE and NASDAQ, respectively, which are classified within Level I of the fair value hierarchy. As a holder of Class C common stock of Townsquare, the Company is entitled to convert at any time all or any part of the Company’s shares into an equal number of shares of Class A common stock of Townsquare, subject to restrictions set forth in Townsquare’s certificate of incorporation.
The cost basis and the carrying fair value of these investments, which are reported under Other assets in the accompanying consolidated balance sheets as of June 30, 2021 and 2020, are as follows:
Balance as of June 30, 2021
Equity Investment with Readily Determinable Fair Values
Units / Shares Held Cost Basis Carrying value
/ Fair value
Townsquare Class A common stock 583  $ 4,221  $ 7,435 
Townsquare Class C common stock 2,625  19,001  33,469 
DraftKings, common stock 869  6,036  45,360 
 Total $ 29,258  $ 86,264 
Balance as of June 30, 2020
Equity Investment with Readily Determinable Fair Value
Units / Shares Held Cost Basis Carrying value
/ fair value
Townsquare Class A common stock 3,208  $ 23,222  $ 14,340 
DraftKings, common stock 1,280  8,798  42,589 
DraftKings, warrant 9  22  132 
 Total $ 32,042  $ 57,061 

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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The following table summarizes the realized and unrealized gains (loss) on equity investments with readily determinable fair value for the years ended June 30, 2021, 2020 and 2019:
June 30,
2021 2020 2019
Unrealized gain (loss) — Townsquare $ 26,563  $ (2,920) $ (3,497)
Unrealized gain — DraftKings 26,942  34,197  — 
Realized gain (loss) — DraftKings (2,327) 6,351  — 
$ 51,178  $ 37,628  $ (3,497)
Supplemental information on realized gain (loss):
Shares of common stock sold — DraftKings 420  197  — 
Cash proceeds from common stock sold — DraftKings $ 22,079  $ 7,659  $ — 
The realized and unrealized gains and losses on investments discussed above are reported under Miscellaneous income (expense), net in the accompanying consolidated and combined statement of operations. See Note 21. Segment Information for addition information.
Unconsolidated Significant Subsidiaries
Based on the amended Rule 1-02(w) of Regulation S-X that the Company early adopted, the Company had no equity investments, individually or in the aggregate, that exceeded 10% in any of the three tests. As such, the Company is not required to provide the summarized balance sheet information for the most recent two fiscal years and the summarized income statement information for the most recent three years for the Company’s equity method investees.
Note 9. Property and Equipment
As of June 30, 2021 and 2020, property and equipment consisted of the following assets: 
June 30,
2021 2020 Estimated Useful Lives
Land $ 150,750  $ 141,638 
Buildings 996,295  993,206  Up to 40 years
Equipment 378,086  345,314  1 year to 20 years
Aircraft 38,090  38,090  20 years
Furniture and fixtures 38,896  42,389  1 year to 7 years
Leasehold improvements 196,273  170,585  Shorter of term of lease or useful life of improvement
Construction in progress 1,144,882  685,382 
2,943,272  2,416,604 
Less accumulated depreciation and amortization (843,925) (770,489)
$ 2,099,347  $ 1,646,115 
The increase in Construction in progress is primarily associated with the development and construction of MSG Sphere in Las Vegas and, to a lesser extent, MSG Sphere in London. The increases in other categories of property and equipment were primarily due to the Tao Group Hospitality’s acquisition of Hakkasan in April 2021, which included leasehold improvement of $26,296, equipment (including computers and software) of $4,701 and furniture and fixtures of $2,396.
The property and equipment balances above include $106,574 and $78,618 of capital expenditure accruals as of June 30, 2021 and 2020, respectively, which are reflected in “Other accrued liabilities” in the accompanying consolidated balance sheets.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Depreciation and amortization expense on property and equipment was $88,519, $91,148 and $95,904 for Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019, respectively.

Note 10. Leases
The Company’s leases primarily consist of certain live-performance venues, entertainment dining and nightlife venues, corporate office space, storage and, to a lesser extent, office and other equipment. The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the lease term is assessed based on the date when the underlying asset is made available by the lessor for the Company’s use. The Company’s assessment of the lease term reflects the non-cancellable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain not to exercise, as well as periods covered by renewal options which the Company is reasonably certain to exercise. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated and combined statements of operations and statements of cash flows over the lease term.
For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of the fixed minimum payment obligations over the lease term. A corresponding ROU asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received.
The Company includes fixed payment obligations related to non-lease components in the measurement of ROU assets and lease liabilities, as the Company has elected to account for lease and non-lease components together as a single lease component. ROU assets associated with finance leases are presented separate from ROU assets associated with operating leases and are included within Property and equipment, net on the Company’s combined balance sheet. For purposes of measuring the present value of the Company’s fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in the underlying leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment surrounding the associated lease.
For operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For finance leases, the initial ROU asset is depreciated on a straight-line basis over the lease term, along with recognition of interest expense associated with accretion of the lease liability, which is ultimately reduced by the related fixed payments. For leases with a term of 12 months or less (“short-term leases”), any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the consolidated balance sheets. Variable lease costs for both operating and finance leases, if any, are recognized as incurred and such costs are excluded from lease balances recorded on the consolidated balance sheets. In addition, the Company excluded its ground lease with Las Vegas Sands Corp. (“Sands”) associated with MSG Sphere in Las Vegas from the ROU asset and lease liability balance recorded on the consolidated balance sheets as the ground lease will have no fixed rent. Under the ground lease agreement, Sands will receive priority access to purchase tickets to events at the venue for inclusion in hotel packages or other uses, as well as certain rent-free use of the venue to support its Sands Expo Convention Center business. However, if certain return objectives are achieved, Sands will receive 25% of the after-tax cash flow in excess of such objectives. The ground lease is for a term of 50 years, commencing upon substantial completion of the MSG Sphere.
As of June 30, 2021, the Company’s existing operating leases, which are recorded on the accompanying financial statements, have remaining lease terms ranging from 0.75 years to 19.5 years. In certain instances, leases include options to renew, with varying option terms in each case. The exercise of lease renewal options is generally at the Company’s discretion and is considered in the Company’s assessment of the respective lease term. The Company’s lease agreements do not contain material residual value guarantees or material restrictive covenants.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The following table summarizes the ROU assets and lease liabilities recorded on the Company’s consolidated balance sheets as of June 30, 2021 and 2020:
Line Item in the Company’s Consolidated Balance Sheet June 30, 2021 June 30, 2020
Right-of-use assets:
Operating leases
Right-of-use lease assets $ 268,568  $ 220,328 
Lease liabilities:
Operating leases, current
Operating lease liabilities, current $ 68,544  $ 53,388 
Operating leases, noncurrent
Operating lease liabilities, noncurrent 224,729  174,219 
Total lease liabilities
$ 293,273  $ 227,607 
The following table summarizes the activity recorded within the Company’s consolidated and combined statements of operations for the years ended June 30, 2021 and 2020:
Line Item in the Company’s Consolidated and Combined Statement of Operations Years Ended June 30,
2021 2020
Operating lease cost
Direct operating expenses $ 31,074  $ 32,348 
Operating lease cost
Selling, general and administrative expenses
20,898  19,525 
Short-term lease cost
Direct operating expenses —  348 
Variable lease cost
Direct operating expenses 1,810  4,008 
Variable lease cost
Selling, general and administrative expenses 57  61 
Total lease cost $ 53,839  $ 56,290 
Supplemental Information
For Fiscal Year 2021 and Fiscal Year 2020, cash paid for lease arrangements totaled $49,312 and $54,980, respectively. For Fiscal Year 2021, the Company recorded new operating lease liabilities of $47,790 arising from obtaining right-of-use lease assets for six locations primarily associated with venues of Tao Group Hospitality. Additionally, in connection with the Hakkasan acquisition on April 27, 2021, the Company acquired operating lease liabilities of $52,025 related to 17 locations. For Fiscal Year 2020, the Company obtained $16,765 of ROU assets in exchange for operating lease liabilities related to three leases.
During Fiscal Year 2020, a net non-cash impairment charge of $5,646 was recorded for the right-of-use lease assets, net of related lease liabilities, associated with two Tao Group Hospitality venues that the Company decided to close and was therefore, released from the obligation to make future payments under the respective lease agreements. See Note 1 for further details. In addition, in connection with COVID-19 related shutdown of its venues, Tao Group Hospitality has negotiated, and continues to negotiate, rent concessions with landlords for certain of its leased venues. The Company has elected to apply the temporary practical expedient to account for such rent abatement concessions as if they were contemplated as part of the existing venue lease contracts. Accordingly, the Company accounted for such concessions as negative variable lease cost in the amount of the rent abatement concessions received during the fourth quarter of Fiscal Year 2020.
The weighted average remaining lease term for operating leases recorded on the accompanying consolidated balance sheet as of June 30, 2021 was 7.3 years. The weighted average discount rate was 8.04% as of June 30, 2021 and represented the Company’s estimated incremental borrowing rate, assuming a secured borrowing, based on the remaining lease term at the time of either (i) adoption of the standard or (ii) the period in which the lease term expectation was modified.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Maturities of operating lease liabilities as of June 30, 2021 are as follows:
Fiscal year ending June 30, 2022 $ 71,346 
Fiscal year ending June 30, 2023 72,248 
Fiscal year ending June 30, 2024 52,311 
Fiscal year ending June 30, 2025 33,751 
Fiscal year ending June 30, 2026 30,248 
Thereafter 150,473 
Total lease payments 410,377 
Less imputed interest 117,104 
Total lease liabilities (a)
$ 293,273 
________________
(a)Operating lease payments exclude minimum lease payments related to a location associated with the entertainment dining and nightlife offerings as the Company has not yet taken possession of the space.
Lessor Arrangements
In connection with the Entertainment Distribution, the Company entered into Arena License Agreements with MSG Sports that, among other things, require the Knicks and the Rangers to play their home games at The Garden in exchange for fixed monthly license fees over the term of the agreements. The Company accounts for these license fees as operating lease revenue given that the Company provides MSG Sports with the right to direct the use of and obtain substantially all of the economic benefit from The Garden during Knicks and Rangers home games. Operating lease revenue is recognized on a straight-line basis over the lease term. In the case of the Arena License Agreements, the lease terms relate to non-consecutive periods of use when MSG Sports uses The Garden for their home games, and operating lease revenue is therefore recognized ratably as events occur.
The Arena License Agreements provide that license fees are not required to be paid by MSG Sports during periods when The Garden is unavailable for use due to a force majeure event. As a result of government-mandated suspension of events at The Garden due to the impact of the COVID-19 pandemic, at the beginning of Fiscal Year 2021, The Garden was not available for use by MSG Sports. Starting December 2020, The Garden reopened for games of the Knicks and the Rangers but initially fans were not permitted to attend due to governmental restrictions. The restrictions were partially lifted during February 2021 with limited fans permitted to attend (10% capacity). Through June 30, 2021, the Knicks and Rangers played a total of 69 home games at The Garden and the Company recorded $21,345 of revenues under the Arena License Agreements for Fiscal Year 2021. In addition, the Company recorded related party sublease revenue for office space of $2,552 and third-party lease revenues of $428 for Fiscal Year 2021, respectively.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Note 11. Goodwill and Intangible Assets
The carrying amounts and activity of goodwill from June 30, 2019 through June 30, 2021 are as follows:
Entertainment Tao Group Hospitality Total
Balance as of June 30, 2019 $ 76,975  $ 88,583  $ 165,558 
Allocation to the assets held for sale, subsequently sold (a)
(2,666) —  (2,666)
Goodwill impairment (b)
—  (88,583) (88,583)
Balance as of June 30, 2020 $ 74,309  $ —  $ 74,309 
Acquisition of Hakkasan (c)
—  3,378  3,378 
Balance as of June 30, 2021 $ 74,309  $ 3,378  $ 77,687 
________________
(a)In connection with the execution of the MIPA on March 24, 2020, pursuant to which the Company agreed to sell the Forum in Inglewood (see Note 3), the Company allocated $2,666 of goodwill associated with the Forum to assets held for sale in accordance with FASB ASC Topic 350, Intangibles - Goodwill and Other, ASC Subtopics 350-20-40-1 to 350-20-40-7. The allocation of goodwill to the Forum was based on the fair value of the Forum compared to the fair value of the Company’s reporting unit. The fair value of the Company’s reporting unit and the Forum were based on unobservable inputs classified within Level III of the fair value hierarchy, primarily from utilizing the discounted cash flow model, which is an income-based approach. Subsequent to this reclassification, the transaction closed on May 1, 2020.
(b)During the first quarter of Fiscal Year 2020, the Company performed its annual impairment test of goodwill and determined that there were no impairments of goodwill identified for any of its reporting units as of the impairment test date. During the third quarter of Fiscal Year 2020, the Company’s operating results were, and continue to be, materially impacted by the COVID-19 pandemic (see Note 1 — Contracts with Customers Impact of the COVID-19 Pandemic). While the Company concluded that the effects of the COVID-19 pandemic would not more likely than not reduce the fair value of its Entertainment reporting unit below its carrying amount, the Company concluded that a triggering event had occurred for its Tao Group Hospitality reporting unit as of March 31, 2020 and performed an interim impairment test. For the interim impairment test, the Company estimated the fair value of the Tao Group Hospitality reporting unit based on a discounted cash flow model (income approach). This approach relied on numerous assumptions and judgments that were subject to various risks and uncertainties. Principal assumptions utilized, all of which are considered Level III inputs under the fair value hierarchy, include the Company’s estimates of future revenue and terminal growth rates, margin assumptions and the discount rate applied to estimate future cash flows. In the fourth quarter of Fiscal Year 2020, the Company completed an evaluation of the subsequent activity. As a result, the Company recorded a non-cash goodwill impairment charge of $88,583 during Fiscal Year 2020. During the first quarter of Fiscal Year 2021, the Company performed its annual impairment test of goodwill and determined that there were no impairments of goodwill identified for any of its reporting units as of the impairment test date
(c)The TAO Group’s purchase price allocation for the Hakkasan acquisition is preliminary and could be subject to further revision as additional information related to the fair value of the identifiable net assets and redeemable noncontrolling interests becomes available during the measurement period that concludes in April 2022. Goodwill recognized in this acquisition is not deductible for income tax purposes. See Note 3 for more information on the allocation of the purchase price and goodwill recognized in connection with this acquisition.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The Company’s indefinite-lived intangible assets, all of which are within the Entertainment segment, as of June 30, 2021 and 2020 are as follows:
June 30,
2021 		June 30,
2020
Trademarks 61,881  61,881 
Photographic related rights 1,920  1,920 
$ 63,801  $ 63,801 
During the first quarter of Fiscal Year 2021, the Company performed its annual impairment test of indefinite-lived intangible assets and determined that there were no impairments of indefinite-lived intangibles identified as of the impairment test date.
The Company’s intangible assets subject to amortization are as follows: 
June 30, 2021 Estimated Useful Lives Gross Accumulated
Amortization 		Net
Trade names (a)
2 years to 25 years $ 121,000  $ (25,605) $ 95,395 
Venue management contracts 5.67 years to 20 years 85,700  (17,518) 68,182 
Non-compete agreements 5.75 years 9,000  (6,913) 2,087 
Festival rights 15 years 8,080  (2,696) 5,384 
Other intangibles (c)
15 years 4,217  (3,814) 403 
$ 227,997  $ (56,546) $ 171,451 
June 30, 2020 Gross Accumulated
Amortization 		Net
Trade names (a)
$ 97,530  $ (20,774) $ 76,756 
Venue management contracts (b)
79,000  (15,590) 63,410 
Non-compete agreements 9,000  (5,348) 3,652 
Festival rights 8,080  (2,156) 5,924 
Other intangibles (c)
4,217  (3,533) 684 
$ 197,827  $ (47,401) $ 150,426 
_________________
(a)The increase in trade names of $23,470 in Fiscal Year 2021, is primarily attributable to Tao Group Hospitality’s acquisition of Hakkasan. Such trade names were valued using unobservable inputs within Level III of the fair value hierarchy, utilizing the discounted cash flow models and relief-from-royalty approach with a weighted-average amortization period of approximately 17.7 years. During Fiscal Year 2020, the Company recorded a non-cash impairment charge of $3,541 associated with one venue within Tao Group Hospitality (see Note 1 “Impact of the COVID-19 Pandemic”).
(b)The increase in venue management contracts of $23,700 in Fiscal Year 2021, is attributable to Tao Group Hospitality’s acquisition of Hakkasan. Such contracts were valued using unobservable inputs within Level III of the fair value hierarchy, utilizing the discounted cash flow models with a weighted-average amortization period of approximately 11.8 years. In addition, during the third quarter of Fiscal Year 2021, the Company recorded $14,280 of accelerated amortization expense for certain venue management contracts (gross cost of $17,000) as a result of Tao Group Hospitality converting certain venues to operating leases that were previously under management contracts.
Amortization expense for intangible assets, excluding the amortization of favorable lease assets of $4,696 for the years ended June 30, 2019, which is reported in rent expense, was $26,145, $13,751 and $13,439 for the years ended June 30, 2021, 2020 and 2019, respectively.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The Company expects its annual amortization expense for existing intangible assets subject to amortization for each fiscal year from 2022 through 2026 to be as follows:
Fiscal year ending June 30, 2022 $ 14,558 
Fiscal year ending June 30, 2023 13,350 
Fiscal year ending June 30, 2024 12,676 
Fiscal year ending June 30, 2025 12,676 
Fiscal year ending June 30, 2026 12,668 

Note 12. Commitments and Contingencies
Commitments
As of June 30, 2021, commitments of the Company in the normal course of business in excess of one year are as follows:
Commitments (a) (b)
Debt Repayments(c)
Other(d)
Total (e)
Fiscal year ending June 30, 2022 $ 12,750  $ 120,132  $ 132,882 
Fiscal year ending June 30, 2023 17,137  118  17,255 
Fiscal year ending June 30, 2024 34,000  118  34,118 
Fiscal year ending June 30, 2025 6,500  57  6,557 
Fiscal year ending June 30, 2026 620,750  —  620,750 
Thereafter —  —  — 
$ 691,137  $ 120,425  $ 811,562 
_________________
(a)The Company’s material off balance sheet arrangements primarily include (i) MSG Sphere in Las Vegas related commitments of approximately $1,025,000 for which the timing of future cash payments is uncertain and may change as development and construction progresses, (ii) $60,458 of operating lease payments for a lease in Burbank (excluding tenant allowance reimbursement of $24,000), which was not recognized on the Consolidated Balance Sheet as of June 30, 2021 since the Company has not yet taken possession of the property, (iii) $60,310 of commitments for capital expenditures, equipment purchases, and services agreements, and (iv) letters of credit of $4,226 obtained by the Company as collateral for lease agreements of the Company and Tao Group Hospitality.
(b)See Note 10 for more information regarding the Company’s contractually obligated minimum lease payments for operating leases having an initial noncancelable term in excess of one year for the Company’s venues, including the Tao Group Hospitality venues and various corporate offices. These commitments are presented exclusive of the imputed interest used to reflect the payment’s present value. In addition, see Note 23 Subsequent Events for a discussion of the amendment and extension of the Radio City Music Hall lease, executed in July 2021.
(c)See Note 14 for more information regarding the principal repayments required under the National Properties Term Loan Facility and the Tao Senior Secured Credit Facilities and a note with respect to a loan of $637 received by BCE from its noncontrolling interest holder that is due in April 2023.
(d)Includes accrued expense of approximately $98,000 associated with the development and construction of MSG Sphere in Las Vegas, all due within Fiscal Year 2022.
(e)Pension obligations have been excluded from the table above as the timing of the future cash payments is uncertain. See Note 15 for more information on the future funding requirements under our pension obligations.
Under the terms of lease agreements and related guaranties, subsidiaries of the Company have certain operating requirements, with one of these subsidiaries being also required to meet a certain net worth obligation. In the event that these subsidiaries
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

were to fail to meet the required obligations and were unable to avail themselves of the cure options, the landlord could terminate the lease.
The Company and a subsidiary of the Sands entered into a ground lease in Las Vegas pursuant to which the Company has agreed to construct a large-scale venue. The ground lease is for a term of 50 years. The Company has announced plans to construct an MSG Sphere on that site. The ground lease has no fixed rent; however, if certain return objectives are achieved, Sands will receive 25% of the after-tax cash flow in excess of such objectives.
Tao Group Hospitality equityholders have the right to put their equity interests in Tao Group Hospitality to a subsidiary of the Company. The purchase price is at fair market value subject, in certain cases, to a floor. Consideration paid upon exercise of such put right shall be, at the Company’s option, in cash, debt, or our Class A Common Stock, subject to certain limitations. In addition, Hakkasan USA, Inc., a minority interest holder of Tao Group Sub-Holdings LLC, a subsidiary of Tao Group Hospitality, following the Hakkasan acquisition, has the right to put its equity interest in Tao Group Sub-Holdings LLC to Tao Group Hospitality for fair market value (subject to a floor value determined based upon a multiple of trailing EBITDA) beginning in 2026 and each second year thereafter by providing notice during a 30 day window starting June 1, 2025 (and each second June 1 thereafter). Consideration paid upon exercise of the put right shall be, at the option of Tao Group Hospitality, in cash, debt, or stock of the Company or its successor, subject to certain limitations. Additionally, Tao Group Hospitality may elect to satisfy this put obligation through a sale of Tao Group Sub-Holdings LLC or a going public transaction with respect to Tao Group Hospitality.
Legal Matters
Fourteen complaints were filed in connection with the Merger by purported stockholders of the Company and MSG Networks.
Nine of these complaints involved allegations of materially incomplete and misleading information set forth in the joint proxy statement/prospectus filed by the Company and MSG Networks in connection with the Merger. As a result of supplemental disclosures made by the Company and MSG Networks on July 1, 2021, all of these actions were voluntarily dismissed with prejudice prior to or shortly following the consummation of the Merger.
On May 27, 2021, a complaint captioned Hollywood Firefighters’ Pension Fund et al. v. James Dolan, et al., 2021-0468-KSJM, was filed in the Court of Chancery of the State of Delaware by purported stockholders of the Company against the Company, its Board of Directors (the “Board”), certain Dolan family stockholders and MSG Networks. The complaint purported to allege derivative claims on behalf of the Company and claims on behalf of a putative class of Company stockholders concerning the Merger. Plaintiffs alleged, among other things, that the Merger is a business combination with an interested stockholder that is not allowed under Section 203 of the Delaware General Corporation Law (the “DGCL”), that the Board members and majority stockholders violated their fiduciary duties in agreeing to the Merger, and that the disclosures relating to the Merger are misleading or incomplete. Plaintiffs sought, among other relief, declaratory and preliminary and permanent injunctive relief enjoining the stockholder vote and consummation of the Merger, and an award of damages in the event the transaction is consummated and plaintiffs’ attorneys’ fees. On June 15, 2021, plaintiffs filed a brief in support of its motion seeking a preliminary injunction enjoining the Company’s stockholder vote and consummation of the Merger, which the defendants opposed. The Court of Chancery denied the plaintiffs’ preliminary injunction motion on July 2, 2021.
On June 9, 2021, a complaint captioned Timothy Leisz v. MSG Networks Inc. et al., 2021-0504-KSJM, was filed in the Court of Chancery of the State of Delaware by a purported stockholder of MSG Networks against MSG Networks, the MSG Networks board, certain Dolan family stockholders and the Company. The complaint purports to allege claims on behalf of a putative class of MSG Networks stockholders concerning the Merger. The MSG Networks plaintiff alleged, among other things, that the Merger is a business combination with an interested stockholder that is not allowed under Section 203 of the DGCL, that the MSG Networks board members and majority stockholders violated their fiduciary duties in agreeing to the Merger, and that the disclosures relating to the merger are misleading or incomplete. Plaintiff sought, among other relief, declaratory and preliminary and permanent injunctive relief enjoining the stockholder vote and consummation of the Merger, and an award of damages in the event the transaction is consummated and plaintiff’s attorneys’ fees. On June 21, 2021, plaintiff filed a brief in support of his motion seeking a preliminary injunction enjoining the MSG Networks stockholder vote and consummation of the Merger, which defendants have opposed. The Court of Chancery denied the plaintiff’s preliminary injunction motion on July 2, 2021.
On July 6, 2021, a complaint captioned Stevens et al. v. Dolan et al., 2021-575, was filed in the Court of Chancery of the State of Delaware by purported stockholders of MSG Networks against the MSG Networks board. The complaint purports to allege claims on behalf of a putative class of MSG Networks stockholders concerning the Merger. The plaintiffs allege, among other things, that the MSG Networks board members and majority stockholders violated their fiduciary duties in agreeing to the
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Merger and that the disclosures relating to the merger are misleading or incomplete. Plaintiffs sought, among other relief, an order rescinding the merger and rescinding any severance paid to James Dolan in connection with the Merger, an award of damages in the event the transaction is consummated, and plaintiffs’ attorneys’ fees.
On July 6, 2021, a complaint captioned The City of Boca Raton Police and Firefighters’ Retirement System v. MSG Networks Inc., 2021-0578, was filed in the Court of Chancery of the State of Delaware by purported shareholders of MSG Networks against MSG Networks. The complaint purported to seek to enforce plaintiff’s right to inspect certain of MSG Networks’ books and records under Section 220 of the DGCL. The complaint was voluntarily dismissed on August 10, 2021.
On August 11, 2021,a stockholder derivative complaint captioned City of Miramar Retirement Plan and Trust Fund for General Employees et al. v. Dolan et al., 2021-0692 was filed in the Court of Chancery of the State of Delaware by purported stockholders of the Company. The complaint purports to allege derivative claims on behalf of the Company and direct claims on behalf of a putative class of Company stockholders. Plaintiffs allege that the Board and the Company’s majority stockholders violated their fiduciary duties by failing to protect the Company’s interest in connection with the Merger. Plaintiffs seek, among other relief, an award of damages to the purported class and Company including interest, and plaintiffs’ attorneys’ fees.
We are currently unable to determine a range of potential liability, if any, with respect to these Merger-related claims. Accordingly, no accrual for these matters has been made in our consolidated financial statements.
The Company is a defendant in various other lawsuits. Although the outcome of these matters cannot be predicted with certainty, management does not believe that resolution of these lawsuits will have a material adverse effect on the Company.
Note 13. Fair Value Measurements
The following table presents the Company’s assets that are measured at fair value within Level I of the fair value hierarchy on a recurring basis using observable inputs that reflect quoted prices for identical assets in active markets. These assets include (i) cash equivalents in money market accounts, time deposits and U.S. treasury bills, (ii) short-term investments in term deposits and U.S. treasury bills, (iii) notes receivable, and (iv) equity investments with readily determinable fair value: 
Line Item on Consolidated Balance Sheet June 30,
2021 2020
Assets:
Money market accounts (a)
Cash and cash equivalents $ 362,237  $ — 
Time deposits (a)
Cash and cash equivalents 691,521  777 
U.S. treasury bills (a)
Cash and cash equivalents —  699,945 
Term deposits (b)
Short-term investments —  37,250 
U.S. treasury bills (b)
Short-term investments —  299,942 
Notes receivable (b)
Other current assets —  6,328 
Equity investments with readily determinable fair value (c)
Other assets 86,264  57,061 
Total assets measured at fair value $ 1,140,022  $ 1,101,303 
_________________
(a)The carrying amount of the Company’s cash equivalents in money market accounts, time deposits, and U.S. treasury bills approximate fair value due to their short-term maturities.
(b)As of June 30, 2020, the Company’s short-term investments consisted of investments that (i) had original maturities of greater than three months and (ii) could be converted into cash by the Company within one year. In addition, the Company’s notes receivable were invested with a banking institution as collateral for issuances of letters of credit. The Company’s notes receivable and short-term investments in term deposits were carried at cost, including interest accruals, which approximated fair value and were classified within Level I of the fair value hierarchy.
(c)See Note 7 for more information on the Company’s equity investments with readily determinable fair value in Townsquare and DraftKings.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

In addition to the table above, the carrying value and fair value of the Company’s financial instruments reported in the accompanying consolidated balance sheets are as follows:
June 30, 2021 June 30, 2020
Carrying
Value 		Fair
Value 		Carrying
Value 		Fair
Value
Liabilities
Current and non-current portion of long-term debt under National Properties Term Loan Facility (a)
$ 646,750  $ 669,386  $ —  $ — 
Current and non-current portion of long-term debt under Tao Credit Facilities (a)
43,750  43,851  33,750  32,367 
_________________
(a)On May 23, 2019, Tao Group Intermediate Holdings LLC and Tao Group Operating LLC entered into a $40,000 five-year term loan facility and a $25,000 five-year term revolving facility. On November 12, 2020, MSG National Properties and certain subsidiaries of the Company entered into the National Properties Term Loan Facility, providing a five-year $650,000 term loan facility. The Company’s long-term debt is classified within Level II of the fair value hierarchy as it is valued using quoted indices of similar securities for which the inputs are readily observable. See Note 14 for more information and outstanding balances on this long-term debt.
Note 14. Credit Facilities
National Properties Term Loan Facility
On November 12, 2020, MSG National Properties, an indirect, wholly-owned subsidiary of the Company, MSG Entertainment Group and certain subsidiaries of MSG National Properties entered into a five-year $650,000 senior secured term loan facility (the “National Properties Term Loan Facility”). The proceeds of the National Properties Term Loan Facility may be used to fund working capital needs, for general corporate purposes of MSG National Properties and its subsidiaries, and to make distributions to MSG Entertainment Group.
The National Properties Term Loan Facility includes a minimum liquidity covenant, pursuant to which MSG National Properties and its restricted subsidiaries are required to maintain a specified minimum level of average daily liquidity, consisting of cash and cash equivalents and available revolving commitments, over the last month of each quarter. From the closing date until the first anniversary of the National Properties Term Loan Facility, the minimum liquidity threshold is $450,000, which is reduced each quarter by the amount of cash usage, subject to a minimum liquidity floor of $200,000. After the first anniversary, the minimum liquidity level is reduced to $200,000. If at any time the total leverage ratio of MSG National Properties and its restricted subsidiaries is less than 5.00 to 1.00 as of the end of any four consecutive fiscal quarter periods or MSG National Properties obtains an investment grade rating, the minimum liquidity level is permanently reduced to $50,000.
Subject to customary notice and minimum amount conditions, the Company may voluntarily prepay outstanding loans under the National Properties Term Loan Facility at any time, in whole or in part (subject to customary breakage costs with respect to LIBOR loans) subject to a prepayment premium equal to (i) for the initial 18 month period following the facility’s effective date, 2.0% of the principal amount prepaid plus the amount of interest that would have been payable on such principal amount from the date of such prepayment through the end of such 18-month period, (ii) after the initial 18 month period but on or prior to the three year anniversary of the effective date, 2.0% of the principal amount prepaid, (iii) after the three year anniversary but on or prior to the four year anniversary of the effective date, 1.0% of the principal amount prepaid and (iv) after the 4th anniversary, 0%.
The principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments in an aggregate amount equal to 1.00% per annum (0.25% per quarter), with the balance due at the maturity of the facility. The National Properties Term Loan Facility will mature on November 12, 2025. Borrowings under the National Properties Term Loan Facility bear interest at a floating rate, which at the option of MSG National Properties may be either (i) a base rate plus a margin of 5.25% per annum or (ii) LIBOR, with a floor of 0.75%, plus a margin of 6.25% per annum. The interest rate on the National Properties Term Loan Facility as of June 30, 2021 was 7.00%.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

All obligations under the National Properties Term Loan Facility are guaranteed by MSG Entertainment Group and MSG National Properties’ existing and future direct and indirect domestic subsidiaries, other than the subsidiaries that own The Garden, BCE and certain other excluded subsidiaries (the “Subsidiary Guarantors”).
All obligations under the National Properties Term Loan Facility, including the guarantees of those obligations, are secured by certain of the assets of MSG National Properties and the Subsidiary Guarantors (collectively, “Collateral”) including, but not limited to, a pledge of some or all of the equity interests held directly or indirectly by MSG National Properties in each Subsidiary Guarantor. The Collateral does not include, among other things, any interests in The Garden or the leasehold interests in Radio City Music Hall and the Beacon Theatre.
Under certain circumstances, MSG National Properties is required to make mandatory prepayments on loans outstanding, including prepayments in an amount equal to a specified percentage of excess cash flow in any fiscal year and prepayments in an amount equal to the net cash proceeds of certain sales of assets or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights), in each case subject to certain exceptions.
In addition to the minimum liquidity covenant, the National Properties Term Loan Facility and the related security agreement contain certain customary representations and warranties, affirmative and negative covenants and events of default.
The National Properties Term Loan Facility contains certain restrictions on the ability of MSG National Properties and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the National Properties Term Loan Facility, including the following: (i) incur additional indebtedness; (ii) create liens on certain assets; (iii) make investments, loans or advances in or to other persons; (iv) pay dividends and distributions or repurchase capital stock (which will restrict the ability of MSG National Properties to make cash distributions to the Company); (v) repay, redeem or repurchase certain indebtedness; (vi) change its lines of business; (vii) engage in certain transactions with affiliates; (viii) amend their respective organizational documents; (ix) merge or consolidate; and (x) make certain dispositions. As of June 30, 2021, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Term Loan Facility.
Tao Credit Facilities
On May 23, 2019, Tao Group Intermediate Holdings LLC (“TAOIH” or “Intermediate Holdings”) and Tao Group Operating LLC (“TAOG” or “Senior Borrower”), entered into a credit agreement (the “Tao Senior Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and a letter of credit issuer, and the lenders party thereto. Together the Tao Senior Credit Agreement and a $49,000 intercompany subordinated credit agreement that matures in August 2024 (the “Tao Subordinated Credit Agreement”) between a subsidiary of the Company and Tao Group Sub-Holdings LLC, a subsidiary of Tao Group Hospitality, replaced the Senior Borrower’s prior credit agreement dated January 31, 2017 (“2017 Tao Credit Agreement”). On June 15, 2020, the Company entered into the second amendment to the Tao Subordinated Credit Agreement, which provided an additional $22,000 of intercompany loan borrowing availability under the Tao Subordinated Credit Agreement. The net intercompany loan outstanding balances under the Tao Subordinated Credit Agreement, as amended, were $63,000 and $49,000 as of June 30, 2021 and 2020, respectively. The balances and interest-related activities pertaining to the Tao Subordinated Credit Agreement, as amended, have been eliminated in the consolidated and combined financial statements in accordance with ASC Topic 810, Consolidation.
In connection with the early termination of the 2017 Tao Credit Agreement, the Company recorded $3,977 of loss on extinguishment of debt in the fourth quarter of Fiscal Year 2019, which is reported as Miscellaneous income (expense) in the accompanying combined statement of operations for the year ended June 30, 2019. The loss on extinguishment of debt consisted of a write-off of deferred financing costs and prepayment penalties paid in connection with the 2017 Tao Credit Agreement. See Note 21. Segment Information for further details.
The Tao Senior Credit Agreement provides TAOG with senior secured credit facilities (the “Tao Senior Secured Credit Facilities”) consisting of: (i) an initial $40,000 term loan facility with a term of five years (the “Tao Term Loan Facility”) and (ii) a $25,000 revolving credit facility with a term of five years (the “Tao Revolving Credit Facility”). Up to $5,000 of the Tao Revolving Credit Facility is available for the issuance of letters of credit. All borrowings under the Tao Revolving Credit Facility, including, without limitation, amounts drawn under the revolving line of credit are subject to the satisfaction of customary conditions. The Tao Senior Secured Credit Facilities were obtained without recourse to the Company or any of its affiliates (other than TAOG, TAOIH and its subsidiaries and in respect of a certain reserve account, each as discussed below).
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The Tao Senior Credit Agreement requires TAOIH to comply with a maximum total leverage ratio of 4.00:1.00 and a maximum senior leverage ratio of 3.00:1.00 from the closing date until December 31, 2021 and a maximum total leverage ratio of 3.50:1.00 and a maximum senior leverage ratio of 2.50:1.00 from and after December 31, 2021. In addition, there is a minimum fixed charge coverage ratio of 1.25:1.00 for TAOIH. On August 6, 2020, TAOG and TAOIH entered into an amendment to the Tao Senior Credit Agreement, which suspended the application of the financial maintenance covenants thereunder, modified certain restrictive covenants therein through December 31, 2021, modified the applicable interest rates and increased the minimum liquidity requirement for the outstanding balance of $33,750 under the Tao Term Loan Facility and for the $25,000 availability under the Tao Revolving Credit Facility. In addition, in connection with the amendment, the Company, through its direct wholly owned subsidiary, MSG Entertainment Group, entered into a guarantee and reserve account agreement (i) to guarantee the obligations of TAOG under the Tao Senior Credit Agreement, (ii) to establish and grant a security interest in a reserve account that initially held a deposit of approximately $9,800 and (iii) with a covenant to maintain a minimum liquidity requirement of no less than $75,000 at all times. The balance held in the reserve account was approximately $4,800 as of June 30, 2021. As of June 30, 2021, TAOG, TAOIH and the restricted subsidiaries were in compliance with the covenants of the Tao Senior Credit Agreement.
All obligations under the Tao Senior Credit Agreement are guaranteed by MSG Entertainment Group, TAOIH and TAOIH’s existing and future direct and indirect domestic subsidiaries (other than (i) TAOG, (ii) domestic subsidiaries substantially all of whose assets consist of controlled foreign corporations and (iii) subsidiaries designated as immaterial subsidiaries or unrestricted subsidiaries) (the “Tao Subsidiary Guarantors,” and together with TAOIH, the “Tao Guarantors”). All obligations under the Tao Senior Credit Agreement, including the guarantees of those obligations, are secured by the reserve account noted above and substantially all of the assets of TAOG and each Tao Guarantor (collectively, “Tao Collateral”), including, but not limited to, a pledge of the equity interests in TAOG held directly by TAOIH and the equity interests in each Tao Subsidiary Guarantor held directly or indirectly by TAOIH.
Borrowings under the Tao Senior Credit Agreement bear interest at a floating rate, which at the option of the Senior Borrower may be either (a) a base rate plus an additional rate ranging from 1.50% to 2.50% per annum (determined based on a total leverage ratio) (the “Base Rate”), or (b) a Eurocurrency rate plus an additional rate ranging from 2.50% to 3.50% per annum (determined based on a total leverage ratio) (the “Eurocurrency Rate”), provided that through December 31, 2021, the additional rate used in calculating the floating rate is (i) 1.50% per annum for borrowings bearing the Base Rate, and (ii) 2.50% per annum for borrowings bearing the Eurocurrency Rate. The Tao Senior Credit Agreement requires TAOG to pay a commitment fee of 0.50% in respect of the daily unused commitments under the Tao Revolving Credit Facility. TAOG is also required to pay customary letter of credit fees, as well as fronting fees, to banks that issue letters of credit pursuant to the Tao Senior Credit Agreement. The interest rate on the Tao Senior Credit Agreement as of June 30, 2021 was 2.60%. There was $15,000 and zero borrowings outstanding under the Tao Revolving Credit Facility as of June 30, 2021 and 2020, respectively. During the year ended June 30, 2021, Tao Group Hospitality utilized $750 of the Tao Revolving Credit Facility for issuance of letters of credit and the remaining borrowing available as of June 30, 2021 was $9,250.
In addition to the financial covenants described above, the Tao Senior Credit Agreement and the related security agreements contain certain customary representations and warranties, affirmative covenants and events of default. The Tao Senior Credit Agreement contains certain restrictions on the ability of TAOIH, TAOG and its restricted subsidiaries to take certain actions as provided in (and subject to various exceptions and baskets set forth in) the Tao Senior Credit Agreement, including, without limitation, the following: (i) incurring additional indebtedness and contingent liabilities; (ii) creating liens on certain assets; (iii) making investments, loans or advances in or to other persons; (iv) paying dividends and distributions or repurchasing capital stock; (v) engaging in certain transactions with affiliates; (vi) amending specified agreements; (vii) merging or consolidating; (viii) making certain dispositions; and (ix) entering into agreements that restrict the granting of liens. Intermediate Holdings is subject to a customary passive holding company covenant.
Subject to customary notice and minimum amount conditions, TAOG may voluntarily prepay outstanding loans under the Tao Senior Credit Agreement at any time, in whole or in part, without premium or penalty (except for customary breakage costs with respect to Eurocurrency loans). The initial Tao Term Loan Facility amortizes quarterly in accordance with its terms from June 30, 2019 through March 31, 2024 with a final maturity date on May 23, 2024. TAOG is required to make mandatory prepayments of the Tao Term Loan Facility from the net cash proceeds of certain sales of assets (including Tao Collateral) or casualty insurance and/or condemnation recoveries (in each case, subject to certain reinvestment, repair or replacement rights) and the incurrence of certain indebtedness, subject to certain exceptions.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Principal Repayments
Long-term debt maturities over the next five years for the outstanding balance under the Tao Term Loan Facility(a) and National Properties Term Loan Facility as of June 30, 2021 were:
Tao Term Loan Facility National Properties Term Loan Facility Total
Fiscal year ending June 30, 2022 $ 6,250  $ 6,500  $ 12,750 
Fiscal year ending June 30, 2023 10,000  6,500  16,500 
Fiscal year ending June 30, 2024 (a)
27,500  6,500  34,000 
Fiscal year ending June 30, 2025 —  6,500  6,500 
Fiscal year ending June 30, 2026 —  620,750  620,750 
Thereafter —  —  — 
$ 43,750  $ 646,750  $ 690,500 
_______________
(a)Repayment balance for the fiscal year ending June 30, 2024 includes the $15,000 borrowing outstanding under the Tao Revolving Credit Facility as of June 30, 2021.
Deferred Financing Costs
In connection with the National Properties Term Loan Facility, the Company incurred a $19,500 original issue discount and $14,417 of issuance costs (collectively, “deferred financing costs”). The deferred financing costs are amortized, as interest expense, over the term of the National Properties Term Loan Facility on a straight-line basis, which approximates the effective interest method.
The following table summarizes the presentation of the outstanding balances under the Tao Term Loan Facility, the Tao Revolving Credit Facility and the National Properties Term Loan Facility, as well as the related deferred financing costs in the accompanying consolidated balance sheets as of June 30, 2021 and 2020.
June 30, 2021 June 30, 2020
Principal Unamortized Deferred Financing Costs
Net (a)
Principal Unamortized Deferred Financing Costs
Net (a)
Current portion
National Properties Term Loan Facility
$ 6,500  $ (6,783) $ (283) $ —  $ —  $ — 
Tao Term Loan Facility 6,250  (239) 6,011  5,000  (208) 4,792 
Current portion of long-term debt, net of deferred financing costs (a)
$ 12,750  $ (7,022) $ 5,728  $ 5,000  $ (208) $ 4,792 
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

June 30, 2021 June 30, 2020
Principal Unamortized Deferred Financing Costs
Net (a)
Principal Unamortized Deferred Financing Costs
Net (a)
Noncurrent portion
National Properties Term Loan Facility (a)
$ 640,250  $ (22,819) $ 617,431  $ —  $ —  $ — 
Tao Term Loan Facility 22,500  (475) 22,025  28,750  (624) 28,126 
Tao Revolving Credit Facility (b)
15,000  —  15,000  —  —  — 
Long-term debt, net of deferred financing costs (a)
$ 677,750  $ (23,294) $ 654,456  $ 28,750  $ (624) $ 28,126 
__________________________________
(a)In addition to the outstanding balance associated with the Tao Term Loan Facility, the Tao Revolving Credit Facility and the National Properties Term Loan Facility disclosed above, the Company’ s Long-term debt, net of deferred financing costs in the accompanying consolidated balance sheet of $655,093 as of June 30, 2021 included $637 of the note with respect to a loan received by BCE from its noncontrolling interest holder that is due in April 2023.
(b)Unamortized deferred financing costs associated with Tao Revolving Credit Facility are presented under the captions Other current assets and Other assets in the accompanying consolidated balance sheets:
June 30,
2021 		June 30,
2020
Other current assets $ 108  $ 85 
Other assets 207  248 
Supplemental cash flows information
During the years ended June 30, 2021, 2020 and 2019, interest payments and loan principal repayments made by the Company under the Tao Senior Credit Agreement for term loan and revolving credit facilities and National Properties Term Loan Facility were as follows:
Interest Payments Loan Principal Repayments
Years Ended June 30, Years Ended June 30,
2021 2020 2019 2021 2020 2019
National Properties Term Loan Facility $ 22,879  $ —  $ —  $ 3,250  $ —  $ — 
Tao Senior Credit Agreement 1,128  1,817  13,084  5,000  21,250  109,312 
$ 24,007  $ 1,817  $ 13,084  $ 8,250  $ 21,250  $ 109,312 
Note 15. Pension Plans and Other Postretirement Benefit Plan
Defined Benefit Pension Plans and Postretirement Benefit Plans
The Company sponsors a non-contributory, qualified cash balance retirement plan covering its non-union employees (the “Cash Balance Pension Plan”) and an unfunded non-contributory, non-qualified excess cash balance plan covering certain employees who participate in the underlying qualified plan (collectively, the “Cash Balance Plans”). Since March 1, 2011, the Cash Balance Pension Plan has also included the assets and liabilities of a frozen (as of December 31, 2007) non-contributory qualified defined benefit pension plan covering non-union employees hired prior to January 1, 2001. These plans are considered “Shared Plans” as previously defined.
The Company also sponsors an unfunded non-contributory, non-qualified defined benefit pension plan for the benefit of certain employees who participate in an underlying qualified plan which was merged into the Cash Balance Pension Plan on March 1, 2011 (the “Excess Plan”). As of December 31, 2007, the Excess Plan was amended to freeze all benefits earned through
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

December 31, 2007 and to eliminate the ability of participants to earn benefits for future service under these plans. This plan is considered a Shared Plan.
The Cash Balance Plans were amended to freeze participation and future benefit accruals effective December 31, 2015 for all employees. Therefore, after December 31, 2015, no employee of the Company or MSG Sports who was not already a participant may become a participant in the plans and no further annual pay credits will be made for any future year. Existing account balances under the plans will continue to be credited with monthly interest in accordance with the terms of the plans.
Lastly, the Company sponsors a non-contributory, qualified defined benefit pension plan covering certain of its union employees (the “Union Plan”). Benefits payable to retirees under the Union Plan are based upon years of Benefit Service (as defined in the Union Plan document).
The Cash Balance Plans, Union Plan, and Excess Plan are collectively referred to as the “Pension Plans.”
The Company also sponsors a contributory welfare plan which provides certain postretirement healthcare benefits to certain employees hired prior to January 1, 2001 who are eligible to commence receipt of early or normal benefits under the Cash Balance Pension Plan and their dependents, as well as certain union employees (“Postretirement Plan”).
For purposes of the combined financial statements it was determined that the Company was the obligor for these plans’ liabilities for the historical periods presented herein. Therefore, the combined financial statements reflect the full impact of the Shared Plans and Direct Plan on both the combined statements of operations and combined balance sheets. The pension expense related to employees of MSG Sports participating in any of these plans is reflected as a contributory charge from the Company to MSG Sports, resulting in a decrease to the expense recognized in the consolidated and combined statements of operations.
The following table summarizes the projected benefit obligations, assets, funded status and the amounts recorded on the Company’s consolidated and combined balance sheets as of June 30, 2021 and 2020, associated with the Pension Plans and Postretirement Plan based upon actuarial valuations as of those measurement dates.
  
Pension Plans Postretirement Plan
June 30, June 30,
  
2021 2020 2021 2020
Change in benefit obligation:
Benefit obligation at beginning of period $ 174,892  $ 173,569  $ 3,658  $ 4,307 
Service cost 96  95  47  56 
Interest cost 3,385  5,261  45  108 
Actuarial loss (gain) 1,981  12,670  (76) 277 
Benefits paid (4,410) (6,698) (390) (1,090)
Curtailments (91) —  —  — 
Plan settlements paid (3,777) (551) —  — 
Other (177) (74) (66) — 
Transfer of liabilities (a)
—  (9,380) —  — 
Benefit obligation at end of period 171,899  174,892  3,218  3,658 
Change in plan assets:
Fair value of plan assets at beginning of period 151,756  132,965  —  — 
Actual return on plan assets 1,969  18,221  —  — 
Employer contributions 60  7,260  —  — 
Benefits paid (4,409) (6,690) —  — 
Plan settlements paid (3,724) —  —  — 
Fair value of plan assets at end of period 145,652  151,756  —  — 
Funded status at end of period $ (26,247) $ (23,136) $ (3,218) $ (3,658)
_________________
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

(a)Represents the benefit obligation related to the MSG Sports Non-Qualified Plans as of April 17, 2020, the date of the Entertainment Distribution.
In Fiscal Year 2021 and Fiscal Year 2020, the actuarial losses on the benefit obligations were primarily due to a net decrease in discount and interest crediting rate.
Amounts recognized in the consolidated and combined balance sheets as of June 30, 2021 and 2020 consist of:
   Pension Plans Postretirement Plan
June 30, June 30,
  
2021 2020 2021 2020
Current liabilities (included in accrued employee related costs)
$ (260) $ (331) $ (369) $ (331)
Non-current liabilities (included in defined benefit and other postretirement obligations)
(25,987) (22,805) (2,849) (3,327)
$ (26,247) $ (23,136) $ (3,218) $ (3,658)
Accumulated other comprehensive loss, before income tax, as of June 30, 2021 and 2020 consists of the following amounts that have not yet been recognized in net periodic benefit cost:
   Pension Plans Postretirement Plan
  
June 30, June 30,
2021 2020 2021 2020
Actuarial loss $ (39,957) $ (36,704) $ (786) $ (1,025)
The following table presents components of net periodic benefit cost for the Pension Plans and Postretirement Plan included in the accompanying consolidated and combined statements of operations for the years ended June 30, 2021, 2020 and 2019. Service cost is recognized in direct operating expenses and selling, general and administrative expenses. All other components of net periodic benefit cost are reported in Miscellaneous income (expense), net.
Pension Plans Postretirement Plan
Years Ended June 30, Years Ended June 30,
2021 2020 2019 2021 2020 2019
Service cost $ 96  $ 95  $ 91  $ 47  $ 56  $ 57 
Interest cost 3,385  5,261  5,895  45  108  150 
Expected return on plan assets (5,232) (5,319) (3,133) —  —  — 
Recognized actuarial loss 1,093  1,336  1,281  98  6  5 
Amortization of unrecognized prior service cost (credit) —  —  —  —  —  (7)
Settlement loss recognized (a)
870  67  52  —  —  — 
Other —  —  —  —  —  (1,513)
Net periodic benefit cost $ 212  $ 1,440  $ 4,186  $ 190  $ 170  $ (1,308)
Contributory charge to Madison Square Garden Sports Corp. for participation in the Shared Plans and all allocation of costs related to the corporate employees —  (173) (692) —  (26) 231 
Net periodic benefit cost reported in the consolidated and combined statements of operations $ 212  $ 1,267  $ 3,494  $ 190  $ 144  $ (1,077)
_________________
(a)For Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019, lump-sum payments totaling $52, $551 and $343, respectively, were distributed to vested participants of the non-qualified excess cash balance plan, triggering the recognition of settlement losses in accordance with ASC Topic 715. Due to these pension settlements, the Company was required to remeasure its pension plan liability as of June 30, 2021 and 2020 and for Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019, respectively. Discount rates used for the projected benefit obligation and interest cost were 1.77%
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

and 1.24% as of June 30, 2021, respectively, 2.95% and 2.83% as of June 30, 2020, respectively, and 3.75% and 3.18% as of June 30, 2019, respectively. Additionally, settlement charges of $870, $67 and $52 were recognized in Miscellaneous income (expense), net for Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019.
Other pre-tax changes in plan assets and benefit obligations recognized in other comprehensive income (loss) for Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019 are as follows:
   Pension Plans Postretirement Plan
Years Ended June 30, Years Ended June 30,
   2021 2020 2019 2021 2020 2019
Actuarial gain (loss), net $ (5,244) $ 232  $ (3,137) $ 76  $ (277) $ 572 
Recognized actuarial loss
1,093  1,336  1,281  98  6  5 
Recognized prior service credit
—  —  —  —  —  (7)
Curtailments 91  —  —  65  —  — 
Settlement loss recognized
870  67  52  —  —  — 
Total recognized in other comprehensive income (loss)
$ (3,190) $ 1,635  $ (1,804) $ 239  $ (271) $ 570 
Funded Status
The accumulated benefit obligation for the Pension Plans aggregated to $171,897 and $174,775 at June 30, 2021 and 2020, respectively. As of June 30, 2021 and 2020, each of the Pension Plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets.
Pension Plans and Postretirement Plan Assumptions
Weighted-average assumptions used to determine benefit obligations (made at the end of the period) as of June 30, 2021 and 2020 are as follows:
  
Pension Plans Postretirement Plan
June 30, June 30,
  
2021 2020 2021 2020
Discount rate 2.87  % 3.21  % 2.17  % 2.09  %
Interest crediting rate 2.32  % 1.37  % n/a n/a
Healthcare cost trend rate assumed for next year n/a n/a 6.25  % 6.50  %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
n/a n/a 5.00  % 5.00  %
Year that the rate reaches the ultimate trend rate n/a n/a 2027 2027
Weighted-average assumptions used to determine net periodic benefit cost (made at the beginning of the period) for Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019 are as follows:
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

   Pension Plans Postretirement Plan
Years Ended June 30, Years Ended June 30,
   2021 2020 2019 2021 2020 2019
Discount rate - projected benefit obligation 2.84  % 3.58  % 4.19  % 2.09  % 3.18  % 4.06  %
Discount rate - service cost 3.20  % 3.78  % 4.25  % 2.15  % 3.45  % 4.25  %
Discount rate - interest cost 1.92  % 3.21  % 3.90  % 1.23  % 2.84  % 3.67  %
Expected long-term return on plan assets
4.02  % 5.28  % 3.72  % n/a n/a n/a
Interest crediting rate 1.37  % 3.28  % 2.82  % n/a n/a n/a
Healthcare cost trend rate assumed for next year
n/a n/a n/a 6.50  % 6.75  % 7.00  %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
n/a n/a n/a 5.00  % 5.00  % 5.00  %
Year that the rate reaches the ultimate trend rate
n/a n/a n/a 2027 2027 2027
The discount rates were determined (based on the expected duration of the benefit payments for the plans) from the Willis Towers Watson U.S. Rate Link: 40-90 Discount Rate Model as of June 30, 2021 and 2020 to select a rate at which the Company believed the plans’ benefits could be effectively settled. This model was developed by examining the yields on selected highly rated corporate bonds. The expected long-term return on plan assets is based on a periodic review and modeling of the plans’ asset allocation structures over a long-term horizon. Expectations of returns for each asset class are the most important of the assumptions used in the review and modeling and are based on comprehensive reviews of historical data, forward-looking economic outlook, and economic/financial market theory. The expected long-term rate of return was selected from within the reasonable range of rates determined by (i) historical returns for the asset classes covered by the investment policy and (ii) projections of returns over the long-term period during which benefits are payable to plan participants.
Plan Assets and Investment Policy
The weighted-average asset allocation of the Pension Plans’ assets at June 30, 2021 and 2020 was as follows:
June 30,
Asset Classes (a):
2021 2020
Fixed income securities 98  % 99  %
Cash equivalents 2  % 1  %
100  % 100  %
_____________________
(a)The Company’s target allocation for pension plan assets is 99% fixed income securities and 1% cash equivalents as of June 30, 2021.
Investment allocation decisions have been made by the Company’s Investment and Benefits Committee, which considers investment advice provided by the Company’s external investment consultant. The investment consultant takes into account expected long-term risks, returns, correlation, and other prudent investment assumptions when recommending asset classes and investment managers to the Company’s Investment and Benefits Committee. The investment consultant also considers the pension plans’ liabilities when making investment allocation recommendations. The Company’s Investment and Benefits Committee’s decisions are influenced by asset/liability studies conducted by the external investment consultant who combines actuarial considerations and strategic investment advice. The major investment categories of the pension plan assets are in cash equivalents and long duration fixed income securities that are marked-to-market on a daily basis. As a result, the pension plan assets are subjected to interest-rate risk, specifically to a rising interest rate environment, as the majority of the pension plan assets are invested in long duration fixed income securities. However, the pension plan assets are structured in an asset/liability framework, and consequently, an increase in interest rates would cause a corresponding decrease to the overall liability of the pension plans, thus creating a hedge against rising interest rates. Additional risks involving the asset/liability framework include earning insufficient investment returns to cover future pension plan liabilities and imperfect hedging of such liabilities. In addition, a portion of the long duration fixed income securities portfolio is invested in non-government securities that are subject to credit risk of the issuers who might default on interest and/or principal payments.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Investments at Estimated Fair Value
The cumulative fair values of the individual plan assets at June 30, 2021 and 2020 by asset class are as follows:
Fair Value Hierarchy June 30,
2021 2020
Fixed income securities:
U.S. Treasury securities (a)
I $ —  $ 3,825 
U.S. corporate bonds (b)
II 100,229  110,542 
Foreign issues (c)
II 20,119  13,764 
Municipal bonds (d)
II 3,880  4,146 
Money market accounts (e)
I 2,753  1,329 
Common collective trust (f)
II 18,669  18,150 
Total investments measured at fair value $ 145,650  $ 151,756 
_____________________
(a)U.S. Treasury Securities are classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets.
(b)U.S. corporate bonds are classified within Level II of the fair value hierarchy as they are valued using quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active and evaluations based on various market and industry inputs.
(c)Foreign issued corporate bonds are classified within Level II of the fair value hierarchy as they are valued at a price that is based on a compilation of primarily observable market information or a broker quote in a non-active over-the-counter market.
(d)Municipal bonds are classified within Level II of the fair value hierarchy as they are valued at a price that is based on a compilation of primarily observable market information or a broker quote in a non-active over-the-counter market.
(e)Money market fund is classified within Level I of the fair value hierarchy as they are valued using observable inputs that reflect quoted prices for identical assets in active markets.
(f)Common collective trust (CCT) is classified within Level II of the fair value hierarchy at its net asset value (NAV) as reported by the Trustee. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. The CCT publishes its daily NAV and uses such value as the basis for current transactions.
Contributions for Qualified Defined Benefit Pension Plans
During Fiscal Year 2021, the Company did not contribute to the Cash Balance Pension Plan and contributed $60 to the Union Plan. The Company does not expect to contribute to the Cash Balance Pension Plan and expects to contribute $400 to Union Plan in Fiscal Year 2022.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Estimated Future Benefit Payments
The following table presents estimated future fiscal year benefit payments for the Pension Plans and Postretirement Plan:
Pension
Plans     		Postretirement
Plan    
Fiscal year ending June 30, 2022 $ 11,927  $ 369 
Fiscal year ending June 30, 2023 8,305  349 
Fiscal year ending June 30, 2024 7,904  319 
Fiscal year ending June 30, 2025 7,977  332 
Fiscal year ending June 30, 2026 8,540  322 
Fiscal years ending June 30, 2027 – 2031 43,320  1,054 
Defined Contribution Pension Plans
The Company sponsors The Madison Square Garden 401(k) Savings Plan (the “401(k) Plan”) and the MSG S&E, LLC Excess Savings Plan (collectively referred to as the “Savings Plans”). The 401(k) Plan is a multiple employer plan. For the years ended June 30, 2021, 2020 and 2019, expenses related to the Savings Plans, excluding expenses related to MSG Sports employees, that are included in the accompanying combined statements of operations were $4,189, $5,521 and $8,372, respectively. These amounts include $1,240 and $3,300 of expenses related to Company’s corporate employees which were allocated to MSG Sports during the years ended June 30, 2020 and 2019, respectively.
In addition, the Company sponsors The Madison Square Garden 401(k) Union Plan (the “Union Savings Plan”). The Union Savings Plan is a multiple employer plan. For the years ended June 30, 2021, 2020 and 2019, expenses related to the Union Savings Plan included in the accompanying consolidated and combined statements of operations were $215, $539 and $521, respectively.
Multiemployer Plans
The Company contributes to a number of multiemployer defined benefit pension plans, multiemployer defined contribution pension plans, and multiemployer health and welfare plans that provide benefits to retired union-represented employees under the terms of collective bargaining agreements (“CBAs”).
Multiemployer Defined Benefit Pension Plans
The multiemployer defined benefit pension plans to which the Company contributes generally provide for retirement and death benefits for eligible union-represented employees based on specific eligibility/participant requirements, vesting periods and benefit formulas. The risks to the Company of participating in these multiemployer defined benefit pension plans are different from single-employer defined benefit pension plans in the following aspects:
•Assets contributed to a multiemployer defined benefit pension plan by one employer may be used to provide benefits to employees of other participating employers.
•If a participating employer stops contributing to a multiemployer defined benefit pension plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
•If the Company chooses to stop participating in some of these multiemployer defined benefit pension plans, the Company may be required to pay those plans an amount based on the Company’s proportion of the underfunded status of the plan, referred to as a withdrawal liability. However, cessation of participation in a multiemployer defined benefit pension plan and subsequent payment of any withdrawal liability is subject to the collective bargaining process.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The following table outlines the Company’s participation in multiemployer defined benefit pension plans for the years ended June 30, 2021, 2020 and 2019, and summarizes the contributions that the Company has made during each period. The “EIN” and “Pension Plan Number” columns provide the Employer Identification Number and the three-digit plan number for each applicable plan. The most recent Pension Protection Act zone status available as of June 30, 2021 and 2020 relates to the plan’s two most recent years ended which are indicated. Among other factors, plans in the red zone are generally less than 65% funded, plans in the orange zone are both less than 80% funded and have an accumulated funding deficiency or are expected to have a deficiency in any of the next six plan years, plans in the yellow zone are less than 80% funded, and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates whether a funding improvement plan (“FIP”) for yellow/orange zone plans or a rehabilitation plan (“RP”) for red zone plans is either pending or has been implemented by the trustees of such plan. The zone status and any FIP or RP information is based on information that the Company received from the plan, and the zone status is as certified by the plan’s actuary. The last column lists the expiration date(s) or a range of expiration dates of the CBA to which the plans are subject. There are no other significant changes that affect such comparability.
PPA Zone Status FIP/RP Status Pending / Implemented Company Contributions
As of June 30, Years Ended June 30,
Plan Name EIN Pension Plan Number 2021 2020 2021 2020 2019 Surcharge Imposed Expiration Date of CBA
Pension Fund of Local No. 1 of I.A.T.S.E. 136414973 001
Green
as of
2020-12-31
Green
as of
2019-12-31
No $ 194  $ 1,831  $ 2,529  No
6/30/2021 - 5/1/2023
All Other Multiemployer Defined Benefit Pension Plans
584  3,137  3,234 
$ 778  $ 4,968  $ 5,763 
The Company was listed in the following plans’ Form 5500’s as providing more than 5 percent of the total contributions for the following plans and plan years:
Fund Name
Exceeded 5 Percent of Total Contributions Year Contributions to Plan Exceeded
5 Percent of Total Contributions
(As of Plan’s Year-End)
Pension Fund of Local No. 1 of I.A.T.S.E True December 31, 2019, 2018 and 2017
32BJ/Broadway League Pension Fund True December 31, 2019, 2018 and 2017
Treasurers and Ticket Sellers Local 751 Pension Fund True August 31, 2020, 2019 and 2018
Multiemployer Defined Contribution Pension Plans
The Company contributed $723, $5,258 and $6,699 for the years ended June 30, 2021, 2020 and 2019, respectively, to multiemployer defined contribution pension plans.
Note 16. Share-based Compensation
Effective as of the Entertainment Distribution, the Company adopted two share-based compensation plans: the 2020 Employee Stock Plan (the “Employee Stock Plan”) and the 2020 Stock Plan for Non-Employee Directors (the “Non-Employee Director Plan”). Under the Employee Stock Plan, the Company is authorized to grant incentive stock options, non-qualified stock options, restricted shares, restricted stock units (“RSUs”), stock appreciation rights and other equity-based awards. The Company may grant awards for up to 3,000 shares of MSG Entertainment Class A Common Stock (subject to certain adjustments). Options and stock appreciation rights under the Employee Stock Plan must be granted with an exercise price of not less than the fair market value of a share of the Company’s Class A Common Stock on the date of grant and must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder). The terms and conditions of awards granted under the Employee Stock Plan, including vesting and exercisability, were determined by the Compensation Committee of the Board of Directors (“Compensation Committee”) and included terms or conditions based upon performance criteria. RSUs that were awarded by the Company to its employees will settle in shares of the Company's Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash.
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NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Under the Non-Employee Director Plan, the Company is authorized to grant non-qualified stock options, restricted stock units, restricted shares, stock appreciation rights and other equity-based awards. The Company may grant awards for up to 150 shares of MSG Entertainment Class A Common Stock (subject to certain adjustments). Options under the Non-Employee Director Plan must be granted with an exercise price of not less than the fair market value of a share of the Company’s Class A Common Stock on the date of grant and must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder). The terms and conditions of awards granted under the Non-Employee Director Plan, including vesting and exercisability, were determined by the Compensation Committee. Unless otherwise provided in an applicable award agreement, options granted under this plan will be fully vested and exercisable upon the date of grant. Unless otherwise provided in an applicable award agreement, restricted stock units granted under this plan will be fully vested upon the date of grant and will settle in shares of the Company's Class A Common Stock (either from treasury or with newly issued shares), or, at the option of the Compensation Committee, in cash, on the first business day after ninety days from the date the director's service on the Board of Directors ceases or, if earlier, upon the director’s death.
Treatment After the Distribution of Share-based Payment Awards Initially Granted Under MSG Sports Equity Award Programs
Prior to the Entertainment Distribution, certain employees and the non-employee directors of MSG Sports (some of whom are now employees or non-employee directors of the Company) participated in MSG Sports equity award programs (the “MSG Sports Stock Plans”). In connection with the Entertainment Distribution, each option to purchase MSG Sports’ Class A Common Stock became two options: one option to acquire MSG Sports Class A Common Stock and one an option to acquire the Company Class A Common Stock granted under the Employee Stock Plan. The exercise price of the option was allocated between the existing MSG Sports options and new Company options based upon the weighted average price of each of the MSG Sports Class A common stock and our Class A Common Stock over the ten trading days immediately following the Distribution as reported by Bloomberg, and the underlying share amount was consistent with the one-to-one distribution ratio (one share of our Class A common stock will be issued for every one share of MSG Sports Class A common stock). As a result of this adjustment, 69.5% of the pre-Distribution exercise price of options was allocated to the MSG Sports options and 30.5% was allocated to the Company options. In connection with the Entertainment Distribution, each holder of an MSG Sports employee restricted stock unit received one Company restricted stock unit in respect of every one MSG Sports restricted stock unit owned on the Record Date and continues to be entitled to a share of MSG Sports Class A common stock (or cash or other property) for each MSG Sports restricted stock unit in accordance with the MSG Sports award agreement. Additionally, each holder of an MSG Sports employee performance stock unit received one Company performance stock unit (“PSU”) (at target performance) in respect of every one MSG Sports performance stock unit (at target performance) owned on the Record Date and continues to be entitled to a share of MSG Sports Class A common stock (or cash or other property) for each MSG Sports performance stock unit in accordance with the MSG Sports award agreement.
Further, in connection with the Entertainment Distribution, each holder of an MSG Sports director restricted stock unit received one share of our Class A Common Stock in respect of every one MSG Sports restricted stock unit owned on the Record Date and continue to be entitled to a share of MSG Sports Class A common stock (or cash or other property) in accordance with the MSG Sports award agreement.
Share-based Compensation Expense
Share-based compensation expense is generally recognized straight-line over the vesting term of the award, which typically provides for three-year cliff or graded vesting subject to continued employment. For awards that are graded vesting and subject to performance conditions, in addition to continued employment, the Company uses the graded-vesting method to recognize share-based compensation expense.
The Company’s RSUs/PSUs and/or stock options held by individuals who are solely MSG Sports employees will not be expensed by the Company; however, such RSUs/PSUs and/or stock options do have a dilutive effect on earnings (loss) per share available to the Company’s common stockholders.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Share-based compensation expense was recognized in the consolidated and combined statements of operations as a component of direct operating expenses or selling, general and administrative expenses. The following table presents the share-based compensation expense recorded during Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019.
Years Ended June 30,
2021 (b)
2020 2019
Nonperformance and performance based RSUs $ 40,195  $ 36,811  $ 31,509 
Stock options (c)
12,722  5,379  3,892 
Total share-based compensation expense (a)
$ 52,917  $ 42,190  $ 35,401 
_________________
(a)The share-based compensation expense reported above includes expense associated with MSG Sports’ RSUs and stock options granted to the Company’s employees prior to the Entertainment Distribution.
(b)The Company recorded previously unrecognized share-based compensation expense of $11,129 for Fiscal Year 2021 associated with the cancellation of certain awards pursuant to a settlement agreement related to an executive.
(c)Included $2,348 and $489 in accretion of put options within the Tao Group Hospitality reportable segment during Fiscal Year 2021 and Fiscal Year 2020, respectively.
As of June 30, 2021, there was $63,377 of unrecognized compensation cost related to unvested RSUs and PSUs held by the Company’s employees. The cost is expected to be recognized over a weighted-average period of approximately 1.6 years for unvested RSUs and PSUs. For Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019, the Company capitalized $5,467, $5,051 and $3,946 of share-based compensation expense, respectively.
Restricted Stock Units Award Activity
The following table summarizes activity related to the Company’s RSUs for Fiscal Year 2021:
  Number of Weighted-Average
Fair Value 
Per Share At
Date of Grant
  Nonperformance
Based Vesting
RSUs
(In Thousands) 		Performance
Based Vesting
RSUs
(In Thousands)
Unvested award balance as of June 30, 2020 277  328  $ 75.34 
Granted 424  343  $ 72.81 
Vested (156) (106) $ 70.84 
Forfeited (48) (54) $ 72.46 
Cancelled —  (32) $ 88.58 
Unvested award balance as of June 30, 2021 497  479  $ 74.42 
The fair value of RSUs and PSUs that vested and were distributed during Fiscal Year 2021 was $20,251. Upon delivery, RSUs granted under the MSG Sports Stock Plans were net share-settled to cover the required statutory tax withholding obligations. To fulfill the employees’ statutory minimum tax withholding obligations for the applicable income and other employment taxes, 82 of these RSUs, with an aggregate value of $6,060 were retained by the Company during Fiscal Year 2021, of which 8 of these RSUs, with an aggregate value of $575, were related to MSG Sports employees.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Stock Options Award Activity
The following table summarizes activity related to the Company’s stock options for the year ending June 30, 2021:
Number of
Time Vesting Options
(In Thousands) 		Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value
Balance as of June 30, 2020 543  $ 99.68 
Cancelled (449) $ 107.07 
Balance as of June 30, 2021 94  $ 64.36  6.46 $ 1,840 
Exercisable as of June 30, 2021 94  $ 64.36  6.46 $ 1,840 
Note 17. Stock Repurchase Program
On March 31, 2020, the Company’s Board of Directors authorized the repurchase of up to $350,000 of the Company’s Class A Common Stock once the shares of the Company’s Class A Common Stock began “regular way” trading on April 20, 2020. Under the authorization, shares of Class A Common Stock may be purchased from time to time in accordance with applicable insider trading and other securities laws and regulations. The timing and amount of purchases will depend on market conditions and other factors. The Company has not engaged in any share repurchase activities under its share repurchase program to date.
Note 18. Accumulated Other Comprehensive Loss
The following table details the components of accumulated other comprehensive loss:
Pension Plans and
Postretirement
Plan 		Cumulative Translation Adjustments Accumulated
Other
Comprehensive
Loss
Balance as of June 30, 2020 $ (39,322) $ (12,535) $ (51,857)
Other comprehensive income (loss):
Other comprehensive loss before reclassifications —  27,688  27,688 
Amounts reclassified from accumulated other comprehensive loss (a)
(2,951) —  (2,951)
Other comprehensive income (loss), total (2,951) 27,688  24,737 
Balance as of June 30, 2021 $ (42,273) $ 15,153  $ (27,120)
Pension Plans and
Postretirement
Plan 		Cumulative Translation Adjustments Accumulated
Other
Comprehensive
Loss
Balance as of June 30, 2019 $ (42,080) $ (4,843) $ (46,923)
Other comprehensive income (loss):
Other comprehensive loss before reclassifications (45) (7,692) (7,737)
Amounts reclassified from accumulated other comprehensive loss (a)
1,409 — 1,409
Other comprehensive income (loss), total 1,364  (7,692) (6,328)
Adjustment related to the transfer of Pension Plans and Postretirement Plan liabilities as a result of the Entertainment Distribution
1,394  —  1,394 
Balance as of June 30, 2020 $ (39,322) $ (12,535) $ (51,857)
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Pension Plans and
Postretirement
Plan 		Cumulative Translation Adjustments
Unrealized Gain (Loss) on Available-for-sale
Securities (b)
Accumulated
Other
Comprehensive
Loss
Balance as of June 30, 2018 $ (40,846) $ (502) $ (5,570) $ (46,918)
Reclassification of unrealized loss on available-for sale securities —  —  5,570  5,570 
Other comprehensive loss:
Other comprehensive loss before reclassifications (2,565) (4,341) —  (6,906)
Amounts reclassified from accumulated other comprehensive loss (a)
1,331  —  —  1,331 
Other comprehensive loss, total (1,234) (4,341) —  (5,575)
Balance as of June 30, 2019 $ (42,080) $ (4,843) $ —  $ (46,923)
________________
(a)Amounts reclassified from accumulated other comprehensive loss represent the amortization of net actuarial loss and net unrecognized prior service credit included in net periodic benefit cost, which is reflected under Miscellaneous income (expense), net in the accompanying consolidated and combined statements of operations (see Note 15).
(b)As of July 1, 2018, upon adoption of ASU No. 2016-01, the Company recorded a transition adjustment to reclassify accumulated other comprehensive loss associated with its investment in Townsquare in the amount of $2,466 pre-tax ($5,570, net of tax) to Madison Square Garden Sports Corp. Investment. See Note 8 for more information related to its investment in Townsquare.
Note 19. Income Taxes
For the periods prior to the Entertainment Distribution, the Company did not file separate tax returns as the Company was included in the tax grouping of other MSG Sports entities within the respective entity’s tax jurisdiction. The income tax provision included in these periods has been calculated using the separate return basis, as if the Company filed a separate tax return.
Income tax expense (benefit) is comprised of the following components:
Years Ended June 30,
  2021 2020 2019
Current expense (benefit):
Federal $ (6,400) $ 8,558  $ — 
State and other (2,491) 7,009  814 
(8,891) 15,567  814 
Deferred expense (benefit):
Federal (627) (6,083) (350)
State and other 147  (4,438) (21)
(480) (10,521) (371)
Income tax expense (benefit) $ (9,371) $ 5,046  $ 443 
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The income tax expense (benefit) differs from the amount derived by applying the statutory federal rate to pre-tax income (loss) principally due to the effect of the following items:
Years Ended June 30,
  2021 2020 2019
Federal tax expense (benefit) at statutory federal rate $ (92,362) $ (2,024) $ (6,236)
State income taxes, net of federal benefit (44,848) 4,016  951 
Change in the estimated applicable tax rate used to determine deferred taxes (3,368) 1,237  (454)
Nondeductible transaction costs —  6,961  — 
Federal tax credits —  (1,480) (1,900)
GAAP income of consolidated partnership attributable to non-controlling interest 3,857  6,701  2,571 
Tax effect of indefinite intangible amortization 1,072  993  449 
Change in valuation allowance 121,216  (14,220) (71)
Nondeductible officers’ compensation (a)
5,311  4,407  7,655 
Nondeductible expenses 409  690  809 
Excess tax benefit related to shared based-payments awards (1,066) (2,276) (3,376)
Other 408  41  45 
Income tax expense (benefit) $ (9,371) $ 5,046  $ 443 
_________________
a.The Tax Cuts and Jobs Act, enacted on December 22, 2017, included changes to Internal Revenue Code Section 162(m), including elimination of the exception for qualified performance-based compensation over the $1,000 annual limit. Accordingly, effective January 1, 2018, all compensation for certain officers in excess of $1,000 is generally nondeductible.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The tax effects of temporary differences which give rise to significant portions of the deferred tax assets and liabilities at June 30, 2021 and 2020 are as follows:
June 30,
  2021 2020
Deferred tax asset:
Net operating loss (“NOL”) carryforwards $ 166,420  $ 1,575 
Tax credit carryforwards 532  532 
Accrued employee benefits 24,825  26,538 
Restricted stock units and stock options 12,527  14,267 
Deferred revenue 42,616  45,050 
Right-of-use lease assets and lease liabilities, net 8,234  — 
Investments 63,639  39,737 
Other —  1,062 
Total deferred tax assets $ 318,793  $ 128,761 
Less valuation allowance (161,586) (34,646)
Net deferred tax assets $ 157,207  $ 94,115 
Deferred tax liabilities:
Intangible and other assets $ (38,578) $ (39,893)
Property and equipment (124,864) (59,077)
Prepaid expenses (4,355) (7,595)
Other (1,382) — 
Total deferred tax liabilities $ (169,179) $ (106,565)
Net deferred tax liability $ (11,972) $ (12,450)
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow for the utilization of its federal net operating loss carryforward and its future deductible temporary differences. As of June 30, 2021, based on current facts and circumstances, management believes that it is more likely than not that the Company will not realize the benefit for a portion of its deferred tax asset. Accordingly, a partial valuation allowance has been recorded as of June 30, 2021. However, the Company anticipates a full reversal of the valuation allowance in the first quarter of the fiscal year ended June 30, 2022 in connection with the Merger with MSG Networks, due primarily to the anticipated future taxable income of MSG Networks operations. The Company will continue to assess the realizability of its deferred tax assets on a quarterly basis.
The NOL carryforwards as of June 30, 2021 is approximately $505,000. The NOL is solely related to the current fiscal year and has an unlimited carryforward period. The Company’s historical combined financial statements for periods prior to the Entertainment Distribution reflect NOLs and tax credits calculated on a separate return basis. These NOL carryforwards were calculated as if the Company operated as a separate stand-alone entity. Because the Entertainment Distribution involved a spin-off of the Company, substantially all of the NOLs and tax credits did not carry over to the Company.
Prior to the Entertainment Distribution, the Company’s collection for ticket sales, sponsorships and suite rentals in advance were recorded as deferred revenue and were recognized as revenues when earned for both accounting and tax purposes. The tax recognition on most of these deferred revenues was accelerated to the date of the Entertainment Distribution and is the responsibility of MSG Sports. The Company will not reimburse MSG Sports for such taxes. As of June 30, 2021, the Company has a deferred tax asset of $42,616 with regard to the deferred revenue acceleration. The remaining tax deduction will be recorded as deferred revenue that was accelerated for tax purposes on April 17, 2020 is earned as the associated events occur or upon payment of refunds.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Prior to the Entertainment Distribution, the Company and MSG Sports entered into a Tax Disaffiliation Agreement (“TDA”) that governs the parties’ respective rights, responsibilities and obligations with respect to taxes and tax benefits. Under the TDA, MSG Sports will generally be responsible for all U.S. federal, state, local and other applicable income taxes of the Company for any taxable period or portion of such period ending on or before the Entertainment Distribution Date.
The Company does not have any recorded tax benefit for uncertain tax positions as of June 30, 2021 and 2020.
Note 20. Related Party Transactions
As of July 31, 2021, following the Company’s acquisition of MSG Networks, members of the Dolan family including trusts for member of the Dolan family (collectively, the “Dolan Family Group”), for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, collectively beneficially owned all of the Company’s outstanding Class B Common Stock and approximately 5.1% of the Company’s outstanding Class A Common Stock (inclusive of options exercisable and RSUs vesting within 60 days of July 31, 2021). Such shares of the Company’s Class A Common Stock and Class B Common Stock, collectively, represent approximately 72.8% of the aggregate voting power of Company’s outstanding common stock. Members of the Dolan family are also the controlling stockholders of MSG Sports and AMC Networks Inc. (“AMC Networks”). Prior to the Merger, members of the Dolan family were also the controlling stockholder of MSG Networks.
Current Related Party Arrangements
The Company is party to the following agreements and/or arrangements with MSG Sports:
•Sponsorship sales and service representation agreements pursuant to which the Company has the exclusive right and obligation to sell MSG Sports’ sponsorships for an initial stated term of ten years for a commission;
•A team sponsorship allocation agreement with MSG Sports, pursuant to which MSG Sports continues receiving an allocation of sponsorship and signage revenues associated with the sponsorship agreements that existed at the Entertainment Distribution Date;
•Arena License Agreements pursuant to which the Company (i) provides MSG Sports the right to use The Garden for games of the Knicks and Rangers for a 35-year term in exchange for venue license fees, (ii) shares revenues collected for suite licenses, (iii) operates and manages the sale of the sports teams merchandise at The Garden for a commission, (iv) operates and manages the sale of food and beverage concessions and catering services during the Knicks and Rangers games for a portion of net profits (as defined under the Arena License Agreements), (v) provides day of game services that were historically provided prior to the Entertainment Distribution, and (vi) provides other general services within The Garden;
•A transition services agreement (the “TSA”) pursuant to which the Company provides certain corporate and other transition services to MSG Sports, such as information technology, accounting, accounts payable, payroll, tax, certain legal functions, human resources, insurance and risk management, government affairs, investor relations, corporate communications, benefit plan administration and reporting, and internal audit functions as well as certain marketing functions, in exchange for service fees. MSG Sports also provides certain transition services to the Company, in exchange for service fees.
•A sublease agreement, pursuant to which the Company subleases office space to MSG Sports;
•A group ticket sales representation agreement, pursuant to which the Company appointed MSG Sports as its sales and service representative to sell group ticket packages related Company events in exchange for a commission;
•A single night rental commission agreement, pursuant to which MSG Sports may, from time to time, sell (or make referrals for sales of) licenses for the use of suites at The Garden for individual Company events in exchange for a commission;
•Aircraft time sharing agreements (discussed below); and;
•Other agreements with MSG Sports entered into in connection with the Entertainment Distribution such as a distribution agreement, a tax disaffiliation agreement, an employee matters agreement, a trademark license agreement and certain other arrangements.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

In addition, the Company has various agreements with MSG Networks (which is now a subsidiary of the Company following the completion of the Merger in July 2021). Following the Merger, the Company is assessing these agreements, and some may be revised or terminated. Agreements in place with MSG Networks for Fiscal Year 2021 include an advertising sales representation agreement, and a services agreement (the “MSG Networks Services Agreement”). Pursuant to the advertising sales representation agreement, the Company has the exclusive right and obligation to sell advertising on behalf of MSG Networks in exchange for a commission. In connection with the Merger with MSG Networks, these revenues will be eliminated retrospectively on a consolidated basis beginning Fiscal Year 2022. Pursuant to the MSG Networks Services Agreement, effective July 1, 2019, the Company provides certain services to MSG Networks, such as information technology, accounts payable and payroll, human resources, and other corporate functions, as well as the executive support services described below, in exchange for service fees. MSG Networks also provides certain services to the Company, in exchange for service fees.
Further, the Company shares certain executive support costs, including office space, executive assistants, security and transportation costs, for (i) the Company’s Executive Chairman and Chief Executive Officer with MSG Sports and MSG Networks, (ii) the Company’s President with MSG Sports, and (iii) the Company’s Vice Chairman with MSG Sports, MSG Networks and AMC Networks.
The Company is a party to various aircraft arrangements. Pursuant to certain Aircraft Support Services Agreements (the “Support Agreements”), the Company provides certain aircraft support services to entities controlled by (i) James L. Dolan, the Company’s Executive Chairman, Chief Executive Officer and a director, (ii) Charles F. Dolan, a director, and certain of his children, who are siblings of James L. Dolan, specifically: Thomas C. Dolan (a director of the Company), Deborah Dolan-Sweeney, Patrick F. Dolan, Marianne Dolan Weber (a director of the Company), and Kathleen M. Dolan, and (iii) Patrick F. Dolan, the son of Charles F. Dolan and brother of James L. Dolan.
The Company entered into reciprocal time sharing/dry lease agreements with each of (i) Quart 2C, LLC (“Q2C”), a company controlled by James L. Dolan and Kristin A. Dolan, his spouse and a director of the Company, and (ii) Charles F. Dolan and Sterling2k LLC (collectively, “CFD”), an entity owned and controlled by Deborah Dolan-Sweeney, the daughter of Charles F. Dolan and the sister of James L. Dolan, pursuant to which the Company has agreed from time to time to make its aircraft available to each of Q2C and CFD, and Q2C, and CFD have agreed from time to time to make their aircraft available to the Company. Pursuant to the terms of the agreements, Q2C and/or CFD may lease on a non-exclusive, “time sharing” basis, the Company’s Gulfstream Aerospace G550 aircraft.
The Company is also party to a dry lease agreement with Brighid Air, LLC (“Brighid Air”), a company owned and controlled by Patrick F. Dolan, the son of Charles F. Dolan and the brother of James L. Dolan, pursuant to which the Company may lease on a non-exclusive basis Brighid Air’s Bombardier BD100-1A10 Challenger 350 aircraft (the “Challenger”). In connection with the dry lease agreement, the Company also entered into a Flight Crew Services Agreement (the “Flight Crew Agreement”) with Dolan Family Office, LLC (“DFO”), an entity owned and controlled by Charles F. Dolan, pursuant to which the Company may utilize pilots employed by DFO for purposes of flying the Challenger when the Company is leasing that aircraft under the Company’s dry lease agreement with Brighid Air.
The Company and each of MSG Sports, MSG Networks and AMC Networks are party to certain aircraft time sharing agreements, pursuant to which the Company has agreed from time to time to make aircraft available to MSG Sports, MSG Networks and/or AMC Networks for lease on a “time sharing” basis. Additionally, the Company, MSG Sports, MSG Networks and AMC Networks have agreed on an allocation of the costs of certain aircraft and helicopter use by their shared executives.
In addition to the aircraft arrangements described above, certain executives of the Company are party to aircraft time sharing agreements, pursuant to which the Company has agreed from time to time to make certain aircraft available for lease on a “time sharing” basis for personal use in exchange for payment of actual expenses of the flight (as listed in the agreement).
From time to time the Company enters into arrangements with 605, LLC. James L. Dolan, the Company’s Executive Chairman, Chief Executive Officer and a director, and his spouse, Kristin A. Dolan (a director of the Company), own 50% of 605, LLC. Kristin A. Dolan is also the founder and Chief Executive Officer of 605, LLC. 605, LLC provides audience measurement and data analytics services to the Company and its subsidiaries in the ordinary course of business.
As of June 30, 2021 and 2020, BCE had $637 of notes payable with respect to a loan received by BCE from its noncontrolling interest holder. See Note 14 for further information.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

The Company has also entered into certain commercial agreements with its equity method investment nonconsolidated affiliates in connection with MSG Sphere. For Fiscal Year 2021 and Fiscal Year 2020, the Company recorded approximately $66,525 and $16,726, respectively, of capital expenditures in connection with services provided to the Company under these agreements. As of June 30, 2021 and 2020, accrued capital expenditures associated with related parties were approximately $7,000 and $2,000, respectively, and are reported under other accrued liabilities in the accompanying consolidated balance sheets
Revenues and Operating Expenses
The following table summarizes the composition and amounts of the transactions with the Company’s affiliates. The significant components of these amounts are discussed below. These amounts are reflected in revenues and operating expenses in the accompanying consolidated and combined statements of operations for Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019:
Years Ended June 30,
2021 2020 2019
Revenues $ 49,969  $ 18,408  $ 18,259 
Operating expenses (credits):
Revenue sharing expenses $ 1,025  $ 110,002  $ 145,723 
Allocation of charges for venue usage to MSG Sports —  (46,072) (47,093)
Reimbursement under Arena License Arrangement (8,776) —  — 
Corporate general and administrative — credits with MSG Sports (36,502) (116,946) (116,551)
Corporate general and administrative — credits with MSG Networks (9,616) (9,772) (10,362)
Consulting fees 77  214  1,792 
Advertising expenses —  506  1,037 
Other operating expenses (credits), net 1,991  420  (198)
Revenues
Historically, revenues from related parties primarily consist of commissions earned in connection with the advertising sales representation agreement pursuant to which the Company has the exclusive right and obligation to sell MSG Networks’ advertising availabilities. In addition, amounts disclosed above for Fiscal Year 2021 include the Company’s revenues from Arena License Agreements (as discussed below), sponsorship sales and representation agreements with MSG Sports as well as sublease revenues. Substantially all of the sources of related party revenues are noted below.
In connection with the Entertainment Distribution, the Company entered into Arena License Agreements with MSG Sports that, among other things, require the Knicks and the Rangers to play their home games at The Garden in exchange for fixed annual license fees scheduled to be paid monthly over the term of the agreements. The Company accounts for these license fees as operating lease revenue given that the Company provides MSG Sports with the right to direct the use of and obtain substantially all of the economic benefit from The Garden during Knicks and Rangers home games, as further detailed in Note 10.
The Arena License Agreements provide that license fees are not required to be paid by MSG Sports during periods when The Garden is unavailable for use due to a force majeure event. As a result of government-mandated suspension of events at The Garden due to the impact of the COVID-19 pandemic, at the beginning of Fiscal Year 2021, The Garden was not available for use by MSG Sports. Starting December 2020, The Garden reopened for games of the Knicks and the Rangers but initially fans were not permitted to attend due to governmental restrictions. The restrictions were partially lifted during February 2021 with limited fans permitted to attend (10% capacity). Through Fiscal Year 2021, the Knicks and the Rangers played a total of 69 home games at The Garden and the Company recorded $21,345 of revenues under the Arena License Agreements for Fiscal Year 2021.
In addition, the Company recorded revenues under sponsorship sales and service representation agreements with MSG Sports of $13,584 for Fiscal Year 2021. Revenues under the advertising sales representation agreement with MSG Networks for Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019 were $13,699, $12,653, and $14,913, respectively. In connection with the Merger with MSG Networks, these revenues will be eliminated retrospectively on a consolidated basis beginning Fiscal Year
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

2022. The Company also earned $2,450 of sublease revenue from related parties during Fiscal Year 2021. These related party revenues were partially offset by approximately $1,134 of merchandise revenue sharing with MSG Sports for Fiscal Year 2021.
In addition, the Company and Tribeca Enterprises have a service agreement pursuant to which the Company provides marketing inventory, advertising sales and consulting services to Tribeca Enterprises for a fee. On August 5, 2019, the Company sold its equity capital in Tribeca Enterprises. Accordingly, Tribeca Enterprises is no longer a related party of the Company, and thus the related party transactions disclosed herein that relate to Tribeca Enterprises were recognized prior to August 5, 2019. The Company is also a party to certain commercial arrangements with AMC Networks and its subsidiaries.
Revenue sharing expenses
Prior to the Entertainment Distribution, revenue sharing expenses with MSG Sports included the Company’s suite license arrangements and venue signage and sponsorship agreements entered into by the Company and sales of in-venue food and beverages are recorded on a gross basis. MSG Sports’ share of the Company’s revenue related to such arrangements is recognized as a component of direct operating expenses. After the Entertainment Distribution, revenue sharing expenses include MSG Sports’ share of the Company’s suite license arrangements and certain venue signage agreements entered into by the Company, as well as profit sharing expenses related to in-venue food and beverage sales with MSG Sports in connection with the Arena License Agreements.
Allocation of Charges for Venue Usage to MSG Sports
For purposes of the Company’s combined financial statements prior to the Entertainment Distribution, the Company allocated to MSG Sports certain expenses for the usage of The Garden, which were reported as a reduction of direct operating expense in the accompanying consolidated and combined statements of operations.
After the Entertainment Distribution, fees recognized by the Company under the Arena License Agreements with MSG Sports for use of The Garden are reported as operating lease revenues in accordance with ASC Topic 842, Leases. Because The Garden was closed by government mandate, the Company did not recognize operating lease revenue under the Arena License Agreements for the three months ended September 30, 2020. Starting December 2020, The Garden reopened for games of the Knicks and the Rangers and the Company recorded $21,345 of revenues under the Arena License Agreements for Fiscal Year 2021. In addition, the Company recorded $9,055 of a credit to direct operating expenses as a reimbursement under the Arena License Agreements for Fiscal Year 2021.
Corporate General and Administrative Expenses, net — MSG Sports
Prior to the Entertainment Distribution, allocations of corporate overhead and shared services expense were recorded by both the Company and MSG Sports for corporate and operational functions based on direct usage or the relative proportion of revenue, headcount or other measures of the Company or MSG Sports. The Company’s corporate overhead expenses primarily related to centralized functions, including executive management, finance, treasury, tax, internal audit, legal, information technology, human resources and risk management functions. After the Entertainment Distribution, corporate general and administrative expenses, net – MSG Sports primarily reflects charges from the Company to MSG Sports pursuant to the TSA of $36,365 and $7,005 for Fiscal Year 2021 and Fiscal Year 2020, respectively.
Corporate General and Administrative Expenses, net - MSG Networks
The Company’s corporate overhead expenses that are charged to MSG Networks are primarily related to centralized functions, including information technology, accounts payable, payroll, tax, human resources, insurance and risk management, investor relations, corporate communications, benefit plan administration and reporting and internal audit, as well as certain executive support services.
For Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019, Corporate general and administrative expense, net - MSG Networks primarily reflects charges from the Company to MSG Networks under the MSG Networks Services Agreement of $9,616, $9,910 and $10,467, respectively.
Advertising Expenses
The Company incurs advertising expenses for services rendered by its related parties, primarily MSG Networks, most of which are related to the utilization of advertising and promotional benefits by the Company.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Other Operating Expenses, net
The Company and its related parties enter into transactions with each other in the ordinary course of business. Amounts charged to the Company for other transactions with its related parties are net of amounts charged by the Company to the Knickerbocker Group, LLC, an entity owned by James L. Dolan, the Executive Chairman, Chief Executive Officer and a director of the Company, for office space equal to the allocated cost of such space and the cost of certain technology services. In addition, other operating expenses include net charges relating to (i) reciprocal aircraft arrangements between the Company and each of Q2C and CFD and (ii) time sharing agreements with MSG Networks and AMC Networks.
Nonoperating Expense
Miscellaneous expense, net includes a contributory charge to MSG Sports related to the participation of MSG Sports and corporate employees in the Shared Plans and Postretirement Plan, of $178 and $451 for Fiscal Year 2020 and Fiscal Year 2019, respectively.
Cash Management
MSG Sports uses a centralized approach to cash management and financing of operations. Prior to the Entertainment Distribution, the Company’s and other MSG Sports’ or MSG Sports subsidiaries’ cash was available for use and was regularly “swept” historically. Transfers of cash both to and from MSG Sports were included as components of MSG Sports. Investment on the combined statements of divisional equity and redeemable noncontrolling interests. The main components of the net transfers (to)/from MSG Sports are cash pooling/general financing activities, various expense allocations to/from MSG Sports, and receivables/payables from/to MSG Sports deemed to be effectively settled upon the distribution of the Company by MSG Sports.
Madison Square Garden Sports Investment
All significant balances and transactions among the Company and MSG Sports and its subsidiaries, which include allocations of corporate general and administrative expenses, share-based compensation expense and other historical intercompany activities, are recorded as components of Divisional Equity. As the books and records of the Company were not kept on a separate basis from MSG Sports, the determination of the average net balance due to or from MSG Sports is not practicable.
Note 21. Segment Information
As of June 30, 2021, the Company was comprised of two reportable segments: Entertainment and Tao Group Hospitality. In determining its reportable segments, the Company assessed the guidance of ASC 280-10-50-1, which provides the definition of a reportable segment. In accordance with the FASB’s guidance, the Company takes into account whether two or more operating segments can be aggregated together as one reportable segment as well as the type of discrete financial information that is available and regularly reviewed by its chief operating decision maker. The Company has evaluated this guidance and determined that there are two reportable segments. In addition, the Company incurs non-capitalizable content development and technology costs associated with the Company’s MSG Sphere initiative, which are reported in “Entertainment”. In addition to event-related operating expenses, Entertainment also includes other expenses such as (a) corporate and supporting department operating costs that are attributable to the Sphere Development and (b) non-event related operating expenses for the Company’s venues such as (i) rent for the Company’s leased venues, (ii) real estate taxes, (iii) insurance, (iv) utilities, (v) repairs and maintenance, (vi) labor related to the overall management of the venues, and (vii) depreciation and amortization expense related to the Company’s performance venues and certain corporate property, equipment and leasehold improvements. Additionally, the Company does not allocate any purchase accounting adjustments related to business acquisitions to the reporting segments. Following the closing of the Merger on July 9, 2021, the Company has a third segment, MSG Networks.
The Company evaluates segment performance based on several factors, of which the key financial measure is operating income (loss) before (i) adjustments to remove the impact of non-cash straight-line leasing revenue associated with the Arena License Agreements with MSG Sports, (ii) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (iii) amortization for capitalized cloud computing arrangement costs (see Note 2. Summary of Significant Accounting Policies for further details), (iv) share-based compensation expense or benefit, (v) restructuring charges or credits, and (vi) gains or losses on sales or dispositions of businesses and associated settlements, which is referred to as adjusted operating income (loss), a non-GAAP measure. In addition to excluding the impact of the items discussed above, the impact of purchase accounting adjustments related to business acquisitions is also excluded in evaluating the Company’s consolidated and
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

combined adjusted operating income (loss). Because it is based upon operating income (loss), adjusted operating income (loss) also excludes interest expense (including cash interest expense) and other non-operating income and expense items. Management believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the various operating units of the Company’s business without regard to the settlement of an obligation that is not expected to be made in cash. In addition, the Company believes that given the length of the arena license agreements and resulting magnitude of the difference in leasing revenue recognized and cash revenue received, the exclusion of non-cash leasing revenue provides investors with a clearer picture of the Company's operating performance. The Company believes adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of its business segments and the Company on a consolidated basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze the Company’s performance. The Company uses revenues and adjusted operating income (loss) measures as the most important indicators of its business performance, and evaluates management’s effectiveness with specific reference to these indicators.
Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. The Company has presented the components that reconcile operating income (loss), the most directly comparable GAAP financial measure, to adjusted operating income (loss).
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Information as to the operations of the Company’s reportable segments is set forth below. 
Year ended June 30, 2021
Entertainment Tao Group Hospitality Purchase accounting adjustments Inter-segment eliminations Total
Revenues $ 82,281  $ 100,166  $ —  $ (2,046) $ 180,401 
Direct operating expenses 103,089  66,591  3,334  (1,090) 171,924 
Selling, general and administrative expenses 268,705  54,034  —  (25) 322,714 
Depreciation and amortization 80,142  8,955  25,567  —  114,664 
Restructuring charges 21,299  —  —  —  21,299 
Operating loss (390,954) (29,414) (28,901) (931) (450,200)
Loss in equity method investments (6,858)
Interest income 1,273 
Interest expense (35,098)
Miscellaneous income, net
(a)
51,062 
Loss from operations before income taxes $ (439,821)
Reconciliation of operating loss to adjusted operating loss:
Operating loss $ (390,954) $ (29,414) $ (28,901) $ (931) $ (450,200)
Add back:
Non-cash portion of arena license fees from MSG Sports (13,026) —  —  —  (13,026)
Share-based compensation expense 47,633  5,284  —  —  52,917 
Depreciation and amortization 80,142  8,955  25,567  — 

114,664 
Restructuring charges 21,299  —  —  —  21,299 
Other purchase accounting adjustments —  —  3,334  —  3,334 
Adjusted operating loss $ (254,906) $ (15,175) $ —  $ (931) $ (271,012)
Other information:
Capital expenditures
(b)
$ 448,962  $ 3,192  $ —  $ —  $ 452,154 
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Year ended June 30, 2020
Entertainment Tao Group Hospitality Purchase accounting adjustments Inter-segment eliminations Total
Revenues $ 585,208  $ 180,201  $ —  $ (2,473) $ 762,936 
Direct operating expenses 388,643  116,638  4,361  (1,520) 508,122 
Selling, general and administrative expenses
282,043  63,049  6  (461) 344,637 
Depreciation and amortization
84,289  8,156  12,454  —  104,899 
Impairment for intangibles, long-lived assets, and goodwill —  94,946  10,871  —  105,817 
Gain on disposal of assets held for sale (240,783) —  —  —  (240,783)
Operating income (loss)
71,016  (102,588) (27,692) (492) (59,756)
Loss in equity method investments (4,433)
Interest income
17,993 
Interest expense
(2,300)
Miscellaneous income, net
(a)
38,855 
Loss from operations before income taxes $ (9,641)
Reconciliation of operating income (loss) to adjusted operating income (loss):
Operating income (loss)
$ 71,016  $ (102,588) $ (27,692) $ (492) $ (59,756)
Add back:
Share-based compensation expense
41,227  963  —  —  42,190 
Depreciation and amortization
84,289  8,156  12,454  —  104,899 
Impairment for intangibles, long-lived assets, and goodwill —  94,946  10,871  —  105,817 
Gain on disposal of assets held for sale (240,783) —  —  —  (240,783)
Other purchase accounting adjustments
—  —  4,367  —  4,367 
Adjusted operating income (loss) $ (44,251) $ 1,477  $ —  $ (492) $ (43,266)
Other information:
Capital expenditures
(b)
$ 448,944  $ 3,482  $ —  $ —  $ 452,426 
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

Year ended June 30, 2019
Entertainment Tao Group Hospitality Purchase accounting adjustments Inter-segment eliminations Total
Revenues $ 797,058  $ 253,651  $ —  $ (1,800) $ 1,048,909 
Direct operating expenses 513,305  153,969  4,240  (873) 670,641 
Selling, general and administrative expenses
239,321  75,529  524  (852) 314,522 
Depreciation and amortization
87,005  6,437  15,901  —  109,343 
Operating income (loss)
(42,573) 17,716  (20,665) (75) (45,597)
Equity in earnings of equity method investments 7,062 
Interest income
30,163 
Interest expense
(15,262)
Miscellaneous expense, net
(a)
(6,061)
Loss from operations before income taxes $ (29,695)
Reconciliation of operating income (loss) to adjusted operating income (loss):
Operating income (loss)
$ (42,573) $ 17,716  $ (20,665) $ (75) $ (45,597)
Add back:
Share-based compensation expense
35,264  137  —  —  35,401 
Depreciation and amortization 87,005  6,437  15,901  —  109,343 
Other purchase accounting adjustments —  —  4,764  —  4,764 
Adjusted operating income (loss) $ 79,696  $ 24,290  $ —  $ (75) $ 103,911 
Other information:
Capital expenditures
(b)
$ 168,981  $ 15,021  $ —  $ —  $ 184,002 
_________________
(a)Miscellaneous income (expense), net includes the followings:
Years Ended June 30,
2021 2020 2019
Realized and unrealized gain (loss) on equity investments with readily determinable fair value, see Note 8 for further detail.
$ 51,178  $ 37,628  $ (3,497)
Non-service cost components of net periodic pension and postretirement benefit costs
(264) (1,239) (2,276)
Dividend income from equity investments
—  722  1,202 
Loss on extinguishment of debt associated with Tao Group Hospitality
—  —  (3,977)
Measurement alternative adjustments for equity investments without readily determinable fair value
—  (532) 3,340 
Others, net, primarily reflects the impact of Tao Group Hospitality three-month lag elimination in Fiscal Year 2020.
148  2,276  (853)
$ 51,062  $ 38,855  $ (6,061)
See Note 15 for further details on the non-service cost components of net periodic pension and postretirement benefit cost.
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MADISON SQUARE GARDEN ENTERTAINMENT CORP.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(Continued)

(b)The Entertainment segment includes capital expenditures associated with the MSG Sphere in Las Vegas of $389,643, $380,258, and $93,334 for Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019, respectively.
See Note 4. Revenue Recognition — Disaggregation of Revenue for disclosure related to the Company’s revenues by type of goods or services in accordance with the required entity-wide disclosure requirements per FASB ASC Subtopic 280-10-50-38 for Fiscal Year 2021, Fiscal Year 2020 and Year 2019.
Substantially all revenues and assets of the Company’s reportable segments are attributed to or located in the United States. A majority of the Company’s revenues and assets are concentrated in the New York City metropolitan area.
Note 22. Concentrations of Risk
Financial instruments that may potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are invested in U.S. treasury bills, money market accounts and time deposits. The Company monitors the financial institutions and money market funds where it invests its cash and cash equivalents with diversification among counterparties to mitigate exposure to any single financial institution. The Company’s emphasis is primarily on safety of principal and liquidity and secondarily on maximizing the yield on its investments.
The Company did not have any non-affiliated customer that represented 10% or more of its consolidated and combined revenues for Fiscal Year 2021, Fiscal Year 2020 and Fiscal Year 2019. In addition, the Company did not have a single non-affiliated customer that represented 10% or more of its consolidated accounts receivable as of June 30, 2021 and 2020.
As of June 30, 2021, approximately 1,900 full-time and part-time employees, who represent approximately 33% of the Company’s workforce, are subject to CBAs. Approximately 52% are subject to CBAs that expired as of June 30, 2021 and approximately 11% are subject to CBAs that will expire by June 30, 2022 if they are not extended prior thereto.
Note 23. Subsequent Events
Radio City Music Hall Lease
On July 1, 2021, Radio City Productions LLC (“Radio City Productions”), a wholly owned subsidiary of the Company, and RCPI Landmark Properties, L.L.C. (“RCPI”) entered into the sixth amendment (the “Lease Amendment”) to a lease agreement dated December 4, 1997, as amended, pursuant to which Radio City Productions leases Radio City Music Hall and ancillary spaces (the “RCMH Lease”). The Lease Amendment extends the term of the RCMH Lease, which was previously set to expire in February 2023, until August 31, 2038 for all spaces covered by the prior Lease other than the Retail Space (as defined in the RCMH Lease), with an option to renew for an additional 10 years at Fair Market Value (as defined under the Lease Amendment) by providing notice to RCPI. The Lease Amendment also modifies the fixed rent payable, commencing on March 1, 2023, with a six-month rent abatement period as long as Radio City Productions is not in default under the RCMH Lease. The Lease Amendment also provides for certain building improvements to be carried out by the parties and funded by RCPI up to certain amounts specified in the Lease Amendment. The term of the Lease with respect to the Retail Space will expire as of February 28, 2023. Total incremental lease payments under the Lease Amendment will be $233,000.
Merger with MSG Networks
On July 9, 2021, the Company completed its previously announced acquisition of MSG Networks, See Note 1 for more information regarding the Merger.
F - 79


Exhibit 4.3
DESCRIPTION OF CAPITAL STOCK

The following description of the capital stock of Madison Square Garden Entertainment Corp. (the “Company,” “we,” “us,” and “our”) is not complete and may not contain all the information you should consider before investing in our capital stock. This description is summarized from, and qualified in its entirety by reference to, our amended and restated certificate of incorporation and amended by-laws, which have been publicly filed with the Securities and Exchange Commission (“SEC”). The terms of these securities may also be affected by the General Corporation Law of the State of Delaware.
Our authorized capital stock consists of 165,000,000 shares, with a par value of $0.01 per share, of which 120,000,000 shares are Class A Common Stock, par value $.01 per share (the “Class A Common Stock”), 30,000,000 shares are Class B Common Stock, par value $.01 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), and 15,000,000 shares are Preferred Stock, par value $.01 per share.
Class A Common Stock and Class B Common Stock
All shares of our Common Stock currently outstanding are fully paid and non-assessable, not subject to redemption and without preemptive or other rights to subscribe for or purchase any proportionate part of any new or additional issues of stock of any class or of securities convertible into stock of any class.
Voting
Holders of Class A Common Stock are entitled to one vote per share. Holders of Class B Common Stock are entitled to ten votes per share. All actions submitted to a vote of stockholders are voted on by holders of Class A Common Stock and Class B Common Stock voting together as a single class, except for the election of directors and as otherwise set forth below. With respect to the election of directors, holders of Class A Common Stock vote together as a separate class and are entitled to elect 25% of the total number of directors constituting the whole Board of Directors and, if such 25% is not a whole number, then the holders of Class A Common Stock, voting together as a separate class, are entitled to elect the nearest higher whole number of directors that is at least 25% of the total number of directors. Holders of Class B Common Stock, voting together as a separate class, are entitled to elect the remaining directors.
If, however, on the record date for any stockholders meeting at which directors are to be elected, the number of outstanding shares of Class A Common Stock is less than 10% of the total number of outstanding shares of both classes of Common Stock, the holders of Class A Common Stock and Class B Common Stock vote together as a single class with respect to the election of directors and the holders of Class A Common Stock do not have the right to elect 25% of the total number of directors but have one vote per share for all directors and the holders of Class B Common Stock have ten votes per share for all directors.
If, on the record date for notice of any stockholders meeting at which directors are to be elected, the number of outstanding shares of Class B Common Stock is less than 12 1/2% of the total number of outstanding shares of both classes of Common Stock, then the holders of Class A Common Stock, voting as a separate class, continue to elect a number of directors equal to 25% of the total number of directors constituting the whole Board of Directors and, in addition, vote together with the holders of Class B Common Stock, as a single class, to elect the remaining directors to be elected at such meeting, with the holders of Class A
1




Common Stock entitled to one vote per share and the holders of Class B Common Stock entitled to ten votes per share.
In addition, the affirmative vote or consent of the holders of at least 66 2/3% of the outstanding shares of Class B Common Stock, voting separately as a class, is required for the authorization or issuance of any additional shares of Class B Common Stock and for any amendment, alteration or repeal of any provisions of our amended and restated certificate of incorporation which would affect adversely the powers, preferences or rights of the Class B Common Stock. The number of authorized shares of Class A Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of the majority of the Common Stock. Our amended and restated certificate of incorporation does not provide for cumulative voting.
The Dolan family, including trusts for the benefit of members of the Dolan family (collectively, the “Dolan Family Group”), by virtue of their ownership of Class B Common Stock, are able collectively to control decisions on matters in which holders of our Class A Common Stock and Class B Common Stock vote together as a single class (including, but not limited to, a change in control), and to elect up to 75% of the Company’s Board. Members of the Dolan Family Group are parties to a Stockholders Agreement, which has the effect of causing the voting power of the holders of our Class B Common Stock to be cast as a block with respect to all matters to be voted on by holders of our Class B Common Stock. Under the Stockholders Agreement, the shares of Class B Common Stock owned by members of the Dolan Family Group are to be voted on all matters in accordance with the determination of the Dolan Family Committee, except that the decisions of the Dolan Family Committee are non-binding with respect to the Class B shares owned by certain Dolan family trusts that collectively own approximately 40.5% of the outstanding Class B Common Stock.
Advance Notification of Stockholder Nominations and Proposals
Our amended bylaws establish advance notice procedures with respect to stockholder proposals and nomination of candidates for election as directors other than nominations made by or at the direction of our Board of Directors. In particular, stockholders must notify our corporate secretary in writing prior to the meeting at which the matters are to be acted upon or directors are to be elected. The notice must contain the information specified in our amended bylaws. To be timely, the notice must be received by our corporate secretary not less than 60 or more than 90 days prior to the date of the stockholders’ meeting, provided that if the date of the meeting is publicly announced or disclosed less than 70 days prior to the date of the meeting, the notice must be given not more than ten days after such date is first announced or disclosed.
No Stockholder Action by Written Consent
Our amended and restated certificate of incorporation provides that, except as otherwise provided as to any series of preferred stock in the terms of that series, no action of stockholders required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting of stockholders, without prior notice and without a vote, and the power of the stockholders to consent in writing to the taking of any action without a meeting is specifically denied.




2




Conversions
The Class A Common Stock has no conversion rights. The Class B Common Stock is convertible into Class A Common Stock in whole or in part at any time and from time to time on the basis of one share of Class A Common Stock for each share of Class B Common Stock. In the case of any sale or disposition of Class B Common Stock by a Dolan children trust, or of any children trust shares by any other Dolan family interest to which such shares have been transferred, such stock must be converted to Class A Common Stock on a one-for-one basis. This conversion requirement will not apply to sales or dispositions of Class B Common Stock to Charles F. Dolan or other Dolan family interests. Any conversion of Class B Common Stock into Class A Common Stock would result in the issuance of additional shares of Class A Common Stock. As a result of any such conversion, existing holders of Class A Common Stock would own the same percentage of the outstanding Common Stock but a smaller percentage of the total number of shares of issued and outstanding Class A Common Stock. Additionally, the conversion of shares of Class B Common Stock, which are entitled to ten votes per share, into shares of Class A Common Stock, which are entitled to one vote per share, would increase the voting power of Class A Common Stockholders with respect to all actions that are voted on by holders of Class A Common Stock and Class B Common Stock as a single class; however, the holders of Class B Common Stock, voting as a separate class, would continue to have the right to elect up to 75% of the Board of Directors unless and until the Class B Common Stock represented less than 12 1/2% of the outstanding Common Stock and, when both classes vote together as one class, would continue to represent a majority of the outstanding voting power of our Common Stock unless and until the Class B Common Stock represented less than approximately 9.1% of our outstanding Common Stock.
Dividends
Holders of Class A Common Stock and Class B Common Stock are entitled to receive dividends equally on a per-share basis if and when such dividends are declared by the Board of Directors from funds legally available therefor. No dividend may be declared or paid in cash or property or shares of either Class A Common Stock or Class B Common Stock unless the same dividend is paid simultaneously on each share of the other class of Common Stock. In the case of any stock dividend, holders of Class A Common Stock are entitled to receive the same dividend on a percentage basis (payable in shares of or securities convertible to shares of Class A Common Stock and other securities of us or any other person) as holders of Class B Common Stock receive (payable in shares of or securities convertible into shares of Class A Common Stock, shares of or securities convertible into shares of Class B Common Stock and other securities of us or any other person). The distribution of shares or other securities of the Company or any other person to common stockholders is permitted to differ to the extent that the Common Stock differs as to voting rights and rights in connection to certain dividends.
Liquidation
Holders of Class A Common Stock and Class B Common Stock share with each other on a ratable basis as a single class in the net assets available for distribution in respect of Class A Common Stock and Class B Common Stock in the event of a liquidation.




3




Other Terms
Neither the Class A Common Stock nor the Class B Common Stock may be subdivided, consolidated, reclassified or otherwise changed, except as expressly provided in our amended and restated certificate of incorporation, unless the other class of Common Stock is subdivided, consolidated, reclassified or otherwise changed at the same time, in the same proportion and in the same manner.
In any merger, consolidation or business combination, the consideration to be received per share by holders of either Class A Common Stock or Class B Common Stock must be identical to that received by holders of the other class of Common Stock, except that in any such transaction in which shares of capital stock are distributed, such shares may differ as to voting rights only to the extent that voting rights now differ between Class A Common Stock and Class B Common Stock.
Transfer Agent and Registrar
The transfer agent and registrar for the Class A Common Stock is EQ Shareowner Services.
Listing
Our Class A Common Stock is listed on the NYSE under the symbol “MSGE.”
Preferred Stock
Under our amended and restated certificate of incorporation, our Board of Directors is authorized, without further stockholder action to provide for the issuance of up to 15,000,000 shares of preferred stock in one or more series. The powers, designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions, including dividend rights, voting rights, conversion rights, terms of redemption and liquidation preferences, of the preferred stock of each series will be fixed or designated by the Board of Directors pursuant to a certificate of designations. There are no shares of our preferred stock currently outstanding. Any issuance of preferred stock may adversely affect the rights of holders of our Common Stock and may render more difficult certain unsolicited or hostile attempts to take over the Company.
Section 203 of the Delaware General Corporation Law
Section 203 of the Delaware General Corporation Law prohibits certain transactions between a Delaware corporation and an “interested stockholder.” An “interested stockholder” for this purpose is a stockholder who is directly or indirectly a beneficial owner of 15% or more of the aggregate voting power of a Delaware corporation. This provision prohibits certain business combinations between an interested stockholder and a corporation for a period of three years after the date on which the stockholder became an interested stockholder, unless: (1) prior to the time that a stockholder became an interested stockholder, either the business combination or the transaction which resulted in the stockholder becoming an interested
4




stockholder is approved by the Company’s Board of Directors; (2) the interested stockholder acquired at least 85% of the aggregate voting power of the Company in the transaction in which the stockholder became an interested stockholder; or (3) the business combination is approved by a majority of the Board of Directors and the affirmative vote of the holders of two-thirds of the aggregate voting power not owned by the interested stockholder at or subsequent to the time that the stockholder became an interested stockholder. These restrictions do not apply if, among other things, the Company’s certificate of incorporation contains a provision expressly electing not to be governed by Section 203. Our amended and restated certificate of incorporation does not contain such an election. However, our Board of Directors exercised its right under Section 203 to approve the acquisition of Common Stock in the spin-off of the Company from Madison Square Garden Sports Corp. by members of the Dolan family group. This has the effect of making Section 203 inapplicable to transactions between the Company and current and future members of the Dolan family group. Section 203 also may be inapplicable to the Dolan family group or to other persons for other reasons specified in the statute.



5

Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
MADISON SQUARE GARDEN, INC.
AND
THE CHARLES F. DOLAN CHILDREN TRUSTS
 




 

REGISTRATION RIGHTS AGREEMENT

          Registration Rights Agreement (this “ Agreement ”) dated as of January 13, 2010 (but effective as provided in Section 10(l)), by and among Madison Square Garden, Inc., a Delaware corporation (the “ Company ”), the Charles F. Dolan Children Trusts, created under an Agreement dated December 22, 2009, between Kathleen M. Dolan, Paul J. Dolan, Matthew J. Dolan and Mary S. Dolan, as Grantors and Trustees (the “ Children Trusts ”), and the Qualifying Creditors, if any, who have agreed in writing to become bound by this Agreement. Certain capitalized terms used in this Agreement are defined in Annex A hereto.

WITNESSETH :
          WHEREAS, as of the date of this Agreement, the Children Trusts own shares of Cablevision NY Group Class B Common Stock, par value $.01 per share (“ Cablevision Class B Common Stock ”), and shares of Cablevision NY Group Class A Common Stock, par value $.01 per share (“ Cablevision Class A Common Stock ”);
          WHEREAS, Cablevision Systems Company (“ CSCo ”) was party to a Registration Rights Agreement (the “ Cablevision Registration Rights Agreement ”), dated as of January 27, 1986, with CSC Holdings Inc., a Delaware corporation (“ CSC Holdings ”), as amended on May 31, 1989, and the Children Trusts have certain registration rights under that agreement with respect to shares of Cablevision Class A Common Stock as provided in the Cablevision Registration Rights Agreement;
          WHEREAS, Cablevision intends to distribute (the “ Distribution ”) to the holders of Cablevision Class A Common Stock all of the outstanding shares of the Company’s Class A Common Stock, $.01 par value (the “ Class A Common Stock ”), and
 




 

to the holders of Cablevision Class B Common Stock all of the outstanding shares of the Company’s Class B Common Stock, $.01 par value (the “ Class B Common Stock ”); and
          WHEREAS, the Company and the Children Trusts wish to provide for benefits and restrictions applicable to the Shares owned by the Children Trust Holders following the Distribution, all as provided herein.
          NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereby agree as follows:
          1. Conversion of Class B Common Stock into Class A Common Stock .
          (a) Transfers Requiring Conversion . Subject to Section 1(b), (i) each Children Trust agrees that if at any time or from time to time it desires to sell, transfer or otherwise dispose of, directly or indirectly (including, without limitation, any transfer or issuance of equity or beneficial interests in an entity that is a Children Trust Holder) (a “ Transfer ”), any or all of its shares of Class B Common Stock and (ii) each other Children Trust Holder agrees that if at any time or from time to time it desires to Transfer any or all of its CSCo Shares, such Children Trust or Children Trust Holder, as the case may be, shall convert such shares of Class B Common Stock into shares of Class A Common Stock in accordance with the terms of the Amended and Restated Certificate of Incorporation of the Company immediately prior to such Transfer. Subject to Section 1(b), the Company shall be under no obligation to record the Transfer on its
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books of such shares of Class B Common Stock until they have been converted into Class A Common Stock.
          (b) Permissible Transfers Without Conversion . The provisions of subparagraph (a) of this Section 1 are inapplicable to (i) any Transfer of shares of Class B Common Stock (including any Transfer of equity or beneficial interests in an entity that is a Children Trust Holder) to Dolan, his spouse, any person related to Dolan by reason of being his ancestor or descendent (natural or adopted), any Acceptable Marital Trust, any entity (whether a corporation, partnership, limited liability company, trust or other entity of any kind) all of the equity or beneficial interests in which are owned or held by any of the foregoing persons, or any person (whether or not such person is one of the foregoing persons) who is a trustee for, or is acting on behalf of, any of such foregoing persons, and (ii) any bona fide pledge or similar perfected security interest relating to any interest in any of the foregoing persons (an “ Indirect Pledge ”) or to Collateral Stock, in either case for the benefit of any Creditor; provided , however , that the Transfer shall not be permissible and shall be void for all purposes unless (x) in the case of a Transfer referred to in clause (i) the transferee executes a joinder agreement in the form attached hereto as Exhibit A (it being understood that, if such transferee is also a successor to a Children Trust, neither the obligation to execute, nor the execution of, such a joinder agreement shall limit the effect of the first sentence of Section 10(d)), and (y) in the case of a Transfer referred to in clause (ii), (A) such shares of Collateral Stock or, in the case of an Indirect Pledge, such interests in such other person remain registered solely in the name of one or more Children Trust Holders, and (B) any such Creditor agrees with the
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Company in a writing reasonably acceptable to the Company not to foreclose on, or otherwise make use of or exercise remedies with respect to, or effect any Transfer of, the Collateral Stock or, in the case of an Indirect Pledge, such interests, without prior conversion of the shares of Collateral Stock or, in the case of an Indirect Pledge, the shares of Class B Common Stock owned by the person the interests in which are the subject of the Indirect Pledge into shares of Class A Common Stock in accordance with the terms of the Amended and Restated Certificate of Incorporation of the Company, and provided further that the last sentence of paragraph (a) of this Section 1 shall remain applicable to any shares of Class B Common Stock that are the subject of a Transfer, including any pledge or the creation of any security interest, pursuant to this Section 1(b).
          (c) Legends . All certificates representing shares of Class B Common Stock that are covered by this Agreement shall have endorsed thereon a legend which shall read substantially as follows:

“The shares represented by this certificate are held subject to the terms of a certain Registration Rights Agreement, dated January 13, 2010, by and among Madison Square Garden, Inc. and the Dolan Children Trusts, as amended from time to time, a copy of which is on file with the Secretary of Madison Square Garden, Inc., and such shares may not be sold, transferred or otherwise disposed of, directly or indirectly, except in accordance with the terms of such Registration Rights Agreement.”

          2. Demand Registration by the Children Trust Parties of the Shares .
          (a) Demand Registration . One or more of the Children Trust Parties may request in writing, with the prior written consent (the “ Dolan Consent ”) of (i) Dolan, (ii) if Dolan is deceased or disabled, of his widow or (iii) if both Dolan and his wife are deceased or disabled, the Dolan Family Committee, that the Company file a registration
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statement on an appropriate form for the general registration of securities under the Securities Act, and include therein such number of the Shares owned by such Children Trust Party as such person may specify in its written request; provided , however , that (x) the Company shall not be required to file a registration statement pursuant to this Section 2 if (A) the Shares requested to be so registered do not, in the case of a Children Trust Holder, together with any Shares timely requested to be registered by other Children Trust Holders and Other Holders pursuant to the third-to-last sentence of this Section 2(a), have an aggregate Market Price exceeding the Rule 144 Threshold as of the Trading Day immediately preceding the expiration of the applicable Notice Period under such sentence or, in the case of a Qualifying Creditor, do not have an aggregate Market Price exceeding the Rule 144 Threshold as of the Trading Day immediately preceding the date on which the request for registration is received by the Company, or (B) the Company delivers to each Children Trust Party requesting registration under this Section 2 an opinion of counsel to the Company (such opinion and such counsel to be reasonably acceptable to each such Children Trust Party, it being agreed that the Company’s regular outside securities counsel shall be deemed to be reasonably acceptable counsel for this purpose) to the effect that the Shares proposed to be registered by such person may be offered and sold by such person to the public in the United States together with the Shares requested to be registered by all other Children Trust Parties and Other Holders (I) without registration pursuant to an effective registration statement under the Securities Act and (II) within the volume limitations under Rule 144(e) promulgated under the Securities Act (or any successor rule or regulation) whether or not such volume limitations are then applicable, (y) subject to the next sentence, after the death of both
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Dolan and his spouse, the Children Trust Holders shall in the aggregate have the right on only four occasions to require the Company to file a registration statement pursuant to this Section 2, and (z) subject to the next sentence, a Qualifying Creditor may require registration only following the exercise of its remedies under a security agreement with a Children Trust Holder and for the purpose of Transferring Shares pursuant thereto and each Qualifying Creditor may only require one registration hereunder. The total number of demand registrations under clauses (y) and (z) of the immediately preceding sentence and under the corresponding provisions of the Dolan Registration Rights Agreement shall not exceed four. Notwithstanding anything in this Agreement to the contrary, it is understood and agreed that the Dolan Consent may be granted by the person or entity then entitled to grant such consent with respect to a Qualifying Creditor at the time the pledge or similar security arrangement applicable to such Qualifying Creditor is created, and that such consent will thereafter constitute an irrevocable Dolan Consent for any future request by such Qualifying Creditor for a registration under this Section 2, whether or not the person or entity that granted such Dolan Consent is the person or entity otherwise entitled to grant Dolan Consents at the time such request is actually exercised. All requests made pursuant to this paragraph shall specify the aggregate number of Shares to be registered and the intended methods of disposition thereof, which methods may include an underwritten public offering. Upon receipt of a writ ten request for registration from a Children Trust Holder pursuant to the preceding sentences, the Company shall promptly give written notice of the proposed registration to each such other Children Trust Holder and each Other Holder and provide each such other holder with the opportunity to join in such request by written notice to the Company specifying
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the aggregate number of Shares to be registered by such holder within 20 days from the date of the Company’s written notice (such period is referred to as the “ Notice Period ”). Subject to Section 2(c) of this Agreement, the Company will use its reasonable best efforts to ensure that each registration statement required to be filed pursuant to this Section 2 shall be filed with the Securities and Exchange Commission (the “ Commission ”) as promptly as reasonably practicable, but not later than 45 days after receipt of such request by the Company, and the Company shall use its reasonable best efforts to cause such registration statement to be declared effective by the Commission as promptly thereafter as practicable; provided , however , that the Company shall not be required to maintain such effectiveness for more than 90 days. Notwithstanding the Company’s rights to effect a Suspension of Filing or Suspension of Effectiveness in Section 2(c), the Children Trust Parties that made the registration request under this Section 2(a) shall have the right to withdraw any such request, and such withdrawn request shall not count as a demand registration under clause (y) or (z) of this Section 2(a) or the corresponding provisions under the Dolan Registration Rights Agreement, if (1) the registration statement required to be filed pursuant to this Section 2 is not filed with the Commission by the date that is 45 days after such request is received by the Company and has not at the time of such withdrawal been filed with the Commission, or is not declared effective by the date that is 90 days after the date such registration statement is filed with the Commission and has not at the time of such withdrawal been declared effective, and (2) in either case, such Children Trust Parties notify the Company of the withdrawal of such request no later than 10 days after such 45 th or 90 th day, as the case may be.
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          (b) Concurrent Primary Offering . Anything in this Section 2 to the contrary notwithstanding, if the Company at the time of receipt of a request for registration pursuant to this Section 2 has a bona fide intent and plan to file a registration statement (other than on Form S-4 or S-8 or any successor forms) covering a primary offering by the Company of its Common Equity Securities, the Company, by notice to the applicable Children Trust Parties, may delay the filing (but not the preparation) of the requested registration statement for a period ending on the earlier of (i) 60 days after the closing of such offering or (ii) 120 days after receipt of the request for registration; and, provided , further , if the Company either abandons its plan to file such registration statement or does not file the same within 75 days after receipt of such request, the Company shall promptly thereafter file the requested registration statement. The Company may not, pursuant to the immediately preceding sentence, delay the filing of a requested registration statement more than once during any two-year period.
          (c) Suspension of Offering . Upon notice by the Company to any Children Trust Party which has requested registration under this Section 2 that a negotiation or consummation of a transaction by the Company or any of its subsidiaries is pending or an event has occurred , which negotiation, consummation or event would require disclosure in the registration statement for the requested registration and such disclosure would, in the good faith judgment of the board of directors of the Company, be materially adverse to the business interests of the Company, and the nondisclosure of which in the registration statement would reasonably be expected to cause the registration statement to fail to comply with applicable disclosure requirements (a “ Materiality Notice ”), the Company may delay the filing (but not the preparation) of such registration
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statement (a “ Suspension of Filing ”). Upon the delivery of a Materiality Notice by the Company pursuant to the preceding sentence at any time when a registration statement has been filed but not declared effective, the Company may delay seeking the effectiveness of such registration statement (a “ Suspension of Effectiveness ”), and each Children Trust Party named therein shall immediately discontinue any offers of Shares under such registration statement until such Children Trust Party receives copies of a supplemented or amended prospectus that corrects such misstatement or omission, or until it is advised in writing by the Company that offers under such registration statement may be resumed and has received copies of any additional or supplemental filings which are incorporated by reference in such registration statement. Upon the delivery of a Materiality Notice by the Company pursuant to the first sentence of this Section 2(c) at any time when a registration statement has been filed and declared effective, each Children Trust Party named therein shall immediately discontinue offers and sales of Shares under such registration statement until such Children Trust Party receives copies of a supplemented or amended prospectus that corrects such misstatement or omission and notice that any post-effective amendment has become effective, or until it is advised in writing by the Company that offers under such registration statement may be resumed and has received copies of any additional or supplemental filings which are incorporated by reference in the registration statement (a “ Suspension of Offering ;” a Suspension of Filing, a Suspension of Effectiveness and a Suspension of Offering are collectively referred to herein as, “ Suspensions ”). If so directed by the Company, each Children Trust Party will deliver to the Company all copies (other than permanent file copies then in such Children Trust Party’s possession) of any prospectus covering Shares in the
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possession of such Children Trust Party or its agents current at the time of receipt of any Materiality Notice. In any 12-month period, the aggregate time of all Suspensions shall not, without the consent of a majority of the Children Trust Holders (by number of Shares held), which consent shall not be unreasonably withheld, exceed 180 days. If interrupted by a Suspension of Offering, any ninety (90) day period in respect of which the Company is required to maintain the effectiveness of a registration statement pursuant to Section 2(a) of this Agreement shall be extended by the number of days during which the Suspension of Offering was in effect. In the event of any Suspension of Offering of more than 30 days in duration prior to which the Children Trust Parties have sold less than 75% of the Shares to be sold in such offering, the Children Trust Parties shall be entitled to withdraw such registration prior to the later of (i) the end of the Suspension of Offering and (ii) three business days after the Company has provided the Dolan Family Parties written notice of the anticipated date on which the Suspension of Offering will end, and, if such registration is withdrawn, the related demand for registration shall not count for the purposes of the limitations set forth under clauses (y) and (z) of Section 2(a) or the comparable provisions under the Dolan Registration Rights Agreement.
          (d) Market Price; Trading Day. For purposes of this Section 2:
          (i) “ Market Price ” of a share of Class A Common Stock shall mean the weighted average of the closing prices for the Class A Common Stock on each Trading Day (as defined below) in the 30-day period ending on the day prior to the date of determination as reported in the consolidated transaction reporting system of the NASDAQ Global Market or on the comparable reporting
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system of such other exchange or trading system that is at the time the principal market for the Class A Common Stock.
          (ii) “ Trading Day ” shall mean any day on which trading takes place on the NASDAQ Global Market or such other exchange or trading system that is at the time the principal market for the Class A Common Stock.
          3. Coordination of PiggyBack Registration Rights .
          Each of the Children Trust Parties hereby acknowledges and consents to the grant by the Company to the Dolan Family Affiliate Holders (as defined in the Dolan Registration Rights Agreement and hereinafter referred to in this Agreement as the “ Other Holders ”), in the Dolan Registration Rights Agreement, of the right of the Other Holders to include certain of their respective shares of Class A Common Stock in certain registration statements filed pursuant hereto. Each of the Children Trust Parties further acknowledges and agrees that if any offering hereunder is to be underwritten and if the managing underwriter or underwriters of such offering informs such person in writing that the number of shares of Class A Common Stock which the Children Trust Parties, and the Other Holders, as the case may be, intend to include in such offering is sufficiently large so as to affect the offering price of such offering materially and adversely, then the respective number of shares of Class A Common Stock to be offered for the account of each Children Trust Party and each Other Holder, as the case may be, who is participating in such offering shall be reduced pro rata to the extent necessary to reduce the total number of shares of Class A Common Stock to be included in such offering to the number recommended by such managing underwriter. Except for such piggyback registration rights granted to Other Holders, and to any transferee of the shares
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of Class A Common Stock owned by an Other Holder which may be registered pursuant to the Dolan Registration Rights Agreement, neither the Company nor any of its security holders shall have the right to include any of the Company’s securities in any registration statement filed pursuant hereto.
          4. Piggyback Registration of the Shares .
          If the Company proposes to file a registration statement under the Securities Act with respect to an offering (a) by an Other Holder of its holdings of Class A Common Stock pursuant to the Dolan Registration Rights Agreement, (b) by any other holder of any Common Equity Securities or (c) by the Company for its own account of any Common Equity Securities (other than a registration statement on Form S-4 or S-8, or any successor form or a form filed in connection with an exchange offer or an offering of securities solely to the existing stockholders of the Company), the Company shall give written notice of such proposed filing to each of the Children Trust Holders at least 20 days before the anticipated filing date which shall state whether such registration will be in connection with an underwritten offering and offer such Children Trust Holders the opportunity, subject to obtaining Dolan’s consent, if he is not then deceased or disabled, to include in such registration statement such number of the Shares as such Children Trust Holder may request within three days prior to the anticipated filing date. The Company shall use its reasonable best efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit such Children Trust Holders to be included in the registration for such offering and to include such Shares in such offering on the same terms and conditions as the Common Equity Securities included in such offering. If such proposed offering is to be underwritten, then upon request by the
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managing underwriter or underwriters given to such Children Trust Holders prior to the effective date of the offering, any Children Trust Holder electing to have Shares included in the registration statement shall either enter into underwriting agreements with customary terms and conditions for a secondary offering with such underwriter or underwriters providing for the inclusion of such number of the Shares owned by such Children Trust Holder in such offering on such terms and conditions or, if such Children Trust Holder shall refuse to enter into any such agreement, the Company shall have the right to exclude from such registration all (but not less than all) of the Shares of such Children Trust Holder. Notwithstanding the foregoing, (x) in no event will any Children Trust Holder be required in such underwriting agreement (or in any other agreement in connection with such offering) to (i) make any representations or warranties to or agreements with the underwriters other than representations, warranties or agreements customarily made by selling securityholders in underwritten secondary offerings, (ii) make any representations or warranties to or agreements with the Company other than representations, warranties or agreements regarding such Children Trust Holder, the ownership of such Children Trust Holder’s Common Equity Securities, the authorization, validity and binding effect of transaction documents executed by such Children Trust Holder in connection with such registration and such Children Trust Holder’s intended method or methods of distribution and any other representation required by law; provided that no Children Trust Holder shall be required to make any representation or warranty to any person covered by the indemnity in Section 8(b) other than on a several (and not joint) basis, or (iii) furnish any indemnity to any person which is broader than the indemnity customarily furnished by selling security holders in underwritten offerings;
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provided that no Children Trust Holder shall be required to furnish any indemnity broader than the indemnity furnished by such Children Trust Holder in Section 8(b) to any person covered by the indemnity in Section 8(b), and (y) if the managing underwriter or underwriters of such offering informs the Children Trust Holders in writing that the number of Shares which the Children Trust Holders and the number of Shares which the Other Holders intend to include in such offering is sufficiently large so as to affect materially and adversely the success of such offering, the Shares to be offered for the account of the Children Trust Holders and the Other Holders shall first be reduced pro rata to the extent necessary to reduce the total number of shares of Class A Common Stock to be included in such offering to the number recommended by such managing underwriter. In giving effect to the foregoing reduction, the respective number of the Shares to be offered for the account of Children Trust Holders shall be reduced pro rata.
          5. Holdback Agreements .
          (a) Restrictions on Public Sale by Children Trust Parties . To the extent not inconsistent with applicable law, each Children Trust Party agrees not to offer publicly or effect any public sale or distribution of Common Equity Securities, including a sale pursuant to Rule 144 under the Securities Act (or any successor rule or regulation), during the seven days prior to, and during the 90-day period beginning on, the effective date of any registration statement filed by the Company pursuant to which any such shares or securities are being registered (except as part of such registration), if and to the extent requested by the Company in the case of a non-underwritten public offering or if and to the extent requested by the managing underwriter or underwriters in the case of an underwritten public offering.
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          (b) Restrictions on Public Sale by the Company and Others . The Company agrees (i) that during the seven days prior to, and during the 90-day period beginning on, the effective date of any registration statement filed at the request of a Children Trust Party pursuant hereto, the Company will not offer publicly or effect any public sale or distribution of Common Equity Securities (other than any such sale or distribution of such securities in connection with any merger or consolidation of the Company or any subsidiary with, or the acquisition by the Company or a subsidiary of the capital stock or substantially all of the assets of, any other person or any offer or sale of such securities pursuant to a registration statement on Form S-8), and (ii) that any agreement entered into after the date of this Agreement pursuant to which the Company issues or agrees to issue any privately placed Common Equity Securities shall contain a provision under which holders of such securities agree not to effect any public sale or distribution of any such securities during the periods described in (i) above, in each case including a sale pursuant to Rule 144 (or any successor rule or regulation) under the Securities Act (except as part of any such registration, if permitted).
          6. Registration Procedures .
          In connection with any registration of the Shares owned by a Children Trust Party contemplated hereby, the Company will as expeditiously as possible:
          (a) Furnish to such Children Trust Party, prior to filing a registration statement, copies of such registration statement as proposed to be filed, and thereafter such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents
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in such quantities as such Children Trust Party may reasonably request from time to time in order to facilitate the disposition of the Shares.
          (b) Use its reasonable best efforts to register or qualify the Shares being registered as contemplated hereby (the “ Registered Class A ”) under such other securities or blue sky laws of such jurisdictions as such Children Trust Party reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Children Trust Party to consummate the disposition in such jurisdictions of the Registered Class A; provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (b), (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction.
          (c) Use its reasonable best efforts to cause the Registered Class A to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable such Children Trust Party to consummate the disposition of such Registered Class A.
          (d) Notify such Children Trust Party at any time, (i) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a registration statement or related prospectus or for additional information, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of a registration statement or the initiation of any proceedings for that purpose, (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registered Class A for sale in any jurisdiction, or the initiation or threatening of any proceeding for
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such purpose, and (iv) when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, except as otherwise provided in Section 2(c) hereof, the Company will, as expeditiously as practicable, prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registered Class A, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
          (e) Use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registered Class A for sale in any jurisdiction at the earliest date reasonably practical.
          (f) Cause all such Registered Class A to be listed on the NASDAQ Global Market or on any other securities exchange on which the Class A Common Stock is then listed, provided that the applicable listing requirements are satisfied.
          (g) Enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably requested by the relevant Children Trust Party in order to expedite or facilitate the disposition of the Registered Class A.
          (h) Make available for inspection by such Children Trust Party, any underwriter participating in any disposition pursuant to such registration statement, and
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any attorney, accountant or other agent retained by such Children Trust Party or such underwriter (collectively, the “ Inspectors ”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “ Records ”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the officers, directors and employees of the Company to supply all information reasonably requested by any such Inspector in connection with such registration statement. Records which the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Any Children Trust Party shall use reasonable best efforts, prior to any disclosure by any such Inspector under clause (i) of the preceding sentence, to inform the Company that such disclosure is necessary to avoid or correct a misstatement or omission in the registration statement. Each Children Trust Party further agrees that it will, upon learning that disclosure of Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at the expense of the Company, to undertake appropriate action to prevent disclosure of the Records deemed confidential.
          (i) In the event such sale is pursuant to an underwritten offering, use its reasonable best efforts to (i) obtain a comfort letter from the independent public accountants for the Company in customary form and covering such matters of the type customarily covered by such letters as any Children Trust Party reasonably requests and (ii) ensure that (A) the representations, warranties and covenants contained in the
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applicable underwriting agreement shall expressly be for the benefit of any Children Trust Party participating in such sale, (B) the conditions to closing in said underwriting agreement shall be reasonably satisfactory to such Children Trust Party and (C) to the extent customary, all comfort letters and opinions of counsel contemplated by said underwriting agreements are delivered to such Children Trust Party on the closing date of the offering.
          (j) Otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission and have the registration statement declared effective as soon as practicable after filing.
          The Company may require any Children Trust Party to furnish to the Company such information regarding such Children Trust Party as the Company may from time to time reasonably request in writing, in each case only as required by the Securities Act or the rules and regulations thereunder.
          Each Children Trust Party agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 6(d) hereof, such Children Trust Party will forthwith discontinue disposition of the Registered Class A pursuant to the registration statement covering such Registered Class A until such Children Trust Party receives the copies of the supplemented or amended prospectus contemplated by Section 6(d) hereof, and, if so directed by the Company, such Children Trust Party will deliver to the Company (at the expense of the Company) all copies, other than permanent file copies then in such Children Trust Party’s possession, of the prospectus covering such Registered Class A current at the time of receipt of such notice. If interrupted by receipt of any such notice pursuant to Section 6(d), any 90 day period in
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respect of which the Company is required to maintain the effectiveness of a registration statement pursuant to Section 2(a) shall be extended by the number of days during which the interruption was in effect.
          7. Registration Expenses .
          Other than in the case of (a) a registration at the request of a Qualifying Creditor or (b) a demand registration under Section 2(a)(iii) after the second such registration (each registration referred to in clause (a) or (b), a “ Designated Registration ”), all expenses incident to the performance of or compliance with this Agreement by the Company, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registered Class A), printing expenses, messenger and delivery expenses, internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the fees and expenses incurred in connection with the listing of the Registered Class A on the NASDAQ Global Market or any other securities exchange on which such Class A Common Stock is then listed, fees and disbursements of counsel for the Company and its independent certified public accountants (including the expenses of any special audit or comfort letters required by or incident to such performance), securities acts liability insurance (if the Company elects to obtain such insurance), the fees and expenses of any special experts retained by the Company in connection with such registration, the fees and expenses of other persons retained by the Company, including transfer agents, trustees, depositories and registrars (all such expenses being herein called “ Registration Expenses ”), will be borne by the
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Company. In the case of a Designated Registration, all Registration Expenses other than internal expenses of the Company and securities acts liability insurance obtained by the Company at its election, shall be borne by the Qualifying Creditor or the Children Trust Holders participating in the offering, as the case may be. The Company will not have any responsibility for any of the expenses of any Children Trust Party incurred in connection with any registration statement hereunder, including, without limitation, underwriting discounts or commissions attributable to the sale of Registered Class A and fees and expenses of counsel for such Children Trust Party.
          8. Indemnification; Contribution .
          (a) Indemnification by the Company . The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, (i) each Children Trust Party, (ii) the directors, officers, partners, employees, agents, beneficiaries, trustees, members and affiliates of each Children Trust Party, and the directors, officers, partners, employees and agents of each such affiliate, and (iii) each person who controls any of the foregoing (within the meaning of the Securities Act and the Exchange Act), and any investment adviser thereof, against any and all losses, claims, damages, liabilities, expenses (or actions or proceedings in respect thereof) or costs (including, without limitation, costs of investigation and reasonable attorneys’ fees and disbursements incurred by any such indemnified person in connection with enforcing its rights hereunder preparing, pursuing or defending any such loss, claim, damage, liability, expense, action or proceeding), including any of the foregoing incurred in settlement of any litigation commenced or threatened (collectively, “ Losses ”), joint or several, based upon or arising out of (x) any untrue or alleged untrue statement of material fact
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contained in any registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto, (y) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, or (z) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company in connection with such registration, and the Company will reimburse each such indemnified party for any such Loss, except in each case insofar as any such Loss arises out of or is based upon an untrue statement or omission made in any such registration statement, prospectus, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement, or a violation of law or regulation in reliance upon and in conformity with written information furnished to the Company by such indemnified party expressly for use in the preparation thereof, it being understood that the information to be furnished to the Company for use in the preparation of any such document shall be limited only to the information specifically referenced in the penultimate sentence of Section 8(b). Such indemnity shall remain in full force and effect regardless of any investigation made by such indemnified person and shall survive the Transfer of any Shares by any such indemnified person. The indemnity in this Section 8(a) shall not apply to Losses incurred by a person other than in his or her capacity as a selling security holder. In connection with an underwritten offering, the Company will indemnify the underwriters thereof, their officers and directors and each person who controls such underwriters (within the meaning of the Securities Act or the Exchange Act) to the same extent as provided above with respect to the indemnification of each Children Trust Party.
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          (b) Indemnification by Children Trust Parties . In connection with any registration statement contemplated hereby, each Children Trust Party participating in any offer or sale pursuant to such registration statement will furnish to the Company in writing such information with respect to such Children Trust Party as the Company reasonably requests for use in connection with any such registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto and agrees to indemnify and hold harmless, severally, and not jointly, to the fullest extent permitted by law, the Company, its directors, officers, employees, agents and affiliates and the directors, officers, partners, employees and agents of each such affiliate and each person who controls the Company (within the meaning of the Securities Act or the Exchange Act) against any Losses insofar as such Losses arise out of or are based upon (i) an untrue or alleged untrue statement of a material fact contained in any such registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, to the extent, that such untrue statement or omission is contained in or omitted from any information with respect to such Children Trust Party so furnished in writing by such Children Trust Party expressly for use in the preparation of such registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto, as the case may be, or (ii) any violation by such Children Trust Party of any federal, state or common law rule or regulation applicable to such Children Trust Party in connection with such registration. It is understood that the
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information to be furnished by a Children Trust Party to the Company for use in the preparation of any such document shall be limited only to information regarding such Children Trust Party, the ownership of such Children Trust Party’s Common Equity Securities, such Children Trust Party’s intended method or methods of distribution and any other information required by law. The liability of a Children Trust Party under this Section 8(b) shall not exceed the amount of net proceeds received by such Children Trust Party (net of underwriting discounts borne by such Children Trust Party) from the sale of the Shares in the offering that is the subject of an indemnity claim under this Section 8(b).
          (c) Conduct of Indemnification Proceedings . Any person entitled to indemnification hereunder agrees to give prompt written notice to the indemnifying party after the receipt by such person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such person will claim indemnification or contribution pursuant to this Agreement, provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnified party of its obligations under this Section 8, except to the extent that the indemnifying party is materially prejudiced by such failure to give notice. Unless in the reasonable judgment of such indemnified party, a conflict of interest may exist between such indemnified party and the indemnifying party with respect to such claim, the indemnified party shall permit the indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to such indemnified party. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel with respect
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to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels. No indemnifying party will be subject to any liability for any settlement made without its consent. No indemnifying party, in the defense of any such claim or litigation shall, except with the consent of the applicable indemnified party, which consent shall not be unreasonably withheld, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.
          (d) Indemnification Payments . Any indemnification required to be made by an indemnifying party pursuant to this Section 8 shall be made by periodic payments to the indemnified party during the course of the action or proceeding, as and when bills are received by such indemnifying party with respect to indemnifiable Losses incurred by such indemnified party.
          (e) Contribution . If the indemnification provided for in this Section 8 from the indemnifying party is unavailable to an indemnified party hereunder in respect of any Losses or is insufficient to hold harmless an indemnified party from all Losses covered thereby, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted
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in such Losses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statements or omissions. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.
          The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(e) were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
          Notwithstanding anything else contained herein, (i) no party shall be liable for contribution under this Section 8(e) except to the extent and under such circumstances as such party would have been liable to indemnify under this Section 8 if such indemnification were enforceable under applicable law and (ii) no Children Trust Party (or related indemnified party) shall be required to contribute any amount in excess of the amount by which net the proceeds received by such Children Trust Party (net of
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underwriting discounts borne by such Children Trust Party) from the sale of Shares in the offering that is the subject of the claim for contribution exceeds the amount of any damages which such Children Trust Party (or related indemnified party) would have been required to pay by reason of the indemnity under this Section 8 if such indemnification was enforceable under applicable law.
          If indemnification is available under this Section 8, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections 8(a) and (b) without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Section 8(e).
          9. Participation in Underwritten Registrations . A Children Trust Party may not participate in any underwritten registration hereunder or under the Dolan Registration Rights Agreement or otherwise unless such Children Trust Party (a) agrees to sell the Shares on the basis provided in any underwriting arrangements with customary terms and conditions for a secondary offering approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, provided that none of the foregoing shall in any way limit the obligations of the Company under Section 8.
          10. Miscellaneous .
          (a) Specific Performance . The Company and each Children Trust Party acknowledge that it will be impossible to measure in money the damage to the Company if such Children Trust Party fails to comply with any of the obligations imposed by Section 1 of this Agreement, that every such obligation therein is material
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and that, in the event of any such failure, the Company will not have an adequate remedy at law or in damages. Accordingly, each Children Trust Party consents to the issuance of an injunction or the enforcement of other equitable remedies against it at the suit of the Company without bond or other security, to compel performance by such Children Trust Party of all the terms of Section 1 hereof, and waives any defenses of (i) failure of consideration, (ii) breach of any other provision of this Agreement and (iii) availability of relief in damages.
          (b) No Inconsistent Agreements . The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Children Trust Parties in this Agreement.
          (c) Amendments . This Agreement may not be amended, modified or altered except by a writing duly signed by the party against which such amendment or modification is sought to be enforced.
          (d) Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the Company, the Children Trust Parties and the respective successors and permitted assigns of the Company and the Children Trust Parties. This Agreement may not be assigned by either the Company or a Children Trust Party without the prior written consent of the other party hereto. The Company shall assign its rights and obligations hereunder to any entity that succeeds to all or substantially all of its assets, by merger or otherwise, including to any holding company that may be formed to be the parent of the Company, if such entity becomes the issuer of the securities then owned by the Children Trust Holders.
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          (e) Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
          (f) Headings . The headings in this Agreement are for reference purposes only and shall not constitute a part hereof.
          (g) Construction . This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without giving any effect to principles of conflicts of laws.
          (h) Notices . Any notice required or desired to be delivered hereunder shall be ( i ) in writing, ( ii ) delivered by personal delivery, sent by commercial delivery service or certified mail, return receipt requested, or by facsimile or electronic mail, ( iii ) deemed to have been given on the date of personal delivery, the date set forth in the records of the delivery service or return receipt, or in the case of facsimile or electronic mail, upon dispatch, and ( iv ) addressed as designated on Schedule 1 hereto (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof), with copies as designated on Schedule 1 hereto.
          (i) Severability . If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected unless the provision held invalid shall substantially impair the benefits of the remaining portions of this Agreement.
          (j) Entire Agreement . This Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive
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statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
          (k) Attorneys’ Fees . In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.
          (l) Effectiveness . This Agreement shall become effective on February 9, 2010, or if the Distribution is not consummated on that date, then it shall become effective on the date on which the Distribution is consummated, in each case without any further action of any of the parties hereto.
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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
         
    MADISON SQUARE GARDEN, INC.
         
    By:   /s/ Robert M. Pollichino
         
        Name: Robert M. Pollichino
        Title: Executive Vice President and Chief Financial Officer
         
    KATHLEEN M. DOLAN
 
    /s/ Kathleen M. Dolan
     
    As a Trustee of the Charles F. Dolan Children Trusts FBO Kathleen M. Dolan, Deborah A. Dolan-Sweeney, Marianne Dolan Weber, Patrick F. Dolan, Thomas C. Dolan and James L. Dolan
         
    PAUL J. DOLAN
 
    /s/ Paul J. Dolan
     
    As a Trustee of the Charles F. Dolan Children Trust FBO Kathleen M. Dolan and the Charles F. Dolan Children Trust FBO James L. Dolan
         
    MATTHEW DOLAN
 
    /s/ Matthew Dolan
     
    As a Trustee of the Charles F. Dolan Children Trust FBO Marianne Dolan Weber and the Charles F. Dolan Children Trust FBO Thomas C. Dolan
         
    MARY S. DOLAN
 
    /s/ Mary S. Dolan
     
    As a Trustee of the Charles F. Dolan Children Trust FBO Deborah A. Dolan-Sweeney and the Charles F. Dolan Children Trust FBO Patrick F. Dolan

[Signature Page to CSCo Registration Rights Agreement (MSG)]
 




 

Definitions :
          “ Acceptable Marital Trust ” means a marital trust the income of which is for the benefit of any spouse of any descendant of Dolan and the principal of which (including all shares of Class B Common Stock held by such trust) is for the sole benefit of any descendant of Dolan.
          “ Cablevision ” means Cablevision Systems Corporation, a Delaware corporation.
          “ Cablevision Class A Common Stock ” has the meaning ascribed thereto in the Recitals.
          “ Cablevision Class B Common Stock ” has the meaning ascribed thereto in the Recitals.
          “ Cablevision Registration Rights Agreement ” has the meaning ascribed thereto in the Recitals.
          “ Children Trust Holders ” means the Children Trusts and any transferee of shares of Class B Common Stock pursuant to clause (i) of Section 1(b).
          “ Children Trust Parties ” means all Children Trust Holders and any Qualifying Creditor.
          “ Children Trusts ” has the meaning ascribed thereto in the Recitals.
          “ Class A Common Stock ” has the meaning ascribed thereto in the Recitals.
          “ Class B Common Stock ” has the meaning ascribed thereto in the Recitals.
          “ Collateral Stock ” means shares of Class B Common Stock that are the subject of a bona fide pledge or similar perfected security interest.
          “ Commission ” has the meaning ascribed thereto in Section 2(a) hereof.
          “ Common Equity Securities ” means shares of any class of common stock, or any securities convertible into or exchangeable or exercisable for shares of any class of common stock of the Company.
          “ Company ” has the meaning ascribed thereto in the Recitals.
          “ Creditor ” means any financial institution approved by the Company, such approval not to be unreasonably withheld.
A-1




 

          “ CSC Holdings ” has the meaning ascribed thereto in the Recitals.
          “ CSCo ” has the meaning ascribed thereto in the Recitals.
          “ CSCo Shares ” means shares of Class B Common Stock issued in the Distribution in respect of shares of Cablevision Class B Common Stock that were owned at any time by CSCo, CFD Joint Venture or MAC TRUST GROUP or issued by Cablevision in respect of any such shares as a result of any stock split, stock dividend or other recapitalization, and any shares of Class B Common Stock issued by the Company in respect of such shares issued in the Distribution as a result of any stock split, stock dividend or other recapitalization.
          “ Designated Registration ” shall have the meaning ascribed thereto in Section 7 hereof.
          “ Distribution ” has the meaning ascribed thereto in the Recitals.
          “ Dolan ” means Charles F. Dolan; such term does not include Mr. Dolan’s legal representatives or his estate.
          “ Dolan Consent ” has the meaning ascribed thereto in Section 2(a) hereof.

          “ Dolan Family Committee ” means the Dolan Family Committee established pursuant to the MSG Stockholders Agreement, dated as of January 13, 2010, by and among each of the holders of the Class B Common Stock, as the same may be amended, modified or amended and restated from time to time.

          “ Dolan Registration Rights Agreement ” means the Registration Rights Agreement, dated as of the date hereof, between the Company, Charles F. Dolan, Helen A. Dolan, the Charles F. Dolan 2009 Family Trusts, the Charles F. Dolan 2009 Revocable Trust, the Charles F. Dolan 2008 Grantor Retained Annuity Trust #2, the Charles F. Dolan 2009 Grantor Retained Annuity Trust #1, the Charles F. Dolan 2009 Grantor Retained Annuity Trust #2, the Charles F. Dolan 2009 Grantor Retained Annuity Trust #3, the Charles F. Dolan 2010 Grantor Retained Annuity Trust #1, the Helen A. Dolan 2009 Revocable Trust, the Helen A. Dolan 2009 Grantor Retained Annuity Trust #1, the Helen A. Dolan 2009 Grantor Retained Annuity Trust #2, the Helen A. Dolan 2010 Grantor Retained Annuity Trust #1 and the other parties thereto.
          “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
          “ Inspectors ” has the meaning ascribed thereto in Section 6(g) hereof.
          “ Losses ” has the meaning ascribed thereto in Section 8(a) hereof.
          “ Market Price ” has the meaning ascribed thereto in Section 2(d) hereof.
A-2




 

          “ Materiality Notice ” has the meaning ascribed thereto in Section 2(c) hereof.
          “ Other Holders ” has the meaning ascribed thereto in Section 3 hereof.
          “ Public Offering ” has the meaning ascribed thereto in the Recitals.
          “ Qualifying Creditor ” means a Creditor who has, at the written request of a Children Trust Holder, signed an instrument in form reasonably acceptable to the Company agreeing to be bound by the provisions of this Agreement. Any affiliate of a Qualifying Creditor who owns Collateral Stock shall be deemed to be the same person as the Qualifying Creditor for purposes of Section 2.
          “ Records ” has the meaning ascribed thereto in Section 6(g) hereof.
          “ Registered Class A ” has the meaning ascribed thereto in Section 6(b).
          “ Registration Expenses ” has the meaning ascribed thereto in Section 7 hereof.
          “ Rule 144 Threshold ” means the product of (a) the maximum number of shares of Class A Common Stock of the Company that could be sold under Rule 144(e)(1) under the Securities Act (or any successor rule or regulation) and (b) the applicable Market Price provided for in this Agreement.
          “ Securities Act ” means the Securities Act of 1933, as amended.
          “ Shares ” means (i) shares of Class A Common Stock and Class B Common Stock acquired by any Children Trust Holder in the Distribution or pursuant to a Transfer in accordance with Section 1(b), (ii) shares of Class A Common Stock and Class B Common Stock acquired by any Children Trust Holder as a result of any stock split, stock dividend or other recapitalization with respect to any shares of Class A Common Stock and Class B Common Stock acquired by any Children Trust Holder in the Distribution, pursuant to a Transfer in accordance with Section 1(b) or as provided in this clause (ii) and (iii) shares of Class A Common Stock acquired upon conversion of Class B Common Stock acquired in the Distribution, pursuant to a Transfer in accordance with Section 1(b) or as provided in clause (ii).
          “ Suspension of Effectiveness ” has the meaning ascribed thereto in Section 2(c) hereof.
          “ Suspension of Filing ” has the meaning ascribed thereto in Section 2(c) hereof.
          “ Suspension of Offering ” has the meaning ascribed thereto in Section 2(c) hereof.
A-3




 

          “ Trading Day ” has the meaning ascribed thereto in Section 2(d) hereof.
          “ Transfer ” has the meaning ascribed thereto in Section 1(a) hereof.
A-4




 

Exhibit A
FORM OF JOINDER
REGISTRATION RIGHTS JOINDER AGREEMENT

     Reference is made to the Registration Rights Agreement, dated January 13, 2010, by and among Madison Square Garden, Inc. and the Charles F. Dolan Children Trusts (as amended from time to time, the “ Registration Rights Agreement ”).

     In consideration of the benefits to which the undersigned is entitled under the Registration Rights Agreement as a Children Trust Holder (as defined in the Registration Rights Agreement), the undersigned hereby agrees to be bound by the provisions of the Registration Rights Agreement as a Children Trust Holder, including Sections 1(a), 1(b) and 1(c) thereof, but, for the avoidance of doubt, only with respect to its CSCo Shares (as defined in the Registration Rights Agreement).

      
 
Name: [                      ]

 



Exhibit 4.5
 
 
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
MADISON SQUARE GARDEN, INC.
AND
THE DOLAN FAMILY AFFILIATES
 
 
 




 

REGISTRATION RIGHTS AGREEMENT

          Registration Rights Agreement (this “Agreement”) dated as of January 13, 2010 (but effective as provided in Section 9(k)), by and among Madison Square Garden, Inc., a Delaware corporation (the “Company”), the parties set forth on Annex A to this Agreement (the “Dolan Family Affiliates”) and the Qualifying Creditors, if any, who have agreed in writing to become bound by this Agreement. Certain capitalized terms used in this Agreement are defined in Annex B hereto.

WITNESSETH :
          WHEREAS, as of the date of this Agreement, the Dolan Family Affiliates own shares of Cablevision NY Group Class B Common Stock, par value $.01 per share (“Cablevision Class B Common Stock”), and shares of Cablevision NY Group Class A Common Stock, par value $.01 per share (“Cablevision Class A Common Stock”);
          WHEREAS, CSC Holdings Company was party to a Registration Rights Agreement (the “Cablevision Registration Rights Agreement”), dated as of January 27, 1986, with CSC Holdings Inc., a Delaware corporation (“CSC Holdings”), as amended on December 31, 1986, and the Dolan Family Affiliates have certain registration rights under that agreement with respect to shares of Cablevision Class A Common Stock as provided in the Cablevision Registration Rights Agreement;
          WHEREAS, Cablevision intends to distribute (the “Distribution”) to the holders of Cablevision Class A Common Stock all of the outstanding shares of the Company’s Class A Common Stock, $.01 par value (the “Class A Common Stock”), and
 




 

to the holders of Cablevision Class B Common Stock all of the outstanding shares of the Company’s Class B Common Stock, $.01 par value (the “Class B Common Stock”); and
          WHEREAS, the Company and the Dolan Family Affiliates wish to provide for benefits and restrictions applicable to the Shares owned by the Dolan Family Holders following the Distribution, all as provided herein.
          NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereby agree as follows:
          1. Demand Registration by the Dolan Family Parties of the Shares .
          (a) Demand Registration . One or more of the Dolan Family Parties may request in writing that the Company file a registration statement on an appropriate form for the general registration of securities under the Securities Act, and include therein such number of the Shares owned by such Dolan Family Party as such person may specify in its written request; provided , however , that (i) the Company shall not be required to file a registration statement pursuant to this Section 1 if (x) the Shares requested to be so registered do not, in the case of a Dolan Family Holder, together with any Shares timely requested to be registered by other Dolan Family Holders and Other Holders pursuant to the third-to-last sentence of this Section 1(a), have an aggregate Market Price exceeding the Rule 144 Threshold as of the Trading Day immediately preceding the expiration of the applicable Notice Period under such sentence or, in the case of a Qualifying Creditor, do not have an aggregate Market Price exceeding the Rule 144 Threshold as of the Trading Day immediately preceding the date on which the request for registration is received by the Company, or (y) the Company delivers to each Dolan Family Party requesting registration under this Section 1 an opinion of counsel to
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the Company (such opinion and such counsel to be reasonably acceptable to each such Dolan Family Party, it being agreed that the Company’s regular outside securities counsel shall be deemed to be reasonably acceptable counsel for this purpose) to the effect that the Shares proposed to be registered by such person may be offered and sold by such person to the public in the United States together with the Shares requested to be registered by all other Dolan Family Parties and Other Holders (I) without registration pursuant to an effective registration statement under the Securities Act and (II) within the volume limitations under Rule 144(e) promulgated under the Securities Act (or any successor rule or regulation) whether or not such volume limitations are then applicable, (ii) subject to the next sentence, after the death of both Dolan and his spouse, the Dolan Family Holders shall in the aggregate have the right on only four occasions to require the Company to file a registration statement pursuant to this Section 1, and (iii) subject to the next sentence, a Qualifying Creditor may require registration only following the exercise of its remedies under a security agreement with a Dolan Family Holder and for the purpose of Transferring Shares pursuant thereto and each Qualifying Creditor may only require one registration hereunder. The total number of demand registrations under clauses (ii) and (iii) of the immediately preceding sentence and under the corresponding provisions of the Dolan Children Trusts Registration Rights Agreement shall not exceed four. All requests made pursuant to this paragraph shall specify the aggregate number of Shares to be registered and the intended methods of disposition thereof, which methods may include an underwritten public offering. Upon receipt of a written request for registration from a Dolan Family Holder pursuant to the preceding sentences, the Company shall promptly give written notice of the proposed registration to each such
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other Dolan Family Holder and each Other Holder and provide each such other holder with the opportunity to join in such request by written notice to the Company specifying the aggregate number of Shares to be registered by such holder within 20 days from the date of the Company’s written notice (such period is referred to as the “Notice Period”). Subject to Section 1(c) of this Agreement, the Company will use its reasonable best efforts to ensure that each registration statement required to be filed pursuant to this Section 1 shall be filed with the Securities and Exchange Commission (the “Commission”) as promptly as reasonably practicable, but no later than 45 days after receipt of such request by the Company, and the Company shall use its reasonable best efforts to cause such registration statement to be declared effective by the Commission as promptly thereafter as practicable; provided , however , that the Company shall not be required to maintain such effectiveness for more than 90 days. Notwithstanding the Company’s rights to effect a Suspension of Filing or Suspension of Effectiveness in Section 1(c), the Dolan Family Parties that made the registration request under this Section 1(a) shall have the right to withdraw any such request, and such withdrawn request shall not count as a demand registration under clause (ii) or (iii) of this Section 1(a) or the corresponding provisions under the Dolan Children Trusts Registration Rights Agreement, if (1) the registration statement required to be filed pursuant to this Section 1 is not filed with the Commission by the date that is 45 days after such request is received by the Company and has not at the time of such withdrawal been filed with the Commission, or is not declared effective by the date that is 90 days after the date such registration statement is filed with the Commission and has not at the time of such withdrawal been declared effective, and (2) in either case, such Dolan Family Parties
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notify the Company of the withdrawal of such request no later than 10 days after such 45 th or 90 th day, as the case may be.
          (b) Concurrent Primary Offering . Anything in this Section 1 to the contrary notwithstanding, if the Company at the time of receipt of a request for registration pursuant to this Section 1 has a bona fide intent and plan to file a registration statement (other than on Form S-4 or S-8 or any successor forms) covering a primary offering by the Company of its Common Equity Securities, the Company, by notice to the applicable Dolan Family Parties, may delay the filing (but not the preparation) of the requested registration statement for a period ending on the earlier of (i) 60 days after the closing of such offering or (ii) 120 days after receipt of the request for registration; and, provided , further , if the Company either abandons its plan to file such registration statement or does not file the same within 75 days after receipt of such request, the Company shall promptly thereafter file the requested registration statement. The Company may not, pursuant to the immediately preceding sentence, delay the filing of a requested registration statement more than once during any two-year period.
          (c) Suspension of Offering . Upon notice by the Company to any Dolan Family Party which has requested registration under this Section 1 that a negotiation or consummation of a transaction by the Company or any of its subsidiaries is pending or an event has occurred , which negotiation, consummation or event would require disclosure in the registration statement for the requested registration and such disclosure would, in the good faith judgment of the board of directors of the Company, be materially adverse to the business interests of the Company, and the nondisclosure of which in the registration statement would reasonably be expected to cause the registration
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statement to fail to comply with applicable disclosure requirements (a “Materiality Notice”), the Company may delay the filing (but not the preparation) of such registration statement (a “Suspension of Filing”). Upon the delivery of a Materiality Notice by the Company pursuant to the preceding sentence at any time when a registration statement has been filed but not declared effective, the Company may delay seeking the effectiveness of such registration statement (a “Suspension of Effectiveness”), and each Dolan Family Party named therein shall immediately discontinue any offers of Shares under such registration statement until such Dolan Family Party receives copies of a supplemented or amended prospectus that corrects such misstatement or omission, or until it is advised in writing by the Company that offers under such registration statement may be resumed and has received copies of any additional or supplemental filings which are incorporated by reference in such registration statement. Upon the delivery of a Materiality Notice by the Company pursuant to the first sentence of this Section 1(c) at any time when a registration statement has been filed and declared effective, each Dolan Family Party named therein shall immediately discontinue offers and sales of Shares under such registration statement until such Dolan Family Party receives copies of a supplemented or amended prospectus that corrects such misstatement or omission and notice that any post-effective amendment has become effective, or until it is advised in writing by the Company that offers under such registration statement may be resumed and has received copies of any additional or supplemental filings which are incorporated by reference in the registration statement (a “Suspension of Offering;” a Suspension of Filing, a Suspension of Effectiveness and a Suspension of Offering are collectively referred to herein as, “Suspensions”). If so directed by the Company, each Dolan Family
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Party will deliver to the Company all copies (other than permanent file copies then in such Dolan Family Party’s possession) of any prospectus covering Shares in the possession of such Dolan Family Party or its agents current at the time of receipt of any Materiality Notice. In any 12-month period, the aggregate time of all Suspensions shall not, without the consent of a majority of the Dolan Family Holders (by number of Shares held), which consent shall not be unreasonably withheld, exceed 180 days. If interrupted by a Suspension of Offering, any 90-day period in respect of which the Company is required to maintain the effectiveness of a registration statement pursuant to Section 1(a) of this Agreement shall be extended by the number of days during which the Suspension of Offering was in effect. In the event of any Suspension of Offering of more than 30 days in duration prior to which the Dolan Family Parties have sold less than 75% of the Shares to be sold in such offering, the Dolan Family Parties shall be entitled to withdraw such registration prior to the later of (i) the end of the Suspension of Offering and (ii) three business days after the Company has provided the Dolan Family Parties written notice of the anticipated date on which the Suspension of Offering will end, and, if such registration is withdrawn, the related demand for registration shall not count for the purposes of the limitations set forth under clauses (y) and (z) of Section 1(a) or the comparable provisions under the Dolan Trusts Registration Rights Agreement.
          (d) Market Price; Trading Day . For purposes of this Section 1:
          (i) “Market Price” of a share of Class A Common Stock shall mean the weighted average of the closing prices for the Class A Common Stock on each Trading Day (as defined below) in the 30-day period ending on the day prior to the date of determination as reported in the consolidated transaction
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reporting system of the NASDAQ Global Market or on the comparable reporting system of such other exchange or trading system that is at the time the principal market for the Class A Common Stock.
          (ii) “Trading Day” shall mean any day on which trading takes place on the NASDAQ Global Market or such other exchange or trading system that is at the time the principal market for the Class A Common Stock.
          2. Coordination of PiggyBack Registration Rights .
          Each of the Dolan Family Parties hereby acknowledges and consents to the grant by the Company to the Children Trust Holders (as defined in the Dolan Children Trusts Registration Rights Agreement and hereinafter referred to in this Agreement as the “Other Holders”), in the Dolan Children Trusts Registration Rights Agreement, of the right of the Other Holders to include certain of their respective shares of Class A Common Stock in certain registration statements filed pursuant hereto. Each of the Dolan Family Parties further acknowledges and agrees that if any offering hereunder is to be underwritten and if the managing underwriter or underwriters of such offering informs such person in writing that the number of shares of Class A Common Stock which the Dolan Family Parties, and the Other Holders, as the case may be, intend to include in such offering is sufficiently large so as to affect the offering price of such offering materially and adversely, then the respective number of shares of Class A Common Stock to be offered for the account of each Dolan Family Party and each Other Holder, as the case may be, who is participating in such offering shall be reduced pro rata to the extent necessary to reduce the total number of shares of Class A Common Stock to be included in such offering to the number recommended by such managing underwriter.
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Except for such piggyback registration rights granted to Other Holders, and to any transferee of the shares of Class A Common Stock owned by an Other Holder which may be registered pursuant to the Dolan Children Trusts Registration Rights Agreement, neither the Company nor any of its security holders shall have the right to include any of the Company’s securities in any registration statement filed pursuant hereto.
          3. Piggyback Registration of the Shares .
          If the Company proposes to file a registration statement under the Securities Act with respect to an offering (a) by an Other Holder of its holdings of Class A Common Stock pursuant to the Dolan Children Trusts Registration Rights Agreement, (b) by any other holder of any Common Equity Securities or (c) by the Company for its own account of any Common Equity Securities (other than a registration statement on Form S-4 or S-8, or any successor form or a form filed in connection with an exchange offer or an offering of securities solely to the existing stockholders of the Company), the Company shall give written notice of such proposed filing to each of the Dolan Family Holders at least 20 days before the anticipated filing date which shall state whether such registration will be in connection with an underwritten offering and offer such Dolan Family Holders the opportunity to include in such registration statement such number of the Shares as such Dolan Family Holder may request within three days prior to the anticipated filing date. The Company shall use its reasonable best efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit such Dolan Family Holders to be included in the registration for such offering and to include such Shares in such offering on the same terms and conditions as the Common Equity Securities included in such offering. If such proposed offering is to be underwritten, then
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upon request by the managing underwriter or underwriters given to such Dolan Family Holders prior to the effective date of the offering, any Dolan Family Holder electing to have Shares included in the registration statement shall either enter into underwriting agreements with customary terms and conditions for a secondary offering with such underwriter or underwriters providing for the inclusion of such number of the Shares owned by such Dolan Family Holder in such offering on such terms and conditions or, if such Dolan Family Holder shall refuse to enter into any such agreement, the Company shall have the right to exclude from such registration all (but not less than all) of the Shares of such Dolan Family Holder. Notwithstanding the foregoing, (x) in no event will any Dolan Family Holder be required in such underwriting agreement (or in any other agreement in connection with such offering) to (i) make any representations or warranties to or agreements with the underwriters other than representations, warranties or agreements customarily made by selling securityholders in underwritten secondary offerings, (ii) make any representations or warranties to or agreements with the Company other than representations, warranties or agreements regarding such Dolan Family Holder, the ownership of such Dolan Family Holder’s Common Equity Securities, the authorization, validity and binding effect of transaction documents executed by such Dolan Family Holder in connection with such registration and such Dolan Family Holder’s intended method or methods of distribution and any other representation required by law; provided that no Dolan Family Holder shall be required to make any representation or warranty to any person covered by the indemnity in Section 7(b) other than on a several (and not joint) basis, or (iii) furnish any indemnity to any person which is broader than the indemnity customarily furnished by selling security holders in
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underwritten offerings; provided that no Dolan Family Holder shall be required to furnish any indemnity broader than the indemnity furnished by such Dolan Family Holder in Section 7(b) to any person covered by the indemnity in Section 7(b), and (y) if the managing underwriter or underwriters of such offering informs the Dolan Family Holders in writing that the number of Shares which the Dolan Family Holders and the number of Shares which the Other Holders intend to include in such offering is sufficiently large so as to affect materially and adversely the success of such offering, the Shares to be offered for the account of the Dolan Family Holders and the Other Holders shall first be reduced pro rata to the extent necessary to reduce the total number of shares of Class A Common Stock to be included in such offering to the number recommended by such managing underwriter. In giving effect to the foregoing reduction, the respective number of the Shares to be offered for the account of Dolan Family Holders shall be reduced pro rata.
          4. Holdback Agreements .
          (a) Restrictions on Public Sale by Dolan Family Parties . To the extent not inconsistent with applicable law, each Dolan Family Party agrees not to offer publicly or effect any public sale or distribution of Common Equity Securities, including a sale pursuant to Rule 144 under the Securities Act (or any successor rule or regulation), during the seven days prior to, and during the 90-day period beginning on, the effective date of any registration statement filed by the Company pursuant to which any such shares or securities are being registered (except as part of such registration), if and to the extent requested by the Company in the case of a non-underwritten public offering or if and to the extent requested by the managing underwriter or underwriters in the case of an underwritten public offering.
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          (b) Restrictions on Public Sale by the Company and Others . The Company agrees (i) that during the seven days prior to, and during the 90-day period beginning on, the effective date of any registration statement filed at the request of a Dolan Family Party pursuant hereto, the Company will not offer publicly or effect any public sale or distribution of Common Equity Securities (other than any such sale or distribution of such securities in connection with any merger or consolidation of the Company or any subsidiary with, or the acquisition by the Company or a subsidiary of the capital stock or substantially all of the assets of, any other person or any offer or sale of such securities pursuant to a registration statement on Form S-8), and (ii) that any agreement entered into after the date of this Agreement pursuant to which the Company issues or agrees to issue any privately placed Common Equity Securities shall contain a provision under which holders of such securities agree not to effect any public sale or distribution of any such securities during the periods described in (i) above, in each case including a sale pursuant to Rule 144 (or any successor rule or regulation) under the Securities Act (except as part of any such registration, if permitted).
          5. Registration Procedures .
          In connection with any registration of the Shares owned by a Dolan Family Party contemplated hereby, the Company will as expeditiously as possible:
          (a) Furnish to such Dolan Family Party, prior to filing a registration statement, copies of such registration statement as proposed to be filed, and thereafter such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents
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in such quantities as such Dolan Family Party may reasonably request from time to time in order to facilitate the disposition of the Shares.
          (b) Use its reasonable best efforts to register or qualify the Shares being registered as contemplated hereby (the “Registered Class A”) under such other securities or blue sky laws of such jurisdictions as such Dolan Family Party reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Dolan Family Party to consummate the disposition in such jurisdictions of the Registered Class A; provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (b), (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction.
          (c) Use its reasonable best efforts to cause the Registered Class A to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable such Dolan Family Party to consummate the disposition of such Registered Class A.
          (d) Notify such Dolan Family Party at any time, (i) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a registration statement or related prospectus or for additional information, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of a registration statement or the initiation of any proceedings for that purpose, (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registered Class A for sale in any jurisdiction, or the initiation or threatening of any proceeding for
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such purpose, and (iv) when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, except as otherwise provided in Section 1(c) hereof, the Company will, as expeditiously as practicable, prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registered Class A, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
          (e) Use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registered Class A for sale in any jurisdiction at the earliest date reasonably practical.
          (f) Cause all such Registered Class A to be listed on the NASDAQ Global Market or on any other securities exchange on which the Class A Common Stock is then listed, provided that the applicable listing requirements are satisfied.
          (g) Enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably requested by the relevant Dolan Family Party in order to expedite or facilitate the disposition of the Registered Class A.
          (h) Make available for inspection by such Dolan Family Party, any underwriter participating in any disposition pursuant to such registration statement, and
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any attorney, accountant or other agent retained by such Dolan Family Party or such underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the officers, directors and employees of the Company to supply all information reasonably requested by any such Inspector in connection with such registration statement. Records which the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Any Dolan Family Party shall use reasonable best efforts, prior to any disclosure by any such Inspector under clause (i) of the preceding sentence, to inform the Company that such disclosure is necessary to avoid or correct a misstatement or omission in the registration statement. Each Dolan Family Party further agrees that it will, upon learning that disclosure of Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at the expense of the Company, to undertake appropriate action to prevent disclosure of the Records deemed confidential.
          (i) In the event such sale is pursuant to an underwritten offering, use its reasonable best efforts to (i) obtain a comfort letter from the independent public accountants for the Company in customary form and covering such matters of the type customarily covered by such letters as any Dolan Family Party reasonably requests and (ii) ensure that (A) the representations, warranties and covenants contained in the
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applicable underwriting agreement shall expressly be for the benefit of any Dolan Family Party participating in such sale, (B) the conditions to closing in said underwriting agreement shall be reasonably satisfactory to such Dolan Family Party and (C) to the extent customary, all comfort letters and opinions of counsel contemplated by said underwriting agreements are delivered to such Dolan Family Party on the closing date of the offering.
          (j) Otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission and have the registration statement declared effective as soon as practicable after filing.
          The Company may require any Dolan Family Party to furnish to the Company such information regarding such Dolan Family Party as the Company may from time to time reasonably request in writing, in each case only as required by the Securities Act or the rules and regulations thereunder.
          Each Dolan Family Party agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5(d) hereof, such Dolan Family Party will forthwith discontinue disposition of the Registered Class A pursuant to the registration statement covering such Registered Class A until such Dolan Family Party receives the copies of the supplemented or amended prospectus contemplated by Section 5(d) hereof, and, if so directed by the Company, such Dolan Family Party will deliver to the Company (at the expense of the Company) all copies, other than permanent file copies then in such Dolan Family Party’s possession, of the prospectus covering such Registered Class A current at the time of receipt of such notice. If interrupted by receipt of any such notice pursuant to Section 5(d), any 90 day period in
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respect of which the Company is required to maintain the effectiveness of a registration statement pursuant to Section 1(a) shall be extended by the number of days during which the interruption was in effect.
          6. Registration Expenses .
          Other than in the case of (a) a registration at the request of a Qualifying Creditor or (b) a demand registration under Section 1(a)(ii) after the second such registration (each registration referred to in clause (a) or (b), a “Designated Registration”), all expenses incident to the performance of or compliance with this Agreement by the Company, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registered Class A), printing expenses, messenger and delivery expenses, internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the fees and expenses incurred in connection with the listing of the Registered Class A on the NASDAQ Global Market or any other securities exchange on which such Class A Common Stock is then listed, fees and disbursements of counsel for the Company and its independent certified public accountants (including the expenses of any special audit or comfort letters required by or incident to such performance), securities acts liability insurance (if the Company elects to obtain such insurance), the fees and expenses of any special experts retained by the Company in connection with such registration, the fees and expenses of other persons retained by the Company, including transfer agents, trustees, depositories and registrars (all such expenses being herein called “Registration Expenses”), will be borne by the
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Company. In the case of a Designated Registration, all Registration Expenses other than internal expenses of the Company and securities acts liability insurance obtained by the Company at its election, shall be borne by the Qualifying Creditor or the Dolan Family Holders participating in the offering, as the case may be. The Company will not have any responsibility for any of the expenses of any Dolan Family Party incurred in connection with any registration statement hereunder, including, without limitation, underwriting discounts or commissions attributable to the sale of Registered Class A and fees and expenses of counsel for such Dolan Family Party.
          7. Indemnification; Contribution .
          (a) Indemnification by the Company . The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, (i) each Dolan Family Party, (ii) the directors, officers, partners, employees, agents, beneficiaries, trustees, members and affiliates of each Dolan Family Party, and the directors, officers, partners, employees and agents of each such affiliate, and (iii) each person who controls any of the foregoing (within the meaning of the Securities Act and the Exchange Act), and any investment adviser thereof, against any and all losses, claims, damages, liabilities, expenses (or actions or proceedings in respect thereof) or costs (including, without limitation, costs of investigation and reasonable attorneys’ fees and disbursements incurred by any such indemnified person in connection with enforcing its rights hereunder preparing, pursuing or defending any such loss, claim, damage, liability, expense, action or proceeding), including any of the foregoing incurred in settlement of any litigation commenced or threatened (collectively, “Losses”), joint or several, based upon or arising out of (x) any untrue or alleged untrue statement of material fact
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contained in any registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto, (y) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, or (z) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company in connection with such registration, and the Company will reimburse each such indemnified party for any such Loss, except in each case insofar as any such Loss arises out of or is based upon an untrue statement or omission made in any such registration statement, prospectus, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement, or a violation of law or regulation in reliance upon and in conformity with written information furnished to the Company by such indemnified party expressly for use in the preparation thereof, it being understood that the information to be furnished to the Company for use in the preparation of any such document shall be limited only to the information specifically referenced in the penultimate sentence of Section 7(b). Such indemnity shall remain in full force and effect regardless of any investigation made by such indemnified person and shall survive the Transfer of any Shares by any such indemnified person. The indemnity in this Section 7(a) shall not apply to Losses incurred by a person other than in his or her capacity as a selling security holder. In connection with an underwritten offering, the Company will indemnify the underwriters thereof, their officers and directors and each person who controls such underwriters (within the meaning of the Securities Act or the Exchange Act) to the same extent as provided above with respect to the indemnification of each Dolan Family Party.
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          (b) Indemnification by Dolan Family Parties . In connection with any registration statement contemplated hereby, each Dolan Family Party participating in any offer or sale pursuant to such registration statement will furnish to the Company in writing such information with respect to such Dolan Family Party as the Company reasonably requests for use in connection with any such registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto and agrees to indemnify and hold harmless, severally, and not jointly, to the fullest extent permitted by law, the Company, its directors, officers, employees, agents and affiliates and the directors, officers, partners, employees and agents of each such affiliate and each person who controls the Company (within the meaning of the Securities Act or the Exchange Act) against any Losses insofar as such Losses arise out of or are based upon (i) an untrue or alleged untrue statement of a material fact contained in any such registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, to the extent, that such untrue statement or omission is contained in or omitted from any information with respect to such Dolan Family Party so furnished in writing by such Dolan Family Party expressly for use in the preparation of such registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto, as the case may be, or (ii) any violation by such Dolan Family Party of any federal, state or common law rule or regulation applicable to such Dolan Family Party in connection with such registration. It is understood that the
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information to be furnished by a Dolan Family Party to the Company for use in the preparation of any such document shall be limited only to information regarding such Dolan Family Party, the ownership of such Dolan Family Party’s Common Equity Securities, such Dolan Family Party’s intended method or methods of distribution and any other information required by law. The liability of a Dolan Family Party under this Section 7(b) shall not exceed the amount of net proceeds received by such Dolan Family Party (net of underwriting discounts borne by such Dolan Family Party) from the sale of the Shares in the offering that is the subject of an indemnity claim under this Section 7(b).
          (c) Conduct of Indemnification Proceedings . Any person entitled to indemnification hereunder agrees to give prompt written notice to the indemnifying party after the receipt by such person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such person will claim indemnification or contribution pursuant to this Agreement, provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnified party of its obligations under this Section 7, except to the extent that the indemnifying party is materially prejudiced by such failure to give notice. Unless in the reasonable judgment of such indemnified party, a conflict of interest may exist between such indemnified party and the indemnifying party with respect to such claim, the indemnified party shall permit the indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to such indemnified party. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel with respect
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to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels. No indemnifying party will be subject to any liability for any settlement made without its consent. No indemnifying party, in the defense of any such claim or litigation shall, except with the consent of the applicable indemnified party, which consent shall not be unreasonably withheld, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.
          (d) Indemnification Payments . Any indemnification required to be made by an indemnifying party pursuant to this Section 7 shall be made by periodic payments to the indemnified party during the course of the action or proceeding, as and when bills are received by such indemnifying party with respect to indemnifiable Losses incurred by such indemnified party.
          (e) Contribution . If the indemnification provided for in this Section 7 from the indemnifying party is unavailable to an indemnified party hereunder in respect of any Losses or is insufficient to hold harmless an indemnified party from all Losses covered thereby, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted
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in such Losses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statements or omissions. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 7(c), any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.
          The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7(e) were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
          Notwithstanding anything else contained herein, (i) no party shall be liable for contribution under this Section 7(e) except to the extent and under such circumstances as such party would have been liable to indemnify under this Section 7 if such indemnification were enforceable under applicable law and (ii) no Dolan Family Party (or related indemnified party) shall be required to contribute any amount in excess of the amount by which net the proceeds received by such Dolan Family Party (net of
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underwriting discounts borne by such Dolan Family Party) from the sale of Shares in the offering that is the subject of the claim for contribution exceeds the amount of any damages which such Dolan Family Party (or related indemnified party) would have been required to pay by reason of the indemnity under this Section 7 if such indemnification was enforceable under applicable law.
          If indemnification is available under this Section 7, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections 7(a) and (b) without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Section 7(e).
          8. Participation in Underwritten Registrations . A Dolan Family Party may not participate in any underwritten registration hereunder or under the Dolan Children Trusts Registration Rights Agreement or otherwise unless such Dolan Family Party (a) agrees to sell the Shares on the basis provided in any underwriting arrangements with customary terms and conditions for a secondary offering approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, provided that none of the foregoing shall in any way limit the obligations of the Company under Section 7.
          9. Miscellaneous .
          (a) No Inconsistent Agreements . The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Dolan Family Parties in this Agreement.
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          (b) Amendments . This Agreement may not be amended, modified or altered except by a writing duly signed by the party against which such amendment or modification is sought to be enforced.
          (c) Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the Company, the Dolan Family Parties and the respective successors and permitted assigns of the Company and the Dolan Family Parties. This Agreement may not be assigned by either the Company or a Dolan Family Party without the prior written consent of the other party hereto; provided that the Company agrees that all transferees of all or substantially all of the Shares held by Dolan shall be accorded all of the registration rights of Dolan hereunder. The Company shall assign its rights and obligations hereunder to any entity that succeeds to all or substantially all of its assets, by merger or otherwise, including to any holding company that may be formed to be the parent of the Company, if such entity becomes the issuer of the securities then owned by the Dolan Family Holders.
          (d) Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
          (e) Headings . The headings in this Agreement are for reference purposes only and shall not constitute a part hereof.
          (f) Construction . This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without giving any effect to principles of conflicts of laws.
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          (g) Notices . Any notice required or desired to be delivered hereunder shall be ( i ) in writing, ( ii ) delivered by personal delivery, sent by commercial delivery service or certified mail, return receipt requested, or by facsimile or electronic mail, ( iii ) deemed to have been given on the date of personal delivery, the date set forth in the records of the delivery service or return receipt, or in the case of facsimile or electronic mail, upon dispatch, and ( iv ) addressed as designated on Schedule 1 hereto (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof), with copies as designated on Schedule 1 hereto.
          (h) Severability . If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected unless the provision held invalid shall substantially impair the benefits of the remaining portions of this Agreement.
          (i) Entire Agreement . This Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
          (j) Attorneys’ Fees . In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a
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defense, the successful party shall be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.
          (k) Effectiveness . This Agreement shall become effective on February 9, 2010, or if the Distribution is not consummated on that date, then it shall become effective on the date on which the Distribution is consummated, in each case without any further action of any of the parties hereto.
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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
         
    MADISON SQUARE GARDEN, INC.
         
    By:   /s/ Robert M. Pollichino
         
        Name: Robert M. Pollichino
        Title: Executive Vice President and Chief Financial Officer
         
    CHARLES F. DOLAN
         
    /s/ Charles F. Dolan
     
    Individually and as Trustee of the Charles F. Dolan 2009 Revocable Trust, the Charles F. Dolan 2008 Grantor Retained Annuity Trust #2, the Charles F. Dolan 2009 Grantor Retained Annuity Trust #1, the Charles F. Dolan 2009 Grantor Retained Annuity Trust #2, the Charles F. Dolan 2009 Grantor Retained Annuity Trust #3 and the Charles F. Dolan 2010 Grantor Retained Annuity Trust #1
         
    HELEN A. DOLAN
         
    /s/ Helen A. Dolan
     
    Individually and as Trustee of the Helen A. Dolan 2009 Revocable Trust, the Helen A. Dolan 2009 Grantor Retained Annuity Trust #1, the Helen A. Dolan 2009 Grantor Retained Annuity Trust #2 and the Helen A. Dolan 2010 Grantor Retained Annuity Trust #1
         
    LAWRENCE J. DOLAN
         
    /s/ Lawrence J. Dolan
     
    As Trustee of the Charles F. Dolan 2009 Family Trusts
         
    DAVID M. DOLAN
         
    /s/ David M. Dolan
     
    As Trustee of the Charles F. Dolan 2009 Family Trusts
[Signature Page to Holdings Registration Rights Agreement (MSG)]
 




 


         
    KATHLEEN M. DOLAN
         
    /s/ Kathleen M. Dolan
     
    As Trustee of the Tara Dolan 1989 Trust, the Charles Dolan 1989 Trust and the Ryan Dolan 1989 Trust
         
    DOLAN FAMILY FOUNDATION
         
    By:   /s/ Marianne Dolan Weber
         
        Name: Marianne Dolan Weber
       
Title:
Chairwoman
         
    DOLAN CHILDREN’S FOUNDATION
         
    By:   /s/ Marianne Dolan Weber
         
        Name: Marianne Dolan Weber
       
Title:
Chairwoman
[Signature Page to Holdings Registration Rights Agreement (MSG)]
 




 

ANNEX A
DOLAN FAMILY AFFILIATES
Charles F. Dolan
Helen A. Dolan
Charles F. Dolan 2009 Revocable Trust
Helen A. Dolan 2009 Revocable Trust
Charles F. Dolan 2008 Grantor Retained Annuity Trust #2
Charles F. Dolan 2009 Grantor Retained Annuity Trust #1
Charles F. Dolan 2009 Grantor Retained Annuity Trust #2
Charles F. Dolan 2009 Grantor Retained Annuity Trust #3
Charles F. Dolan 2010 Grantor Retained Annuity Trust #1
Helen A. Dolan 2009 Grantor Retained Annuity Trust #1
Helen A. Dolan 2009 Grantor Retained Annuity Trust #2
Helen A. Dolan 2010 Grantor Retained Annuity Trust #1
Charles F. Dolan 2009 Family Trusts
Tara Dolan 1989 Trust
Charles Dolan 1989 Trust
Ryan Dolan 1989 Trust
Dolan Family Foundation
Dolan Children’s Foundation
A-1




 

Annex B
Definitions
          “ Acceptable Marital Trust ” means a marital trust the income of which is for the benefit of any spouse of any descendant of Dolan and the principal of which (including all shares of Class B Common Stock held by such trust) is for the sole benefit of any descendant of Dolan.
          “Cablevision” means Cablevision Systems Corporation, a Delaware corporation.
          “Cablevision Class A Common Stock” has the meaning ascribed thereto in the Recitals.
          “Cablevision Class B Common Stock” has the meaning ascribed thereto in the Recitals.
          “Cablevision Registration Rights Agreement” has the meaning ascribed thereto in the Recitals.
          “Class A Common Stock” has the meaning ascribed thereto in the Recitals.
          “Class B Common Stock” has the meaning ascribed thereto in the Recitals.
          “Collateral Stock” means shares of Class B Common Stock that are the subject of a bona fide pledge or similar perfected security interest.
          “Commission” has the meaning ascribed thereto in Section 1(a) hereof.
          “Common Equity Securities” means shares of any class of common stock, or any securities convertible into or exchangeable or exercisable for shares of any class of common stock of the Company.
          “Company” has the meaning ascribed thereto in the Recitals.
          “Creditor” means any financial institution approved by the Company, such approval not to be unreasonably withheld.
          “CSC Holdings” has the meaning ascribed thereto in the Recitals.
          “Designated Registration” shall have the meaning ascribed thereto in Section 6 hereof.
          “Distribution” has the meaning ascribed thereto in the Recitals.
B-1




 

          “Dolan” means Charles F. Dolan; such term does not include Mr. Dolan’s legal representatives or his estate.
          “Dolan Children Trusts Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, between the Company and the Charles F. Dolan Children Trusts.
          “Dolan Family Affiliates” has the meaning ascribed thereto in the Preamble hereof.
          “Dolan Family Holders” means the Dolan Family Affiliates and any other Dolan Family Member who or that is a transferee of shares of Class B Common Stock from a Dolan Family Affiliate or other Dolan Family Member.
          “Dolan Family Member” means Dolan, his spouse, any person related to Dolan by reason of being his ancestor or descendent (natural or adopted), any Acceptable Marital Trust, any entity (whether a corporation, partnership, limited liability company, trust or other entity of any kind) all of the equity or beneficial interests in which are owned or held by any of the foregoing persons, or any person (whether or not such person is one of the foregoing persons) who is a trustee for, or is acting on behalf of, any of such foregoing persons.
          “Dolan Family Parties” means all Dolan Family Holders and any Qualifying Creditor.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended.
          “Inspectors” has the meaning ascribed thereto in Section 5(g) hereof.
          “Losses” has the meaning ascribed thereto in Section 7(a) hereof.
          “Market Price” has the meaning ascribed thereto in Section 1(d) hereof.
          “Materiality Notice” has the meaning ascribed thereto in Section 1(c) hereof.
          “Other Holders” has the meaning ascribed thereto in Section 2 hereof.
          “Public Offering” has the meaning ascribed thereto in the Recitals.
          “Qualifying Creditor” means a Creditor who has, at the written request of a Dolan Family Holder, signed an instrument in form reasonably acceptable to the Company agreeing to be bound by the provisions of this Agreement. Any affiliate of a Qualifying Creditor who owns Collateral Stock shall be deemed to be the same person as the Qualifying Creditor for purposes of Section 1.
B-2




 

          “Records” has the meaning ascribed thereto in Section 5(g) hereof.
          “Registered Class A” has the meaning ascribed thereto in Section 5(b).
          “Registration Expenses” has the meaning ascribed thereto in Section 6 hereof.
          “Rule 144 Threshold” means the product of (a) the maximum number of shares of Class A Common Stock of the Company that could be sold under Rule 144(e)(1) under the Securities Act (or any successor rule or regulation) and (b) the applicable Market Price provided for in this Agreement.
          “Securities Act” means the Securities Act of 1933, as amended.
          “Shares” means (i) shares of Class A Common Stock and Class B Common Stock acquired by a Dolan Family Holder in the Distribution, (ii) any shares of Class A Common Stock or Class B Common Stock acquired by any Dolan Family Holder as a result of any stock split, stock dividend or other recapitalization with respect to any shares of Class A Common Stock and Class B Common Stock acquired by any Dolan Family Holder in the Distribution or acquired as provided in this clause (ii) and (iii) shares of Class A Common Stock acquired upon conversion of Class B Common Stock acquired in the Distribution or acquired as provided in clause (ii).
          “Suspension of Effectiveness” has the meaning ascribed thereto in Section 2(c) hereof.
          “Suspension of Filing” has the meaning ascribed thereto in Section 1(c) hereof.
          “Suspension of Offering” has the meaning ascribed thereto in Section 1(c) hereof.
          “Trading Day” has the meaning ascribed thereto in Section 1(d) hereof.
          “Transfer” means a sale, transfer or other disposition.
B-3



Exhibit 10.3
 
 
 
TAX DISAFFILIATION AGREEMENT
BETWEEN
THE MADISON SQUARE GARDEN COMPANY
( TO BE RENAMED MSG NETWORKS INC. )
AND
MSG SPINCO, INC.
(TO BE RENAMED THE MADISON SQUARE GARDEN COMPANY)
dated as of September 11, 2015
 
 
 




TABLE OF CONTENTS
 
SECTION 1.    Definition of Terms      2   
SECTION 2.    Allocation of Taxes and Tax-Related Losses      11   
   2.1    Allocation of Taxes      11   
   2.2    Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes      12   
   2.3    Tax Payments      12   
SECTION 3.    Preparation and Filing of Tax Returns      13   
   3.1    Combined Returns      13   
   3.2    Separate Returns      13   
   3.3    Agent      13   
   3.4    Provision of Information      13   
   3.5    Special Rules Relating to the Preparation of Tax Returns      14   
   3.6    Refunds, Credits, Offsets, Tax Benefits      14   
   3.7    Carrybacks      15   
   3.8    Amended Returns      15   
   3.9    Compensatory Equity Interests      15   
SECTION 4.    Tax Payments      16   
   4.1    Payment of Taxes to Tax Authority      16   
   4.2    Indemnification Payments      16   
   4.3    Interest on Late Payments      16   
   4.4    Tax Consequences of Payments      16   
   4.5    Adjustments to Payments      16   
   4.6    Section 336(e) Election      17   
   4.7    Certain Final Determinations      18   
SECTION 5.    Cooperation and Tax Contests      18   
   5.1    Cooperation      18   
   5.2    Notices of Tax Contests      18   
   5.3    Control of Tax Contests      18   
   5.4    Cooperation Regarding Tax Contests      19   
SECTION 6.    Tax Records      19   
   6.1    Retention of Tax Records      19   
   6.2    Access to Tax Records      19   
   6.3    Confidentiality      20   
 
i





SECTION 7.    Representations and Covenants      20   
   7.1    Covenants of Networks and Spinco      20   
   7.2    Private Letter Ruling      20   
   7.3    Covenants of Spinco      21   
   7.4    Covenants of Networks      21   
   7.5    Exceptions      22   
   7.6    Injunctive Relief      23   
   7.7    Further Assurances      23   
SECTION 8.    General Provisions      23   
   8.1    Construction      23   
   8.2    Ancillary Agreements      23   
   8.3    Counterparts      23   
   8.4    Notices      23   
   8.5    Amendments      24   
   8.6    Assignment      24   
   8.7    Successors and Assigns      24   
   8.8    Change in Law      24   
   8.9    Authorization, Etc.      24   
   8.10    Termination      24   
   8.11    Subsidiaries      25   
   8.12    Third-Party Beneficiaries      25   
   8.13    Double Recovery      25   
   8.14    Titles and Headings      25   
   8.15    Governing Law      25   
   8.16    Waiver of Jury Trial      25   
   8.17    Severability      25   
   8.18    No Strict Construction; Interpretation      25   
 
ii




TAX DISAFFILIATION AGREEMENT
THIS TAX DISAFFILIATION AGREEMENT (the “ Agreement ”) is dated as of September 11, 2015, by and between The Madison Square Garden Company (to be renamed MSG Networks Inc. after the Effective Time (as defined below)), a Delaware corporation (“ Networks ”), and MSG Spinco, Inc. (to be renamed The Madison Square Garden Company after the Effective Time), a Delaware corporation and an indirect wholly-owned subsidiary of Networks (“ Spinco ” and, together with Networks, the “ Parties ”, and each, a “ Party ”). Unless otherwise indicated, all “Section” references in this Agreement are to sections of the Agreement.
RECITALS
WHEREAS, the Board of Directors of Networks determined that, based on the Corporate Business Purposes (as defined below), it is in the best interests of Networks and its stockholders to separate the businesses of Spinco, all as more fully described in Spinco’s registration statement on Form 10, from Networks’ other businesses on the terms and conditions set forth in the Distribution Agreement between Networks and Spinco dated on or about the date hereof (the “ Distribution Agreement ”);
WHEREAS, the Board of Directors of Regional MSG Holdings LLC (“ RMH ”) authorized the distribution to Networks, as the sole member of RMH, of all the Spinco Pre-Recapitalization Shares (as defined below) (the “ RMH Distribution ”) and has determined that, based on the Corporate Business Purposes, the RMH Distribution is in the best interests of RMH and its stockholder and has approved the Distribution Agreement;
WHEREAS, the Board of Directors of Networks has authorized the distribution to the holders of the issued and outstanding shares of Class A Common Stock, par value $0.01 per share, of Networks (“ Networks Class A Common Stock ”) and Class B Common Stock, par value $0.01 per share, of Networks (“ Networks Class B Common Stock ” and, together with the Networks Class A Common Stock, the “ Networks Common Stock ”) as of the record date for the distribution of all the issued and outstanding shares of Class A Common Stock, par value $0.01 per share, of Spinco (the “ Spinco Class A Common Shares ”) and Class B Common Stock, par value $0.01 per share, of Spinco (the “ Spinco Class B Common Shares ”) (each such Spinco Class A Common Share and Spinco Class B Common Share is individually referred to as a “ Spinco Share ” and collectively referred to as the “ Spinco Shares ”), respectively, on the basis of one Spinco Share for every one share of Networks Common Stock (the “ Distribution ”);
WHEREAS, Networks and Spinco intend the MSGH Contribution (as defined below) to qualify as a transaction to which sections 351(a) and 1032(a) of the Code (as defined below) apply;
WHEREAS, Networks and Spinco intend the MSGH Distribution (as defined below) to qualify, with respect to Networks, as a distribution to which section 731(a) of the Code applies;
WHEREAS, Networks and Spinco intend the Recapitalization (as defined below) to qualify as a tax-free transaction under section 368(a)(1)(E) of the Code;




WHEREAS, Networks and Spinco intend the Eden Insurance Contribution (as defined below) and Distribution to qualify for the Tax-Free Status (as defined below);
WHEREAS, the Boards of Directors of Networks and Spinco have each determined that the Distribution and the other transactions contemplated by the Distribution Agreement, and the Ancillary Agreements (as defined below) are in furtherance of and consistent with the Corporate Business Purposes and, as such, are in the best interests of their respective companies and stockholders or sole stockholder, as applicable, and have approved the Distribution Agreement, and each of the Ancillary Agreements;
WHEREAS, the Parties set forth in the Distribution Agreement the principal arrangements between them regarding the separation of the Spinco Group (as defined below) from the Networks Group (as defined below); and
WHEREAS, the Parties desire to provide for and agree upon the allocation between the Parties of liabilities for Taxes (as defined below) arising prior to, as a result of, and subsequent to the Distribution, and to provide for and agree upon other matters relating to Taxes;
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Parties hereby agree as follows:
SECTION 1. Definition of Terms . For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:
“Affiliate” has the meaning set forth in the Distribution Agreement. For the avoidance of doubt, the term “Affiliate” as it applies to Spinco shall include the Spinco Company Entities.
“Agreed Treatment” means the treatment of (i) the MSGH Contribution as a transaction to which sections 351(a) and 1032(a) of the Code apply, (ii) the MSGH Distribution with respect to Networks as a distribution to which section 731(a) of the Code applies, (iii) the Recapitalization as a tax-free transaction to which section 368(a)(1)(E) of the Code applies, and (iv) the Eden Insurance Contribution and the Distribution in accordance with the Tax-Free Status.
“Agreement” has the meaning set forth in the preamble hereof.
“Ancillary Agreements” means the agreements encompassed by such term in the Distribution Agreement.
“Assignment Agreement” means the Assignment Agreement and Stock Power between Networks and Spinco dated on or about the date hereof.
“Business Day” has the meaning set forth in the Distribution Agreement.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
 
2




“Combined Return” means a consolidated, combined or unitary Tax Return that includes, by election or otherwise, one or more members of the Networks Group and one or more members of the Spinco Group.
“Companies” means Networks and Spinco.
“Company” means Networks or Spinco, as the context requires.
“Compensatory Equity Interests” means options, stock appreciation rights, restricted stock, restricted stock units or other rights with respect to Networks Common Stock or Spinco Shares that are granted by Networks, Spinco or any of their respective Subsidiaries in connection with employee or director compensation or other employee benefits.
“Compensatory Equity Net Share Settlements” means “net share settlement” transactions with respect to Compensatory Equity Interests between either Party (or any of their respective Subsidiaries) on the one hand and the employee (or director, as the case may be) of such Party or the other Party (or any of their respective Subsidiaries) on the other hand, in each case pursuant to the terms of the relevant agreement with respect to such Compensatory Equity Interests.
“Contribution Agreement” means the Contribution Agreement between Networks, MSGH, and Spinco dated on or about the date hereof.
“Controlling Party” means, with respect to a Tax Contest, the Person that has responsibility, control and discretion in handling, defending, settling or contesting such Tax Contest.
“Corporate Business Purposes” means the Corporate Business Purposes as set forth in the Tax Opinion Representations (including any appendices thereto) and the “Reasons for the Distribution” in Spinco’s registration statement on Form 10.
“Deconsolidation Taxes” means any Taxes imposed on any member of the Networks Group or the Spinco Group as a result of or in connection with the MSGH Contribution, the MSGH Distribution, the Eden Insurance Contribution and the Distribution (or any portion thereof), including, but not limited to, (i) MSGH Contribution Taxes, (ii) MSGH Distribution Taxes, and (iii) any Taxes imposed pursuant to or as a result of section 311 or 1502 of the Code or the Treasury Regulations thereunder (and under any applicable similar state, local or foreign law), but excluding any Transfer Taxes and Distribution Taxes.
“Disclosing Party” has the meaning set forth in Section 6.3.
“Distribution” has the meaning set forth in the recitals hereof.
“Distribution Agreement” has the meaning set forth in the recitals hereof.
“Distribution Date” has the meaning set forth in the Distribution Agreement.
 
3




“Distribution Taxes” means any Taxes arising from a Final Determination that the Eden Insurance Contribution and the Distribution failed to be tax-free to Networks in accordance with the requirements of section 355 or section 368(a)(1)(D) of the Code (including any Taxes resulting from the application of section 355(d) or (e) to the Distribution), or that any stock of Spinco failed to qualify as “qualified property” within the meaning of section 355(c)(2) of the Code (including as a result of the application of section 355(d) or 355(e) of the Code to the Distribution) or where applicable, failed to be stock permitted to be received without recognition of gain or loss under section 361(a) of the Code, and shall include any Taxes resulting from an election under section 336(e) of the Code in the circumstances set forth in Section 4.6 hereof.
“Due Date” has the meaning set forth in Section 4.3.
“Eden Insurance Contribution” means the contribution by Networks to Spinco of all of the outstanding common stock of Eden Insurance Company, Inc., a New York corporation, as effected pursuant to the Assignment Agreement.
“Effective Time” means 11:59 p.m., New York City time, on the Distribution Date.
“Employee Matters Agreement” means the Employee Matters Agreement by and between Networks and Spinco entered into on or about the date hereof.
“Escheat Liability” means any unclaimed property or escheat liability, including any interest, penalty, administrative charge, or addition thereto and further including all costs of responding to or defending against an audit, examination, or controversy with respect to such liability, imposed by or on behalf of a governmental entity with respect to any property or obligation (including, without limitation, uncashed checks to vendors, customers, or employees and non-refunded overpayments).
“Excess Taxes” means the excess of (x) the Taxes for which Networks Group is liable if an election is made pursuant to section 336(e) of the Code under Section 4.6 of this Agreement, over (y) the Taxes for which Networks Group is liable if such an election is not made, in each case taking into account the allocation of Taxes that is otherwise applicable in this Agreement but without regard to Section 4.6 hereof.
“Expert Law Firm” means a law firm nationally recognized for its expertise in the matter for which its opinion is sought.
“Fifty-Percent Equity Interest” means, in respect of any corporation (within the meaning of the Code), stock or other equity interests of such corporation possessing (i) at least fifty percent (50%) of the total combined voting power of all classes of stock or equity interests entitled to vote, or (ii) at least fifty percent (50%) of the total value of shares of all classes of stock or of the total value of all equity interests.
“Filer” means the Company that is responsible for filing the applicable Tax Return pursuant to Sections 3.1 or 3.2.
“Final Determination” means a determination within the meaning of section 1313 of the Code or any similar provision of state or local Tax Law.
 
4




“Group” means the Networks Group or the Spinco Group, as the context requires.
“Indemnified Party” has the meaning set forth in Section 4.5.
“Indemnifying Party” has the meaning set forth in Section 4.5.
“Interest Rate” means (x) the “Applicable Rate” as set forth in the Distribution Agreement, or (y) if higher and if with respect to a payment to indemnify for a Tax to which the “large corporate underpayment” provision within the meaning of section 6621(c) of the Code applies, such interest rate that would be applicable at such time to such “large corporate underpayment.”
“IRS” means the Internal Revenue Service.
“MSGH” means MSG Holdings, L.P., a Delaware limited partnership.
“MSGH Contribution” means the contribution by MSGH to Spinco of (i) all of MSGH’s interests in the Spinco Company Entities and (ii) approximately $1.459 billion in cash, in exchange for the Spinco Pre-Recapitalization Shares.
“MSGH Contribution Gain” means any income or gain (including in respect of Schedule C) recognized upon the MSGH Contribution.
“MSGH Contribution Taxes” means any Taxes imposed on the MSGH Contribution Gain.
“MSGH Distribution” means the distribution by MSGH to RMH of all Spinco Pre-Recapitalization Shares received by MSGH pursuant to the MSGH Contribution.
“MSGH Distribution Gain” means any gain recognized by Networks upon the MSGH Distribution from the deemed sale or exchange of unrealized receivables or inventory items (as defined in section 751(c) and (d) of the Code, respectively) of MSGH.
“MSGH Distribution Taxes” means any Taxes imposed on the Networks Distribution Gain.
“Networks” has the meaning set forth in the preamble hereof.
“Networks Business” has the meaning ascribed to the term “Networks Business” in the Tax Opinion Representations that constitutes an active trade or business (within the meaning of section 355(b) of the Code) of the separate affiliated group of Networks.
“Networks Class A Common Stock” has the meaning set forth in the recitals to this Agreement.
“Networks Class B Common Stock” has the meaning set forth in the recitals to this Agreement.
 
5




“Networks Common Stock” has the meaning set forth in the recitals to this Agreement.
“Networks Group” has the meaning ascribed to the term “MSG Networks Group” in the Distribution Agreement.
“Networks Indemnified Party” includes each member of the Networks Group, each of their representatives and Affiliates, each of their respective directors, officers, managers and employees, and each of their heirs, executors, trustees, administrators, successors and assigns.
“Networks Restricted Action” means any action by Networks or any of its Subsidiaries inconsistent with the covenants set forth in Section 7.4(a); and, for the avoidance of doubt, an action shall be and remain a Networks Restricted Action even if Networks or any of its Subsidiaries is permitted to take such an action pursuant to Section 7.5(b).
“Networks Tainting Act” means any breach of a representation or covenant made by Networks in Section 7.1 of this Agreement or the taking of a Networks Restricted Action, if as a result of such breach or taking of a Networks Restricted Action a Final Determination is made that the Eden Insurance Contribution and the Distribution failed to be tax-free by reason of (i) failing to qualify as a distribution described in section 355 and section 368(a)(1)(D) of the Code, or (ii) any stock of Spinco failing to qualify as “qualified property” within the meaning of section 355(c)(2) of the Code (including as a result of the application of section 355(d) or 355(e) of the Code to the Distribution) or where applicable, failing to be stock permitted to be received without recognition of gain or loss under section 361(a) of the Code.
“Non-Controlling Party” has the meaning set forth in Section 5.3(a).
“Non-Filer” means any Company that is not responsible for filing the applicable Tax Return pursuant to Sections 3.1 or 3.2.
“Other Party” has the meaning set forth in Section 4.6(b).
“Party” has the meaning set forth in the preamble hereof.
“Parties” has the meaning set forth in the preamble hereof.
“Payment Date” means (x) with respect to any U.S. federal income tax return, the date on which any required installment of estimated taxes determined under section 6655 of the Code is due, the date on which (determined without regard to extensions) filing the return determined under section 6072 of the Code is required, and the date the return is filed, and (y) with respect to any other Tax Return, the corresponding dates determined under the applicable Tax Law.
“Periodic Taxes” means Taxes imposed on a periodic basis that are not based upon or related to income or receipts. Periodic Taxes include property Taxes and similar Taxes.
“Permitted Acquisition” means any acquisition (as a result of the Distribution) of Spinco Shares solely by reason of holding Networks Common Stock, but does not include such an acquisition if such Networks Common Stock, before such acquisition, was itself acquired in a manner to which the flush language of section 355(e)(3)(A) of the Code applies (thus causing, for the avoidance of doubt, section 355(e)(3)(A)(i), (ii), (iii) or (iv) of the Code not to apply).
 
6




“Person” means any individual, corporation, company, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind.
“Post-Distribution Period” means any Tax Year or other taxable period beginning after the Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other taxable period that begins at the beginning of the day after the Distribution Date.
“Pre-Distribution Period” means any Tax Year or other taxable period that ends on or before the Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other taxable period through the end of the day on the Distribution Date.
“Preparer” means the Company that is responsible for the preparation and filing of the applicable Tax Return pursuant to Sections 3.1 or 3.2.
“Recapitalization” means the issuance of all Spinco Shares to Networks in exchange for all of Networks’ Spinco Pre-Recapitalization Shares.
“Receiving Party” has the meaning set forth in Section 6.3.
“Responsible Party” has the meaning set forth in Section 4.6(b).
“Restriction Period” means the period beginning on the Distribution Date and ending twenty-four (24) months after the Distribution Date.
“Ruling” means the private letter ruling that was issued to Networks in response to the Ruling Request.
“Ruling Request” means the request for ruling in connection with the Distribution filed by Networks with the IRS, as amended or supplemented, including any appendices and exhibits attached thereto or included therewith and including so much of the pre-submission materials submitted by Networks to the IRS, as related to the Distribution.
“Satisfactory Guidance” means either a ruling from the IRS or an Unqualified Opinion, in either case reasonably satisfactory to Networks or Spinco (as the context dictates) in both form and substance.
“Separate Return” means (a) in the case of any Tax Return required under relevant Tax Law to be filed by any member of the Networks Group (including any consolidated, combined or unitary Tax Return), any such Tax Return that does not include any member of the Spinco Group, and (b) in the case of any Tax Return required under relevant Tax Law to be filed by any member of the Spinco Group (including any consolidated, combined or unitary Tax Return), any such Tax Return that does not include any member of the Networks Group.
 
7




“Spinco” has the meaning set forth in the preamble hereof.
“Spinco Business” has the meaning ascribed to the term “Spinco Business” in the Tax Opinion Representations that constitutes an active trade or business (within the meaning of section 355(b) of the Code) of the separate affiliated group of Spinco.
“Spinco Class A Common Shares” has the meaning set forth in the recitals to this Agreement.
“Spinco Class B Common Shares” has the meaning set forth in the recitals to this Agreement.
“Spinco Company Entities” means, collectively, the entities listed on Schedule A of the Distribution Agreement.
“Spinco Group” has the meaning ascribed to the term “Spinco Group” in the Distribution Agreement.
“Spinco Indemnified Party” includes each member of the Spinco Group, each of their representatives and Affiliates, each of their respective directors, officers, managers and employees, and each of their heirs, executors, trustees, administrators, successors and assigns.
“Spinco Pre-Recapitalization Shares” means the single class of issued and outstanding common stock, par value $0.01 per share, of Spinco.
“Spinco Restricted Action” means any action by Spinco or any of its Subsidiaries inconsistent with the covenants set forth in Section 7.3; and, for the avoidance of doubt, an action shall be and remain a Spinco Restricted Action even if Spinco or any of its Subsidiaries is permitted to take such an action pursuant to Section 7.5(a).
“Spinco Shares” has the meaning set forth in the recitals to this Agreement.
“Spinco Tainting Act” means a breach of the covenant made by Spinco in Section 7.1 of this Agreement or the taking of a Spinco Restricted Action, if as a result of such breach or taking of a Spinco Restricted Action a Final Determination is made that the MSGH Contribution failed to be tax-free by reason of the application of section 351(e) of the Code to the MSGH Contribution, or that the Eden Insurance Contribution and the Distribution failed to be tax-free by reason of (i) failing to qualify as a distribution described in section 355 and section 368(a)(1)(D) of the Code, or (ii) any stock of Spinco failing to qualify as “qualified property” within the meaning of section 355(c)(2) of the Code (including as a result of the application of section 355(d) or 355(e) of the Code to the Distribution) or where applicable, failing to be stock permitted to be received without recognition of gain or loss under section 361(a) of the Code.
“Straddle Period” means any taxable period beginning on or prior to, and ending after, the Distribution Date.
 
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“Subsidiary” when used with respect to any Person, means (i)(A) a corporation a majority in voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, (B) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (1) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (2) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company, or (C) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has or have (1) the power to elect or direct the election of a majority of the members of the governing body of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of such a governing body, at least a majority ownership interest or (ii) any other Person of which an aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person. For the avoidance of doubt, the term “Subsidiary” as it applies to Spinco shall include the Spinco Company Entities.
“Tax” or “Taxes” means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers’ compensation, employment, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any Tax Authority, any Escheat Liability, abandoned, or unclaimed property law, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing, together with any reasonable expenses, including attorneys’ fees, incurred in defending against any such tax.
“Tax Adjustment” has the meaning set forth in Section 4.7.
“Tax Authority” means, with respect to any Tax, the governmental entity or political subdivision, agency, commission or authority thereof that imposes such Tax, and the agency, commission or authority (if any) charged with the assessment, determination or collection of such Tax for such entity or subdivision.
“Tax Benefit” means a reduction in the Tax liability of a taxpayer (or of the Group of which it is a member) for any taxable period. Except as otherwise provided in this Agreement, a Tax Benefit shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that the Tax liability of the taxpayer (or of the Group of which it is a member) for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer in the current period and all prior periods, is less than it would have been if such Tax liability were determined without regard to such Tax Item.
“Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding with the purpose, potential or effect of redetermining Taxes of any member of either Group (including any administrative or judicial review of any claim for refund).
 
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“Tax Counsel” means the advisors listed in Schedule A.
“Tax-Free Status” means the qualification of the Eden Insurance Contribution and the Distribution (a) as a transaction described in section 355 and section 368(a)(1)(D) of the Code, (b) as a transaction in which the stock of Spinco distributed by Networks is “qualified property” for purposes of sections 355(c)(2), 355(d), 355(e) and 361(c) of the Code, and (c) a transaction in which shareholders of Networks will not recognize income, gain or loss upon the Distribution under section 355(a) of the Code (except with respect to cash received in lieu of fractional shares).
“Tax Item” means, with respect to any Tax, any item of income, gain, loss, deduction, credit, adjustment in basis, or other attribute that may have the effect of increasing or decreasing any Tax.
“Tax Law” means the law of any governmental entity or political subdivision thereof, and any controlling judicial or administrative interpretations of such law, relating to any Tax.
“Tax Opinion” means the opinion (or opinions) to be delivered by Tax Counsel to Networks in connection with the Distribution to the effect that (i) Networks will not recognize gain or loss upon the Distribution under section 355(c) or section 361(c) of the Code, and (ii) shareholders of Networks will not recognize gain or loss upon the Distribution under section 355(a) of the Code, and no amount will be included in such shareholders’ income, except in respect of cash received in lieu of fractional shares of Spinco.
“Tax Opinion Representations” means the written and signed representations delivered to Tax Counsel in connection with the Tax Opinion.
“Tax Records” means Tax Returns, Tax Return work papers, documentation relating to any Tax Contests, and any other books of account or records required to be maintained under applicable Tax Laws (including but not limited to section 6001 of the Code) or under any record retention agreement with any Tax Authority.
“Tax Return” means any report of Taxes due, any claims for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document filed or required to be filed (by paper, electronically or otherwise) under any applicable Tax Law, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.
“Tax Year” means, with respect to any Tax, the year, or shorter period, if applicable, for which the Tax is reported as provided under applicable Tax Law.
“Transactions” means the transactions contemplated by the Assignment Agreement, the Contribution Agreement and the Distribution Agreement and includes, for the avoidance of doubt, (i) the MSGH Contribution, (ii) the MSGH Distribution, (iii) the Recapitalization, (iv) the Eden Insurance Contribution and (v) the Distribution.
“Transfer Taxes” means all U.S. federal, state, local or foreign sales, use, privilege, transfer, documentary, gains, stamp, duties, recording, and similar Taxes and fees (including any penalties, interest or additions thereto) imposed upon any Party hereto or any of its Affiliates in connection with the Distribution.
 
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“Transition Services Agreement” means the transition services agreement between Networks and Spinco dated on or about the date hereof.
“Treasury Regulations” means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Year.
“Unqualified Opinion” means an unqualified “will” opinion of an Expert Law Firm that permits reliance by Networks or Spinco (as the context dictates). For the avoidance of doubt, an Unqualified Opinion must be based on factual representations and assumptions that are reasonably satisfactory to Networks or Spinco (as the context dictates).
SECTION 2. Allocation of Taxes and Tax-Related Losses .
2.1 Allocation of Taxes . Except as provided in Section 2.2 (Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes), Taxes shall be allocated as follows:
(a) Networks shall be liable for and shall be allocated (i) any Taxes attributable to members of the Networks Group for all periods, (ii) any Taxes attributable to members of the Spinco Group for any Pre-Distribution Period, other than the Taxes listed on Schedule D, and (iii) any Taxes listed on Schedule D to the extent that the amount of such Taxes is less than or equal to the amount listed on Schedule D.
(b) Spinco shall be liable for and shall be allocated (i) any Taxes attributable to members of the Spinco Group for any Post-Distribution Period, and (ii) any Taxes listed on Schedule D to the extent that the amount of such Taxes is in excess of the amount listed on Schedule D.
(c) In applying the provisions of Sections 2.1(a) and 2.1(b) (but subject to the provisions of Section 2.2):
(i) Any Taxes, other than Periodic Taxes, in respect of a Straddle Period shall be allocated between the Pre-Distribution Period and the Post-Distribution Period on a “closing of the books” basis by assuming that the books of the members of the Networks Group and the members of the Spinco Group were closed on the Distribution Date. Any Periodic Taxes in respect of a Straddle Period shall be allocated to the Pre-Distribution Period in an amount equal to such Periodic Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in the period ending on the Distribution Date and the denominator of which is the number of calendar days in the entire period. The portion of any Periodic Taxes in respect of a Straddle Period not allocated to the Pre-Distribution Period shall be allocated to the Post-Distribution Period. For the avoidance of doubt, if a Party has prepaid Periodic Taxes that are allocated to the other Party under any provisions of this Agreement, the second Party shall reimburse the first Party to the extent so allocated.
 
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(ii) Taxes attributable to any transaction or action taken by or with respect to any member of the Spinco Group before the Effective Time on the Distribution Date shall be allocated to the Pre-Distribution Period, and Taxes attributable to any transaction or action taken by or with respect to any member of the Spinco Group after the Effective Time on the Distribution Date shall be allocated to the Post-Distribution Period.
(iii) In determining the allocation of any Escheat Liability, the liability shall be allocated to the Party whose Group members actually hold (or are required to hold) the property subject to the Escheat Liability at the time a payment or remittance in respect of such liability is required to be made to the applicable governmental entity.
2.2 Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes . Notwithstanding any other provision of this Agreement:
(a) Any and all Deconsolidation Taxes shall be borne by Networks.
(b) Spinco shall indemnify and hold harmless each Networks Indemnified Party from and against any liability of Networks for Distribution Taxes to the extent such Distribution Taxes are attributable to a Spinco Tainting Act, provided , however , that Spinco shall have no obligation to indemnify any Networks Indemnified Party hereunder if there has occurred, prior to such Spinco Tainting Act, a Networks Tainting Act and such Distribution Taxes are attributable to such Networks Tainting Act. It is understood and agreed that, in determining the amounts payable under this Section 2.2(b), there shall be included all costs, expenses and damages associated with shareholders litigation or controversies and any amount paid by Networks in respect of the liability of its shareholders, whether paid to its shareholders or to any Tax Authority, in connection with liability that may arise to shareholders as a result of receiving or accruing an amount payable under this Section 2.2(b), and all reasonable costs and expenses associated with such payments.
(c) Networks shall indemnify and hold harmless each Spinco Indemnified Party from and against any liability of Spinco for Distribution Taxes to the extent that Spinco is not liable for such Taxes pursuant to Section 2.2(b).
(d) The Companies shall cooperate with each other and use their commercially reasonable efforts to reduce and/or eliminate any Transfer Taxes. If any Transfer Tax remains payable after application of the first sentence of this Section 2.2(d) and notwithstanding any other provision in this Section 2, all Transfer Taxes shall be allocated to Networks.
2.3 Tax Payments . Each Company shall be liable for and shall pay the Taxes allocated to it by this Section 2 either to the applicable Tax Authority or to the other Company in accordance with Section 4 and the other applicable provisions of this Agreement.
 
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SECTION 3. Preparation and Filing of Tax Returns .
3.1 Combined Returns .
(a) Networks shall be responsible for preparing and filing (or causing to be prepared or filed) all Combined Returns for any Tax Year. For any such return, Spinco shall furnish any relevant information, including pro forma returns, disclosures, apportionment data and supporting schedules, relating to any member of the Spinco Group necessary for completing any such return in a format suitable for inclusion in such return, provided that Spinco shall have the right to review and approve items on such returns if and to the extent such items directly relate to Taxes for which Spinco would be liable under Section 2, such approval not to be unreasonably delayed, conditioned or withheld by Spinco.
(b) For the period in which the Transition Services Agreement is in effect, Spinco shall assist in the preparation of any Tax Returns which may be requested by Networks in accordance with the terms of the Transition Services Agreement (even if, for the avoidance of doubt, the responsibility for preparation such Tax Return may be allocated to Networks under other provisions of this Agreement). Nothing in this Section 3.1(b) shall be construed to affect Networks’ right or responsibility to file the Tax Returns whose filing is allocated to Networks under other provisions of this Agreement.
3.2 Separate Returns .
(a) Tax Returns to be Prepared by Networks . Networks shall be responsible for preparing and filing (or causing to be prepared and filed) all Separate Returns which relate to one or more members of the Networks Group and for which Spinco is not responsible under Section 3.2(b).
(b) Tax Returns to be Prepared by Spinco. Spinco shall be responsible for preparing and filing (or causing to be prepared and filed) all Separate Returns which relate to one or more members of the Spinco Group for any Tax Year, provided , however , that in the case of such returns in respect of any Pre-Distribution Period or Straddle Period, Networks shall have the right to review and approve such returns, such approval not to be unreasonably delayed, conditioned or withheld by Networks.
3.3 Agent . Subject to the other applicable provisions of this Agreement (including, without limitation, Section 5), Networks and Spinco (and their respective Affiliates) shall designate the other Party as its agent and attorney-in-fact to take such action (including execution of documents) as such other Party may deem reasonably appropriate in matters relating to the preparation or filing of any Tax Return described in Sections 3.1 and 3.2.
3.4 Provision of Information .
(a) Networks shall provide to Spinco, and Spinco shall provide to Networks, any information about members of the Networks Group or the Spinco Group, respectively, that the Preparer reasonably requires to determine the amount of Taxes due on any Payment Date with respect to a Tax Return for which the Preparer is responsible pursuant to Section 3.1 or 3.2 and to properly and timely file all such Tax Returns.
(b) If a member of the Spinco Group supplies information to a member of the Networks Group, or a member of the Networks Group supplies information to a member of the Spinco Group, and an officer of the requesting member intends to sign a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then a duly authorized officer of the member supplying such information shall certify, to the best of such officer’s knowledge, the accuracy of the information so supplied.
 
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3.5 Special Rules Relating to the Preparation of Tax Returns .
(a) In General . All Tax Returns that include any members of the Networks Group or Spinco Group, or any of their respective Affiliates, shall be prepared in a manner that is consistent with the Ruling Request, the Ruling, and the Tax Opinion (including, for the avoidance doubt, the Tax Opinion Representations). Except as otherwise set forth in this Agreement, all Tax Returns for which Networks has the right to prepare, review, approve or file under Sections 3.1 and 3.2 shall be prepared (x) in accordance with elections, Tax accounting methods and other practices used with respect to such Tax Returns filed prior to the Distribution Date (unless such past practices are not permissible under applicable law), or (y) to the extent any items are not covered by past practices (or in the event such past practices are not permissible under applicable Tax Law), in any reasonable manner, in accordance with the preparation, review, approval and filing responsibilities of Sections 3.1 and 3.2; provided , however , that (i) each Party agrees that the Tax Returns listed in Schedule B shall not be prepared in a manner inconsistent with the requirements set forth in this Section 3.5(a) provided that such Tax Returns are prepared in the manner described in Schedule B, and (ii) in each case of (x) and (y) to the extent that a change in such elections, methods or practices could not reasonably be expected to result in any adverse impact on Networks and would not be inconsistent with applicable law, such Tax Returns shall be prepared in accordance with reasonable practices selected by Spinco.
(b) Election to File Consolidated, Combined or Unitary Tax Returns . Subject to Spinco’s reasonable approval, Networks shall elect to file any Tax Return on a consolidated, combined or unitary basis, if such Tax Return would include at least one member of each Group and the filing of such Tax Return is elective under the relevant Tax Law.
3.6 Refunds, Credits, Offsets, Tax Benefits
(a) Any refunds, credits, or offsets with respect to Taxes allocated to Networks pursuant to this Agreement shall be for the account of Networks. Any refunds, credits or offsets with respect to Taxes allocated to Spinco pursuant to this Agreement shall be for the account of Spinco.
(b) Networks shall forward to Spinco, or reimburse Spinco for, any such refunds, credits or offsets, plus any interest received thereon, net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith, that are for the account of Spinco within fifteen (15) Business Days from receipt thereof by Networks or any of its Affiliates. Spinco shall forward to Networks, or reimburse Networks for, any refunds, credits or offsets, plus any interest received thereon, net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith, that are for the account of Networks within fifteen (15) Business Days from receipt thereof by Spinco or any of its Affiliates. Any refunds, credits or offsets, plus any interest received thereon, or reimbursements not forwarded or made within the fifteen (15) Business Day period specified above shall bear interest from the date received by the refunding or reimbursing party (or its Affiliates) through and including the date of payment at the Interest Rate (treating the date received as the Due Date for purposes of determining such interest). If, subsequent to a Tax Authority’s allowance of a refund, credit or offset, such Tax Authority reduces or eliminates such allowance, any refund, credit or offset, plus any interest received thereon, forwarded or reimbursed under this Section 3.6 shall be returned to the party who had forwarded or reimbursed such refund, credit or offset and interest upon the request of such forwarding party in an amount equal to the applicable reduction, including any interest received thereon.
 
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(c) For the avoidance of doubt, no Party shall be required to reimburse the other Party under this Section 3.6 for the use of a refund, credit or offset or other Tax Benefit, calculated by reference to the Tax allocated to the other Party, including but not limited to a “dividends received deduction” set forth under section 243 of the Code and an unincorporated business tax credit as currently provided by Section 11-604 of the New York City Administrative Code or any successor thereto, if such deduction, credit or offset is not available to reduce the Tax liability of such other Party for any Tax Year.
3.7 Carrybacks . To the extent permitted under applicable Tax Laws, the Spinco Group shall make the appropriate elections in respect of any Tax Returns to waive any option to carry back any net operating loss, any credits or any similar item from a Post-Distribution Period to any Pre-Distribution Period or to any Straddle Period. Any refund of or credit for Taxes resulting from any such carryback by a member of the Spinco Group that cannot be waived shall be payable to Spinco net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith.
3.8 Amended Returns . Any amended Tax Return or claim for Tax refund, credit or offset with respect to any member of the Networks Group or Spinco Group may be made only by the Company (or its Affiliates) responsible for filing the original Tax Return with respect to such member pursuant to Sections 3.1 or 3.2 (and, for the avoidance of doubt, subject to the same preparation, review, approval and filing rights set forth in Sections 3.1 or 3.2, to the extent applicable). Such Company (or its Affiliates) shall not, without the prior written consent of the other Company (which consent shall not be unreasonably withheld or delayed), file, or cause to be filed, any such amended Tax Return or claim for Tax refund, credit or offset to the extent that such filing, if accepted, is likely to increase the Taxes allocated to, or the Tax indemnity obligations under this Agreement of, such other Company for any Tax Year (or portion thereof); provided , however , that such consent need not be obtained if (i) the Company filing the amended Tax Return by written notice to the other Company agrees to indemnify the other Company for the incremental Taxes allocated to, or the incremental Tax indemnity obligation resulting under this Agreement to, such other Company as a result of the filing of such amended Tax Return, or (ii) such amended Tax Return is a Tax Return listed in Schedule B and prepared in the manner as described in Schedule B.
3.9 Compensatory Equity Interests . Matters relating to Taxes and/or Tax Items with respect to Compensatory Equity Interests shall be governed by the Employee Matters Agreement.
 
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SECTION 4. Tax Payments .
4.1 Payment of Taxes to Tax Authority . Networks shall be responsible for remitting to the proper Tax Authority the Tax shown on any Tax Return for which it is responsible for filing pursuant to Section 3.1 or Section 3.2, and Spinco shall be responsible for remitting to the proper Tax Authority the Tax shown on any Tax Return for which it is responsible for filing pursuant to Section 3.2.
4.2 Indemnification Payments .
(a) Tax Payments Made by the Networks Group . If any member of the Networks Group is required to make a payment to a Tax Authority for Taxes allocated to Spinco under this Agreement, Spinco will pay the amount of Taxes allocated to it to Networks not later than the later of (i) five (5) Business Days after receiving notification requesting such amount, and (ii) five (5) Business Days prior to the date such payment is required to be made to such Tax Authority. Notwithstanding the preceding sentence, if any member of the Networks Group has made a prepayment of Periodic Taxes that are allocated to Spinco under this Agreement, Spinco will pay the amount of such Taxes allocated to it to Networks not later than thirty (30) Business Days after the Distribution Date.
(b) Tax Payments Made by the Spinco Group. If any member of the Spinco Group is required to make a payment to a Tax Authority for Taxes allocated to Networks under this Agreement, Networks will pay the amount of Taxes allocated to it to Spinco not later than the later of (i) five (5) Business Days after receiving notification requesting such amount, and (ii) five (5) Business Days prior to the date such payment is required to be made to such Tax Authority. Notwithstanding the preceding sentence, if any member of the Spinco Group has made a prepayment of Periodic Taxes that are allocated to Networks under this Agreement, Networks will pay the amount of such Taxes allocated to it to Spinco not later than thirty (30) Business Days after the Distribution Date.
4.3 Interest on Late Payments . Payments pursuant to this Agreement that are not made by the date prescribed in this Agreement or, if no such date is prescribed, not later than five (5) Business Days after demand for payment is made (the “ Due Date ”) shall bear interest for the period from and including the date immediately following the Due Date through and including the date of payment at the Interest Rate. Such interest will be payable at the same time as the payment to which it relates. Interest will be calculated on the basis of a year of 365 days and the actual number of days for which due.
4.4 Tax Consequences of Payments . For all Tax purposes and to the extent permitted by applicable Tax Law, the parties hereto shall treat any payment made pursuant to this Agreement as a capital contribution or a distribution, as the case may be, immediately prior to the Distribution.
4.5 Adjustments to Payments . The amount of any payment made pursuant to this Agreement shall be adjusted as follows:
(a) If the receipt or accrual of any indemnity amounts for which any Party hereto (the “ Indemnifying Party ”) is required to pay another Party (the “ Indemnified Party ”) under this Agreement causes, directly or indirectly, an increase in the taxable income of the Indemnified Party under one or more applicable Tax Laws, such payment shall be increased so that, after the payment of any Taxes with respect to the payment, the Indemnified Party shall have realized the same net amount it would have realized had the payment not resulted in taxable income. For the avoidance of doubt, any liability for Taxes due to an increase in taxable income described in the immediately preceding sentence shall be governed by this Section 4.5(a) and not by Section 2.2.
 
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(b) To the extent that Taxes for which the Indemnifying Party is required to pay to the Indemnified Party pursuant to this Agreement gives rise to a deduction, credit or other Tax Benefit (including as a result of any election set forth in Section 4.6) to the Indemnified Party or any of its Affiliates, the amount of any payment made to the Indemnified Party by the Indemnifying Party shall be decreased by taking into account any resulting reduction in Taxes actually realized by the Indemnified Party or any of its Affiliates resulting from such Tax Benefit (including as a result of any election set forth in Section 4.6). If such a reduction in Taxes of the Indemnified Party occurs following the payment made to the Indemnified Party with respect to the relevant indemnified Taxes, the Indemnified Party shall promptly repay the Indemnifying Party the amount of such reduction when actually realized. If the Tax Benefit arising from the foregoing reduction of Taxes described in this Section 4.5(b) is subsequently decreased or eliminated, then the Indemnifying Party shall promptly pay the Indemnified Party the amount of the decrease in such Tax Benefit. This Section 4.5(b) shall not apply to the extent that Section 3.6(d) would also apply to cause recovery of the same amounts to the Indemnifying Party.
4.6 Section 336(e) Election .
(a) Networks and Spinco shall make a protective election under section 336(e) of the Code (and any similar election under state or local law) with respect to the Distribution in accordance with Treasury Regulations section 1.336-2(h) and (j) (and any applicable provisions under state and local law), provided that Spinco shall indemnify Networks for any cost to the Networks Group of making such an election (but it being understood that any such cost arising from Taxes shall be limited to Excess Taxes). Networks and Spinco shall cooperate in the timely completion and/or filings of such elections and any related filings or procedures (including filing or amending any Tax Returns to implement an election that becomes effective). This Section 4.6 is intended to constitute a binding, written agreement to make an election under section 336(e) of the Code with respect to the Distribution.
(b) If Taxes are allocated to a Party (the “ Responsible Party ”) as a result of any election set forth in Section 4.6, then to the extent that such Taxes give rise to a Tax Benefit, other than a refund, credit or offset as described in Section 3.6(b), to the other Party (the “ Other Party ”) or any of its Affiliates, and such Tax Benefit results in an actual reduction in Taxes (determined on a with and without basis) of the Other Party or any of its Affiliates in any Tax Year, the Other Party shall pay to the Responsible Party in the relevant Tax Year an amount equal to such reduction in Taxes (determined on a with and without basis); provided , however , that this provision shall not apply to the extent that the actual reduction in Taxes for the relevant Tax Year and any unpaid reduction in Taxes for all prior Tax Years is less than $50,000.
 
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4.7 Certain Final Determinations . If an adjustment (a “ Tax Adjustment ”) pursuant to a Final Determination in a Tax Contest initiated by a Tax Authority results in a Tax greater than the Tax shown on the relevant Tax Return for any Pre-Distribution Period, the Indemnified Party shall pay to the Indemnifying Party an amount equal to any Tax Benefit as and when actually realized by such Indemnified Party as a result of such Tax Adjustment. The Parties agree that if an Indemnified Party is required to make a payment to an Indemnifying Party pursuant to this Section 4.7, the Parties shall negotiate in good faith to set off the amount of such payment against any indemnity payments owed by the Indemnifying Party to the Indemnified Party, taking into account time value and similar concepts as appropriate.
SECTION 5. Cooperation and Tax Contests .
5.1 Cooperation . In addition to the obligations enumerated in Sections 3.4 and 5.4, Networks and Spinco will cooperate (and cause their respective Subsidiaries and Affiliates to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters, including provision of relevant documents and information in their possession and making available to each other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Parties or their respective Subsidiaries or Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Taxes.
5.2 Notices of Tax Contests . Each Company shall provide prompt notice to the other Company of any pending or threatened Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware relating to (i) Taxes for which it is or may be indemnified by such other Company hereunder or (ii) Tax Items that may affect the amount or treatment of Tax Items of such other Company. Such notice shall contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of any such matters; provided , however , that failure to give such notification shall not affect the indemnification provided hereunder except, and only to the extent that, the indemnifying Company shall have been actually prejudiced as a result of such failure. Thereafter, the indemnified Company shall deliver to the indemnifying Company such additional information with respect to such Tax Contest in its possession that the indemnifying Company may reasonably request.
5.3 Control of Tax Contests .
(a) Controlling Party. Subject to the limitations set forth in Section 5.3(b), each Filer (or the appropriate member of its Group) shall, at its own cost and expense, be the Controlling Party with respect to any Tax Contest involving a Tax reported (or that, it is asserted, should have been reported) on a Tax Return for which such Company is responsible for filing (or causing to be filed) pursuant to Section 3 of this Agreement (it being understood, for the avoidance of doubt but subject to the other provisions of this Section 5.3(a), that Networks shall be the Controlling Party with respect to any Tax Contest involving Distribution Taxes), in which case any Non-Filer that could have liability under this Agreement for a Tax to which such Tax Contest relates shall be treated as the “ Non-Controlling Party .” Notwithstanding the immediately preceding sentence, if a Non-Filer (x) acknowledges to the Filer in writing its full liability under this Agreement to indemnify for any Tax, and (y) provides to the Filer evidence (that is satisfactory to the Filer as determined in the Filer’s reasonable discretion) of the Non-Filer’s financial readiness and capacity to make such indemnity payment, then thereafter with respect to the Tax Contest relating solely to such Tax the Non-Filer shall be the Controlling Party (subject to Section 5.3(b)) and the Filer shall be treated as the Non-Controlling Party.
 
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(b) Non-Controlling Party Participation Rights . With respect to a Tax Contest of any Tax Return that could result in a Tax liability that is allocated under this Agreement, (i) the Non-Controlling Party shall, at its own cost and expense, be entitled to participate in such Tax Contest and to provide comments and suggestions to the Controlling Party, such comments and suggestions not to be unreasonably rejected, (ii) the Controlling Party shall keep the Non-Controlling Party updated and informed, and shall consult with the Non-Controlling Party, (iii) the Controlling Party shall act in good faith with a view to the merits in connection with the Tax Contest, and (iv) the Controlling Party shall not settle or compromise such Tax Contest without the prior written consent of the Non-Controlling Party (which consent shall not be unreasonably withheld).
5.4 Cooperation Regarding Tax Contests . The Parties shall provide each other with all information relating to a Tax Contest which is needed by the other Party or Parties to handle, participate in, defend, settle or contest the Tax Contest. At the request of any party, the other Parties shall take any action (e.g., executing a power of attorney) that is reasonably necessary in order for the requesting Party to exercise its rights under this Agreement in respect of a Tax Contest. Spinco shall assist Networks, and Networks shall assist Spinco, in taking any remedial actions that are necessary or desirable to minimize the effects of any adjustment made by a Tax Authority. The Indemnifying Party or Parties shall reimburse the Indemnified Party or Parties for any reasonable out-of-pocket costs and expenses incurred in complying with this Section 5.4.
SECTION 6. Tax Records .
6.1 Retention of Tax Records . Each of Networks and Spinco shall preserve, and shall cause their respective Subsidiaries to preserve, all Tax Records that are in their possession, and that could affect the liability of any member of the other Group for Taxes, for as long as the contents thereof may become material in the administration of any matter under applicable Tax Law, but in any event until the later of (x) the expiration of any applicable statute of limitations, as extended, and (y) seven years after the Distribution Date.
6.2 Access to Tax Records . Spinco shall make available, and cause its Subsidiaries to make available, to members of the Networks Group for inspection and copying the portion of any Tax Record in their possession that relates to a Pre-Distribution Period or Post-Distribution Period and which is reasonably necessary for the preparation, review, approval or filing of a Tax Return by a member of the Networks Group or any of their Affiliates or with respect to any Tax Contest with respect to such return. Networks shall make available, and cause its Subsidiaries to make available, to members of the Spinco Group for inspection and copying the portion of any Tax Record in their possession that relates to a Pre-Distribution Period and which is reasonably necessary for the preparation, review, approval or filing of a Tax Return by a member of the Spinco Group or any of their Affiliates or with respect to any Tax Contest with respect to such return.
 
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6.3 Confidentiality . Each party hereby agrees that it will hold, and shall use its reasonable best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence all records and information prepared and shared by and among the Parties in carrying out the intent of this Agreement, except as may otherwise be necessary in connection with the filing of Tax Returns or any administrative or judicial proceedings relating to Taxes or unless disclosure is compelled by a governmental authority. Information and documents of one Party (the “ Disclosing Party ”) shall not be deemed to be confidential for purposes of this Section 6.3 to the extent that such information or document (i) is previously known to or in the possession of the other Party or Parties (the “ Receiving Party ”) and is not otherwise subject to a requirement to be kept confidential, (ii) becomes publicly available by means other than unauthorized disclosure under this Agreement by the Receiving Party or (iii) is received from a third party without, to the knowledge of the Receiving Party after reasonable diligence, a duty of confidentiality owed to the Disclosing Party.
SECTION 7. Representations and Covenants .
7.1 Covenants of Networks and Spinco .
(a) Networks hereby covenants that, to the fullest extent permissible under U.S. federal income and state Tax Laws, it will, and will cause the members of the Networks Group to, treat the applicable Transactions in accordance with the Agreed Treatment. Spinco hereby covenants that, to the fullest extent permissible under U.S. federal income and state Tax Laws, it will, and will cause each Subsidiary of Spinco to, treat the applicable Transactions in accordance with the Agreed Treatment.
(b) Networks further covenants that, as of and following the date hereof, Networks shall not and shall cause the members of the Networks Group not to take any action that (or fail to take any action the omission of which) would be inconsistent with the applicable Transactions qualifying for the Agreed Treatment or that would preclude the applicable Transactions from qualifying for the Agreed Treatment.
(c) Spinco further covenants that, as of and following the date hereof, Spinco shall not and shall cause its Subsidiaries not to take any action that (or fail to take any action the omission of which) would be inconsistent with the applicable Transactions qualifying for the Agreed Treatment or that would preclude the applicable Transactions from qualifying for the Agreed Treatment.
7.2 Private Letter Ruling . Networks represents that it has provided Spinco with a copy of the Ruling and the Ruling Request submitted on or prior to the Distribution Date, and agrees to provide Spinco with copies of any additional documents submitted to the IRS relating to the Ruling Request and prepared after the Distribution Date prior to the submission of such documents to the IRS in connection with the Distribution.
 
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7.3 Covenants of Spinco .
(a) Without limiting the generality of the provisions of Section 7.1, Spinco, on behalf of itself and its Subsidiaries, agrees and covenants that Spinco and each of its Subsidiaries will not, directly or indirectly, during the Restriction Period, (i) take any action that would result in Spinco’s ceasing to be engaged in the active conduct of the Spinco Business with the result that Spinco is not engaged in the active conduct of a trade or business within the meaning of section 355(b)(2) of the Code, (ii) redeem or otherwise repurchase (directly or through an Affiliate of Spinco) any of Spinco’s outstanding stock, other than through stock purchases meeting the requirements of section 4.05(1)(b) of Revenue Procedure 96-30, 1996-1 C.B. 696 (but it being understood, for the avoidance of doubt, that no agreement or covenant under this Section 7.3(a)(ii) is being entered with respect to Compensatory Equity Net Share Settlements), (iii) amend the certificate of incorporation (or other organizational documents) of Spinco that would affect the relative voting rights of separate classes of Spinco’s stock or would convert one class of Spinco’s stock into another class of its stock, (iv) liquidate (within the meaning of section 331 of the Code and the Treasury Regulations promulgated thereunder) or partially liquidate Spinco, (v) merge Spinco with any other corporation (other than in a transaction that does not affect the relative shareholding of Spinco shareholders), sell or otherwise dispose of (other than in the ordinary course of business) the assets of Spinco and its Subsidiaries, or take any other action or actions if such merger, sale, other disposition or other action or actions in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, assets representing one-half or more of the asset value of the Spinco Group, or (vi) take any other action or actions that in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, stock of Spinco representing a Fifty-Percent Equity Interest in Spinco (as determined for purposes of section 355(e) of the Code), other than a Permitted Acquisition.
7.4 Covenants of Networks .
(a) Without limiting the generality of the provisions of Section 7.1, Networks, on behalf of itself and each member of the Networks Group, agrees and covenants that Networks and each member of the Networks Group will not, directly or indirectly, during the Restriction Period, (i) take any action that would result in Networks’ ceasing to be engaged in the active conduct of the Networks Business with the result that Networks is not engaged in the active conduct of a trade or business within the meaning of section 355(b)(2) of the Code, (ii) redeem or otherwise repurchase (directly or through an Affiliate of Networks) any of Networks’ outstanding stock, other than through stock purchases meeting the requirements of section 4.05(1)(b) of Revenue Procedure 96-30, 1996-1 C.B. 696 (but it being understood, for the avoidance of doubt, that no agreement or covenant under this Section 7.4(a)(ii) is being entered with respect to Compensatory Equity Net Share Settlements), (iii) amend the certificate of incorporation (or other organizational documents) of Networks that would affect the relative voting rights of separate classes of Networks’ stock or would convert one class of Networks’ stock into another class of its stock, (iv) liquidate (within the meaning of section 331 of the Code and the Treasury Regulations promulgated thereunder) or partially liquidate Networks, (v) merge Networks with any other corporation (other than in a transaction that does not affect the relative shareholding of Networks shareholders), sell or otherwise dispose of (other than in the ordinary course of business) the assets of Networks and its Subsidiaries, or take any other action or actions if such merger, sale, other disposition or other action or actions in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, assets representing one-half or more of the asset value of the Networks Group, or (vi) take any other action or actions that in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, stock of Networks representing a Fifty-Percent Equity Interest in Networks (as determined for purposes of section 355(e) of the Code).
 
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(b) Nothing in this Section 7 shall be construed to give Spinco or any Affiliates of Spinco any right to remedies other than indemnification for any increase in the actual Tax liability (and/or decrease in Tax Benefit) of Spinco or any Affiliate of Spinco that results from Networks Group’s failure to comply with the covenants and representations in this Section 7.
7.5 Exceptions .
(a) Exceptions with Respect to Spinco.
(i) Notwithstanding Section 7.3 above, Spinco or any of its Subsidiaries may take a Spinco Restricted Action if Networks consents in writing to such Spinco Restricted Action, or if Spinco provides Networks with Satisfactory Guidance concluding that such Spinco Restricted Action will not alter the Tax-Free Status of the Distribution in respect of Networks and Networks’ shareholders.
(ii) Spinco and each of its Subsidiaries agree that Networks and each Networks Affiliate are to have no liability for any Tax resulting from any Spinco Restricted Actions permitted pursuant to this Section 7.5(a) and, subject to Section 2.2, agree to indemnify and hold harmless each Networks Indemnified Party against any such Tax. Spinco shall bear all costs incurred by it, and all reasonable costs incurred by Networks, in connection with requesting and/or obtaining any Satisfactory Guidance.
(b) Exceptions with Respect to Networks.
(i) Notwithstanding Section 7.4(a) above, Networks or any of its Subsidiaries may take a Networks Restricted Action if Spinco consents in writing to such Networks Restricted Action, or if Networks provides Spinco with Satisfactory Guidance concluding that such Networks Restricted Action will not alter the Tax-Free Status of the Distribution in respect of Spinco and Spinco’s shareholders.
(ii) Networks and each of its Subsidiaries agree that Spinco and each Spinco Affiliate are to have no liability for any Tax resulting from any Networks Restricted Actions permitted pursuant to this Section 7.5(b) and, subject to Section 2.2, agree to indemnify and hold harmless each Spinco Indemnified Party against any such Tax. Networks shall bear all costs incurred by it, and all reasonable costs incurred by Spinco, in connection with requesting and/or obtaining any Satisfactory Guidance.
 
22




7.6 Injunctive Relief . For the avoidance of doubt, Networks shall have the right to seek injunctive relief to prevent Spinco or any of its Subsidiaries from taking any action that is not consistent with the covenants of the Spinco or any of its Subsidiaries under Section 7.1 or 7.3.
7.7 Further Assurances . For the avoidance of doubt, (i) neither Networks nor a member of the Networks Group shall take any action on the Distribution Date that would result in an increase of the actual Tax liability (and/or decrease of any Tax Benefit) of Spinco or any of its Subsidiaries, other than in the ordinary course of business, except for actions undertaken in connection with the Distribution, which actions are described in the Ruling Request or the Ruling, and (ii) neither Spinco nor any of its Subsidiaries shall take any action on the Distribution Date that would result in an increase of the actual Tax liability (and/or decrease of any Tax Benefit) of Networks or a member of the Networks Group, other than in the ordinary course of business, except for actions undertaken in connection with the Distribution, which actions are described in the Ruling Request or the Ruling.
SECTION 8. General Provisions .
8.1 Construction . This Agreement shall constitute the entire agreement (except insofar and to the extent that it specifically and expressly references the Distribution Agreement and any other Ancillary Agreement) between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.
8.2 Ancillary Agreements . This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Distribution Agreement or any other Ancillary Agreement.
8.3 Counterparts . This Agreement 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 such counterparts have been signed by each of the Parties and delivered to the other Party.
8.4 Notices . All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:
To Networks:
The Madison Square Garden Company (or, after the applicable name change, MSG Networks, Inc.)
11 Penn Plaza
New York, New York 10001
Attention: President
 
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with copy to:
MSG Spinco, Inc. (or, after the applicable name change, The Madison Square Garden Company)
Two Penn Plaza
New York, New York 10121
Attention: General Counsel
To Spinco:
MSG Spinco, Inc. (or, after the applicable name change, The Madison Square Garden Company)
Two Penn Plaza
New York, New York 10121
Attention: General Counsel
8.5 Amendments . This Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.
8.6 Assignment . This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided that, subject to compliance with Section 7, if applicable, either Party may assign this Agreement to a purchaser of all or substantially all of the properties and assets of such Party so long as such purchaser expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed.
8.7 Successors and Assigns . The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.
8.8 Change in Law . Any reference to a provision of the Code or any other Tax Law shall include a reference to any applicable successor provision or law.
8.9 Authorization, Etc . Each of the Parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of such Party and that the execution, delivery and performance of this Agreement by such Party does not contravene or conflict with any provision of law or the Party’s charter or bylaws or any agreement, instrument or order binding such Party.
8.10 Termination . This Agreement may be terminated at any time prior to the Distribution by and in the sole discretion of Networks without the approval of Spinco or the stockholders of Networks. In the event of such termination, no Party shall have any liability of any kind to any other Party or any other Person. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by the Parties.
 
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8.11 Subsidiaries . Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any entity that is contemplated to be a Subsidiary of such Party after the Distribution Date.
8.12 Third-Party Beneficiaries . Except with respect to Networks Indemnified Parties and Spinco Indemnified Parties, and in each case, only where and as indicated herein, this Agreement is solely for the benefit of the Parties and their respective Subsidiaries and Affiliates and should not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement. Notwithstanding anything in this Agreement to the contrary, this Agreement is not intended to confer upon any Spinco Indemnified Parties any rights or remedies against Spinco hereunder, and this Agreement is not intended to confer upon any Networks Indemnified Parties any rights or remedies against Networks hereunder.
8.13 Double Recovery . Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances.
8.14 Titles and Headings . Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
8.15 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.
8.16 Waiver of Jury Trial . The Parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby.
8.17 Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
8.18 No Strict Construction; Interpretation .
(a) Each of Networks and Spinco acknowledges that this Agreement has been prepared jointly by the Parties hereto and shall not be strictly construed against any Party hereto.
 
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(b) The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.
 
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by the respective officers as of the date set forth above.
 
THE MADISON SQUARE GARDEN COMPANY
(To be renamed MSG Networks Inc.)
By:   /s/ James L. Dolan
  Name:   James L. Dolan
  Title:   Executive Chairman
 
MSG SPINCO, INC.
(To be renamed The Madison Square Garden Company)
By:   /s/ David O’Connor
  Name:   David O’Connor
  Title:   President & Chief Executive Officer
[Signature Page to Tax Disaffiliation Agreement]



Exhibit 10.4
DISTRIBUTION AGREEMENT
BY AND BETWEEN
THE MADISON SQUARE GARDEN COMPANY
(TO BE RENAMED MSG NETWORKS INC.),
AND
MSG SPINCO, INC.
(TO BE RENAMED THE MADISON SQUARE GARDEN COMPANY)
Dated as of September 11, 2015




TABLE OF CONTENTS
 
        
Page
 
 
ARTICLE I
  
 
DEFINITIONS
  
Section 1.1
  General      2   
Section 1.2
  Reference; Interpretation      10   
 
ARTICLE II
  
 
DISTRIBUTION AND
  
 
CERTAIN COVENANTS
  
Section 2.1
  Distribution      10   
Section 2.2
  MSG Networks Determination      11   
Section 2.3
  Charter; Bylaws      11   
Section 2.4
  Directors      11   
Section 2.5
  Election of Officers      11   
Section 2.6
  Certain Licenses and Permits      11   
Section 2.7
  State Securities Laws      12   
Section 2.8
  Listing Application; Notice to NYSE      12   
Section 2.9
  Assignment of Agreements      12   
Section 2.10
  Removal of Certain Guarantees; Releases from Liabilities      13   
Section 2.11
  Corporate Names; Trademarks      14   
Section 2.12
  Ancillary Agreements      14   
Section 2.13
  Acknowledgment by Spinco      14   
Section 2.14
  Release      15   
Section 2.15
  Discharge of Liabilities      17   
Section 2.16
  Further Assurances      17   
 
ARTICLE III
  
 
INDEMNIFICATION
  
Section 3.1
  Indemnification by MSG Networks      18   
Section 3.2
  Indemnification by Spinco      18   
Section 3.3
  Procedures for Indemnification      19   
Section 3.4
  Indemnification Payments      21   
 
ARTICLE IV
  
 
ACCESS TO INFORMATION
  
Section 4.1
  Provision of Corporate Records      21   
Section 4.2
  Access to Information      22   
Section 4.3
  Witnesses; Documents and Cooperation in Actions      22   
Section 4.4
  Confidentiality      22   
 
i





        
Page
 
Section 4.5
  Privileged Matters      23   
Section 4.6
  Ownership of Information      25   
Section 4.7
  Cost of Providing Records and Information      25   
Section 4.8
  Retention of Records      26   
Section 4.9
  Other Agreements Providing for Exchange of Information      26   
Section 4.10
  Policies and Best Practices      26   
Section 4.11
  Compliance with Laws and Agreements      26   
 
ARTICLE V
  
 
MISCELLANEOUS
  
Section 5.1
  Complete Agreement; Construction      26   
Section 5.2
  Ancillary Agreements      26   
Section 5.3
  Counterparts      26   
Section 5.4
  Survival of Agreements      27   
Section 5.5
  Distribution Expenses      27   
Section 5.6
  Notices      27   
Section 5.7
  Waivers      28   
Section 5.8
  Amendments      28   
Section 5.9
  Assignment      28   
Section 5.10
  Successors and Assigns      28   
Section 5.11
  Termination      28   
Section 5.12
  Subsidiaries      28   
Section 5.13
  Third-Party Beneficiaries      29   
Section 5.14
  Title and Headings      29   
Section 5.15
  Schedules      29   
Section 5.16
  Governing Law      29   
Section 5.17
  Waiver of Jury Trial      29   
Section 5.18
  Specific Performance      29   
Section 5.19
  Severability      29   
Schedule A List of Spinco Subsidiaries
     A-1   
Schedule B Retained Claims Liabilities
     B-1   
Schedule C-1 Guarantees
     C-1   
Schedule C-2 Guarantees
     C-2   
Schedule D Ancillary Agreements
     D-1   
 
- ii -




DISTRIBUTION AGREEMENT
This Distribution Agreement (this “ Agreement ”), is dated as of September 11, 2015, by and between The Madison Square Garden Company (to be renamed MSG Networks Inc. after the Effective Time (as defined herein)), a Delaware corporation (“ MSG Networks ”), and MSG Spinco, Inc. (to be renamed The Madison Square Garden Company after the Effective Time), a Delaware corporation and an indirect wholly-owned subsidiary of MSG Networks (“ Spinco ” and, together with MSG Networks, the “ Parties ”).
WHEREAS, the Board of Directors of MSG Networks determined that it is in the best interests of MSG Networks and its stockholders to separate the businesses of Spinco, all as more fully described in Spinco’s registration statement on Form 10 (collectively, the “ Spinco Business ”), from MSG Networks’ other businesses on the terms and conditions set forth herein;
WHEREAS, MSG Networks, as the sole member of Regional MSGN Holdings LLC (“ RMH ”), authorized the distribution from RMH to MSG Networks of all of the Spinco Common Stock (the “ RMH Distribution ”) and has determined that the RMH Distribution is in the best interests of RMH and its member and has approved this Agreement;
WHEREAS, the Board of Directors of MSG Networks has authorized the distribution to the holders of the issued and outstanding shares of MSG Networks’ Class A Common Stock, par value $0.01 per share, of MSG Networks (“ MSG Networks Class A Common Stock ”) and MSG Networks’ Class B Common Stock, par value $0.01 per share, of MSG Networks (“ MSG Networks Class B Common Stock ” and, together with the MSG Networks Class A Common Stock, the “ MSG Networks Common Stock ”) as of the record date for the distribution of all the issued and outstanding shares of Class A common stock, par value $0.01 per share, of Spinco (the “ Spinco Class A Common Shares ”) and Spinco Class B common stock, par value $0.01 per share, of Spinco (the “ Spinco Class B Common Shares ”) (each such Spinco Class A Common Share and Spinco Class B Common Share is individually referred to as a “ Spinco Share ” and collectively referred to as the “ Spinco Common Stock ”), respectively, on the basis of one Spinco Class A Common Share for every three shares of MSG Networks Class A Common Stock and one Spinco Class B Common Share for every three shares of MSG Networks Class B Common Stock (the “ Distribution ”);
WHEREAS, the Boards of Directors of MSG Networks and Spinco have each determined that the Distribution and the other transactions contemplated by this Agreement and the Ancillary Agreements are in furtherance of and consistent with the Corporate Business Purposes and, as such, are in the best interests of their respective companies and stockholders or sole member, as applicable, and have approved this Agreement and each of the Ancillary Agreements; and
WHEREAS, the Parties have determined to set forth the principal corporate and other transactions required to effect the Distribution and to set forth other agreements that will govern certain other matters prior to and following the Distribution.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the parties hereby agree as follows:




ARTICLE I
DEFINITIONS
Section 1.1 General. Unless otherwise defined herein or unless the context otherwise requires, as used in this Agreement, the following terms shall have the following meanings:
“ Action ” shall mean any demand, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority or any arbitration or mediation tribunal.
“ Affiliate ” shall mean, when used with respect to any specified Person, a Person that directly or indirectly controls, is controlled by, or is under common control with such specified Person. As used herein, “ control ” means 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 or other interests, by contract or otherwise. Unless explicitly provided herein to the contrary, for purposes of this Agreement none of MSG Networks, Cablevision Systems Corporation or AMC Networks Inc., nor any of their respective Subsidiaries, shall be deemed to be an Affiliate of Spinco or any of its Subsidiaries. For the avoidance of doubt, the term “Affiliate” as it applies to Spinco shall include all of the Spinco Subsidiaries.
“ Agent ” shall have the meaning set forth in Section 2.1(a) of this Agreement.
“ Agreement ” shall have the meaning set forth in the preamble to this Agreement.
“ Ancillary Agreements ” shall mean all of the written agreements, instruments, understandings, assignments or other arrangements (other than this Agreement) entered into by the Parties or any other member of their respective Groups in connection with the transactions contemplated hereby, including the agreements set forth on Schedule D.
“ Applicable Rate ” shall mean the rate of interest per annum announced from time to time by JPMorgan Chase Bank, National Association, as its prime lending rate.
“ Business Day ” shall mean any day other than a Saturday, Sunday or a day on which commercial banking institutions located in The City of New York are authorized or obligated by law or executive order to close.
“ Commission ” shall mean the Securities and Exchange Commission.
“ Contribution Agreement ” shall mean the Contribution Agreement among MSG Networks, MSG Holdings, L.P. and Spinco, which has been or shall be entered into prior to or on the Distribution Date.
 
- 2 -




“Corporate Business Purposes” shall have the meaning set forth in the Tax Disaffiliation Agreement.
“ Distribution ” shall have the meaning set forth in the recitals to this Agreement.
“ Distribution Date ” shall mean such date as may be determined by the Board of Directors of MSG Networks or a committee of such Board of Directors, as the date as of which the Distribution shall be effected.
“ Distribution Record Date ” shall mean such date as may be determined by the Board of Directors of MSG Networks or a committee of such Board of Directors, as the record date for the Distribution.
“ Effective Time ” shall mean 11:59 p.m., New York City time, on the Distribution Date.
“ Employee Matters Agreement ” shall mean the Employee Matters Agreement by and between MSG Networks and Spinco, which agreement shall be entered into prior to or on the Distribution Date.
“ Environmental Laws ” shall mean any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, principles of common law, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions (including without limitation the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq .), whether now or hereafter in existence, relating to the environment, natural resources, human health or safety, endangered or threatened species of fish, wildlife and plants, or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment (including without limitation indoor or outdoor air, surface water, groundwater and surface or subsurface soils), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the investigation, cleanup or other remediation thereof.
“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated hereunder.
“ Governmental Authority ” shall mean any federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official, the New York Stock Exchange or other regulatory, administrative or governmental authority.
“ Group ” shall mean the MSG Networks Group or the Spinco Group.
 
- 3 -




“ Indemnifiable Losses ” shall mean any and all Liabilities, costs or expenses (including reasonable out-of-pocket attorneys’ fees and any and all out-of-pocket expenses) reasonably incurred in investigating, preparing for or defending against any Actions or potential Actions or in settling any Action or potential Action or in satisfying any judgment, fine or penalty rendered in or resulting from any Action.
“ Indemnifying Party ” shall have the meaning set forth in Section 3.3(a) of this Agreement.
“ Indemnitee ” shall have the meaning set forth in Section 3.3(a) of this Agreement.
“ Information Statement ” shall mean the Information Statement filed with the Commission as part of the Registration Statement and mailed to the holders of shares of MSG Networks Common Stock in connection with the Distribution, including any amendments or supplements thereto.
“ Law ” shall mean all laws, statutes and ordinances and all regulations, rules and other pronouncements of Governmental Authorities having the effect of law of the United States, any foreign country, or any domestic or foreign state, province, commonwealth, city, country, municipality, territory, protectorate, possession or similar instrumentality, or any Governmental Authority thereof.
“ Liabilities ” shall mean any and all debts, liabilities, obligations, responsibilities, Losses, damages (whether compensatory, punitive or treble), fines, penalties and sanctions, absolute or contingent, matured or unmatured, liquidated or unliquidated, foreseen or unforeseen, joint, several or individual, asserted or unasserted, accrued or unaccrued, known or unknown, whenever arising, including without limitation those arising under or in connection with any Law (including any Environmental Law), Action, threatened Action, order or consent decree of any Governmental Authority or any award of any arbitration tribunal, and those arising under any contract, guarantee, commitment or undertaking, whether sought to be imposed by a Governmental Authority, private party, or Party to this Agreement, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, and including any costs, expenses, interest, attorneys’ fees, disbursement and expense of counsel, expert and consulting fees and costs related thereto or to the investigation or defense thereof.
“ Losses ” shall mean all losses, damages, claims, demands, judgments or settlements of any nature or kind, known or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated, including all reasonable costs and expenses (legal, accounting or otherwise as such costs are incurred) relating thereto, suffered by an Indemnitee.
“ MSG Networks ” shall have the meaning set forth in the preamble to this Agreement.
 
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“ MSG Networks Assignee ” shall have the meaning set forth in Section 2.9(a) of this Agreement.
“ MSG Networks Assignor ” shall have the meaning set forth in Section 2.9(a) of this Agreement.
“ MSG Networks Assumed Contract Liabilities ” shall have the meaning set forth in Section 2.9(b) of this Agreement.
“ MSG Networks Business ” shall mean each and every business conducted at any time by MSG Networks or any Subsidiary controlled by MSG Networks, except the Spinco Business.
“ MSG Networks Class A Common Stock ” shall have the meaning set forth in the recitals to this Agreement.
“ MSG Networks Class B Common Stock ” shall have the meaning set forth in the recitals to this Agreement.
“ MSG Networks Common Stock ” shall have the meaning set forth in the recitals to this Agreement.
“ MSG Networks Group ” means MSG Networks and each Person (other than any member of the Spinco Group) that is a Subsidiary of MSG Networks immediately after the Distribution Date.
“ MSG Networks Indemnitee ” shall mean:
(i) MSG Networks and each Affiliate thereof after giving effect to the Distribution; and
(ii) each of the respective Representatives of any of the entities described in the immediately preceding clause (i) and each of the heirs, executors, successors and assigns of any of such Representatives, except in the case of clauses (i) and (ii), the Spinco Indemnitees; provided , however, that a Person who was a Representative of MSG Networks or an Affiliate thereof may be a MSG Networks Indemnitee in that capacity notwithstanding that such Person may also be a Spinco Indemnitee.
“ MSG Networks Liabilities ” shall mean:
(i) any and all Liabilities (other than Taxes that are specifically covered by the Tax Disaffiliation Agreement and other Liabilities that are specifically covered by the other Ancillary Agreements and not expressly made subject to this Agreement by the express terms of the Ancillary Agreement) that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be assumed by MSG Networks or any member of the MSG Networks Group, and all Liabilities of any member of the MSG Networks Group under this Agreement;
 
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(ii) all Liabilities (other than Taxes that are specifically covered by the Tax Disaffiliation Agreement and other Liabilities that are specifically covered by the other Ancillary Agreements and not expressly made subject to this Agreement by the express terms of the Ancillary Agreement), if and to the extent relating to, arising out of or resulting from:
(A) the ownership or operation of the MSG Networks Business (including any discontinued business or any business which has been sold or transferred), as conducted at any time prior to, on or after the Distribution Date; or
(B) the ownership or operation of any business conducted by MSG Networks or any MSG Networks Subsidiary at any time after the Distribution Date; and
(iii) any Retained Claims Liabilities;
(iv) all MSG Networks Retained Contract Liabilities; and
(v) all MSG Networks Assumed Contract Liabilities.
Notwithstanding the foregoing, the MSG Networks Liabilities shall not include: (x) any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be retained or assumed by Spinco or any member of the Spinco Group; or (y) any agreements and obligations of any member of the Spinco Group under this Agreement or any of the Ancillary Agreements.
“ MSG Networks Releasee ” shall have the meaning set forth in Section 2.14(b) of this Agreement.
“ MSG Networks Releasor ” shall have the meaning set forth in Section 2.14(b) of this Agreement.
“ MSG Networks Retained Contract Liability ” shall have the meaning set forth in Section 2.9(a) of this Agreement.
“ MSG Networks Subsidiaries ” shall mean all of the Subsidiaries of MSG Networks other than Spinco and the Spinco Subsidiaries.
“ NBA Agreement and Undertaking ” shall mean the Agreement and Undertaking entered into by Spinco and the other parties named therein in connection with the approval by the National Basketball Association of the transactions contemplated hereby.
 
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“ NHL Consent Agreement ” shall mean the Consent Agreement, among Spinco, the National Hockey League and the other parties named therein, entered into in connection with the approval by the National Hockey League of the transactions contemplated hereby.
“ NYSE ” shall mean the New York Stock Exchange LLC.
“ Outside Notice Date ” shall have the meaning set forth in Section 3.3(a).
“ Parties ” shall have the meaning set forth in the preamble to this Agreement.
“ Person ” shall mean any natural person, corporation, business trust, limited liability company, joint venture, association, company, partnership or government, or any agency or political subdivision thereof.
“ Records ” shall have the meaning set forth in Section 4.1(a) of this Agreement.
“ Registration Rights Agreements ” shall mean the two Registration Rights Agreements by and among Spinco and various holders of Spinco Class B Common Stock named therein, each of which agreements shall be entered into prior to or on the Distribution Date.
“ Registration Statement ” shall mean the registration statement on Form 10 filed with the Commission to effect the registration of the Spinco Class A Common Shares pursuant to the Exchange Act.
“ Representative ” shall mean, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.
“ Retained Claims Liabilities ” shall mean the Liabilities, if any, described in Schedule B.
“ RMH ” shall have the meaning set forth in the recitals to this Agreement.
“ RMH Distribution ” shall have the meaning set forth in the recitals to this Agreement.
“ Spinco ” shall have the meaning set forth in the preamble to this Agreement.
“ Spinco Assignee ” shall have the meaning set forth in Section 2.9(b) of this Agreement.
“ Spinco Assignor ” shall have the meaning set forth in Section 2.9(b) of this Agreement.
 
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“ Spinco Assumed Contract Liabilities ” shall have the meaning set forth in Section 2.9(a) of this Agreement.
“ Spinco Business ” shall have the meaning set forth in the recitals to this Agreement.
“ Spinco Class A Common Shares ” shall have the meaning set forth in the recitals to this Agreement.
“ Spinco Class B Common Shares ” shall have the meaning set forth in the recitals to this Agreement.
“ Spinco Common Stock ” shall have the meaning set forth in the recitals to this Agreement.
“ Spinco Group ” means Spinco and each Person that is a Subsidiary of Spinco immediately after the Distribution Date.
“ Spinco Indemnitees ” shall mean:
(i) Spinco and each Affiliate thereof after giving effect to the Distribution; and
(ii) each of the respective Representatives of any of the entities described in the immediately preceding clause (i) and each of the heirs, executors, successors and assigns of any of such Representatives.
“ Spinco Liabilities ” shall mean:
(i) any and all Liabilities (other than Taxes that are specifically covered by the Tax Disaffiliation Agreement and other Liabilities that are specifically covered by the other Ancillary Agreements and not expressly made subject to this Agreement by the express terms of any the Ancillary Agreement) that are expressly contemplated by this Agreement or any Ancillary Agreements (or the Schedules hereto or thereto) as Liabilities to be assumed by Spinco or any member of the Spinco Group, and all Liabilities of any member of the Spinco Group under this Agreement;
(ii) all Liabilities (other than Taxes that are specifically covered by the Tax Disaffiliation Agreement and other Liabilities that are specifically covered by the other Ancillary Agreements and not expressly made subject to this Agreement by the express terms of the Ancillary Agreement), if and to the extent relating to, arising out of or resulting from:
(A) the ownership or operation of the Spinco Business (including any discontinued business or any business which has been sold or transferred), as conducted at any time prior to, on or after the Distribution Date; or
 
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(B) the ownership or operation of any business conducted by Spinco or any Spinco Subsidiary at any time after the Distribution Date;
(iii) all Spinco Assumed Contract Liabilities; and
(iv) all Spinco Retained Contract Liabilities.
Notwithstanding the foregoing, the Spinco Liabilities shall not include: (x) any Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be retained or assumed by MSG Networks or any member of the MSG Networks Group; (y) any agreements and obligations of any member of the MSG Networks Group under this Agreement or any of the Ancillary Agreements and (z) any Retained Claims Liabilities.
“ Spinco Releasee ” shall have the meaning set forth in Section 2.14(a) of this Agreement.
“ Spinco Releasor ” shall have the meaning set forth in Section 2.14(a) of this Agreement.
“ Spinco Retained Contract Liabilities ” shall have the meaning set forth in Section 2.9(b) of this Agreement.
“ Spinco Share ” shall have the meaning set forth in the recitals to this Agreement.
“ Spinco Subsidiaries ” shall mean all of the Subsidiaries listed on Schedule A.
“ Subleases ” shall mean the subleases and leases, if any, by and between members of the MSG Networks Group and members of the Spinco Group, which subleases and leases shall be entered into prior to the Distribution Date in such form as is agreed to by MSG Networks and Spinco.
“ Subsidiary ” shall mean with respect to any specified Person, any corporation or other legal entity of which such Person or any of its Subsidiaries controls or owns, directly or indirectly, more than 50% of the stock or other equity interests entitled to vote on the election of members to the board of directors or similar governing body or, in the case of a Person with no governing body, more than 50% of the equity interests. As to Spinco, the term “Subsidiary” shall also include the 50% or less owned entities listed on Schedule A.
“ Tax ” shall have the meaning set forth in the Tax Disaffiliation Agreement.
“ Tax Disaffiliation Agreement ” shall mean the Tax Disaffiliation Agreement by and between MSG Networks and Spinco, which agreement shall be entered into prior to or on the Distribution Date.
 
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“ Third Party ” shall mean any Person who is not a Party to this Agreement.
“ Third-Party Claim ” shall have the meaning set forth in Section 3.3(a) of this Agreement.
“ Transfers ” shall mean the direct and indirect transfers of assets and assignment of agreements from MSG Networks to Spinco which resulted in Spinco owning, directly or indirectly, the Spinco Business.
“ Transition Services Agreement ” shall mean the Transition Services Agreement by and between MSG Networks and Spinco, which agreement shall be entered into prior to or on the Distribution Date.
“ WNBA Agreement and Undertaking ” shall mean the Agreement and Undertaking entered into by Spinco and the other parties named therein in connection with the approval by the Women’s National Basketball Association of the transactions contemplated hereby.
Section 1.2 Reference; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. The words “ include ,” “ includes ” and “ including ” when used in this Agreement shall be deemed to be followed by the phrase “ without limitation .” Unless the context otherwise requires, references in this Agreement to Articles, Sections and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this Agreement. Unless the context otherwise requires, the words “ hereof ”, “ hereby ” and “ herein ” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. Neither this Agreement nor any Ancillary Agreement shall be construed against either Party as the principal draftsperson hereof or thereof.
ARTICLE II
DISTRIBUTION AND
CERTAIN COVENANTS
Section 2.1 Distribution.  (a) On or prior to the Distribution Date, MSG Networks shall deliver to MSG Networks’ stock transfer agent (the “ Agent ”) a single stock certificate representing all of the issued and outstanding Spinco Class A Common Shares and a single stock certificate representing all of the issued and outstanding Spinco Class B Common Shares, in each case, endorsed by MSG Networks in blank, for the benefit of the holders of MSG Networks Common Stock, and MSG Networks shall instruct the Agent to distribute, on or as soon as practicable following the Distribution Date, the Spinco Class A Common Shares to holders of record of shares of MSG Networks Class A Common Stock on the Distribution Record Date and the Spinco Class B Common Shares to holders of record of shares of MSG Networks Class B Common Stock on the Distribution Record Date, all as further contemplated by the Information Statement and hereby. Spinco shall provide any share certificates that the Agent shall require in order to effect the Distribution. The Distribution shall be effective at 11:59 P.M., New York City time, on the Distribution Date.
(b) The Spinco Shares issued in the Distribution are intended to be distributed only pursuant to a book entry system. MSG Networks shall instruct the Agent to deliver the Spinco Shares previously delivered to the Agent to a depositary and to mail
 
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to each holder of record of MSG Networks Common Stock on the Distribution Record Date, a statement of the Spinco Shares credited to such holder’s account. If following the Distribution a holder of Spinco Common Stock requests physical certificates instead of participating in the book entry system, the Agent shall issue certificates for such shares. In lieu of fractional shares, cash shall be given to holders otherwise entitled to such fractional shares of MSG Networks Common Stock on the Distribution Date. As soon as practicable following the Distribution Date, the Agent shall (i) aggregate all fractional Spinco Class A Common Shares into whole Spinco Class A Common Shares and (ii) aggregate all fractional Spinco Class B Common Shares into whole Spinco Class B Common Shares, and convert the whole Spinco Class B Common Shares into whole Spinco Class A Common Shares, and (iii) sell the whole Spinco Class A Common Shares in the open market at then prevailing prices and shall distribute to each such holder such holder’s ratable share of the proceeds of such sale, net of brokerage fees incurred in such sales.
Section 2.2 MSG Networks Determination. MSG Networks shall have the sole and absolute discretion to determine whether to proceed with all or part of the Distribution and all terms of the Distribution, including the form, structure and terms of any transaction(s) and/or offering(s) to effect the Distribution and the timing of and conditions to the consummation of the Distribution. Spinco shall cooperate with MSG Networks in all respects to accomplish the Distribution and shall, at MSG Networks’ direction, promptly take any and all actions necessary or desirable to effect the Distribution. MSG Networks shall select any investment banker(s) and manager(s) in connection with the Distribution, as well as any financial printer, solicitation and/or exchange agent and outside counsel for MSG Networks, which shall include Sullivan & Cromwell LLP. Each of MSG Networks and Spinco acknowledges that it has been afforded the opportunity to seek the advice and assistance of its own separate counsel in connection with the negotiation and preparation of this Agreement and the Ancillary Agreements.
Section 2.3 Charter; Bylaws. On or prior to the Distribution Date, Spinco and MSG Networks shall have taken all necessary actions to provide for the adoption of the form of Amended and Restated Certificate of Incorporation and Amended By-laws in substantially the form filed by Spinco with the Commission as exhibits to the Registration Statement.
Section 2.4 Directors. On or prior to the Distribution Date, MSG Networks and Spinco shall have taken all necessary action to cause the Board of Directors of Spinco to consist of the individuals identified in the Information Statement as directors of Spinco as of the Effective Time.
Section 2.5 Election of Officers. On or prior to the Distribution Date, Spinco shall take all actions necessary and desirable so that as of the Distribution Date the officers of Spinco will be as set forth in the Information Statement.
Section 2.6 Certain Licenses and Permits. On or prior to the Distribution Date or as soon as reasonably practicable thereafter, MSG Networks shall use its commercially reasonable best efforts to transfer or cause to be transferred any transferable licenses,
 
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permits and authorizations issued by any Governmental Authority which relate solely to the Spinco Business but which are held in the name of any member of the MSG Networks Group, or in the name of any employee, officer, director, stockholder or agent of any such member, or otherwise, on behalf of a member of the Spinco Group to the appropriate member of the Spinco Group.
Section 2.7 State Securities Laws. Prior to the Distribution Date, MSG Networks and Spinco shall take all such action as may be necessary or appropriate under the securities or blue sky laws of states or other political subdivisions of the United States in order to effect the Distribution.
Section 2.8 Listing Application; Notice to NYSE. (a) Prior to the Distribution Date, MSG Networks and Spinco shall prepare and file with the NYSE a listing application and related documents and shall take all such other actions with respect thereto as shall be necessary or desirable in order to cause NYSE to list on or prior to the Distribution Date, subject to official notice of issuance, the Spinco Class A Common Shares.
(b) Prior to the Distribution, MSG Networks shall, to the extent possible, give NYSE not less than ten days’ advance notice of the Distribution Record Date in compliance with Rule 10b-17 under the Exchange Act.
Section 2.9 Assignment of Agreements.
(a) In connection with the Transfers, MSG Networks and/or its Affiliates shall enter into assignment agreements pursuant to which rights and obligations of MSG Networks and/or its Affiliates (in each case, an “ MSG Networks Assignor ”) will be assigned to, and accepted and assumed by Spinco and/or its Affiliates (in each case a “ Spinco Assignee ”), in each case effective at or prior to the Effective Time. Unless otherwise agreed in the relevant assignment agreement, the relevant MSG Networks Assignor shall be entitled to the benefits of and be responsible for all Liabilities under each such agreement that relate to all periods of time prior to the Effective Time (each such Liability, an “ MSG Networks Retained Contract Liability ”) and the relevant Spinco Assignee shall be entitled to the benefits of and be responsible for all Liabilities relating to all periods of time after the Effective Time (each such Liability, a “Spinco Assumed Contract Liability ”).
(b) In connection with the Transfers, Spinco and/or its Affiliates shall enter into assignment agreements pursuant to which rights and obligations of Spinco and/or its Affiliates (in each case, an “ Spinco Assignor ”) will be assigned to, and accepted and assumed by MSG Networks and/or its Affiliates (in each case an “ MSG Networks Assignee ”), in each case effective as of the Effective Time. Unless otherwise agreed in the relevant assignment agreement, the relevant Spinco Assignor shall be entitled to the benefits of and be responsible for all Liabilities under each such agreement that relate to all periods of time prior to the Effective Time (each such Liability, a “ Spinco Retained Contract Liability ”) and the relevant MSG Networks Assignee shall be entitled to the benefits and responsible for all Liabilities relating to all periods of time after the Effective Time (each such Liability, an “ MSG Networks Assumed Contract Liability ”).
 
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Section 2.10 Removal of Certain Guarantees; Releases from Liabilities.
(a) Except as otherwise specified in any Ancillary Agreement, (i) Spinco shall use its commercially reasonable efforts to have, on or prior to the Distribution Date, or as soon as practicable thereafter, all members of the MSG Networks Group removed as guarantors of or obligors for any Liability of Spinco, including in respect of those guarantees, if any, set forth on Schedule C-1 of this Agreement, and (ii) MSG Networks shall use its commercially reasonable efforts to have, on or prior to the Distribution Date, or as soon as practicable thereafter, all members of the Spinco Group removed as guarantors of or obligors for any Liability of MSG Networks, including in respect of those guarantees, if any, set forth on Schedule C-2 of this Agreement.
(b) If Spinco or MSG Networks, as the case may be, is unable to obtain, or to cause to be obtained, any such required removal as set forth in Section 2.10(a), the applicable guarantor or obligor shall continue to be bound as such and, unless not permitted by Law or the terms thereof, the relevant beneficiary shall or shall cause one of its Subsidiaries, as agent or subcontractor for such guarantor or obligor to pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder from and after the Effective Time.
(c) If (i) Spinco is unable to obtain, or to cause to be obtained, any such required removal as set forth in Section 2.10(a), or (ii) Spinco Liabilities arise from and after the Effective Time but before a member of the MSG Networks Group which is a guarantor or obligor with reference to any such Spinco Liability is removed pursuant to Section 2.10(a), then such guarantor or obligor shall be indemnified by Spinco for all Liabilities incurred by it in its capacity as guarantor or obligor. Without limiting the foregoing, Spinco shall, or shall cause a member of the Spinco Group to, reimburse any such member of the MSG Networks Group which is a guarantor or obligor as soon as practicable (but in no event later than 30 days) following delivery by MSG Networks to Spinco of notice of a payment made pursuant to this Section 2.10 in respect of Spinco Liabilities.
(d) If (i) MSG Networks is unable to obtain, or to cause to be obtained, any such required removal as set forth in Section 2.10(a), or (ii) MSG Networks Liabilities arise from and after the Effective Time but before a member of the Spinco Group which is a guarantor or obligor with reference to any such MSG Networks Liability is removed pursuant to Section 2.10(a), then such guarantor or obligor shall be indemnified by MSG Networks for all Liabilities incurred by it in its capacity as guarantor or obligor. Without limiting the foregoing, MSG Networks, shall, or shall cause a member of the MSG Networks Group to, reimburse any such member of the Spinco Group which is a guarantor or obligor as soon as practicable (but in no event later than 30 days) following delivery by Spinco to MSG Networks of notice of a payment made pursuant to this Section 2.10 in respect of MSG Networks Liabilities.
 
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(e) In the event that at any time before or after the Distribution Date MSG Networks identifies any letters of credit, interest rate or foreign exchange contracts, surety bonds or other contracts (excluding guarantees) that relate primarily to the Spinco Business but for which a member of the MSG Networks Group has contingent, secondary, joint, several or other Liability of any nature whatsoever, Spinco shall, at its expense, take such actions and enter into such agreements and arrangements as MSG Networks may reasonably request to effect the release or substitution of MSG Networks (or a member of the MSG Networks Group).
(f) In the event that at any time before or after the Distribution Date Spinco identifies any letters of credit, interest rate or foreign exchange contracts, surety bonds or other contracts (excluding guarantees) that relate primarily to the MSG Networks Business but for which a member of the Spinco Group has contingent, secondary, joint, several or other Liability of any nature whatsoever, MSG Networks shall, at its expense, take such actions and enter into such agreements and arrangements as Spinco may reasonably request to effect the release or substitution of Spinco (or a member of the Spinco Group).
(g) The Parties shall use commercially reasonable efforts to obtain, or cause to be obtained, any consent, substitution or amendment required to novate or assign all Spinco Liabilities of any nature whatsoever transferred under this Agreement or an Ancillary Agreement, or to obtain in writing the unconditional release of the assignor so that in each such case, MSG Networks (or an appropriate member of the MSG Networks Group) shall be solely responsible for the MSG Networks Liabilities and Spinco (or an appropriate member of the Spinco Group) shall be solely responsible for the Spinco Liabilities; provided , however, that no Party shall be obligated to pay any consideration therefore (except for filing fees or other similar charges) to any Third Party from whom such consent, substitution, amendment or release is requested. Whether or not any such consent, substitution, amendment or release is obtained, nothing in this Section 2.10 shall in any way limit the obligations of the parties under Article III.
Section 2.11 Corporate Names; Trademarks. All agreements between the Parties and their respective Affiliates relating to intellectual property matters are set forth in a separate MSG Trademark Agreement between the Parties, dated the date hereof, and this Agreement shall in no way modify or supersede the MSG Trademark Agreement.
Section 2.12 Ancillary Agreements. Prior to the Distribution Date, each of MSG Networks and Spinco shall enter into, and/or (where applicable) shall cause members of their respective Groups to enter into, the Ancillary Agreements and any other agreements in respect of the Distribution reasonably necessary or appropriate in connection with the transactions contemplated hereby and thereby.
Section 2.13 Acknowledgment by Spinco. Spinco, on behalf of itself and all members of the Spinco Group, acknowledges, understands and agrees that, except as may be expressly set forth herein or in any Ancillary Agreement, (a) no member of the MSG Networks Group or any other Person has, in this Agreement or in any other agreement or document, or otherwise made any representation or warranty of any kind whatsoever, express or implied, to
 
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Spinco or any member of the Spinco Group or to any director, officer, employee or agent thereof in any way with respect to any of the transactions contemplated hereby or the business, assets, agreements, condition or prospects (financial or otherwise) of, or any other matter involving, the assets, agreements, Liabilities or businesses of MSG Networks, any member of the MSG Networks Group, Spinco or any member of the Spinco Group, any assets that are transferred, any agreements that are assigned, any Spinco Liabilities or the Spinco Business, (b) Spinco and each member of the Spinco Group has taken all of the assets that are transferred, any agreements that are assigned, the Spinco Business and Spinco Liabilities on an “as is, where is” basis, and all implied warranties of merchantability, fitness for a specific purpose or otherwise have been and are hereby expressly disclaimed, and (c) none of MSG Networks or any members of the MSG Networks Group or any other person has made or makes any representation or warranty with respect to the Distribution or the entering into of this Agreement or the Ancillary Agreements or the transactions contemplated hereby and thereby. Except as expressly set forth herein or in any other Ancillary Agreement, Spinco and each member of the Spinco Group shall bear the economic and legal risk that the Spinco Assets shall prove to be insufficient or that the title of any member of the Spinco Group to any Spinco Assets shall be other than good and marketable and free from encumbrances. The provisions of the Contribution Agreement and any related assignment agreement or other related documents are expressly subject to this Section 2.13 and to Section 2.14 hereof.
Section 2.14 Release.
(a) Spinco agrees that for itself and for its predecessors, Subsidiaries, departments, divisions and sections and for their successors, Affiliates, heirs, assigns, executors, administrators, partners, officers, directors, shareholders, employees, attorneys and agents (individually, each a “ Spinco Releasor ” and collectively, the “ Spinco Releasors ”), in consideration of the making by MSG Networks of the Transfers, release, waive and forever discharge MSG Networks and its predecessors, Subsidiaries, departments, divisions, sections, successors, Affiliates, heirs, assigns, partners, officers, directors, shareholders, employees, attorneys and agents (individually, each a “ Spinco Releasee ” and collectively, the “ Spinco Releasees ”) from, and shall, in addition to other obligations under Article III, indemnify and hold harmless all such persons against and from, all Liabilities of every name and nature, in law or equity, known or unknown, which against any Spinco Releasee, a Spinco Releasor ever had, now has or hereafter can, shall or may have by reason of any matter, act, omission, conduct, transaction or occurrence from the beginning of the world up to and including the Distribution Date for, upon, by reason of, asserted in or arising out of, or related to:
 
  •   The management of the business and affairs of Spinco (and its predecessors, Subsidiaries and Affiliates) and the Spinco Business on or prior to the Distribution Date;
 
  •   The terms of this Agreement, the Ancillary Agreements, the Distribution, the Certificate of Incorporation or the By-Laws of Spinco; and
 
  •   Any other decision that may have been made, or any action taken, relating to Spinco (and its predecessors, Subsidiaries and Affiliates), the Spinco Business or the Distribution.
 
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The term “Spinco Releasee” is expressly intended to include any person who served as an incorporator, director, officer, employee, agent or attorney of Spinco on or prior to the Distribution Date at the request of MSG Networks. Each Spinco Releasor expressly covenants and agrees never to institute, or participate (including as a member of a class) in, any Action against any Spinco Releasee, in any court or forum, directly or indirectly, regarding or relating to the matters released through this Release, and further covenants and agrees that this Release is a bar to any such Action. For the avoidance of doubt, the purpose of this Section 2.14(a) is to make clear the intent of the Parties that, following the Distribution Date, the only Liability that any Spinco Releasee shall have to any Spinco Releasor shall be its obligation to perform its obligations under and pursuant to the terms of this Agreement, the Ancillary Agreements and any other agreements to which the Spinco Releasee and the Spinco Releasor are parties and there shall be no Liability in respect of any event, occurrence, action or inaction on or prior to the Distribution Date. This Release shall not extend to any liabilities owed by a Spinco Releasee to a Spinco Releasor in the Spinco Releasor’s capacity as a director, officer, employee or other Representative or shareholder of Spinco Releasee nor shall it release any Liabilities or obligations under this Agreement or any Ancillary Agreements or any other agreements to which the Spinco Releasee and the Spinco Releasor are parties.
(b) MSG Networks agrees that for itself and for its predecessors, Subsidiaries, departments, divisions and sections and for their successors, Affiliates, heirs, assigns, executors, administrators, partners, officers, directors, shareholders, employees, attorneys and agents (individually, each an “ MSG Networks Releasor ” and collectively, the “ MSG Networks Releasors ”), in consideration of the entry by Spinco into this Agreement and the Ancillary Agreements, release, waive and forever discharge Spinco and its predecessors, Subsidiaries, departments, divisions, sections, successors, Affiliates, heirs, assigns, partners, officers, directors, shareholders, employees, attorneys and agents (individually, each an “ MSG Networks Releasee ” and collectively, the “ MSG Networks Releasees ”) from, and shall, in addition to other obligations under Article III, indemnify and hold harmless all such persons against and from, all Liabilities of every name and nature, in law or equity, known or unknown, which against any MSG Networks Releasee, an MSG Networks Releasor ever had, now has or hereafter can, shall or may have by reason of any matter, act, omission, conduct, transaction or occurrence from the beginning of the world up to and including the Distribution Date for, upon, by reason of, asserted in or arising out of, or related to:
 
  •   The management of the business and affairs of MSG Networks (and its predecessors, Subsidiaries and Affiliates) and the MSG Networks Business on or prior to the Distribution Date;
 
  •   The terms of this Agreement, the Ancillary Agreements, the Distribution the Certificate of Incorporation or the By-Laws of MSG Networks; and
 
  •   Any other decision that may have been made, or any action taken, relating to MSG Networks (and its predecessors, Subsidiaries and Affiliates), the MSG Networks Business or the Distribution.
 
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The term “MSG Networks Releasee” is expressly intended to include any person who served as an incorporator, director, officer, employee, agent or attorney of MSG Networks on or prior to the Distribution Date. Each MSG Networks Releasor expressly covenants and agrees never to institute, or participate (including as a member of a class) in, any Action against any MSG Networks Releasee, in any court or forum, directly or indirectly, regarding or relating to the matters released through this Release, and further covenants and agrees that this Release is a bar to any such Action. For the avoidance of doubt, the purpose of this Section 2.14(b) is to make clear the intent of the Parties that, following the Distribution Date, the only Liability that any MSG Networks Releasee shall have to any MSG Networks Releasor shall be its obligation to perform its obligations under and pursuant to the terms of this Agreement, the Ancillary Agreements and any other agreements to which the MSG Networks Releasee and the MSG Networks Releasor are parties and there shall be no Liability in respect of any event, occurrence, action or inaction on or prior to the Distribution Date. This Release shall not extend to any liabilities owed by an MSG Networks Releasee to an MSG Networks Releasor in the MSG Networks Releasor’s capacity as a director, officer, employee or other Representative or shareholder of MSG Networks Releasee nor shall it release any Liabilities or obligations under this Agreement or any Ancillary Agreements or any other agreements to which the MSG Networks Releasee and the MSG Networks Releasor are parties.
Section 2.15 Discharge of Liabilities . Except as otherwise expressly provided herein or in any of the Ancillary Agreements:
(a) From and after the Effective Time, (i) MSG Networks shall, and shall cause each member of the MSG Networks Group to, assume, pay, perform and discharge all MSG Networks Liabilities in the ordinary course of business, consistent with past practice, and (ii) Spinco shall, and shall cause each member of the Spinco Group, to assume, pay, perform and discharge all Spinco Liabilities in the ordinary course of business, consistent with past practice. The agreements in this Section 2.15 are made by each Party for the sole and exclusive benefit of the other Party. To the extent reasonably requested to do so by the other Party, each Party agrees to execute and deliver such documents, in a form reasonably satisfactory to such Party, as may be reasonably necessary to evidence the assumption of any Liabilities hereunder.
(b) All intercompany trade, accounts receivable and accounts payable between any member of one Group and any member of another Group in existence at the Effective Time shall be paid and performed in accordance with their terms.
Section 2.16 Further Assurances.
(a) If at any time after the Effective Time any further action is reasonably necessary or desirable to carry out the purposes of this Agreement and the Ancillary Agreements, the proper officers of each Party shall take all such necessary action. Without limiting the foregoing, each Party shall use its commercially reasonable efforts promptly to obtain all consents and approvals, to enter into all agreements and to make all filings and applications that may be required for the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements, including all applicable filings with, and approvals from, any Governmental Authority.
(b) Without limiting any provision of this Section 2.16, MSG Networks shall, at any time requested by Spinco, cooperate in the submission of joint or separate requests to the Commission to extend the confidential treatment previously granted to MSG Networks by the Commission with respect to the lease documentation for Radio City Music Hall pursuant to orders CF# 24199, dated January 15, 2010, and/or CF# 26449, dated April 29, 2011.
 
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ARTICLE III
INDEMNIFICATION
Section 3.1 Indemnification by MSG Networks. Except as otherwise specifically set forth in any provision of this Agreement from and after the Distribution Date, MSG Networks shall indemnify, defend and hold harmless the Spinco Indemnitees from and against any and all Indemnifiable Losses of the Spinco Indemnitees to the extent arising out of, by reason of or otherwise in connection with (i) the MSG Networks Liabilities or alleged MSG Networks Liabilities, including any breach by any member of the MSG Networks Group of any provision of this Section 3.1; (ii) any breach by any member of the MSG Networks Group of this Agreement; (iii) any untrue statement or alleged untrue statement of a material fact in the Registration Statement or the Information Statement or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent relating to the MSG Networks Group; and (iv) any indemnification obligation that Spinco may have to (x) the National Basketball Association pursuant to the NBA Agreement and Undertaking, (y) the National Hockey League pursuant to the NHL Consent Agreement or (z) the Women’s National Basketball Association pursuant to the WNBA Agreement and Undertaking, in each case as a result of any act or omission by any member of the MSG Networks Group. This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements unless such Ancillary Agreement expressly provides that this Agreement applies to any matter in such Ancillary Agreement.
Section 3.2 Indemnification by Spinco. Except as otherwise specifically set forth in any provision of this Agreement, from and after the Distribution Date, Spinco shall indemnify, defend and hold harmless the MSG Networks Indemnitees from and against any and all Indemnifiable Losses of the MSG Networks Indemnitees to the extent arising out of, by reason of or otherwise in connection with (i) the Spinco Liabilities or alleged Spinco Liabilities; (ii) any breach by any member of the Spinco Group of this Agreement; and (iii) any untrue statement or alleged untrue statement of a material fact in the Registration Statement or the Information Statement or in any registration statement, prospectus or listing application with a securities exchange filed by Spinco in connection with the Distribution, or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided , however, that this clause (iii) shall not apply to any Liability that is covered by Section 3.1(iii). This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements unless such Ancillary Agreement expressly provides that this Agreement applies to any matter in such Ancillary Agreement.
 
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Section 3.3 Procedures for Indemnification.
(a) If a claim or demand is made by a Third Party against a Spinco Indemnitee or a MSG Networks Indemnitee (each, an “ Indemnitee ”) (a “ Third-Party Claim ”) as to which such Indemnitee is entitled to indemnification pursuant to this Agreement, such Indemnitee shall notify the Party which is or may be required pursuant to Section 3.1 or Section 3.2 hereof to make such indemnification (the “ Indemnifying Party ”) in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event by the date (the “ Outside Notice Date ”) that is the 15th Business Day) after receipt by such Indemnitee of written notice of the Third-Party Claim; provided , however, that failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually prejudiced as a result of such failure (except that the Indemnifying Party shall not be liable for any expenses incurred during the period beginning immediately after the Outside Notice Date and ending on the date the Indemnitee gives the required notice). Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within 10 Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notice under this Section 3.3 shall be provided in accordance with Section 5.6. For the avoidance of doubt, knowledge of a Third-Party Claim by a Person who is an officer or director of both MSG Networks and Spinco shall not constitute notice for purposes of this Section 3.3.
If a Third-Party Claim is made against an Indemnitee, the Indemnifying Party shall be entitled to participate in the defense thereof and, if it so chooses and acknowledges in writing its obligation to indemnify the Indemnitee therefor, to assume the defense thereof with counsel selected by the Indemnifying Party; provided , however, that such counsel is not reasonably objected to by the Indemnitee. Should the Indemnifying Party so elect to assume the defense of a Third-Party Claim, the Indemnifying Party shall, within 30 days (or sooner if the nature of the Third-Party Claim so requires), notify the Indemnitee of its intent to do so, and the Indemnifying Party shall thereafter not be liable to the Indemnitee for legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided , however, that such Indemnitee shall have the right to employ counsel to represent such Indemnitee if, in such Indemnitee’s reasonable judgment, a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such claim which would make representation of both such parties by one counsel inappropriate, and in such event the fees and expenses of such separate counsel shall be paid by such Indemnifying Party. If the Indemnifying Party assumes such defense, the Indemnitee shall have the right to participate in the defense thereof and to employ counsel, subject to the proviso of the preceding sentence, at its own expense, separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party shall control such defense. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnitee for any period during which the Indemnifying Party has failed to assume the defense thereof (other than during the period prior to the time the Indemnitee shall have given notice of the Third-Party Claim as provided above). If the Indemnifying Party so elects to assume the defense of any Third-Party Claim, all of the Indemnitees shall cooperate with the Indemnifying Party in the defense or prosecution thereof, including by providing or causing to be provided Records and witnesses as soon as reasonably practicable after receiving any request therefor from or on behalf of the Indemnifying Party.
 
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If the Indemnifying Party acknowledges in writing responsibility under this Section 3.3 for a Third-Party Claim, then in no event will the Indemnitee admit any liability with respect to, or settle, compromise or discharge, any Third-Party Claim without the Indemnifying Party’s prior written consent; provided , however, that the Indemnitee shall have the right to settle, compromise or discharge such Third-Party Claim without the consent of the Indemnifying Party if the Indemnitee releases the Indemnifying Party from its indemnification obligation hereunder with respect to such Third-Party Claim and such settlement, compromise or discharge would not otherwise adversely affect the Indemnifying Party. If the Indemnifying Party acknowledges in writing liability for a Third-Party Claim, the Indemnitee will agree to any settlement, compromise or discharge of a Third-Party Claim that the Indemnifying Party may recommend and that by its terms obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third-Party Claim and releases the Indemnitee completely in connection with such Third-Party Claim and that would not otherwise adversely affect the Indemnitee. If an Indemnifying Party elects not to assume the defense of a Third-Party Claim, or fails to notify an Indemnitee of its election to do so as provided herein, such Indemnitee may compromise, settle or defend such Third-Party Claim.
Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third-Party Claim (and shall be liable for the fees and expenses of counsel incurred by the Indemnitee in defending such Third-Party Claim) if the Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnitee which the Indemnitee reasonably determines, after conferring with its counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third-Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages.
(b) In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right or claim.
(c) Spinco shall, and shall cause the other Spinco Indemnitees to, and MSG Networks shall, and shall cause the other MSG Networks Indemnitees to, cooperate as may reasonably be required in connection with the investigation, defense and settlement of any Third-Party Claim. In furtherance of this obligation, the Parties agree that if an Indemnifying Party chooses to defend or to compromise or settle any Third-Party Claim, MSG Networks or Spinco, as the case may be, shall use its reasonable best efforts to make available to the other Party, upon written request, the former and then current directors, officers, employees and agents of the members of its respective Group as witnesses and any Records or other documents within its control or which it otherwise has the ability to make available, to the extent that any such Person, Records or other documents may reasonably be required in
 
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connection with such defense, settlement or compromise. At the request of an Indemnifying Party, an Indemnitee shall enter into a reasonably acceptable joint defense agreement.
(d) The remedies provided in this Article III shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.
Section 3.4 Indemnification Payments. (a) Indemnification required by this Article III shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or an Indemnifiable Loss is incurred. If the Indemnifying Party fails to make an indemnification payment required by this Article III within 30 days after receipt of a bill therefore or notice that an Indemnifiable Loss has been incurred, the Indemnifying Party shall also be required to pay interest on the amount of such indemnification payment, from the date of receipt of the bill or notice of the Indemnified Loss to but not including the date of payment, at the Applicable Rate.
(b) The amount of any claim by an Indemnitee under this Agreement (i) shall be reduced to reflect any actual Tax savings or insurance proceeds received by any Indemnitee that result from the Indemnifiable Losses that gave rise to such indemnity and (ii) shall be increased by an amount equal to any Tax cost incurred by any Indemnitee that results from receipt of payments under this Article III.
(c) For all Tax purposes and to the extent permitted by applicable Law, the parties hereto shall treat any payment made pursuant to this Article III as a capital contribution or a distribution, as the case may be, immediately prior to the Distribution.
ARTICLE IV
ACCESS TO INFORMATION
Section 4.1 Provision of Corporate Records.
(a) Except as specifically provided in Article III (in which event the provisions of such Article will govern), after the Distribution Date, upon the prior written request by Spinco for specific and identified agreements, documents, books, records or files including accounting and financial records (collectively, “ Records ”) which relate to Spinco or the conduct of the Spinco Business up to the Effective Time, or which Spinco determines are necessary or advisable in order for Spinco to prepare its financial statements and any reports or filings to be made with any Governmental Authority, MSG Networks shall arrange, as soon as reasonably practicable following the receipt of such request, to provide appropriate copies of such Records (or the originals thereof if Spinco has a reasonable need for such originals) in the possession or control of MSG Networks or any of the MSG Networks Subsidiaries, but only to the extent such items are not already in the possession or control of the requesting Party.
 
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(b) Except as specifically provided in Article III (in which event the provisions of such Article will govern), after the Distribution Date, upon the prior written request by MSG Networks for specific and identified Records which relate to MSG Networks or the conduct of the MSG Networks Business up to the Effective Time, or which MSG Networks determines are necessary or advisable in order for MSG Networks to prepare its financial statements and any reports or filings to be made with any Governmental Authority, Spinco shall arrange, as soon as reasonably practicable following the receipt of such request, to provide appropriate copies of such Records (or the originals thereof if MSG Networks has a reasonable need for such originals) in the possession or control of Spinco or any of the Spinco Subsidiaries, but only to the extent such items are not already in the possession or control of the requesting Party.
Section 4.2 Access to Information. Except as specifically provided in Article III (in which event the provisions of such Article will govern), from and after the Distribution Date, each of MSG Networks and Spinco shall afford to the other and its authorized Representatives reasonable access during normal business hours, subject to appropriate restrictions for classified, privileged or confidential information, to the personnel, properties, and Records of such Party and its Subsidiaries insofar as such access is reasonably required by the other Party and relates to such other Party or the conduct of its business prior to the Effective Time.
Section 4.3 Witnesses; Documents and Cooperation in Actions. (a) At all times from and after the Distribution Date, each of MSG Networks and Spinco shall use their commercially reasonable efforts to make available to the other, upon reasonable written request, its and its Subsidiaries’ former and then current Representatives as witnesses and any Records within its control or which it otherwise has the ability to make available, to the extent that such Persons or Records may reasonably be required in connection with the prosecution or defense of any Action in which the requesting Party may from time to time be involved. The requesting Party shall promptly reimburse the other party (and any person it makes available hereunder) for all reasonable out-of-pocket costs and expenses incurred in connection therewith. This provision shall not apply to any Action brought by one Party against another Party (as to which production of documents and witnesses shall be governed by applicable discovery rules).
(b) Without limiting any provision of this Section 4.3, the Parties shall cooperate and consult, and shall cause each member of their respective Groups to cooperate and consult, to the extent reasonably necessary with respect to any Actions.
(c) In connection with any matter contemplated by this Section 4.3, the Parties will enter into a mutually acceptable joint defense agreement so as to maintain to the extent practicable any applicable attorney-client privilege or work product immunity of any member of any Group.
Section 4.4 Confidentiality. (a) MSG Networks and the MSG Networks Subsidiaries and Spinco and the Spinco Subsidiaries shall not use or permit the use of and shall keep, and shall cause its consultants and advisors to keep, confidential all information
 
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concerning the other Party in its possession, its custody or under its control to the extent such information, (w) relates to or was acquired during the period up to the Effective Time, (x) relates to any Ancillary Agreement, (y) is obtained in the course of performing services for the other Party pursuant to any Ancillary Agreement, or (z) is based upon or is derived from information described in the preceding clauses (w), (x) or (y), and each Party shall not (without the prior written consent of the other) otherwise release or disclose such information to any other Person, except such Party’s auditors, attorneys, consultants and advisors, unless compelled to disclose such information by judicial or administrative process or unless such disclosure is required by Law and such Party has used commercially reasonable efforts to consult with the other affected Party or Parties prior to such disclosure. Each Party shall be deemed to have satisfied its obligation to hold confidential any information concerning or owned by the other Party or its Group if it exercises the same care as it takes to preserve confidentiality for its own similar information. The covenants in this Section 4.4 shall survive the transactions contemplated by this Agreement and shall continue indefinitely; provided , however, that the covenants in this Section 4.4 shall terminate with respect to any information not constituting a trade secret under applicable law on the third anniversary of the later of the Distribution Date or the date on which the Party subject to such covenants with respect to such information receives it (but any such termination shall not terminate or otherwise limit any other covenant or restriction regarding the disclosure or use of such information under any Ancillary Agreement or other agreement, instrument or legal obligation). This Section 4.4 shall not apply to information (A) that has been in the public domain through no fault of such Party or (B) that has been later lawfully acquired from other sources by such Party, (C) the use or disclosure of which is permitted by this Agreement or any other Ancillary Agreement or any other agreement entered into pursuant hereto, (D) that is immaterial and its disclosure is required as part of the conduct of that Party’s business and would not reasonably be expected to be detrimental to the interests of the other Party or (E) that the other Party has agreed in writing may be so used or disclosed.
(b) If any Party or any member of its Group either determines that it is required to disclose pursuant to applicable Law, or receives any demand under lawful process or from any Governmental Authority to disclose or provide, information of the other Party (or any member of the other Party’s Group) that is subject to the confidentiality provisions of Section 4.4(a) such Party shall notify the other Party prior to disclosing or providing such information and shall cooperate at the expense of the requesting Party in seeking any reasonable protective arrangements requested by such other Party. Subject to the foregoing, the Person that received such request may thereafter disclose or provide such information if and to the extent required by such Law or by lawful process or such Governmental Authority; provided , however, that the Person shall only disclose such portion of the information as required to be disclosed or provided.
Section 4.5 Privileged Matters. Except as may be otherwise provided in an Ancillary Agreement, the Parties recognize that legal and other professional services that have been and will be provided prior to the Distribution Date have been and will be rendered for the benefit of each of the members of the MSG Networks Group, and the members of the Spinco Group, and that each of the
 
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members of the MSG Networks Group, and each of the members of the Spinco Group should be deemed to be the client for the purposes of asserting all privileges which may be asserted under applicable Law. To allocate the interests of each Party in the information as to which any Party is entitled to assert a privilege, the Parties agree as follows:
(a) MSG Networks shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the MSG Networks Business (other than with respect to Liabilities as to which Spinco is required to provide indemnification under Article III), whether or not the privileged information is in the possession of or under the control of MSG Networks or Spinco. MSG Networks shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting MSG Networks Liabilities (including Retained Claims Liabilities), or other Liabilities as to which it is required to provide indemnification under Article III, now pending or which may be asserted in the future, whether or not the privileged information is in the possession of or under the control of MSG Networks or Spinco.
(b) Spinco shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the Spinco Business (other than with respect to matters or claims that are Retained Claims Liabilities or other Liabilities as to which MSG Networks is required to provide indemnification under Article III), whether or not the privileged information is in the possession of or under the control of MSG Networks or Spinco. Spinco shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the subject matter of any claims constituting Spinco Liabilities, or other liabilities as to which it is required to provide indemnification under Article III, now pending or which may be asserted in the future, in any lawsuits or other proceedings initiated against or by Spinco, whether or not the privileged information is in the possession of Spinco or under the control of MSG Networks or Spinco
(c) The Parties agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this Section 4.5, with respect to all privileges not allocated pursuant to the terms of Sections 4.5(a) and (b).
(d) No Party may waive any privilege which could be asserted under any applicable Law, and in which the other Party has a shared privilege, without the written consent of the other Party, which consent shall not be unreasonably withheld or delayed, except to the extent reasonably required in connection with any Third-Party Claims or as provided in subsection (e) below.
(e) In the event of any litigation or dispute between or among the Parties, any Party and a Subsidiary of the other Party, or a Subsidiary of one Party and a Subsidiary of the other Party, either such Party may waive a privilege in which the other Party has a shared privilege, without obtaining the consent of the other Party, provided , however, that such waiver of a shared privilege
 
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shall be effective only as to the use of information with respect to the litigation or dispute between the Parties and/or their Subsidiaries, and shall not operate as a waiver of the shared privilege with respect to any Third-Party Claims.
(f) If a dispute arises between or among the Parties or their respective Subsidiaries regarding whether a privilege should be waived to protect or advance the interest of any Party, each Party agrees that it shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of the other Party, and shall not unreasonably withhold consent to any request for a waiver by the other Party. Each Party hereto specifically agrees that it will not withhold consent to a waiver for any purpose except to protect its own legitimate interests.
(g) Upon receipt by any Party or by any Subsidiary thereof of any subpoena, discovery or other request which arguably calls for the production or disclosure of information subject to a shared privilege or as to which another Party has the sole right hereunder to assert a privilege, or if any Party obtains knowledge that any of its or any of its Subsidiaries’ current or former Representatives have received any subpoena, discovery or other request which arguably calls for the production or disclosure of such privileged information, such Party shall promptly notify the other Party of the existence of the request and shall provide the other Party a reasonable opportunity to review the information and to assert any rights it or they may have under this Section 4.5 or otherwise to prevent the production or disclosure of such privileged information.
(h) The transfer of all Records and other information pursuant to this Agreement is made in reliance on the agreement of MSG Networks and Spinco, as set forth in Sections 4.2, 4.4 and this Section 4.5, to maintain the confidentiality of privileged information and to assert and maintain all applicable privileges. The access to information being granted pursuant to Sections 4.1, 4.2, and 4.3 hereof, the agreement to provide witnesses and individuals pursuant to Sections 4.2 and 4.3 hereof, the furnishing of notices and documents and other cooperative efforts contemplated by Section 4.3 hereof, and the transfer of privileged information between and among the Parties and their respective Subsidiaries, Affiliates and Representatives pursuant to this Agreement shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.
Section 4.6 Ownership of Information. Any information owned by one Party or any of its Subsidiaries that is provided to a requesting Party pursuant to Article III or this Article IV shall be deemed to remain the property of the providing Person. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such information.
Section 4.7 Cost of Providing Records and Information. A Party requesting Records, information or access to personnel, witnesses or properties, under Article III or this Article IV, agrees to reimburse the other Party and its Subsidiaries for the reasonable out-of-pocket costs, if any, incurred in seeking to satisfy the request of the requesting Party.
 
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Section 4.8 Retention of Records. Except (a) as provided in the Tax Disaffiliation Agreement or (b) when a longer retention period is otherwise required by Law or agreed to in writing, the MSG Networks Group and the Spinco Group shall retain all Records relating to the MSG Networks Business and the Spinco Business as of the Effective Time for the periods of time provided in each Party’s record retention policy (with respect to the documents of such party and without regard to the Distribution or its effects) as in effect on the Distribution Date. Notwithstanding the foregoing, in lieu of retaining any specific Records, MSG Networks or Spinco may offer in writing to deliver such Records to the other and, if such offer is not accepted within 90 days, the offered Records may be destroyed or otherwise disposed of at any time. If a recipient of such offer shall request in writing prior to the scheduled date for such destruction or disposal that any of Records proposed to be destroyed or disposed of be delivered to such requesting Party, the Party proposing the destruction or disposal shall promptly arrange for delivery of such of the Records as was requested (at the cost of the requesting Party).
Section 4.9 Other Agreements Providing for Exchange of Information. The rights and obligations granted under this Article IV are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of information set forth in any Ancillary Agreement or in any other agreement to which a member of the MSG Networks Group and a member of the Spinco Group is a party.
Section 4.10 Policies and Best Practices. Without representation or warranty, Spinco and MSG Networks shall continue to be permitted to share, on a confidential basis, “best practices” information and materials (such as policies, workflow templates and standard form contracts).
Section 4.11 Compliance with Laws and Agreements. Nothing in this Article IV shall be deemed to require any Person to provide any information if doing so would, in the opinion of counsel to such Person, be inconsistent with any legal or constitutional obligation applicable to such Person.
ARTICLE V
MISCELLANEOUS
Section 5.1 Complete Agreement; Construction. This Agreement, including the Schedules, and the Ancillary Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. In the event of any inconsistency between this Agreement and any Schedule, the Schedule shall prevail.
Section 5.2 Ancillary Agreements. Except as may be expressly stated herein, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements.
Section 5.3 Counterparts. This Agreement 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 such counterparts have been signed by each of the Parties and delivered to the other Party.
 
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Section 5.4 Survival of Agreements. Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date.
Section 5.5 Distribution Expenses. Except as otherwise set forth in this Agreement or any Ancillary Agreement, all costs and expenses incurred on or prior to the Distribution Date (whether or not paid on or prior to the Distribution Date) in connection with the preparation, execution, delivery, printing and implementation of this Agreement and any Ancillary Agreement, the Information Statement and the Registration Statement, and the Distribution and the consummation of the transactions contemplated thereby, shall be charged to and paid by MSG Networks. Such expenses shall be deemed to be MSG Networks Liabilities. Except as otherwise set forth in this Agreement or any Ancillary Agreement, each Party shall bear its own costs and expenses incurred after the Distribution Date. Any amount or expense to be paid or reimbursed by any Party to any other Party shall be so paid or reimbursed promptly after the existence and amount of such obligation is determined and written demand therefor is made.
Section 5.6 Notices. All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:
To MSG Networks:
The Madison Square Garden Company (or, after the applicable
name change, MSG Networks Inc.)
11 Penn Plaza
New York, New York 10001
Attention: President
with a copy to:
MSG Spinco, Inc. (or, after the applicable name change, The
Madison Square Garden Company)
Two Penn Plaza
New York, New York 10121
Attention: General Counsel
 
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To Spinco:
MSG Spinco, Inc. (or, after the applicable name change, The
Madison Square Garden Company)
Two Penn Plaza
New York, New York 10121
Attention: General Counsel
Section 5.7 Waivers. The failure of any Party to require strict performance by any other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.
Section 5.8 Amendments. Subject to the terms of Sections 5.11 hereof, this Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.
Section 5.9 Assignment. This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided that either Party may assign this Agreement to a purchaser (by merger, sale of assets or otherwise) of all or substantially all of the properties and assets of such Party so long as such purchaser expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed. Any assignment in violation of the provisions of this Section 5.9 shall be void.
Section 5.10 Successors and Assigns. The provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.
Section 5.11 Termination. This Agreement (including Article III hereof) may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Distribution by and in the sole discretion of MSG Networks without the approval of Spinco or the stockholders of MSG Networks. In the event of such termination, no Party shall have any liability of any kind to any other Party or any other Person. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by the Parties; provided , however, that Article III shall not be terminated or amended after the Distribution in respect of a Third Party beneficiary thereto without the consent of such Person.
Section 5.12 Subsidiaries. Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any entity that is contemplated to be a Subsidiary of such Party after the Distribution Date.
 
- 28 -




Section 5.13 Third-Party Beneficiaries. Except as provided in Article III relating to Indemnitees, this Agreement is solely for the benefit of the Parties and their respective Subsidiaries and Affiliates and should not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.
Section 5.14 Title and Headings. Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
Section 5.15 Schedules. The Schedules shall be construed with and as an integral part of this Agreement to the same extent (except as set forth in the last sentence of Section 5.1) as if the same had been set forth verbatim herein.
Section 5.16 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 5.17 Waiver of Jury Trial. The Parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement.
Section 5.18 Specific Performance. From and after the Distribution, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Parties agree that the Party to this Agreement who is or is to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that, from and after the Distribution, the remedies at law for any breach or threatened breach of this Agreement, including monetary damages, are inadequate compensation for any loss, that any defense in any action for specific performance that a remedy at law would be adequate is hereby waived, and that any requirements for the securing or posting of any bond with such remedy are hereby waived.
Section 5.19 Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
 
- 29 -




IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.
 
THE MADISON SQUARE GARDEN COMPANY
(To be renamed MSG Networks Inc.)
By:       /s/ James L. Dolan
  Name: James L. Dolan
  Title:   Executive Chairman
MSG SPINCO, INC.
(To be renamed The Madison Square Garden Company)
By:   /s/ David O’Connor
  Name: David O’Connor
  Title:   President and Chief Executive Officer




Schedule A
SUBSIDIARIES OF SPINCO
Eden Insurance Company, Inc.
Entertainment Ventures, LLC
Hartford Wolfpack, LLC
Knicks Holdings, LLC
MSG Aircraft Leasing, LLC
MSG Arena Holdings, LLC
MSG Arena, LLC
MSG Aviation, LLC
MSG BBLV, LLC
MSG Beacon, LLC
MSG Boston Theatrical, L.L.C.
MSG Chicago, LLC
MSG Eden Realty, LLC
MSG Entertainment Holdings, LLC
MSG Flight Operations, L.L.C.
MSG Forum, LLC
MSG Holdings Music, LLC
MSG Interactive, LLC
MSG National Properties LLC
MSG Publishing, LLC
MSG Songs, LLC
MSG Sports, LLC
MSG Sports & Entertainment, LLC
MSG TE, LLC
MSG Theatrical Ventures, LLC
MSG Training Center, LLC
MSG Vaudeville, LLC
MSG Ventures, LLC
MSG Ventures Holdings, LLC
MSG Winter Productions, LLC
New York Knicks, LLC
New York Liberty, LLC
New York Rangers Enterprises Company
New York Rangers, LLC
Radio City Productions LLC
Radio City Trademarks, LLC
Rangers Holdings, LLC
The Grand Tour, LLC
Westchester Knicks, LLC
Fuse Media, Inc.
Fuse Media, LLC
Brooklyn Bowl Las Vegas, LLC
Tribeca Enterprises, LLC
Azoff MSG Entertainment, LLC
Finding Neverland USA LLC
Audience Broadway Limited Partnership
Fun Home LLC
WH Bodies Broadway Limited Partnership




Schedule B
RETAINED CLAIMS LIABILITIES
 
1. Distribution Agreement, between Cablevision Systems Corporation and Madison Square Garden, Inc., dated January 12, 2010.
 
2. Contribution Agreement, among Cablevision Systems Corporation, Regional Programming Partners and Madison Square Garden, Inc., dated January 12, 2010.
 
3. Tax Disaffiliation Agreement, between Cablevision Systems Corporation and Madison Square Garden, Inc., dated January 12, 2010.
 
4. Transition Services Agreement, between Cablevision Systems Corporation and Madison Square Garden, Inc., dated January 12, 2010.
 
5. Registration Rights Agreement, by and among Madison Square Garden, Inc. and the Dolan Family Affiliates, dated January 13, 2010.
 
6. Registration Rights Agreement, by and among Madison Square Garden, Inc. and the Charles F. Dolan Children Trusts, dated January 13, 2010.
 
7. All claims for indemnification or advancement by directors, officers, employees, agents of MSG Networks and its subsidiaries (including Spinco and its subsidiaries) with respect to actions or omissions or alleged actions or omissions prior to the Distribution Date including claims under the constitutional documents of any such entity, agreements (including indemnification agreements) or applicable law.




Schedule C-1
GUARANTEES
 
1. Restated Guaranty of Lease, dated August 14, 2008, between MSG Holdings, L.P. (formerly Madison Square Garden, L.P.) and RCPI Landmark Properties, LLC.
 
2. Guaranty of Lease, dated October 19, 2006, between MSG Holdings, L.P. (formerly Madison Square Garden, LP) and Beacon Broadway Company, LLC.
 
3. Second Amended and Restated Booking Agreement, effective as of June 1, 2012, among The Wang Center for the Performing Arts, Inc., Wang Theatre, Inc., MSG Boston Theatrical LLC and MSG Holdings, L.P.




Schedule C-2
GUARANTEES
None.




Schedule D
ANCILLARY AGREEMENTS
 
4. Transition Services Agreement, dated as of September 11, 2015, between MSG Networks and Spinco.
 
5. Tax Disaffiliation Agreement, dated as of September 11, 2015, between MSG Networks and Spinco.
 
6. Employee Matters Agreement, dated as of September 11, 2015, between MSG Networks and Spinco.
 
7. Equity Administration Agreement, dated as of September 11, 2015, between Spinco and Cablevision Systems Corporation.
 
8. Equity Administration Agreement, to be dated on or about September 15, 2015, between Spinco and AMC Networks Inc.
 
9. Media Rights Agreement, dated as of September 11, 2015, between MSG Holdings, L.P. and New York Knicks, LLC.
 
10. Media Rights Agreement, dated as of September 11, 2015, between MSG Holdings, L.P. and New York Rangers, LLC.
 
11. Media Rights Agreement, dated as of September 11, 2015, between MSG Holdings, L.P. and Westchester Knicks, LLC.
 
12. Media Rights Agreement, dated as of September 11, 2015, between MSG Holdings, L.P. and New York Liberty, LLC.
 
13. Audio Rights Agreement, dated as of September 11, 2015, between MSG Holdings, L.P. and New York Rangers, LLC.
 
14. Audio Rights Agreement, dated as of September 11, 2015, between MSG Holdings, L.P. and New York Knicks, LLC.
 
15. Registration Rights Agreement, to be dated on or about September 14, 2015, by and among Spinco and The Charles F. Dolan Children Trusts.
 
16. Registration Rights Agreement, to be dated on or about September 14, 2015, by and among Spinco and The Dolan Family Affiliates.
 
17. Standstill Agreement, to be dated on or about September 14, 2015, between Spinco and The Dolan Family Group.
 
18. NHL Transfer Consent Agreement, to be dated on or about September 28, 2015.
 
19. NHL Transaction Approval Agreement, to be dated on or about September 28, 2015.
 
20. NBA Transfer Consent Agreement with respect to the New York Knicks, to be dated on or about September 28, 2015.
 
21. NBA Agreement and Undertaking, to be dated on or about September 28, 2015.
 
22. WNBA Agreement and Undertaking, to be dated on or about September 28, 2015.
 
23. NBA Release and Indemnification, to be dated on or about September 28, 2015.
 


24. Trademark License Agreement, to be dated on or about September 28, 2015, between MSG Holdings, L.P. and MSG Sports & Entertainment, LLC.
 
25. Advertising Sales Representation Agreement, to be dated on or about September 28, 2015, between MSG Holdings, L.P. and MSG Sports & Entertainment, LLC.
 
26. Marketing Partnership Allocation Agreement, to be dated on or about September 28, 2015, between MSG Holdings, L.P. and MSG Sports & Entertainment, LLC.



Exhibit 10.6
 
EMPLOYEE MATTERS AGREEMENT
by and between
THE MADISON SQUARE GARDEN COMPANY
(TO BE RENAMED MSG NETWORKS INC.)
and
MSG SPINCO, INC.
(TO BE RENAMED THE MADISON SQUARE GARDEN COMPANY)
Dated as of September 11, 2015




TABLE OF CONTENTS
         
Page
ARTICLE I
DEFINITIONS
Section 1.1    Definitions    1
Section 1.2    General Interpretive Principles    8
ARTICLE II
GENERAL PRINCIPLES
Section 2.1    Assumption and Retention of Liabilities; Related Assets    8
Section 2.2    Spinco Participation in MSG Networks Plans    10
Section 2.3    Service Recognition    10
ARTICLE III
U.S. QUALIFIED DEFINED BENEFIT PLAN
Section 3.1    Transfer of Cash Balance Pension Plan to Spinco.    12
Section 3.2    Cash Balance Pension Plan Freeze    12
Section 3.3    MSG Networks Participant Credit    12
ARTICLE IV
U.S. QUALIFIED DEFINED CONTRIBUTION PLANS
Section 4.1    401(k) Plan    12
Section 4.2    Stock Investment Options    13
Section 4.3    Investments and Benefits Committee    13
ARTICLE V
NONQUALIFIED PLANS
Section 5.1    Excess Cash Balance Pension Plan    13
Section 5.2    Excess Retirement Plan.    14
Section 5.3    Excess 401(k) Savings Plan    14
Section 5.4    Transferred Employees    15
Section 5.5    No Separation from Service    15
ARTICLE VI
U.S. HEALTH AND WELFARE PLANS
Section 6.1    Health and Welfare Plans Maintained by MSG Networks Prior to the Distribution Date.    15
Section 6.2    Flexible Spending Accounts Plan    16
Section 6.3    Legal Plan    16
Section 6.4    COBRA and HIPAA    16
 
–i–



         
Page
Section 6.5    Liabilities    17
Section 6.6    Time-Off Benefits    18
Section 6.7    Severance Pay Plans    18
ARTICLE VII
EQUITY COMPENSATION
Section 7.1    Equity Compensation    18
Section 7.2    Taxes and Withholding    19
Section 7.3    Cooperation    21
Section 7.4    SEC Registration    21
Section 7.5    Savings Clause    21
ARTICLE VIII
ADDITIONAL COMPENSATION AND BENEFITS MATTERS
Section 8.1    Cash Incentive Awards    21
Section 8.2    Individual Arrangements    23
Section 8.3    Non-Competition    24
Section 8.4    Collective Bargaining    24
Section 8.5    Union Dues; Severance and Fringe Benefits    24
Section 8.6    Director Programs    24
Section 8.7    Sections 162(m)/409A    24
Section 8.8    2015 Administrative Bonus    24
ARTICLE IX
INDEMNIFICATION
Section 9.1    Indemnification    25
ARTICLE X
GENERAL AND ADMINISTRATIVE
Section 10.1    Sharing of Information    25
Section 10.2    Reasonable Efforts/Cooperation    25
Section 10.3    Non-Termination of Employment; No Third-Party Beneficiaries    26
Section 10.4    Consent of Third Parties    26
Section 10.5    Access to Employees    26
Section 10.6    Beneficiary Designation/Release of Information/Right to Reimbursement    27
Section 10.7    Not a Change in Control    27
ARTICLE XI
MISCELLANEOUS
Section 11.1    Effect If Distribution Does Not Occur    27
Section 11.2    Complete Agreement; Construction    27
Section 11.3    Counterparts    27
Section 11.4    Survival of Agreements    27
 
–ii–





         
Page
Section 11.5    Notices    27
Section 11.6    Waivers    28
Section 11.7    Amendments    28
Section 11.8    Assignment    28
Section 11.9    Successors and Assigns    28
Section 11.10    Subsidiaries    28
Section 11.11    Title and Headings    28
Section 11.12    Governing Law    28
Section 11.13    Waiver of Jury Trial    28
Section 11.14    Specific Performance    29
Section 11.15    Severability    29
 
–iii–




Exhibits
 
Exhibit A
   MSG Networks Retained Retirement Plans
Exhibit B
   Spinco Retained Retirement Plans
Exhibit C
   MSG Networks Retained Multi-Employer Benefit Plans
Exhibit D
   Spinco Retained Multi-Employer Benefit Plans
Exhibit E
   MSG Networks Health & Welfare Plans
Exhibit F
   MSG Networks Union Relationships
Exhibit G
   Spinco Union Relationships
 
–iv–




EMPLOYEE MATTERS AGREEMENT
THIS EMPLOYEE MATTERS AGREEMENT (the “ Agreement ”), dated as of September 11, 2015, is by and between The Madison Square Garden Company (to be renamed MSG Networks Inc.), a Delaware corporation (“ MSG Networks ”), and MSG Spinco, Inc. (to be renamed The Madison Square Garden Company), a Delaware corporation and an indirect wholly-owned subsidiary of MSG Networks (“ Spinco ,” and, together with MSG Networks, each, a “ Party ” and collectively, the “ Parties ”).
RECITALS
WHEREAS , the Board of Directors of MSG Networks has determined that it is in the best interests of MSG Networks to separate the Spinco Business and the MSG Networks Business into two public companies, on the terms and subject to the conditions set forth in the Distribution Agreement (as defined below);
WHEREAS , in order to effectuate the foregoing, MSG Networks and Spinco have entered into a Distribution Agreement, dated as of September 11, 2015 (the “ Distribution Agreement ”), pursuant to which and subject to the terms and conditions set forth therein, the Spinco Business shall be separated from the MSG Networks Business, and all of the issued and outstanding Class A Common Stock, par value $0.01 per share, of Spinco and Class B Common Stock, par value $0.01 per share, of Spinco (collectively, the “ Spinco Common Stock ”) beneficially owned by MSG Networks shall be distributed (the “ Distribution ”) on a pro rata basis to the holders of the issued and outstanding Class A Common Stock, par value $0.01 per share, of MSG Networks and Class B Common Stock, par value $0.01 per share, of MSG Networks (collectively, the “ MSG Networks Common Stock ”); and
WHEREAS , MSG Networks and Spinco have agreed to enter into this Agreement for the purpose of allocating Assets, Liabilities and responsibilities with respect to certain employee compensation and benefit plans, programs and arrangements, and certain employment matters between and among them.
NOW , THEREFORE , in consideration of the premises and of the respective agreements and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions . As used in this Agreement, the following terms shall have the meanings set forth below:
“ 401(k) Plans ” shall have the meaning ascribed thereto in Section 4.1 of this Agreement.
 
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“ Action ” means any claim, demand, complaint, charge, action, cause of action, suit, countersuit, arbitration, litigation, inquiry, proceeding or investigation by or before any Governmental Authority or any arbitration or mediation tribunal.
“ Agreement ” shall have the meaning ascribed thereto in the preamble to this Agreement, including all the exhibits hereto, and all amendments made hereto from time to time.
“ Asset ” means any right, property or asset, whether real, personal or mixed, tangible or intangible, of any kind, nature and description, whether accrued, contingent or otherwise, and wherever situated and whether or not carried or reflected, or required to be carried or reflected, on the books of any Person.
“ Cash Balance Pension Plan ” means the MSG Holdings, L.P. Cash Balance Pension Plan or any successor thereto.
“ COBRA ” means the continuation coverage requirements for “group health plans” under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Section 4980B of the Code and Sections 601 through 608 of ERISA.
“ Code ” means the U.S. Internal Revenue Code of 1986, as amended.
“ Control ” means, as to any Person, 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 or other interests, by contract or otherwise.
“ Distribution ” shall have the meaning ascribed thereto in the recitals to this Agreement, as the same is further described in the Distribution Agreement.
“ Distribution Agreement ” shall have the meaning ascribed thereto in the recitals to this Agreement.
“ Distribution Date ” shall have the meaning ascribed thereto in the Distribution Agreement.
“ DOL ” means the U.S. Department of Labor.
“ Effective Date ” shall have the meaning ascribed thereto in Section 6.1(a) of this Agreement.
“ Equity Compensation ” means, collectively, the MSG Networks Options, MSG Networks RSUs, Spinco Options, and Spinco RSUs.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
“ Fixed Performance Awards ” shall have the meaning ascribed thereto in Section 8.1(a) of this Agreement.
 
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“ Former MSG Networks Employee ” means:
 
  i. with respect to an individual whose MSG Networks Group employment terminated prior to the Distribution Date, any such individual whose last position was in the Media division (including, without limitation, Fuse); and
 
  ii. with respect to an individual whose MSG Networks Group employment terminated on or after the Distribution Date, any former employee of any member of the MSG Networks Group.
Any individual who is an employee of any member of the Spinco Group on the Distribution Date or a Former Spinco Employee shall not be a Former MSG Networks Employee.
“ Former Spinco Employee ” means:
 
  i. with respect to an individual whose MSG Networks Group employment terminated prior to the Distribution Date, any such individual whose last position was not in the Media division; and
 
  ii. with respect to an individual whose Spinco Group employment terminated on or after the Distribution Date, any former employee of any member of the Spinco Group.
Any individual who is an employee of any member of the MSG Networks Group on the Distribution Date or a Former MSG Networks Employee shall not be a Former Spinco Employee.
“ Governmental Authority ” means any federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official, the NYSE, NASDAQ or other regulatory, administrative or governmental authority.
“ Group ” means the MSG Networks Group and/or the Spinco Group, as the context requires.
“ HIPAA ” means the Health Insurance Portability and Accountability Act of 1996, as amended.
“ Information ” shall mean all information, whether in written, oral, electronic or other tangible or intangible form, stored in any medium, including non-public financial information, studies, reports, records, books, accountants’ work papers, contracts, instruments, flow charts, data, communications by or to attorneys, memos and other materials prepared by attorneys and accountants or under their direction (including attorney work product) and other financial, legal, employee or business information or data.
“ IRS ” means the U.S. Internal Revenue Service.
“ Law ” means all laws, statutes and ordinances and all regulations, rules and other pronouncements of Governmental Authorities having the effect of law of the U.S., any foreign country, or any domestic or foreign state, province, commonwealth, city, country, municipality, territory, protectorate, possession or similar instrumentality, or any Governmental Authority thereof.
 
-3-




“ Liabilities ” means all debts, liabilities, obligations, responsibilities, Losses, damages (whether compensatory, punitive, or treble), fines, penalties and sanctions, absolute or contingent, matured or unmatured, liquidated or unliquidated, foreseen or unforeseen, joint, several or individual, asserted or unasserted, accrued or unaccrued, known or unknown, whenever arising, including without limitation those arising under or in connection with any Law, Action, threatened Action, order or consent decree of any Governmental Authority or any award of any arbitration tribunal, and those arising under any contract, guarantee, commitment or undertaking, whether sought to be imposed by a Governmental Authority, private party, or a Party, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, and including any costs, expenses, interest, attorneys’ fees, disbursements and expense of counsel, expert and consulting fees, fees of third-party administrators and costs related thereto or to the investigation or defense thereof.
“ Loss ” means any claim, demand, complaint, damages (whether compensatory, punitive, consequential, treble or other), fines, penalties, loss, liability, payment, cost or expense arising out of, relating to or in connection with any Action.
“ MSG Networks ” shall have the meaning ascribed thereto in the preamble to this Agreement.
“ MSG Networks Business ” means all businesses and operations conducted by the MSG Networks Group from time to time, whether prior to, at or after the Distribution Date, other than the Spinco Business.
“ MSG Networks Common Stock ” shall have the meaning ascribed thereto in the recitals to this Agreement.
“ MSG Networks Compensation Committee ” means the Compensation Committee of the Board of Directors of MSG Networks.
“ MSG Networks Director ” means any individual who is a current or former non-employee director of MSG Networks as of the Distribution Date.
“ MSG Networks Employee ” means any individual who, immediately following the Distribution Date, will be employed by MSG Networks or any member of the MSG Networks Group in a capacity considered by MSG Networks to be common law employment, including active employees and employees on vacation and approved leaves of absence (including maternity, paternity, family, sick, short-term or long-term disability leave, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves).
“ MSG Networks Flexible Spending Accounts Plan ” shall have the meaning ascribed thereto in Section 6.2 of this Agreement.
 
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“ MSG Networks Group ” means, as of the Distribution Date, MSG Networks and each of its former and current Subsidiaries (or any predecessor organization thereof), and any corporation or entity that may become part of such Group from time to time thereafter. The MSG Networks Group shall not include any member of the Spinco Group.
“ MSG Networks Health & Welfare Plans ” shall have the meaning ascribed thereto in Section 6.1(a) of this Agreement.
“ MSG Networks Liabilities ” means all Liabilities assumed or retained by any member of the MSG Networks Group pursuant to this Agreement.
“ MSG Networks Option ” means an option to buy MSG Networks Class A Common Stock granted pursuant to an MSG Networks Share Plan (including the options adjusted for the Distribution) and outstanding as of the Distribution Date.
“ MSG Networks Participant ” means any individual who, immediately following the Distribution Date, is an MSG Networks Employee, a Former MSG Networks Employee or a beneficiary, dependent or alternate payee of any of the foregoing.
“ MSG Networks Plan ” means any Plan sponsored, maintained or contributed to by MSG Networks or any of its Subsidiaries, including the MSG Networks Retained Retirement Plans, MSG Networks Share Plans, MSG Networks Flexible Spending Accounts Plan, MSG Networks Retiree Medical Program, MSG Networks Health & Welfare Plans and MSG Networks Retained Multi-Employer Benefit Plans, but excluding the MSG Holdings, L.P. Cash Balance Pension Plan and the Retirement Plan for Licensed Ushers and Ticket Takers Local No. 176 of the Service Employees’ International Union, AFL-CIO.
“ MSG Networks Retained Multi-Employer Benefit Plans ” means the multi-employer plans that are listed on Exhibit C .
“ MSG Networks Retained Retirement Plans ” means the retirement plans that are listed on Exhibit A.
“ MSG Networks RSU ” means a restricted stock unit representing an unfunded and unsecured promise to deliver a share of MSG Networks Class A Common Stock, or cash or other property equal in value to the share of MSG Networks Class A Common Stock, that is granted pursuant to an MSG Networks Share Plan and outstanding as of the Distribution Date.
“ MSG Networks Share Plans ” means, collectively, any stock option or stock incentive compensation plan or arrangement, including equity award agreements, maintained before the Distribution Date for employees, officers or non-employee directors of MSG Networks or its Subsidiaries or affiliates, as amended.
“ MSG Networks Stock Investment Option ” means the unitized stock fund investment option offered under the MSG Holdings, L.P. 401(k) Savings Plan, with a value based on the value of MSG Networks Common Stock and the cash liquidity component.
“ NASDAQ ” means The NASDAQ Stock Market LLC.
 
-5-




“ NYSE ” means the New York Stock Exchange.
“ Participating Company ” means MSG Networks and any Person (other than an individual) participating in an MSG Networks Plan.
“ Party ” and “ Parties ” shall have the meanings ascribed thereto in the preamble to this Agreement.
“ Person ” means any natural person, corporation, business trust, limited liability company, joint venture, association, company, partnership or governmental, or any agency or political subdivision thereof.
“ Plan ” means, with respect to an entity, each plan, program, arrangement, agreement or commitment that is an employment, consulting, non-competition or deferred compensation agreement, or an executive compensation, incentive bonus or other bonus, employee pension, profit-sharing, savings, retirement, supplemental retirement, stock option, stock purchase, stock appreciation rights, restricted stock, other equity-based compensation, severance pay, salary continuation, life, health, hospitalization, sick leave, vacation pay, disability or accident insurance plan, corporate-owned or key-man life insurance or other employee benefit plan, program, arrangement, agreement or commitment, including any “employee benefit plan” (as defined in Section 3(3) of ERISA), entered into, sponsored or maintained by such entity (or to which such entity contributes or is required to contribute).
“ Service Crediting Date ” shall have the meaning ascribed thereto in Section 2.3(b)(i) of this Agreement.
“ Spinco ” shall have the meaning ascribed thereto in the preamble to this Agreement.
“ Spinco Business ” means all businesses and operations conducted by the Spinco Group from time to time, whether prior to, at or after the Distribution Date, including the businesses and operations conducted by the Spinco Group as more fully described in the Spinco Information Statement and excluding the MSG Networks Business.
“ Spinco Common Stock ” shall have the meaning ascribed thereto in the recitals to this Agreement.
“ Spinco Director ” means any individual who is a current non-employee director of Spinco as of the Distribution Date.
“ Spinco Employee ” means any individual who, immediately following the Distribution Date, will be employed by Spinco or any member of the Spinco Group in a capacity considered by Spinco to be common law employment, including active employees and employees on vacation and approved leaves of absence (including maternity, paternity, family, sick, short-term or long-term disability leave, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act and other approved leaves).
 
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“ Spinco Excess 401(k) Savings Plan ” shall have the meaning ascribed thereto in Section 5.3(a) .
“ Spinco Excess Cash Balance Plan ” shall have the meaning ascribed thereto in Section 5.1(a) .
“ Spinco Excess Retirement Plan ” shall have the meaning ascribed thereto in Section 5.1(a) of this Agreement.
“ Spinco Flexible Spending Accounts Plan ” shall have the meaning ascribed thereto in Section 6.2 of this Agreement.
“ Spinco Group ” means, as of the Distribution Date, Spinco and each of its former and current Subsidiaries (or any predecessor organization thereof), and any corporation or entity that may become part of such Group from time to time thereafter. The Spinco Group shall not include any member of the MSG Networks Group.
“ Spinco Health & Welfare Plans ” shall have the meaning ascribed thereto in Section 6.1 of this Agreement.
“ Spinco Information Statement ” means the definitive information statement distributed to holders of MSG Networks Common Stock in connection with the Distribution and filed with the Securities and Exchange Commission (the “ SEC ”) as Exhibit 99.1 to the registration statement on Form 10 filed with the Commission to effect the registration of the Spinco Class A Common Shares pursuant to the Securities Exchange Act of 1934, as amended, or as an exhibit to a Form 8-K of Spinco.
“ Spinco Liabilities ” means all Liabilities assumed or retained by any member of the Spinco Group pursuant to this Agreement.
“ Spinco Option ” means an option to buy Spinco Class A Common Stock granted pursuant to a Spinco Share Plan and granted in connection with the Distribution.
“ Spinco Participant ” means any individual who, immediately following the Distribution Date, is a Spinco Employee, a Former Spinco Employee or a beneficiary, dependent or alternate payee of any of the foregoing.
“ Spinco Plan ” means any Plan sponsored, maintained or contributed to by any member of the Spinco Group, including the Spinco Retained Retirement Plans, Spinco Share Plans, Spinco Flexible Spending Accounts Plan, the Spinco Retiree Medical Program, Spinco Health & Welfare Plans and Spinco Retained Multi-Employer Benefit Plans.
“ Spinco Retained Multi-Employer Benefit Plans ” means the multi-employer plans that are listed on Exhibit D .
“ Spinco Retained Retirement Plans ” means the retirement plans that are listed on Exhibit B .
 
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“ Spinco RSU ” means a restricted stock unit representing an unfunded and unsecured promise to deliver a share of Spinco Class A Common Stock, or cash or other property equal in value to the share of Spinco Class A Common Stock, that is granted pursuant to a Spinco Share Plan and granted in connection with the Distribution.
“ Spinco Share Plans ” means the Spinco 2015 Employee Stock Plan, Spinco 2015 Stock Plan For Non-Employee Directors and any stock plan or stock incentive arrangement, including equity award agreements, entered into by Spinco in connection with the Distribution.
“ Spinco Stock Investment Option ” means the unitized stock fund investment option to be offered under the MSG Networks 401(k) Savings Plan, with a value based on the value of Spinco Common Stock and the cash liquidity component, subject to the limitations set forth in Section 4.2(b) .
“ Subsidiary ” has the same meaning as provided in the Distribution Agreement.
“ Transition Period ” means, with respect to each MSG Networks Plan in which any Spinco Group member is a Participating Company, the period of time beginning on the Distribution Date and ending on the date Spinco establishes a corresponding Plan and allows participation in such Plan, which shall be no later than the Effective Date. The Transition Period may be extended beyond the Effective Date if both Parties agree to the extension, and such agreement shall not be unreasonably withheld.
“ Transition Period End Date ” means the last day of each applicable Transition Period.
“ U.S. ” means the United States of America.
Section 1.2 General Interpretive Principles . Words in the singular shall include the plural and vice versa, and words of one gender shall include the other gender, in each case, as the context requires. The words “hereof,” “herein,” “hereunder,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement and not to any particular provision of this Agreement, and references to Article, Section, paragraph and Exhibit are references to the Articles, Sections, paragraphs and Exhibits to this Agreement unless otherwise specified. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified. Any reference to any federal, state, local or non-U.S. statute or Law shall be deemed to also refer to all rules and regulations promulgated thereunder, unless the context otherwise requires.
ARTICLE II
GENERAL PRINCIPLES
Section 2.1 Assumption and Retention of Liabilities; Related Assets .
(a) As of the Distribution Date, except as otherwise expressly provided for in this Agreement, MSG Networks shall, or shall cause one or more members of the MSG Networks Group to, assume or retain and MSG Networks hereby agrees to pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all MSG Networks Plans ( provided that, as between MSG Networks and Spinco, Spinco shall be responsible for certain of those Liabilities pursuant to Section 2.1(b) of this Agreement), (ii) all
 
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Liabilities with respect to the employment, retirement, service, termination of employment or termination of service of all MSG Networks Employees, Former MSG Networks Employees, MSG Networks Directors, their dependents and beneficiaries and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or non-payroll worker of any member of the MSG Networks Group or in any other employment, non-employment, or retainer arrangement or relationship with any member of the MSG Networks Group), in each case to the extent arising in connection with or as a result of employment with or the performance of services for any member of the MSG Networks Group, and (iii) any other Liabilities expressly assumed by or retained by MSG Networks or any of its Subsidiaries under this Agreement, including liabilities retained pursuant to Article V of this Agreement. For purposes of clarification and the avoidance of doubt, (x) the Liabilities assumed or retained by the MSG Networks Group as provided for in this Section 2.1(a) are intended to be MSG Networks Liabilities as such term is defined in the Distribution Agreement, and (y) the Parties intend that such Liabilities assumed or retained by the MSG Networks Group include the retirement benefits and health and welfare plan benefits under the MSG Networks Plans for all MSG Networks Employees, Former MSG Networks Employees, their dependents, beneficiaries, alternate payees and surviving spouses.
(b) As of the Distribution Date, except as otherwise expressly provided for in this Agreement, Spinco shall, or shall cause one or more members of the Spinco Group to, assume or retain and Spinco hereby agrees to pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all Spinco Plans, (ii) all Liabilities with respect to the employment, service, retirement, termination of employment or termination of service of all Spinco Employees, Former Spinco Employees, their dependents and beneficiaries and other service providers (including any individual who is, or was, an independent contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee, leased employee, on-call worker, incidental worker, or non-payroll worker of any member of the Spinco Group or in any other employment, non-employment, or retainer arrangement or relationship with any member of the Spinco Group), and (iii) any other Liabilities expressly assumed or retained by Spinco or any of its Subsidiaries under this Agreement. For purposes of clarification and the avoidance of doubt, the Liabilities assumed or retained by the Spinco Group as provided for in this Section 2.1(b) are intended to be Spinco Liabilities as such term is defined in the Distribution Agreement.
(c) From time to time after the Distribution, Spinco shall promptly reimburse MSG Networks, upon MSG Networks’ presentation of such substantiating documentation as Spinco shall reasonably request, for the cost of any Liabilities satisfied by MSG Networks or its Subsidiaries that are, or that have been made pursuant to this Agreement, the responsibility of Spinco or any of its Subsidiaries.
(d) From time to time after the Distribution, MSG Networks shall promptly reimburse Spinco, upon Spinco’s presentation of such substantiating documentation as MSG Networks shall reasonably request, for the cost of any Liabilities satisfied by Spinco or its Subsidiaries that are, or that have been made pursuant to this Agreement, the responsibility of MSG Networks or any of its Subsidiaries.
 
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Section 2.2 Spinco Participation in MSG Networks Plans .
(a) During the Transition Period . Except for the MSG Networks Plans described in Articles III , V , VII and VIII herein, until the Transition Period End Date, Spinco and each member of the Spinco Group that presently participates in a particular MSG Networks Plan may continue to be a Participating Company in such MSG Networks Plan, and MSG Networks and Spinco shall take all necessary action to effectuate each such continuation. Spinco and each member of the Spinco Group shall pay MSG Networks for any Spinco Employee or Former Spinco Employee’s participation in the MSG Networks Plans.
(b) After the Transition Period . Except as otherwise expressly provided for in this Agreement, effective as of the Transition Period End Date, Spinco and each member of the Spinco Group shall cease to be a Participating Company in the corresponding MSG Networks Plan, and MSG Networks and Spinco shall take all necessary action to effectuate each such cessation.
Section 2.3 Service Recognition .
(a) Pre-Distribution Service Credit . Spinco shall give each Spinco Participant full credit for purposes of eligibility, vesting, determination of level of benefits, and, to the extent applicable, benefit accruals under any Spinco Plan for such Spinco Participant’s service with any member of the MSG Networks Group prior to the Distribution Date to the same extent such service was recognized by the corresponding MSG Networks Plans immediately prior to the Distribution Date; provided , however , that such service shall not be recognized to the extent that such recognition would result in the duplication of benefits.
(b) Post-Distribution Service Crediting for the MSG Networks Retained Retirement Plans and Spinco Retained Retirement Plans . Each of MSG Networks and Spinco (acting directly or through their respective Subsidiaries) shall cause each of the MSG Networks Retained Retirement Plans and the Spinco Retained Retirement Plans, respectively, to provide the following service crediting rules effective as of the Distribution Date:
(i) If an MSG Networks Employee who participates in, or is eligible to participate but as of December 31, 2016 (the “ Service Crediting Date ”) is not participating in, any of the MSG Networks Retained Retirement Plans becomes employed by a member of the Spinco Group on or after the Distribution Date, but on or before the Service Crediting Date, and such MSG Networks Employee has been continuously employed by the MSG Networks Group from the Distribution Date through the date such MSG Networks Employee commences active employment with a member of the Spinco Group, then such MSG Networks Employee’s service with the MSG Networks Group following the Distribution Date shall be recognized for purposes of eligibility, vesting and level of benefits under the corresponding Spinco Retained Retirement Plans, in each case to the same extent as such MSG Networks Employee’s service with the MSG Networks Group was recognized under the corresponding MSG Networks Retained Retirement Plans, if any.
 
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(ii) If a Spinco Employee becomes employed by a member of the MSG Networks Group prior to the Service Crediting Date and such Spinco Employee is continuously employed by the Spinco Group from the Distribution Date through the date such Spinco Employee commences active employment with a member of the MSG Networks Group, then such Spinco Employee’s service with the Spinco Group following the Distribution Date shall be recognized for purposes of eligibility, vesting and level of benefits under the corresponding MSG Networks Retained Retirement Plans, in each case to the same extent as such Spinco Employee’s service with the Spinco Group was recognized under the corresponding Spinco Retained Retirement Plans, if any.
(iii) Notwithstanding anything in this Agreement to the contrary, for the period commencing on the Distribution Date until the Service Crediting Date, the MSG Networks Retained Retirement Plans and the Spinco Retained Retirement Plans (other than the Cash Balance Pension Plan) shall provide that no break in service occurs with respect to any MSG Networks Employee or Spinco Employee who is hired or rehired by any member of the Spinco Group or the MSG Networks Group after the termination of such MSG Networks Employee’s or Spinco Employee’s employment with either the MSG Networks Group or the Spinco Group within such period.
(iv) Notwithstanding anything in this Agreement to the contrary, the employment service with the MSG Networks Group or the Spinco Group shall not be double counted or result in duplicative benefits or service crediting under any MSG Networks Retained Retirement Plan or Spinco Retained Retirement Plan.
(c) Post-Distribution Service Crediting for the MSG Networks and Spinco Health & Welfare Plans .
(i) If an MSG Networks Employee who participates in any of the MSG Networks Health & Welfare Plans becomes employed by a member of the Spinco Group on or after the Distribution Date, but on or before the Service Crediting Date, and such MSG Networks Employee has been continuously employed by the MSG Networks Group from the Distribution Date through the date such MSG Networks Employee commences active employment with a member of the Spinco Group, then such MSG Networks Employee’s services with the MSG Networks Group following the Distribution Date shall be recognized for purposes of eligibility under the corresponding Spinco Health & Welfare Plans, in each case to the same extent as such MSG Networks Employee’s service with the MSG Networks Group was recognized under the corresponding MSG Networks Health & Welfare Plan.
(ii) If a Spinco Employee who participates in any of the Spinco Health & Welfare Plans becomes employed by a member of the MSG Networks Group on or after the Distribution Date, but on or before the Service Crediting Date, and such Spinco Employee has been continuously employed by the Spinco Group from the Distribution Date through the date such Spinco Employee commences active employment with a member of the MSG Networks Group, then such Spinco Employee’s services with the Spinco Group following the Distribution Date shall be recognized for purposes of eligibility under the corresponding MSG Networks Health & Welfare Plans, in each case to the same extent as such Spinco Employee’s service with the Spinco Group was recognized under the corresponding Spinco Health & Welfare Plans.
 
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ARTICLE III
U.S. QUALIFIED DEFINED BENEFIT PLAN
Section 3.1 Transfer of Cash Balance Pension Plan to Spinco . As of the Distribution Date, MSG Networks shall transfer to Spinco all of the assets in the trust underlying the Cash Balance Pension Plan, and Spinco shall assume and be responsible for all Liabilities under the Cash Balance Pension Plan. As of the Distribution Date, Spinco shall cause the Cash Balance Pension Plan (or a successor thereto) to recognize and maintain all existing elections, including beneficiary designations, payment form elections and rights of alternate payees under qualified domestic relations orders in existence prior to the Distribution Date.
Section 3.2 Cash Balance Pension Plan Freeze . The Parties acknowledge that prior to the Distribution Date, the Cash Balance Pension Plan (or a successor thereto) has been amended to (a) freeze the Cash Balance Pension Plan (or a successor thereto) to new participants and future benefit accruals effective as of December 31, 2015, (b) provide that, following the Distribution Date through December 31, 2015, service with either MSG Networks or Spinco shall count as continued service for all purposes under such plan (other than 2015 benefits accrual service for MSG Networks Employees and Former MSG Networks Employees, it being understood that 2015 benefits accrual service credit for such individuals is addressed in Section 3.3 ) and (c) provide that, following December 31, 2015, service with either MSG Networks or Spinco shall count as continued service for vesting and early retirement subsidies purposes under such plan.
Section 3.3 MSG Networks Participant Credit . At such time as Spinco allocates 2015 service credits to Cash Balance Pension Plan participants, Spinco shall cause the Cash Balance Pension Plan to credit each MSG Networks Participant with “Compensation” (as defined in the Cash Balance Pension Plan) in respect of calendar year 2015 equal to the “Compensation” earned by such MSG Networks Participant from January 1, 2015 through September 30, 2015, times a fraction (a) the numerator of which is the lesser of 365 or the number of days elapsed from January 1, 2015 through the date of the MSG Networks Participant’s termination of employment from the MSG Networks Group, and (b) the denominator of which is the number of days elapsed from January 1, 2015 through the Distribution Date.
ARTICLE IV
U.S. QUALIFIED DEFINED CONTRIBUTION PLANS
Section 4.1 401(k) Plans . On or prior to the Distribution Date, MSG Networks and Spinco shall take all necessary actions to convert both of the MSG Holdings, L.P. 401(k) Savings Plan and the MSG Holdings, L.P. 401(k) Union Plan (collectively, the “ 401(k) Plans ”) into multiple employer plans and add Spinco as the sponsor and a contributing employer to such plans. On and after the Distribution Date, Spinco Participants who, immediately prior to the Distribution Date were participants in, or entitled to, future benefits under either of the 401(k) Plans shall continue to participate in such 401(k) Plan on the same terms and conditions as
 
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applied prior to the Distribution Date, as may be modified from time to time. On and after the Distribution Date, all contributions payable to the 401(k) Plans with respect to Spinco Participants, determined in accordance with the terms of the 401(k) Plans, ERISA and the Code, shall be paid by Spinco to the 401(k) Plans.
Section 4.2 Stock Investment Options .
(a) No deferrals, employee contributions, employer contributions or exchanges into the MSG Networks Stock Investment Option shall be permitted to be made by MSG Networks Participants or Spinco Participants following the Distribution Date. No deferrals, employee contributions, employer contributions or exchanges into the Spinco Stock Investment Option shall be permitted to be made by MSG Networks Participants or Spinco Participants following the Distribution Date.
(b) The 401(k) Plans will be amended as of the Distribution Date to: (i) create a Spinco Stock Investment Option; (ii) enable the Spinco Stock Investment Option to receive shares of Spinco Common Stock to be distributed in the Distribution on behalf of participants in the 401(k) Plans; and (iii) provide that, following the Distribution, no new amounts may be contributed to the MSG Networks Stock Investment Option or the Spinco Stock Investment Option, whether through employee contributions, employer contributions or exchanges.
Section 4.3 Investment and Benefits Committee . Effective as of the Distribution Date, Spinco shall establish an Investments and Benefits Committee, which will administer the 401(k) Plans. MSG Networks (through its Investment and Benefits Committee) will have mutually agreed representation for purposes of administering the 401(k) Plans.
ARTICLE V
NONQUALIFIED PLANS
Section 5.1 Excess Cash Balance Pension Plan .
(a) No later than the Distribution Date, Spinco shall establish and make payments pursuant to a non-qualified defined benefit pension plan (the “ Spinco Excess Cash Balance Plan ”) to provide non-qualified retirement benefits to eligible Spinco Employees and shall assume the Liabilities of the MSG Holdings, L.P. Excess Cash Balance Plan relating to Spinco Employees. For the avoidance of doubt, Spinco shall not assume, and MSG Networks shall remain responsible for, any Liabilities of the MSG Holdings, L.P. Excess Cash Balance Plan relating to any individual who is no longer employed by the MSG Networks Group or the Spinco Group as of the Distribution Date.
(b) As of the effective date of the Spinco Excess Cash Balance Plan, Spinco (acting directly or through its Subsidiaries) shall cause the Spinco Excess Cash Balance Plan to recognize and maintain all existing beneficiary designations with respect to Spinco Employees under the MSG Holdings, L.P. Excess Cash Balance Plan.
(c) The Parties agree that the Liabilities of the MSG Holdings, L.P. Excess Cash Balance Plan relating to Spinco Employees shall be transferred to the Spinco Excess Cash Balance Plan effective as of the Distribution Date.
 
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(d) The Parties acknowledge that prior to the Distribution Date, the MSG Holdings, L.P. Excess Cash Balance Plan and the Spinco Excess Cash Balance Plan have each been amended to freeze each respective plan to new participants and future benefit accruals effective as of December 31, 2015.
Section 5.2 Excess Retirement Plan .
(a) No later than the Distribution Date, Spinco shall establish and make payments pursuant to a non-qualified defined benefit pension plan (the “ Spinco Excess Retirement Plan ”) to provide non-qualified retirement benefits to eligible Spinco Employees and shall assume the Liabilities of the MSG Holdings, L.P. Excess Retirement Plan relating to Spinco Employees. For the avoidance of doubt, Spinco shall not assume, and MSG Networks shall remain responsible for, any Liabilities of the MSG Holdings, L.P. Excess Retirement Plan relating to any individual who is no longer employed by the MSG Networks Group or the Spinco Group as of the Distribution Date.
(b) As of the effective date of the Spinco Excess Retirement Plan, Spinco (acting directly or through its Subsidiaries) shall cause the Spinco Excess Retirement Plan to recognize and maintain all existing beneficiary designations with respect to Spinco Employees under the MSG Holdings, L.P. Excess Retirement Plan.
(c) The Parties agree that, effective as of the Distribution Date, the Liabilities of the MSG Holdings, L.P. Excess Retirement Plan relating to Spinco Employees shall be transferred to the Spinco Excess Retirement Plan.
Section 5.3 Excess 401(k) Savings Plan .
(a) Establishment of the Spinco Excess 401(k) Savings Plan . No later than the Distribution Date, Spinco shall establish a defined contribution plan for the benefit of Spinco Employees (the “ Spinco Excess 401(k) Savings Plan ”) who, immediately prior to the effective date of the Spinco Excess 401(k) Savings Plan, were participants in, or entitled to, future benefits under the MSG Holdings, L.P. Excess 401(k) Savings Plan.
(b) Transfer of MSG Holdings, L.P. Excess 401(k) Savings Plan Accounts . No later than the Distribution Date, MSG Networks shall cause the accounts in the MSG Holdings, L.P. Excess 401(k) Savings Plan attributable to Spinco Employees to be transferred to the Spinco Excess 401(k) Savings Plan and Spinco shall cause the Spinco Excess 401(k) Savings Plan to accept such transfer of accounts in accordance with current practice and to assume and to fully perform, pay and discharge all Liabilities of the MSG Holdings, L.P. Excess 401(k) Savings Plan relating to the accounts of Spinco Employees as of the effective date of the Spinco Excess 401(k) Savings Plan. For the avoidance of doubt, Spinco shall not assume, and MSG Networks shall remain responsible for, any Liabilities of the MSG Holdings, L.P. Excess 401(k) Savings Plan relating to any individual who is no longer employed by the MSG Networks Group or the Spinco Group as of the Distribution Date.
(c) Continuation of Elections . As of the effective date of the Spinco Excess 401(k) Savings Plan, Spinco (acting directly or through its Subsidiaries) shall cause the Spinco Excess 401(k) Savings Plan to recognize and maintain all elections, including
 
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deferral elections and beneficiary designations with respect to Spinco Employees under the MSG Holdings, L.P. Excess 401(k) Savings Plan for the remainder of the period or periods for which such elections or designations are by their original terms applicable, to the extent such election or designation is available under the Spinco Excess 401(k) Savings Plan.
Section 5.4 Transferred Employees . Employees who transfer from MSG Networks to Spinco between the Distribution Date and the Service Crediting Date will not be eligible for an immediate distribution of their account balance from the MSG Holdings, L.P. Excess Cash Balance Plan, MSG Holdings, L.P. Excess Retirement Plan or the MSG Holdings, L.P. Excess 401(k) Savings Plan; instead, subject to compliance with any applicable requirements of Section 409A of the Code, any such account balance shall be transferred to the Spinco Excess Cash Balance Plan, Spinco Excess Retirement Plan or the Spinco Excess 401(k) Savings Plan on the date of transfer, and MSG Networks shall pay Spinco an amount equal to the vested account balance as of the transfer date within 30 days of such transfer date. Employees who transfer from Spinco to MSG Networks between the Distribution Date and the Service Crediting Date will not be eligible for an immediate distribution of their account balance from the Spinco Excess Cash Balance Plan, Spinco Excess Retirement Plan or the Spinco Excess 401(k) Savings Plan; instead, subject to compliance with any applicable requirements of Section 409A of the Code, any such account balance shall be transferred to the MSG Holdings, L.P. Excess Cash Balance Plan, MSG Holdings, L.P. Excess Retirement Plan or the MSG Holdings, L.P. Excess 401(k) Savings Plan on the date of transfer, and Spinco shall pay MSG Networks an amount equal to the vested account balance as of the transfer date within 30 days of such transfer date.
Section 5.5 No Separation from Service . The transactions provided for under this Agreement shall not constitute a separation from service or a termination of employment under the MSG Holdings, L.P. Excess Cash Balance Plan, MSG Holdings, L.P. Excess Retirement Plan, the Spinco Excess Retirement Plans, the MSG Holdings, L.P. Excess 401(k) Savings Plan or the Spinco Excess 401(k) Savings Plan, each of which shall provide that no distribution of retirement benefits shall be made to any Spinco Employee on account of these transactions.
ARTICLE VI
U.S. HEALTH AND WELFARE PLANS
Section 6.1 Health and Welfare Plans Maintained by MSG Networks Prior to the Distribution Date .
(a) Establishment of the Spinco Health & Welfare Plans . MSG Networks or one or more of its Subsidiaries maintain each of the health and welfare plans set forth on Exhibit E attached hereto (the “ MSG Networks Health & Welfare Plans ”) for the benefit of eligible MSG Networks Participants and Spinco Participants. Effective as of January 1, 2016 (the “ Effective Date ”), Spinco shall, or shall cause one of its Subsidiaries to, adopt health and welfare plans for the benefit of eligible Spinco Participants (collectively, the “ Spinco Health & Welfare Plans ”).
(b) Terms of Participation in Spinco Health & Welfare Plans . Spinco (acting directly or through its Subsidiaries) shall cause all Spinco Health & Welfare Plans, if applicable, to (i) waive all limitations as to preexisting conditions, exclusions, and service conditions with respect to participation and coverage requirements applicable to Spinco Participants, other than limitations
 
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that were in effect with respect to Spinco Participants immediately prior to the Effective Date, (ii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to a Spinco Participant immediately prior to the Effective Date to the extent such Spinco Participant had satisfied any similar limitation under the analogous MSG Networks Health & Welfare Plan, and (iii) in the case of self-insured Spinco Health & Welfare Plans, provide credit for all benefits paid to Spinco Participants under the MSG Networks Health & Welfare Plans for purposes of determining when such persons have reached their lifetime maximums under the Spinco Health & Welfare Plan. Notwithstanding the foregoing, in the event that any Spinco Participant, Former Spinco Employee, or dependent thereof is confined to a facility for treatment as of the Effective Date, such persons nevertheless shall become covered under Spinco Health & Welfare Plans as of such date, and shall cease being covered under MSG Networks Health & Welfare Plans as of such date.
Section 6.2 Flexible Spending Accounts Plan . As of the Effective Date, Spinco (acting directly or through its Subsidiaries) shall establish a flexible spending accounts plan (the “ Spinco Flexible Spending Accounts Plan ”) with features that are comparable to those contained in the flexible spending accounts plan maintained by MSG Networks for the benefit of Spinco Participants immediately prior to the Effective Date (the “ MSG Networks Flexible Spending Accounts Plan ”). Following the Effective Date, Spinco Participants that presently participate in the MSG Networks Flexible Spending Accounts Plan may submit, for reimbursement in accordance with the MSG Networks Flexible Spending Accounts Plan, claims for health costs incurred during the 2015 plan year and any applicable grace period thereafter, and MSG Networks shall be responsible for the payment of such claims. Spinco shall be entitled to retain the net positive balance, if any, of the Spinco Participants’ flexible spending accounts from the 2015 plan year. Spinco shall pay to MSG Networks the net negative balance, if any, of the Spinco Participants’ flexible spending accounts from the 2015 plan year. As of the Effective Date, Spinco shall be responsible for administering all reimbursement claims of Spinco Participants under the Spinco Flexible Spending Accounts Plan with respect to calendar year 2016 under the Spinco Flexible Spending Accounts Plan.
Section 6.3 Legal Plan . Any case initiated by a Spinco Participant under the MSG Networks Group Legal Plan prior to the Effective Date will continue under such plan until its completion regardless of whether the Spinco Participant enrolls in the Spinco Group Legal Plan after the Effective Date.
Section 6.4 COBRA and HIPAA . As of the Effective Date, Spinco (acting directly or through its Subsidiaries) shall assume, or shall have caused the Spinco Health & Welfare Plans to assume, responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to Spinco Participants who, as of the day prior to the Effective Date, were covered under an MSG Networks Health & Welfare Plan pursuant to COBRA or were eligible for COBRA under an MSG Networks Health & Welfare Plan and incur any COBRA claims after the Effective Date. MSG Networks shall be responsible for the claims incurred by Spinco Participants prior to the Effective Date, regardless of whether payments for such claims are made or due after the Effective Date. MSG Networks (acting directly or through its Subsidiaries) shall be responsible for administering compliance with the certificate of creditable coverage requirements of HIPAA applicable to the MSG Networks Health & Welfare
 
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Plans with respect to Spinco Participants for the period ending on the Effective Date. The Parties hereto agree that neither the Distribution nor any transfers of employment directly from the MSG Networks Group to the Spinco Group or directly from the Spinco Group to the MSG Networks Group that occur before the Effective Date shall constitute a COBRA “qualifying event” for purposes of COBRA.
Section 6.5 Liabilities .
(a) Insured Benefits . With respect to employee welfare and fringe benefits that are provided through the purchase of insurance, MSG Networks shall cause the MSG Networks Health & Welfare Plans to fully perform, pay and discharge all claims of Spinco Participants that are incurred prior to the Effective Date (whether reported or unreported by the Effective Date) for the MSG Networks Health & Welfare Plans, and Spinco shall cause the Spinco Health & Welfare Plans to fully perform, pay and discharge all claims of Spinco Participants that are incurred on or after the Effective Date. With respect to claims of Spinco Participants that are incurred prior to the Effective Date (whether reported or unreported by the Effective Date), but after the Distribution Date, and paid by the MSG Networks Health & Welfare Plans, Spinco, as a Participating Company, shall pay MSG Networks for any administrative or other expenses.
(i) Long-Term Disability . Any Spinco Participant who is on long-term disability leave and receiving long-term disability benefits under the MSG Holdings L.P. Long Term Disability Plan as of the Effective Date shall continue to receive benefits under the MSG Holdings L.P. Long Term Disability Plan in accordance with the provisions of such Plan following the Effective Date.
(b) Self-Insured Benefits . With respect to employee welfare and fringe benefits that are provided on a self-insured basis, except as otherwise provided herein, Spinco (acting directly or through its Subsidiaries) shall cause the Spinco Health & Welfare Plans and the Spinco Retiree Medical Program to fully perform, pay and discharge all claims of Spinco Participants after the Effective Date that are incurred on or after the Effective Date. Except as provided otherwise herein, Spinco shall reimburse MSG Networks for the administrative and other expenses related to self-insured benefit claims paid by the MSG Networks Health & Welfare Plans or MSG Networks that were incurred prior to the Effective Date (whether reported or unreported by the Effective Date).
(i) Short-Term Disability .
(A) Any Spinco Participant who is on short-term disability leave and receiving short-term disability benefits under the MSG Holdings L.P. Short Term Disability Plan as of the Effective Date shall continue to receive short-term disability benefits under the MSG Holdings L.P. Short Term Disability Plan. Spinco, as a Participating Company, shall reimburse MSG Networks for all administrative and other expenses paid by the MSG Holdings L.P. Short Term Disability Plan or MSG Networks after the Effective Date. Spinco shall continue to pay any short-term disability benefits owed to a Spinco Participant under the MSG Holdings L.P. Short Term Disability Plan.
 
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(B) Any Spinco Participant who is on a short-term disability leave as of the Effective Date, and who but for the transactions contemplated under the Distribution Agreement would have become eligible for long-term disability benefits in accordance with the provisions of the MSG Holdings L.P. Long Term Disability Plan, will continue to be eligible for long-term disability benefits under the MSG Holdings L.P. Long Term Disability Plan.
(c) Incurred Claim Definition . For purposes of this Section 6.5 , a claim or Liability is deemed to be incurred (i) with respect to medical, dental, vision and/or prescription drug benefits, upon the rendering of health services or provision of supplies giving rise to such claim or Liability; (ii) with respect to life insurance, accidental death and dismemberment and business travel accident insurance, upon the occurrence of the event giving rise to such claim or Liability; (iii) with respect to disability benefits, upon the date of an individual’s disability, as determined by the disability benefit insurance carrier or claim administrator, giving rise to such claim or Liability; and (iv) with respect to a period of continuous hospitalization (or any medical or other service or supply performed or provided during the period of continuous hospitalization), upon the date of admission to the hospital.
Section 6.6 Time-Off Benefits . Spinco shall credit each Spinco Participant with the amount of accrued but unused vacation time, sick time and other time-off benefits as such Spinco Participant had with the MSG Networks Group as of the Distribution Date or as of an employee’s transfer date for an MSG Networks Employee who becomes a Spinco Employee prior to the Service Crediting Date. MSG Networks shall credit each MSG Networks Participant with the amount of accrued but unused vacation time, sick time and other time-off benefits as of an employee’s transfer date for a Spinco Employee who becomes an MSG Networks Employee prior to the Service Crediting Date. Notwithstanding the above, Spinco shall not be required to credit any Spinco Participant and MSG Networks shall not be required to credit any MSG Networks Participant with any accrual to the extent that a benefit attributable to such vacation time, sick time and other time-off benefits is paid by the MSG Networks Group or Spinco Group, respectively.
Section 6.7 Severance Pay Plans . The Parties acknowledge and agree that the transactions contemplated by the Distribution Agreement will not constitute a termination of employment of any Spinco Participant for purposes of any policy, plan, program or agreement of MSG Networks or Spinco or any member of the MSG Networks Group or Spinco Group that provides for the payment of severance, separation pay, salary continuation or similar benefits in the event of a termination of employment.
ARTICLE VII
EQUITY COMPENSATION
Section 7.1 Equity Compensation . The Parties, including through instructions with their respective administrators and recordkeepers, shall use commercially reasonable efforts and shall cooperate in good faith to take all actions reasonably necessary or appropriate for the adjustment of the Equity Compensation under the MSG Networks Share Plans, for the issuance of the Equity Compensation under the Spinco Share Plans, and to coordinate the tax treatment of such Equity Compensation as set forth in this Article VII , all in a manner consistent with the resolutions adopted by the MSG Networks Compensation Committee in connection with the Distribution and the provisions of this Article VII .
 
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Section 7.2 Taxes and Withholding .
(a) Options .
(i) Exercise Price .
(A) Upon the exercise of an MSG Networks Option, whether by an MSG Networks Employee, Former MSG Networks Employee, MSG Networks Director, Spinco Employee, Former Spinco Employee or Spinco Director, the Parties shall take steps to ensure that the exercise price is delivered to MSG Networks.
(B) Upon the exercise of a Spinco Option, whether by an MSG Networks Employee, Former MSG Networks Employee, MSG Networks Director, Spinco Employee, Former Spinco Employee or Spinco Director, the Parties shall take steps to ensure that the exercise price is delivered to Spinco.
(ii) Taxes .
(A) Upon exercise of an MSG Networks Option or Spinco Option, the employer or, in the case of a Former MSG Networks Employee or Former Spinco Employee, the former employer of such holder shall fund any employer taxes.
(B) Upon exercise of an MSG Networks Option or Spinco Option, the Parties shall take steps to ensure that the applicable withholding amount is remitted in cash to the employer or, in the case of a Former MSG Networks Employee or Former Spinco Employee, the former employer of such holder.
(b) [ Intentionally Omitted .]
(c) Restricted Stock Units .
(i) Settlement .
(A) After the Distribution Date, MSG Networks shall be responsible for all Liabilities under MSG Networks RSUs, whether such MSG Networks RSUs are held by MSG Networks Employees, Former MSG Networks Employees, Spinco Employees, Former Spinco Employees and individuals who received such MSG Networks RSUs in their capacity as MSG Networks Directors. MSG Networks shall settle, and satisfy any dividend obligations with respect to, such MSG Networks
 
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RSUs in accordance with the terms of the Madison Square Garden 2010 Employee Stock Plan and the Madison Square Garden 2010 Stock Plan for Non-Employee Directors.
(B) After the Distribution Date, Spinco shall be responsible for all Liabilities under Spinco RSUs, whether such Spinco RSUs are held by MSG Networks Employees, Former MSG Networks Employees, Spinco Employees or Former Spinco Employees. Spinco shall settle, and satisfy any dividend obligations with respect to, such Spinco RSUs in accordance with the terms of the Spinco 2015 Employee Stock Plan.
(ii) Taxes .
(A) Upon settlement of any MSG Networks RSU or Spinco RSU, other than an MSG Networks RSU that is held by an individual who received such MSG Networks RSU in his capacity as an MSG Networks Director, the employer, or, in the case of a Former MSG Networks Employee or Former Spinco Employee, the former employer, of such holder shall fund any employer taxes.
(B) Upon settlement of any MSG Networks RSU or Spinco RSU, other than an MSG Networks RSU that is held by an individual who received such MSG Networks RSU in his capacity as an MSG Networks Director, the Parties shall take steps to ensure that the applicable withholding amount is remitted in cash to the employer, or, in the case of a Former MSG Networks Employee or Former Spinco Employee, the former employer of such holder.
(C) MSG Networks will be responsible for any tax reporting obligations associated with any MSG Networks RSUs that are held by an individual who received such MSG Networks RSU in his capacity as an MSG Networks Director.
(d) Tax Deductions . With respect to the Equity Compensation held by individuals who are MSG Networks Employees or MSG Networks Directors at the time the Equity Compensation becomes taxable and individuals who are Former MSG Networks Employees at such time, MSG Networks shall claim any federal, state and/or local tax deductions after the Distribution Date, and Spinco shall not claim such deductions. With respect to the Equity Compensation held by individuals who are employees of the Spinco Group at the time the Equity Compensation becomes taxable and individuals who are Former Spinco Employees at such time, Spinco shall claim any federal, state and/or local tax deductions after the Distribution Date, and MSG Networks shall not claim such deductions. If either MSG Networks or Spinco determines in its reasonable judgment that there is a substantial likelihood that a tax deduction that was assigned to MSG Networks or Spinco pursuant to this Section 7.2 will instead be available only to the other party (whether as a result of a determination by the IRS, a change in the Code or the regulations or guidance thereunder, or otherwise), it will notify the other party and both Parties will negotiate in good faith to resolve the issue in accordance with the following principle: the party entitled to the deduction shall pay to the other party an amount that places the other party in a financial position
 
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equivalent to the financial position the party would have been in had the party received the deduction as intended under this Section 7.2 . Such amount shall be paid within 90 days of filing the last tax return necessary to make the determination described in the preceding sentence.
Section 7.3 Cooperation . In addition to any cooperation principles governed by Article X , if, after the Distribution Date, MSG Networks or Spinco identify an administrative error in the individuals identified as holding Equity Compensation, the amount of Equity Compensation so held, the vesting level of such Equity Compensation, or any other similar error, MSG Networks and Spinco shall mutually cooperate in taking such actions as are necessary or appropriate to place, as nearly as reasonably practicable, the individual and MSG Networks and Spinco in the position in which they would have been had the error not occurred. Each of the Parties shall establish an appropriate administration system in order to handle in an orderly manner exercises of MSG Networks Options and Spinco Options and the settlement of MSG Networks RSUs and Spinco RSUs. Each of the Parties will work together to unify and consolidate all indicative data and payroll and employment information on regular timetables and make certain that each applicable entity’s data and records with respect to Equity Compensation are correct and updated on a timely basis. The foregoing shall include employment status and information required for tax withholding/remittance, compliance with trading windows and compliance with the requirements of the Securities Exchange Act of 1934 and other applicable Laws.
Section 7.4 SEC Registration . The Parties mutually agree to use commercially reasonable efforts to maintain effective registration statements with the Securities and Exchange Commission with respect to the long-term incentive awards to the extent any such registration statement is required by applicable Law.
Section 7.5 Savings Clause . The Parties hereby acknowledge that the provisions of this Article VII are intended to achieve certain tax, legal and accounting objectives and, in the event such objectives are not achieved, the Parties agree to negotiate in good faith regarding such other actions that may be necessary or appropriate to achieve such objectives.
ARTICLE VIII
ADDITIONAL COMPENSATION AND BENEFITS MATTERS
Section 8.1 Cash Incentive Awards .
(a) Cooperation . The Parties shall use commercially reasonable efforts and shall cooperate in good faith to take all actions reasonably necessary or appropriate to achieve the treatment of annual or long-term cash incentive awards established under the MSG Networks 2010 Cash Incentive Plan (or the comparable non-executive annual incentive plan maintained by MSG Networks) as approved by the MSG Networks Compensation Committee prior to the Distribution in accordance with the terms of such Plans and the award agreements issued thereunder, including as set forth in this Section 8.1 . The Parties acknowledge that the performance-based awards granted in MSG Networks’ fiscal years 2014 and 2015 (where the performance objective(s) relates to performance periods ended June 30, 2016 and June 30, 2017, respectively) (collectively, the “ Fixed Performance Awards ”) have been
 
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amended or, with respect to proxy-reported officers, the MSG Networks Compensation Committee has exercised its negative discretion, to provide that the awards will be paid at the target value of the performance award, with payment subject to the terms and conditions of the award and continued employment with either MSG Networks or Spinco through the date the performance award vests.
(b) Liability .
(i) Effective as of the Distribution Date and subject to Section 8.2(c) , Spinco shall assume or retain, as applicable, responsibilities for all Liabilities, and fully perform, pay and discharge all Liabilities when such Liabilities become due, relating to any annual or long-term cash incentive awards, or portion of any such incentive awards, including awards established under the MSG Networks 2010 Cash Incentive Plan (or the comparable non-executive annual incentive plan maintained by MSG Networks), that any Spinco Participant is eligible to receive with respect to any performance period that ends after the Distribution Date and, effective as of the Distribution Date, MSG Networks shall have no obligations with respect to any such incentive awards.
(A) As soon as reasonably practicable, but in any event within 30 days, following each date that Spinco pays a Fixed Performance Award to a Spinco Participant who, immediately prior to the Distribution, was (a) a “corporate” employee of MSG Networks, MSG Networks will pay to Spinco an amount equal to 33% of the liability accrued by MSG Networks with respect to such Spinco Participant’s Fixed Performance Award as of the Distribution Date, or (b) an advertising sales employee in the Media division of MSG Networks, MSG Networks will pay to Spinco an amount equal to the liability accrued by MSG Networks with respect to such Spinco Participant’s Fixed Performance Award as of the Distribution Date.
(B) As soon as reasonably practicable, but in any event within 30 days, following the date that Spinco pays an annual cash incentive award established with respect to the fiscal year ending June 30, 2016 (“FY 2016”) under the MSG Networks 2010 Cash Incentive Plan (or the comparable non-executive annual incentive plan maintained by MSG Networks) to a Spinco Participant who, immediately prior to the Distribution, was (a) a “corporate” employee of MSG Networks, MSG Networks will pay to Spinco an amount equal to 33% of the liability accrued by MSG Networks with respect to such Spinco Participant’s annual award for FY 2016 as of the Distribution Date, or (b) an advertising sales employee in the Media division of MSG Networks, MSG Networks will pay to Spinco an amount equal to the liability accrued by MSG Networks with respect to such Spinco Participant’s annual award for FY 2016 as of the Distribution Date.
 
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(ii) MSG Networks acknowledges and agrees that, except as otherwise provided herein, it shall have full responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to any incentive, commission or other similar compensatory arrangement previously provided by any member of the MSG Networks Group or Spinco Group to any MSG Networks Participant.
(iii) Spinco acknowledges and agrees that, except as otherwise provided herein, it shall have full responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to any incentive, commission or other similar compensatory arrangement previously provided by any member of the MSG Networks Group or Spinco Group to any Spinco Participant.
(iv) Notwithstanding the foregoing, liabilities with respect to Fixed Performance Awards for executives dually employed by Spinco and MSG Networks following the Distribution shall be subject to Section 8.2(c) below.
Section 8.2 Individual Arrangements .
(a) MSG Networks Individual Arrangements . MSG Networks acknowledges and agrees that, except as otherwise provided herein, it shall have full responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to any employment, separation, severance, consulting, non-competition, retention or other compensatory arrangement previously provided by any member of the MSG Networks Group or Spinco Group to any MSG Networks Participant.
(b) Spinco Individual Arrangements . Spinco acknowledges and agrees that, except as otherwise provided herein, it shall have full responsibility with respect to any Liabilities and the payment or performance of any obligations arising out of or relating to any employment, separation, severance, consulting, non-competition, retention or other compensatory arrangement previously provided by any member of the MSG Networks Group or Spinco Group to any Spinco Participant.
(c) Shared Executives . For purposes of this Agreement, for so long as any executive is employed by both MSG Networks and Spinco, such executive shall be considered to be a Spinco Employee with respect to all amounts and awards outstanding as of the Distribution Date except for amounts and awards explicitly retained by MSG Networks in writing. With respect to all such awards, MSG Networks shall pay to Spinco an amount equal to (a) 33% of the liability accrued by MSG Networks with respect to such award as of the Distribution Date, and (b) 30% of all liability accrued by Spinco with respect to such award after the Distribution Date. Such payment shall be made as soon as reasonably practicable, but in any event within 30 days, following the date that Spinco pays out the applicable award to the executive.
(d) Effect of the Distribution on Severance . The Parties acknowledge and agree that the transactions contemplated by the Distribution Agreement will not constitute a termination of employment of any Spinco Participant for purposes of any policy, plan, program or agreement of MSG Networks or Spinco or any member of the MSG Networks Group or Spinco Group that provides for the payment of severance, separation pay, salary continuation or similar benefits in the event of a termination of employment.
 
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(e) Rangers Arrangements . As of the Distribution Date, Spinco shall assume the compensation and/or salary arrangements, and any agreements and assets related thereto, in respect of Glen Sather, Kevin Stevens, Jaromir Jagr and Bradley Richards.
Section 8.3 Non-Competition . For the purpose of any non-compete provision in any MSG Networks Plan or any award thereunder, Spinco shall not be regarded as a “competitive entity.” For the purpose of any non-compete provision in any Spinco Plan or any award thereunder, MSG Networks shall not be regarded as a “competitive entity.” This Section 8.3 shall apply only so long as MSG Networks and Spinco remain under common Control.
Section 8.4 Collective Bargaining . To the extent any provision of this Agreement is contrary to the provisions of any collective bargaining agreement to which MSG Networks or Spinco or any of their respective Subsidiaries is a party, the terms of such collective bargaining agreement shall prevail. Should any provisions of this Agreement be deemed to relate to a topic determined by an appropriate authority to be a mandatory subject of collective bargaining, MSG Networks or Spinco may be obligated to bargain with the union representing affected employees concerning those subjects.
Section 8.5 Union Dues; Severance and Fringe Benefits . MSG Networks and its Subsidiaries shall retain responsibility for the payment of dues and severance and fringe benefit payments on behalf of MSG Networks Employees with respect to the unions set forth on Exhibit F . Spinco and its Subsidiaries shall retain responsibility for the payment of dues and severance and fringe benefit payments on behalf of Spinco Employees with respect to the unions set forth on Exhibit G .
Section 8.6 Director Programs . MSG Networks shall retain responsibility for the payment of any fees and MSG Networks RSUs payable in respect of service on the MSG Networks Board of Directors that are payable but not yet paid as of the Distribution Date, and Spinco shall have no responsibility for any such payments (to an individual who is a member of the Spinco Board of Directors as of the Distribution Date or otherwise).
Section 8.7 Sections 162(m)/409A . Notwithstanding anything in this Agreement to the contrary (including the treatment of supplemental and deferred compensation plans, outstanding long-term incentive awards and annual incentive awards as described herein), the Parties agree to negotiate in good faith regarding the need for any treatment different from that otherwise provided herein to ensure that (i) a federal income tax deduction for the payment of such supplemental or deferred compensation or long-term incentive award, annual incentive award or other compensation is not limited by reason of Section 162(m) of the Code, and (ii) the treatment of such supplemental or deferred compensation or long-term incentive award, annual incentive award or other compensation does not cause the imposition of a tax under Section 409A of the Code.
Section 8.8 2015 Administrative Bonus . It is understood that Spinco is expected to pay administrative (non-management) bonuses for calendar year 2015 (each, an “Admin Bonus”) to eligible employees in December 2015. As soon as reasonably
 
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practicable, but in any event within 30 days, following the date that Spinco pays an Admin Bonus to a Spinco Employee who, immediately prior to the Distribution, was (a) a “corporate” employee of MSG Networks, MSG Networks will pay to Spinco an amount equal to 33% of the liability accrued by MSG Networks with respect to such Spinco Employee’s Admin Bonus as of the Distribution Date, or (b) an advertising sales employee in the Media division of MSG Networks, MSG Networks will pay to Spinco an amount equal to the liability accrued by MSG Networks with respect to such Spinco Employee’s Admin Bonus as of the Distribution Date.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification . All Liabilities retained or assumed by or allocated to MSG Networks or the MSG Networks Group pursuant to this Agreement shall be deemed to be “MSG Networks Liabilities” (as defined in the Distribution Agreement) for purposes of Article III of the Distribution Agreement, and all Liabilities retained or assumed by or allocated to Spinco or the Spinco Group pursuant to this Agreement shall be deemed to be “Spinco Liabilities” (as defined in the Distribution Agreement) for purposes of Article III of the Distribution Agreement.
ARTICLE X
GENERAL AND ADMINISTRATIVE
Section 10.1 Sharing of Information . MSG Networks and Spinco (acting directly or through their respective Subsidiaries) shall provide to the other and their respective agents and vendors all Information as the other may reasonably request to enable the requesting Party to administer efficiently and accurately each of its Plans, to assist Spinco in obtaining its own insurance policies to provide benefits under Spinco Plans, and to determine the scope of, as well as fulfill, its obligations under this Agreement; provided , however , that, in the event that any Party reasonably determines that any such provision of Information could be commercially detrimental to such Party or any member of its Group, violate any Law or agreement to which such Party or member of its Group is a party, or waive any attorney-client privilege applicable to such Party or member of its Group, the Parties shall provide any such Information and the Parties shall take all reasonable measures to comply with the obligations pursuant to this Section 10.1 in a manner that mitigates any such harm or consequence to the extent practicable, and the Parties agree to cooperate with each other and take such commercially reasonable steps as may be practicable to preserve the attorney-client privilege with respect to the disclosure of any such Information. Such Information shall, to the extent reasonably practicable, be provided in the format and at the times and places requested, but in no event shall the Party providing such Information be obligated to incur any out-of-pocket expenses not reimbursed by the Party making such request or make such Information available outside of its normal business hours and premises. Any Information shared or exchanged pursuant to this Agreement shall be subject to the same confidentiality requirements set forth in Section 4.4 of the Distribution Agreement.
Section 10.2 Reasonable Efforts/Cooperation . Each of the Parties hereto will use its commercially reasonable efforts to promptly take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate the transactions contemplated by this Agreement, including adopting plans
 
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or plan amendments. Each of the Parties hereto shall cooperate fully on any issue relating to the transactions contemplated by this Agreement for which the other Party seeks a determination letter or private letter ruling from the IRS, an advisory opinion from the DOL or any other filing, consent or approval with respect to or by a Governmental Authority.
Section 10.3 Non-Termination of Employment; No Third-Party Beneficiaries . No provision of this Agreement or the Distribution Agreement shall be construed to create any right, or accelerate entitlement, to any compensation or benefit whatsoever on the part of any MSG Networks Employee or Spinco Employee or other future, present, or former employee of any member of the MSG Networks Group or Spinco Group under any MSG Networks Plan or Spinco Plan or otherwise. This Agreement is solely for the benefit of the Parties hereto and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any other person or persons (including any employee or former employee of MSG Networks or Spinco or either of their respective Subsidiaries or any beneficiary or dependent thereof) any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. No provision in this Agreement shall modify or amend any other agreement, plan, program, or document unless this Agreement explicitly states that the provision “amends” that other agreement, plan, program, or document. This shall not prevent the Parties entitled to enforce this Agreement from enforcing any provision in this Agreement, but no other person shall be entitled to enforce any provision in this Agreement on the grounds that it is an amendment to another agreement, plan, program, or document unless the provision is explicitly designated as such in this Agreement, and the person is otherwise entitled to enforce the other agreement, plan, program, or document. If a person not entitled to enforce this Agreement brings a lawsuit or other action to enforce any provision in this Agreement as an amendment to another agreement, plan, program, or document, and that provision is construed to be such an amendment despite not being explicitly designated as one in this Agreement, that provision in this Agreement shall be void ab initio , thereby precluding it from having any amendatory effect. Furthermore, nothing in this Agreement is intended to confer upon any employee or former employee of MSG Networks, Spinco or either of their respective Subsidiaries any right to continued employment, or any recall or similar rights to an individual on layoff or any type of approved leave.
Section 10.4 Consent of Third Parties . If any provision of this Agreement is dependent on the consent of any third party and such consent is withheld, the Parties hereto shall use their reasonable best efforts to implement the applicable provisions of this Agreement to the fullest extent practicable. If any provision of this Agreement cannot be implemented due to the failure of such third party to consent, the Parties hereto shall negotiate in good faith to implement the provision in a mutually satisfactory manner.
Section 10.5 Access to Employees . Following the Distribution Date, MSG Networks and Spinco shall, or shall cause each of their respective Subsidiaries to, make available to each other those of their employees who may reasonably be needed in order to defend or prosecute any legal or administrative action (other than a legal action between any member of the MSG Networks Group and any member of the Spinco Group) to which any employee, director or Plan of the MSG Networks Group or Spinco Group is a party and which relates to their respective Plans prior to the Distribution Date.
 
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Section 10.6 Beneficiary Designation/Release of Information/Right to Reimbursement . To the extent permitted by applicable Law and except as otherwise provided for in this Agreement, all beneficiary designations, authorizations for the release of information and rights to reimbursement made by or relating to Spinco Participants under MSG Networks Plans shall be transferred to and be in full force and effect under the corresponding Spinco Plans until such beneficiary designations, authorizations or rights are replaced or revoked by, or no longer apply to, the relevant Spinco Participant.
Section 10.7 Not a Change in Control . The Parties hereto acknowledge and agree that the transactions contemplated by the Distribution Agreement and this Agreement do not constitute a “change in control” for purposes of any MSG Networks Plan or Spinco Plan.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Effect If Distribution Does Not Occur . Notwithstanding anything in this Agreement to the contrary, if the Distribution Agreement is terminated prior to the Distribution Date, then all actions and events that are, under this Agreement, to be taken or occur effective immediately prior to or as of the Distribution Date, or otherwise in connection with the Distribution, shall not be taken or occur except to the extent specifically agreed to in writing by MSG Networks and Spinco and neither Party shall have any Liability to the other Party under this Agreement.
Section 11.2 Complete Agreement; Construction . This Agreement, including the Exhibits, shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.
Section 11.3 Counterparts . This Agreement 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 such counterparts have been signed by each of the Parties and delivered to the other Party.
Section 11.4 Survival of Agreements . Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date.
Section 11.5 Notices . All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:
To MSG Networks:
The Madison Square Garden Company (or, after the applicable name change, MSG Networks Inc.)
11 Penn Plaza
New York, New York 10001
Attention: President
 
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To Spinco:
MSG Spinco, Inc. (or, after the applicable name change, The Madison Square Garden Company) Two Penn Plaza
New York, New York 10121
Attention: General Counsel
Section 11.6 Waivers . The failure of any Party to require strict performance by any other Party of any provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof.
Section 11.7 Amendments . Subject to the terms of Sections 11.8 and 11.10 hereof, this Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.
Section 11.8 Assignment . This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided that either Party may assign this Agreement to a purchaser (by merger, sale of assets or otherwise) of all or substantially all of the properties and assets of such Party so long as such purchaser expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed. Any arrangement in violation of the provisions of this Section 11.8 shall be void.
Section 11.9 Successors and Assigns . The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.
Section 11.10 Subsidiaries . Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any entity that is contemplated to be a Subsidiary of such Party after the Distribution Date.
Section 11.11 Title and Headings . Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
Section 11.12 Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 11.13 Waiver of Jury Trial . The Parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement.
 
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Section 11.14 Specific Performance . From and after the Distribution, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Parties agree that the Party to this Agreement who is or is to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that, from and after the Distribution, the remedies at law for any breach or threatened breach of this Agreement, including monetary damages, are inadequate compensation for any Loss, that any defense in any action for specific performance that a remedy at law would be adequate is hereby waived, and that any requirements for the securing or posting of any bond with such remedy are hereby waived.
Section 11.15 Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
[signature page follows]
 
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IN WITNESS WHEREOF , the Parties have caused this Agreement to be duly executed as of the date first above written.
 
THE MADISON SQUARE GARDEN COMPANY
(to be renamed MSG Networks Inc.)
By:   /s/ James L. Dolan
  Name:  James L. Dolan
  Title:    Executive Chairman
MSG SPINCO, INC.
(to be renamed The Madison Square Garden Company)
By:   /s/ David O’Connor
  Name:  David O’Connor
  Title:    President and Chief Executive Officer
[Signature Page to Employee Matters Agreement]




Exhibit A
MSG Networks Retained Retirement Plans
MSG Holdings, L.P. Network Retirement Plan for Collective Bargaining Employees
MSG Holdings, L.P. 401(k) Union Plan (as Participating Company)
MSG Holdings, L.P. 401(k) Savings Plan (as Participating Company)
MSG Holdings, L.P. Excess Cash Balance Plan
MSG Holdings, L.P. Excess Retirement Plan
MSG Holdings, L.P. Excess 401(k) Savings Plan




Exhibit B
Spinco Retained Retirement Plans
MSG Holdings, L.P. Cash Balance Pension Plan
MSG Holdings, L.P. Retirement Plan for Licensed Ushers and Ticket Takers Local No. 176 of the Service Employees’ International Union, AFL-CIO
MSG Holdings, L.P. 401(k) Union Plan (as fiduciary and Participating Company)
MSG Holdings, L.P. 401(k) Savings Plan (as fiduciary and Participating Company)
Spinco Excess Cash Balance Plan
Spinco Excess Retirement Plan
Spinco Excess 401(k) Savings Plan




Exhibit C
MSG Networks Retained Multi-Employer Benefit Plans
Multi-Employer Benefit Plans with respect to the following unions:
 
  1. International Brotherhood of Electrical Workers, Local 1212
  2. American Federation of Television & Radio Artists, AFTRA
  3. Directors Guild of America, DGA
  4. Theatrical Protective Union Local One, International Alliance of Theatrical Stage Employees (IATSE)
  5. Union Local 100, IATSE




Exhibit D
Spinco Retained Multi-Employer Benefit Plans
Multi-Employer Benefit Plans with respect to the following unions:
 
  1. Theatrical Protective Union Local One, International Alliance of Theatrical Stage Employees (IATSE)
  2. International Brotherhood of Electrical Workers, Local 3
  3. International Union of Painters & Allied Trades, District Council 9
  4. International Union of Operating Engineers, Local 30
  5. Service Employees International Union, Local 32B/32J
  6. International Brotherhood of Firemen & Oilers, Local 56
  7. Hotel Employees & Restaurant Employees International Union, Local 100
  8. IATSE & Moving Picture Technicians, Local 306
  9. IATSE & Moving Picture Technicians, Artists and Allied Crafts of U.S., its territories and Canada
  10. United Brotherhood of Carpenters, New York District Council, Local 608
  11. Treasurers & Ticket Sellers Local 751, IATSE
  12. Theatrical Wardrobe Union Local 764, IATSE
  13. International Brotherhood of Teamsters, Local 817
  14. Associated Musicians of Greater New York, American Federation of Musicians, Local 802
  15. American Guild of Variety Artists, AGVA
  16. Actors Equity Association
  17. Local 798, IATSE
  18. Association of Theatrical Press Agents and Managers, IATSE
  19. Theatrical Stage Employees Local 2 of IATSE and Moving Picture Technicians, Artists and Allied Crafts of the U.S. and Canada
  20. Motion Picture Projectionists, Audio Visual Engineers & Computer Technicians, Local 110, IATSE
  21. Treasurers and Ticket Sellers Union, Local No. 750
  22. Theatrical Wardrobe Union Chicago, Local 769
  23. Teamsters Local Union, No. 714
  24. All qualified and nonqualified pension obligations related to the National Basketball Association and the National Hockey League.




Exhibit E
MSG Networks Health & Welfare Plans
MSG Networks Medical Plan
MSG Networks Dental Plan
MSG Networks Vision Plan
MSG Networks Flex Spending Healthcare
MSG Networks Flex Spending Dependent Care
MSG Networks Group Legal Plan
MSG Networks Short Term Disability Plan
MSG Networks Long Term Disability Plan
MSG Networks Life and AD&D Plan
MSG Networks Employee Assistance Plan
MSG Networks Commuter Benefits Program
MSG Networks 529 College Savings Program




Exhibit F
MSG Networks Union Relationships
 
  1. International Brotherhood of Electrical Workers, Local 1212
  2. American Federation of Television & Radio Artists, AFTRA
  3. Directors Guild of America, DGA
  4. Theatrical Protective Union Local One, International Alliance of Theatrical Stage Employees (IATSE)
  5. Union Local 100, IATSE




Exhibit G
Spinco Union Relationships
 
  1. Theatrical Protective Union Local One, International Alliance of Theatrical Stage Employees (IATSE)
  2. International Brotherhood of Electrical Workers, Local 3
  3. International Union of Painters & Allied Trades, District Council 9
  4. International Union of Operating Engineers, Local 30
  5. Service Employees International Union, Local 32B/32J
  6. International Brotherhood of Firemen & Oilers, Local 56
  7. Hotel Employees & Restaurant Employees International Union, Local 100
  8. IATSE & Moving Picture Technicians, Local 306
  9. IATSE & Moving Picture Technicians, Artists and Allied Crafts of U.S., its territories and Canada
  10. United Brotherhood of Carpenters, New York District Council, Local 608
  11. Treasurers & Ticket Sellers Local 751, IATSE
  12. Theatrical Wardrobe Union Local 764, IATSE
  13. International Brotherhood of Teamsters, Local 817
  14. Associated Musicians of Greater New York, American Federation of Musicians, Local 802
  15. American Guild of Variety Artists, AGVA
  16. Actors Equity Association
  17. Local 798, IATSE
  18. Association of Theatrical Press Agents and Managers, IATSE
  19. Theatrical Stage Employees Local 2 of IATSE and Moving Picture Technicians, Artists and Allied Crafts of the U.S. and Canada
  20. Motion Picture Projectionists, Audio Visual Engineers & Computer Technicians, Local 110, IATSE
  21. Treasurers and Ticket Sellers Union, Local No. 750
  22. Theatrical Wardrobe Union Chicago, Local 769
  23. Teamsters Local Union, No. 714
  24. National Basketball Association Players’ Association
  25. National Hockey League Players’ Association



 
Exhibit 10.27

MSGNETWORKSLOGOA15.JPG

September 16, 2016

Mr. James L. Dolan
MSG Networks Inc.
11 Pennsylvania Plaza
New York, NY 10121

Dear Jim:

This letter agreement (the “Agreement”), effective as of July 1, 2016 (the “Effective Date”) will confirm the terms of your employment with MSG Networks Inc. (the “Company”) following the Effective Date.

1. Your title continues to be Executive Chairman and it is expected that you will continue to be nominated for election as a director of the Company during the period you serve as Executive Chairman. Subject to the provisions of this paragraph, you agree to devote your business time and attention to the business and affairs of the Company. The Company understands that you are entering into an Employment Agreement with The Madison Square Garden Company (“MSG”) contemporaneous with your entry into this Agreement and recognizes and agrees that your responsibilities to MSG will preclude you from devoting substantially all of your time and attention to the Company’s affairs. However, the Company understands, and you agree, that you will not take on another significant and substantial employment role outside of these two entities and/or their respective subsidiaries,, and that you will devote to the Company’s affairs a sufficiently substantial portion of your time and attention as may be reasonably necessary to accomplish the objectives of your strategic role for the Company as identified in this Agreement and as mutually agreed between yourself and the Company from time to time. In addition, as recognized in Article Tenth of the Company’s Amended and Restated Certificate of Incorporation (the “Overlap Policy”), there may be certain potential conflicts of interest and fiduciary duty issues associated with your dual roles at the Company and MSG. The Company recognizes and agrees that none of (i) your dual responsibilities at the Company and MSG, (ii) your inability to devote substantially all of your time and attention to the Company’s affairs, (iii) the actual or potential conflicts of interest and fiduciary duty issues that are waived in the Overlap Policy or (iv) any actions taken, or omitted to be taken, by you in good faith to comply with your duties and responsibilities to the Company in light of your dual responsibilities to the Company and MSG, shall be deemed to be a breach by you of your obligations under this Agreement (including your obligations under Annex A) nor shall any of the foregoing constitute “Cause” as such term is defined herein.

2. Your annual base salary will be not less than $1,000,000 annually, paid bi-weekly, subject to annual review and potential increase by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) in its discretion. The Compensation

MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA - 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400





of the Company (the “Compensation Committee”) in its discretion. The Compensation Committee will continue to review your compensation package on an annual basis to ensure you are paid consistently with the market for other similarly situated executives as well as external peers.

3. You will also participate in our discretionary annual bonus program with an annual target bonus opportunity equal to not less than 200% of your annual base salary (with such target bonus opportunity effective for the current fiscal year). Bonus payments are based on actual salary dollars paid during the year and depend on a number of factors including Company, unit and individual performance. However, the decision of whether or not to pay a bonus, and the amount of that bonus, if any, is made by the Compensation Committee in its sole discretion. Annual bonuses are typically paid in the first fiscal quarter of the subsequent fiscal year. Except as otherwise provided herein, in order to receive a bonus, you must be employed by the Company at the time bonuses are being paid. Notwithstanding the foregoing, if your employment with the Company ends on the Scheduled Expiration Date (as defined below), you shall be paid your bonus for the fiscal year ending June 30, 2019, if any, even if such payment is not made to you prior to the Scheduled Expiration Date, which bonus shall be subject to Company and your business unit performance for that fiscal year as determined by the Company in its sole discretion, but without adjustment for your individual performance. You and the Company agree that, for purposes of the discretionary annual bonus in respect of the fiscal year ending June 30, 2016, the salary paid to you by the Company prior to October 1, 2015 shall be treated as salary paid by The Madison Garden Company and not salary paid by the Company.

4. You will also, subject to your continued employment by the Company and actual grant by the Compensation Committee, participate in such equity and other long-term incentive programs that are made available in the future to similarly situated executives at the Company but subject to the terms of this Paragraph. It is expected that such awards will consist of annual grants of stock options with a grant date fair value of not less than $4,800,000, as determined by the Compensation Committee in its discretion. All awards described in this Paragraph, in addition to being subject to actual grant by the Compensation Committee, would be pursuant to the applicable plan document subject to the terms and conditions thereof. The Company agrees, subject to applicable plan limitations, that (i) 50% of the stock option awards will be subject to time-based vesting in three equal tranches on the 1 st , 2 nd and 3 rd anniversary of the grant date; (ii) the remaining 50% of the stock option awards will be subject to the same performance criteria as awards made to other executives of the Company under the Company’s long-term incentive programs; and (iii) the options will expire not later than seven years six months after the date of grant. You and the Company acknowledge that any amounts payable pursuant to outstanding long-term cash awards that were granted to you under the plans of the Company prior to October 1, 2015 (as adjusted in connection with the Company’s spinoff of MSG) shall be the sole responsibility and liability of MSG.

5. While you are employed by MSG, you will not be eligible to participate in the Company’s benefits program except as provided below. If your employment with MSG terminates while you remain employed by the Company, you will be eligible to participate in our standard benefits program, subject to meeting the relevant eligibility requirements, payment of the required






premiums, and the terms of the plans themselves. Notwithstanding the first sentence of this Paragraph 5, you will continue to be eligible to participate in the Company’s Excess Savings Plan and your full Company base salary will be used to determine the applicable benefits under the Company’s Excess Savings Plan. Any Company provided life and accidental death and dismemberment insurance will continue to be based on your Company base salary. You will also be eligible for four (4) weeks of vacation to be accrued and used in accordance with Company policy.

6. If your employment with the Company is terminated on or prior to December 31, 2019 (the “Scheduled Expiration Date”): (i) by the Company (other than for “Cause”); or (ii) by you for “Good Reason” (other than if “Cause” then exists); then, subject to your execution and delivery, within 60 days after the date of termination of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement (as defined below), the Company will provide you with the following:
    
(a)
Subject to Annex B of this Agreement, severance in an amount to be determined by the Company (the “Severance Amount”), but in no event less than two (2) times the sum of your annual base salary and your annual target bonus as in effect at the time your employment terminates. Sixty percent (60%) of the Severance Amount will be payable to you on the six-month anniversary of the date your employment so terminates (the “Termination Date”) and the remaining forty percent (40%) of the Severance Amount will be payable to you on the twelve-month anniversary of the Termination Date;

(b)
Any unpaid annual bonus for the Company’s fiscal year prior to the fiscal year which includes your Termination Date, and a pro-rated bonus based on the amount of your base salary actually earned by you during the Company’s fiscal year through the Termination Date, each of which will be paid to you when such bonuses are generally paid to similarly situated active executives and will be based on your then current annual target bonus as well as Company and your business unit performance for the applicable fiscal year (which performance will be evaluated on the same business unit performance standards as are applied to other executive officers of the Company in respect of the payment of bonuses for such year) as determined by the Compensation Committee in its sole discretion, but without adjustment for your individual performance;

(c)
Each of your then-outstanding and not yet vested long-term cash awards (including any deferred compensation awards under the long-term cash award programs) granted under the plans of the Company, if any, shall immediately vest in full and shall be payable to you at the same time as such awards are paid to active executives of the Company, and the payment amount of such award shall be to the same extent that other similarly situated active executives receive payment as determined by the Compensation Committee (subject to satisfaction of any applicable performance criteria but without adjustment for your individual performance);






(d)
(i) All of the time-based restrictions on each of your then-outstanding and not yet vested restricted stock or restricted stock unit awards granted to you under the plans of the Company, if any, shall immediately be eliminated, (ii) payment and deliveries with respect to your restricted stock that are not subject to performance criteria or are subject to performance criteria that have previously been satisfied (as certified by the Compensation Committee) shall be made immediately after the effective date of the Separation Agreement, (iii) payment and deliveries with respect to your restricted stock units that are not subject to performance criteria or are subject to performance criteria that have previously been satisfied (as certified by the Compensation Committee) shall be made on the 90 th day after the termination of your employment and (iv) payments or deliveries with respect to your restricted stock and restricted stock units that are subject to performance criteria that have not yet been satisfied shall be made on the 90 th day after the applicable performance criteria is certified by the Compensation Committee as having been satisfied; and

(e)
Each of your then-outstanding and not yet vested stock options and stock appreciation awards, if any, under the plans of the Company shall immediately vest and become exercisable, and you shall have the right to exercise each of those options and stock appreciation awards for the remainder of the term of such option or award.

If you die after a termination of your employment that is subject to this Paragraph 6, your estate or beneficiaries will be provided with any remaining benefits and rights under this Paragraph 6.

7.      (a) If you cease to be an employee of the Company prior to the Scheduled Expiration Date as a result of your death or your Disability (as defined in the Company’s Long Term Disability Plan), and at such time Cause does not exist, then, subject (other than in the case of death) to your execution and delivery, within 60 days after the date of termination of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement, you or your estate or beneficiary shall be provided with the benefits and rights set forth in Paragraphs 6(b), (d) and (e) above, and each of your outstanding long-term cash awards granted under the plans of the Company shall immediately vest in full, whether or not subject to performance criteria and shall be payable on the 90 th day after the termination of your employment; provided, that if any such award is subject to any performance criteria, then (i) if the measurement period for such performance criteria has not yet been fully completed, then the payment amount shall be at the target amount for such award and (ii) if the measurement period for such performance criteria has already been fully completed, then the payment of such award shall be at the same time and to the extent that other similarly situated executives receive payment as determined by the Compensation Committee (subject to satisfaction of the applicable performance criteria).

(b) If, prior to or after the Scheduled Expiration Date, you cease to be employed by the Company for any reason other than your being terminated for Cause, you shall have three years







to exercise outstanding stock options and stock appreciation awards, unless you are afforded a longer period for exercise pursuant to another provision of this Agreement or any applicable award letter, but in no event exercisable after the end of the applicable regularly scheduled term (except in the case of death, as may otherwise be permitted under the applicable Employee Stock Plan or award letter).

(c) If, after the Scheduled Expiration Date, your employment with the Company is terminated (i) by the Company, (ii) by you for Good Reason, or (iii) as a result of your death or Disability, and at the time of any such termination described in clause (i), (ii) or (iii), Cause does not exist, then, subject (other than in the case of your death) to your execution and delivery, within 60 days after the date of termination of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement, each of your then outstanding long term cash awards and equity awards (including restricted stock, restricted stock units, options and stock appreciation rights) that was awarded prior to the Scheduled Expiration Date shall vest and/or be payable as set forth in Paragraphs 6(c), (d), and (e) above.

(d) Upon the termination of your employment with the Company, the Company shall pay you any unpaid base salary through the date of termination by no later than the next payroll period, and shall reimburse you for any unreimbursed expenses incurred through the date of termination in accordance with the Company’s reimbursement policy. Except as otherwise specifically provided in this Agreement, your rights to benefits and payments under the Company’s pension and welfare plans (other than severance benefits) and any outstanding long-term cash or equity awards shall be determined in accordance with the then current terms and provisions of such plans, agreements and awards under which such benefits and payments (including such long-term cash or equity awards) were granted.

8. For purposes hereof, “Separation Agreement” shall mean the Company’s standard severance agreement (modified to reflect the terms of this Agreement) which will include, without limitation, the provisions set forth in Paragraphs 6, 7 and 9 hereof and Annex A hereto regarding non-compete (limited to one year), non-disparagement, non-hire/non-solicitation, confidentiality (including, without limitation, the last paragraph of Section 3 of Annex A), and further cooperation obligations and restrictions on you (with Company reimbursement of your associated expenses and payment for your services as described in Annex A in connection with any required post-employment cooperation) as well as a general release by you of the Company and its affiliates (and their respective directors and officers), but shall otherwise contain no post-employment covenants unless agreed to by you. The Company shall provide you with the form of Separation Agreement within seven days of your termination of employment. For avoidance of doubt, your rights of indemnification under the Company’s Amended and Restated Certificate of Incorporation, under your indemnification agreement with the Company and under any insurance policy, or under any other resolution of the Board of Directors of the Company shall not be released, diminished or affected by any Separation Agreement or release or any termination of your employment.

9. Except as otherwise set forth in Paragraphs 6 and 7 hereof, in connection with any termination of your employment, your then outstanding equity and cash incentive awards shall






be treated in accordance with their terms and, other than as provided in this Agreement, you shall not be eligible for severance benefits under any other plan, program or policy of the Company. Nothing in this Agreement is intended to limit any more favorable rights that you may be entitled to under your equity and cash incentive award agreements, including, without limitation, your rights in the event of a termination of your employment, a “Going Private Transaction” or a “Change in Control” (as those terms are defined in the applicable award agreement).

10. For purposes of this Agreement, “ Cause ” means your (i) commission of an act of fraud, embezzlement, misappropriation, willful misconduct, gross negligence or breach of fiduciary duty against the Company or an affiliate thereof, or (ii) commission of any act or omission that results in a conviction, plea of no contest, plea of nolo contendere , or imposition of unadjudicated probation for any crime involving moral turpitude or any felony.

For purposes of this Agreement, “ Good Reason ” means that (1) without your written consent and other than by your own causation, (A) your annual base salary or annual target bonus (as each may be increased from time to time in the Compensation Committee’s sole discretion) is reduced, (B) you are no longer the Executive Chairman of the Company, (C) you no longer report directly to the Board of Directors of the Company, (D) the Company requires that your principal office be located outside of Nassau County or the Borough of Manhattan, (E) the Company materially breaches its obligations to you under this Agreement; or (F) your responsibilities are materially diminished, (2) you have given the Company written notice, referring specifically to this Agreement and definition, that you do not consent to such action, (3) the Company has not corrected such action within 30 days of receiving such notice, and (4) you voluntarily terminate your employment with the Company within 90 days following the happening of the action described in subsection (1) above.

11. This Agreement does not constitute a guarantee of employment for any definite period. Your employment is at will and may be terminated by you or the Company at any time, with or without notice or reason.

12. The Company may withhold from any payment due to you any taxes required to be withheld under any law, rule or regulation. If any payment otherwise due to you hereunder would result in the imposition of the excise tax imposed by Section 4999 of the Code, the Company will instead pay you either (i) such amount or (ii) the maximum amount that could be paid to you without the imposition of the excise tax, depending on whichever amount results in your receiving the greater amount of after‑tax proceeds. In the event that the payments and benefits payable to you would be reduced as provided in the previous sentence, then such reduction will be determined in a manner which has the least economic cost to you and, to the extent the economic cost is equivalent, such payments or benefits will be reduced in the inverse order of when the payments or benefits would have been made to you ( i.e. later payments will be reduced first) until the reduction specified is achieved. If the Company elects to retain any accounting or similar firm to provide assistance in calculating any such amounts, the Company shall be responsible for the costs of any such firm.








13. It is intended that this Agreement will comply with Section 409A to the extent this Agreement is subject thereto, and that this Agreement shall be interpreted on a basis consistent with such intent. If and to the extent that any payment or benefit under this Agreement, or any plan, award or arrangement of the Company or its affiliates, constitutes “non-qualified deferred compensation” subject to Section 409A and is payable to you by reason of your termination of employment, then (a) such payment or benefit shall be made or provided to you only upon a “separation from service” as defined for purposes of Section 409A under applicable regulations and (b) if you are a “specified employee” (within the meaning of Section 409A as determined by the Company), (i) any payments will not be made to you and instead will be made to a trust in compliance with Rev. Proc. 92-64 (the “Rabbi Trust”), provided, however, that no payment will be made to the Rabbi Trust if it would be contrary to law or cause you to incur additional tax under Section 409A, (ii) any benefits will be delayed, and (iii) such payments or benefits shall not be made or provided to you before the date that is six months after the date of your separation from service (or your earlier death). Any amount not paid or benefit not provided in respect of the six month period specified in the preceding sentence will be paid to you, together with interest on such delayed amount at a rate equal to the average of the one-year LIBOR fixed rate equivalent for the ten business days prior to the date of your employment termination, in a lump sum or provided to you as soon as practicable after the expiration of such six month period. Each payment or benefit provided under this Agreement shall be treated as a separate payment for purposes of Section 409A to the extent Section 409A applies to such payment. If the Rabbi Trust has not been established at the time of the termination of your employment, you may select an institution to serve as the trustee of the Rabbi Trust (so long as the institution is reasonably acceptable to the Company). You may negotiate such terms with the trustee as are customary for such arrangements and reasonably acceptable to the Company. The Company will bear all costs related to the establishment and operation of the Rabbi Trust, including your attorney’s fees.
  
14. To the extent you are entitled to any expense reimbursement from the Company that is subject to Section 409A, (i) the amount of any such expenses eligible for reimbursement in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable year (except under any lifetime limit applicable to expenses for medical care), (ii) in no event shall any such expense be reimbursed after the last day of the calendar year following the calendar year in which you incurred such expense, and (iii) in no event shall any right to reimbursement be subject to liquidation or exchange for another benefit.

15. The Company will not take any action, or omit to take any action, that would expose any payment or benefit to you to the additional tax of Section 409A, unless (i) the Company is obligated to take the action under an agreement, plan or arrangement to which you are a party, (ii) you request the action, (iii) the Company advises you in writing that the action may result in the imposition of the additional tax and (iv) you subsequently request the action in a writing that acknowledges you will be responsible for any effect of the action under Section 409A. The Company will hold you harmless for any action it may take or omission in violation of this Paragraph 15, including any attorney’s fees you may incur in enforcing your rights.

16. It is our intention that the benefits and rights to which you could become entitled in connection with termination of employment be exempt from or comply with Section 409A. If






you or the Company believes, at any time, that any of such benefit or right is not exempt or does not comply, it will promptly advise the other and will negotiate reasonably and in good faith to amend the terms of such arrangement such that it complies (with the most limited possible economic effect on you and on the Company).

17. This Agreement is personal to you and without the prior written consent of the Company shall not be assignable by you. This Agreement shall inure to the benefit of and be enforceable by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The rights or obligations of the Company under this Agreement may only be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of Company; provided, however, that the assignee or transferee is the successor to all or substantially all of the assets of Company and such assignee or transferee assumes the liabilities and duties of Company, as contained in this Agreement, either contractually or as a matter of law.

18. To the extent permitted by law, you and the Company waive any and all rights to a jury trial with respect to any matter relating to this Agreement (including the covenants set forth in Annex A and Annex B hereof). This Agreement will be governed by and construed in accordance with the law of the State of New York applicable to contracts made and to be performed entirely within that State.

19. Both the Company and you hereby irrevocably submit to the jurisdiction of the courts of the State of New York and the federal courts of the United States of America in each case located in the City of New York, Borough of Manhattan, solely in respect of the interpretation and enforcement of the provisions of this Agreement, and each party hereby waives, and agrees not to assert, as a defense that either party, as appropriate, is not subject thereto or that the venue thereof may not be appropriate. You and the Company each agree that mailing of process or other papers in connection with any such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof.

20. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. It is the parties’ intention that this Agreement not be construed more strictly with regard to you or the Company.

21. This Agreement reflects the entire understanding and agreement of you and the Company with respect to the subject matter hereof and supersedes all prior understandings or agreements relating thereto, including but not limited to the December 24, 2009 Employment Agreement with Madison Square Garden, Inc.; provided, however, that you shall be entitled to the benefits under the indemnification agreement between you and the Company.

22. This Agreement will automatically terminate, and be of no further force or effect, on the Scheduled Expiration Date; provided, however, that the provisions of Paragraphs 6 through 10,





12 through 22, Annex A and Annex B, and any amounts earned but not yet paid to you pursuant to the terms of this Agreement as of the Scheduled Expiration Date shall survive the termination of the Agreement and remain binding on you and the Company in accordance with their terms.

[Signature Page Follows]
















































Sincerely,

MSG NETWORKS INC.



/s/ Andrea Greenberg                 
By:      Andrea Greenberg
Title:      President & Chief Executive Officer


Accepted and Agreed:


/s/ James L. Dolan             
James L. Dolan

 

































ANNEX A
ADDITIONAL COVENANTS
(This Annex constitutes part of the Agreement)

You agree to comply with the following covenants in addition to those set forth in the Agreement.

1. CONFIDENTIALITY

You agree to retain in strict confidence and not divulge, disseminate, copy or disclose to any third party any Confidential Information, other than for legitimate business purposes of the Company and its subsidiaries. As used herein, “Confidential Information” means any non-public information that is material or of a confidential, proprietary, commercially sensitive or personal nature of, or regarding, the Company or any of its subsidiaries or any current or former director, officer or member of senior management of any of the foregoing (collectively “Covered Parties”). The term Confidential Information includes information in written, digital, oral or any other format and includes, but is not limited to (i) information designated or treated as confidential; (ii) budgets, plans, forecasts or other financial or accounting data; (iii) subscriber, customer, guest, fan, vendor, sponsor, marketing affiliate or shareholder lists or data; (iv) financial, technical or strategic information regarding the Covered Parties’ programming, carriage agreements and arrangements, affiliation and/or other distribution arrangements, live streaming, advertising, sports, entertainment, or other businesses; (v) advertising, sponsorship, business, sales or marketing tactics, strategies or information; (vi) policies, practices, procedures or techniques; (vii) trade secrets or other intellectual property; (viii) information, theories or strategies relating to litigation, arbitration, mediation, investigations or matters relating to governmental authorities; (ix) terms of agreements with third parties and third party trade secrets; (x) information regarding employees, talent, announcers and commentators, players, coaches, agents, consultants, advisors or representatives, including their compensation or other human resources policies and procedures; (xi) information or strategies relating to any potential or actual business development transactions and/or any potential or actual business acquisition, divestiture or joint venture, and (xii) any other information the disclosure of which may have an adverse effect on the Covered Parties’ business reputation, operations or competitive position, reputation or standing in the community.

If disclosed, Confidential Information or Other Information could have an adverse effect on the Company’s standing in the community, its business reputation, operations or competitive position or the standing, reputation, operations or competitive position of any of its affiliates, subsidiaries, officers, directors, employees, consultants or agents or any of the Covered Parties.

Notwithstanding the foregoing, the obligations of this section, other than with respect to subscriber information, shall not apply to Confidential Information which is:











a) already in the public domain or which enters the public domain other than by your breach of this Paragraph 1;

b) disclosed to you by a third party with the right to disclose it in good faith; or

c) specifically exempted in writing by the Company from the applicability of this Agreement.

Notwithstanding anything elsewhere in this Agreement, including this Paragraph 1 and Paragraph 3 below, you are authorized to make any disclosure required of you by any federal, state and local laws or judicial, arbitral or governmental agency proceedings (including making truthful statements in connection with a judicial or arbitral proceeding to enforce your rights under this Agreement, to the extent reasonably required and made in good faith), after, to the extent legal and practicable, providing the Company with prior written notice and an opportunity to respond prior to such disclosure. In addition, this Agreement in no way restricts or prevents you from providing truthful testimony concerning the Company to judicial, administrative, regulatory or other governmental authorities.

2. NON-COMPETE

You acknowledge that due to your executive position in the Company and your knowledge of the Company’s confidential and proprietary information, your employment or affiliation with certain entities would be detrimental to the Company. You agree that, without the prior written consent of the Company, you will not represent, become employed by, consult to, advise in any manner or have any material interest in any business directly or indirectly in any Competitive Entity (as defined below). A “Competitive Entity” shall mean any person or entity that (i) owns or operates any regional sports programming network or other online or mobile sports programming platform, in any case, primarily distributed in the New York metropolitan area, or (ii) directly competes with any other business of the Company or one of its subsidiaries that produced greater than 10% of the Company’s revenues in the calendar year immediately preceding the year in which the determination is made. An entity shall be deemed to compete with the on-line content business of the Company, or any of its affiliates only if the entity directly competes against the television programming and/or on-line content business of the Company or its affiliate(s); provided, however, that an entity’s business shall not be deemed to directly compete merely by the fact that the business sells ads on-line, unless the business specifically targets such ads to the same customers or potential customers as being targeted by the on-line content business of the Company, its subsidiary or affiliate. Ownership of not more than 1% of the outstanding stock of any publicly traded company shall not be a violation of this Paragraph. This agreement not to compete will expire upon the one year anniversary of the date of a termination of your employment with the Company.

3. ADDITIONAL UNDERSTANDINGS

You agree, for yourself and others acting on your behalf, that you (and they) have not disparaged and will not disparage, make negative statements about, or act in any manner which is intended to or does damage to the good will of, or the business or personal reputations of the Company or







any of its incumbent officers, directors, agents, consultants, employees, successors and assigns or any of the Covered Parties.

The Company agrees that, except as necessary to comply with applicable law or the rules of the New York Stock Exchange or any other stock exchange on which the Company’s stock may be traded (and any public statements made in good faith by the Company in connection therewith), it and its corporate officers and directors, employees in its public relations department or third party public relations representatives retained by the Company will not disparage you or make negative statements in the press or other media which are damaging to your business or personal reputation. In the event that the Company so disparages you or makes such negative statements, then notwithstanding the “Additional Understandings” provision to the contrary, you may make a proportional response thereto.

In addition, you agree that the Company is the owner of all rights, title and interest in and to all documents, tapes, videos, designs, plans, formulas, models, processes, computer programs, inventions (whether patentable or not), schematics, music, lyrics and other technical, business, financial, advertising, sales, marketing, customer or product development plans, forecasts, strategies, information and materials (in any medium whatsoever) developed or prepared by you or with your cooperation in connection with your employment by the Company (the “Materials”). For purposes of clarity, Materials shall not include any music or lyrics written (in the past or in the future) by you, and shall not include any documents, tapes or videos that relate to such music or lyrics or the performance of such music or lyrics other than music or lyrics written in connection with your employment. The Company will have the sole and exclusive authority to use the Materials in any manner that it deems appropriate, in perpetuity, without additional payment to you.

If requested by the Company, you agree to deliver to the Company upon the termination of your employment, or at any earlier time the Company may request, all memoranda, notes, plans, files, records, reports, and software and other documents and data (and copies thereof regardless of the form thereof (including electronic copies)) containing, reflecting or derived from Confidential Information or the Materials of the Company or any of its affiliates which you may then possess or have under your control. If so requested, you shall provide to the Company a signed statement confirming that you have fully complied with this Paragraph. Notwithstanding the foregoing, you shall be entitled to retain your contacts, calendars and personal diaries and any materials needed for your tax return preparation or related to your compensation.

4. FURTHER COOPERATION

Following the date of termination of your employment with the Company (the “Expiration Date”), you will no longer provide any regular services to the Company or represent yourself as a Company agent. If, however, the Company so requests, you agree to cooperate fully with the Company in connection with any matter with which you were involved prior to the Expiration Date, or in any litigation or administrative proceedings or appeals (including any preparation therefore) where the Company believes that your personal knowledge, attendance and participation could be beneficial to the Company. This cooperation includes, without limitation,






participation on behalf of the Company in any litigation or administrative proceeding brought by any former or existing Company employees, representatives, agents or vendors. The Company will pay you for your services rendered under this provision at the rate of $8,400 per day for each day or part thereof, within 30 days of the approval of the invoice therefor.

The Company will provide you with reasonable notice in connection with any cooperation it requires in accordance with this section and will take reasonable steps to schedule your cooperation in any such matters so as not to materially interfere with your other professional and personal commitments. The Company will reimburse you for any reasonable out-of-pocket expenses you reasonably incur in connection with the cooperation you provide hereunder as soon as practicable after you present appropriate documentation evidencing such expenses. You agree to provide the Company with an estimate of such expense before you incur the same.

5. NON-HIRE OR SOLICIT

You agree not to hire, seek to hire, or cause any person or entity to hire or seek to hire (without the prior written consent of the Company), directly or indirectly (whether for your own interest or any other person or entity’s interest) any person who is or was in the prior six months an employee of the Company, or any of its subsidiaries, until the first anniversary of the date of your termination of employment with the Company. This restriction does not apply to any former employee who was discharged by the Company or any of its affiliates. In addition, this restriction will not prevent you from providing references.

6. ACKNOWLEDGMENTS

You acknowledge that the restrictions contained in this Annex A, in light of the nature of the Company’s business and your position and responsibilities, are reasonable and necessary to protect the legitimate interests of the Company. You acknowledge that the Company has no adequate remedy at law and would be irreparably harmed if you breach or threaten to breach the provisions of this Annex A, and therefore agree that the Company shall be entitled to injunctive relief, to prevent any breach or threatened breach of any of those provisions and to specific performance of the terms of each of such provisions in addition to any other legal or equitable remedy it may have. You further agree that you will not, in any equity proceeding relating to the enforcement of the provisions of this Annex A, raise the defense that the Company has an adequate remedy at law. Nothing in this Annex A shall be construed as prohibiting the Company from pursuing any other remedies at law or in equity that it may have or any other rights that it may have under any other agreement. If it is determined that any of the provisions of this Annex A or any part thereof, is unenforceable because of the duration or scope (geographic or otherwise) of such provision, it is the intention of the parties that the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.

7. SURVIVAL









The provisions of this Annex A shall survive any termination of your employment by the Company or the expiration of the Agreement except as otherwise provided herein.

*      *      *
















































ANNEX B
MSG NETWORKS QUALIFYING TERMINATION
(This Annex constitutes part of the Agreement)

1.
Qualifying MSG Networks Termination While You Remain Employed with MSG .

(a)
Notwithstanding anything in the Agreement to the contrary, if you experience a Qualifying MSG Networks Termination (as defined below) while you remain employed with MSG, then you will not be entitled to the severance payment set forth in Section 6(a) of this Agreement.

(b)
For purposes of this Annex B, a “ Qualifying MSG Networks Termination ” means a termination of your employment with the Company by the Company without Cause or by you for Good Reason (other than if Cause then exists) prior to the Scheduled Expiration Date and while you remain employed with MSG.






Exhibit 10.28
 
MSGNETWORKSLOGOA15A.JPG
August 26, 2020
Mr. James L. Dolan
MSG Networks Inc.
11 Pennsylvania Plaza
New York, NY 10121
Dear Jim:
This letter agreement (the “Agreement”), effective as of July 1, 2020 (the “Effective Date”) will confirm the terms of your continued employment with MSG Networks Inc. (the “Company”) following the Effective Date.
1. Your title continues to be Executive Chairman and it is expected that you will continue to be nominated for election as a director of the Company during the period you serve as Executive Chairman. Subject to the provisions of this paragraph, you agree to devote your business time and attention to the business and affairs of the Company. The Company understands that you are a party to an Employment Agreement with each of Madison Square Garden Sports Corp. (“MSGS”) and Madison Square Garden Entertainment Corp. (“MSGE”) and recognizes and agrees that your responsibilities to MSGS and MSGE will preclude you from devoting substantially all of your time and attention to the Company’s affairs. However, the Company understands, and you agree, that you will not take on another significant and substantial employment role outside of these three entities and/or their respective subsidiaries,, and that you will devote to the Company’s affairs a sufficiently substantial portion of your time and attention as may be reasonably necessary to accomplish the objectives of your strategic and operational role for the Company as identified in this Agreement and as mutually agreed between yourself and the Company from time to time. In addition, as recognized in Article Tenth of the Company’s Amended and Restated Certificate of Incorporation (the “Overlap Policy”), there may be certain potential conflicts of interest and fiduciary duty issues associated with your roles at the Company, MSGS and MSGE. The Company recognizes and agrees that none of (i) your responsibilities at the Company, MSGS and MSGE, (ii) your inability to devote substantially all of your time and attention to the Company’s affairs, (iii) the actual or potential conflicts of interest and fiduciary duty issues that are waived in the Overlap Policy or (iv) any actions taken, or omitted to be taken, by you in good faith to comply with your duties and responsibilities to the Company in light of your responsibilities to the Company, MSGS and MSGE, shall be deemed to be a breach by you of your obligations under this Agreement (including your obligations under Annex A) nor shall any of the foregoing constitute “Cause” as such term is defined herein.
2. As of the Effective Date, your annual base salary for periods thereafter will be not less than $1,250,000 annually, paid bi-weekly, subject to annual review and potential increase by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) in its discretion. The Compensation Committee will continue to review your compensation package on an annual basis to ensure you are paid consistently with the market for other similarly situated executives as well as external peers.
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 2
 
3. You will also participate in our discretionary annual bonus program with an annual target bonus opportunity equal to not less than 200% of your annual base salary (with such target bonus opportunity effective for the current fiscal year). Bonus payments depend on a number of factors including Company, unit and individual performance. However, the decision of whether or not to pay a bonus, and the amount of that bonus, if any, is made by the Compensation Committee in its sole discretion. Annual bonuses are typically paid in the first fiscal quarter of the subsequent fiscal year. Except as otherwise provided herein, in order to receive a bonus, you must be employed by the Company at the time bonuses are being paid. Notwithstanding the foregoing, if your employment with the Company ends on the Scheduled Expiration Date (as defined below), you shall be paid your bonus for the fiscal year ending June 30, 2024, if any, even if such payment is not made to you prior to the Scheduled Expiration Date, which bonus shall be subject to Company and your business unit performance for that fiscal year as determined by the Company in its sole discretion, but without adjustment for your individual performance.
4. You will also, subject to your continued employment by the Company and actual grant by the Compensation Committee, participate in such equity and other long-term incentive programs that are made available in the future to similarly situated executives at the Company but subject to the terms of this Paragraph. Commencing with the Company’s fiscal year starting July 1, 2020, It is expected that such awards will consist of annual grants of cash and/or long term equity awards with an annual target value of not less than $4,050,000, as determined by the Compensation Committee in its discretion. All awards described in this Paragraph, in addition to being subject to actual grant by the Compensation Committee, would be pursuant to the applicable plan document and would be subject to any terms and conditions established by the Compensation Committee in its sole discretion that would be detailed in separate agreements you would receive after any award is actually made; provided, however, that such terms and conditions shall be consistent with those in awards granted to similarly situated executives.
5. You will also be eligible to participate in all of our benefits and retirement plans and programs, subject to meeting relevant eligibility requirements, payment of the required premiums, and the terms of the plans themselves. Any Company provided life and accidental death and dismemberment insurance will continue to be based on your Company base salary. You will also continue to be eligible for paid time off to be accrued and used in accordance with Company policy, which currently allows for time off on a flexible and unlimited basis.
6. If your employment with the Company is terminated on or prior to June 30, 2024 (the “Scheduled Expiration Date”): (i) by the Company (other than for “Cause”); or (ii) by you for “Good Reason” (other than if “Cause” then exists); then, subject to your execution and delivery, within 60 days after the date of termination of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement (as defined below), the Company will provide you with the following:
 
  (a) Severance in an amount to be determined by the Company (the “Severance Amount”), but in no event less than two (2) times the sum of your annual base salary and your annual target bonus as in effect at the time your employment
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 3
 
  terminates. Sixty percent (60%) of the Severance Amount will be payable to you on the six-month anniversary of the date your employment so terminates (the “Termination Date”) and the remaining forty percent (40%) of the Severance Amount will be payable to you on the twelve-month anniversary of the Termination Date;
 
  (b)
Any unpaid annual bonus for the Company’s fiscal year prior to the fiscal year which includes your Termination Date, and a pro-rated bonus based on the amount of your base salary actually earned by you during the Company’s fiscal year through the Termination Date, each of which will be paid to you when such bonuses are generally paid to similarly situated active executives and will be based on your then current annual target bonus as well as Company and your business unit performance for the applicable fiscal year (which performance will be evaluated on the same business unit performance standards as are applied to other executive officers of the Company in respect of the payment of bonuses for such year) as determined by the Compensation Committee in its sole discretion, but without adjustment for your individual performance;
 
  (c) Each of your then-outstanding and not yet vested long-term cash awards (including any deferred compensation awards under the long-term cash award programs) granted under the plans of the Company, if any, shall immediately vest in full and shall be payable to you at the same time as such awards are paid to active executives of the Company, and the payment amount of such award shall be to the same extent that other similarly situated active executives receive payment as determined by the Compensation Committee (subject to satisfaction of any applicable performance criteria but without adjustment for your individual performance);
 
  (d)
(i) All of the time-based restrictions on each of your then-outstanding and not yet vested restricted stock or restricted stock unit awards granted to you under the plans of the Company, if any, shall immediately be eliminated, (ii) payment and deliveries with respect to your restricted stock that are not subject to performance criteria or are subject to performance criteria that have previously been satisfied (as certified by the Compensation Committee) shall be made immediately after the effective date of the Separation Agreement, (iii) payment and deliveries with respect to your restricted stock units that are not subject to performance criteria or are subject to performance criteria that have previously been satisfied (as certified by the Compensation Committee) shall be made on the 90th day after the termination of your employment and (iv) payments or deliveries with respect to your restricted stock and restricted stock units that are subject to performance criteria that have not yet been satisfied shall be made on the 90th day after the applicable performance criteria is certified by the Compensation Committee as having been satisfied; and
 
  (e) Each of your then-outstanding and not yet vested stock options and stock appreciation awards, if any, under the plans of the Company shall immediately vest and become exercisable, and you shall have the right to exercise each of those options and stock appreciation awards for the remainder of the term of such option or award.
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 4
 
If you die after a termination of your employment that is subject to this Paragraph 6, your estate or beneficiaries will be provided with any remaining benefits and rights under this Paragraph 6.
7. (a) If you cease to be an employee of the Company prior to the Scheduled Expiration Date as a result of your death or your Disability (as defined in the Company’s Long Term Disability Plan), and at such time Cause does not exist, then, subject (other than in the case of death) to your execution and delivery, within 60 days after the date of termination of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement, you or your estate or beneficiary shall be provided with the benefits and rights set forth in Paragraphs 6(b), (d) and (e) above, and each of your outstanding long-term cash awards granted under the plans of the Company shall immediately vest in full, whether or not subject to performance criteria and shall be payable on the 90th day after the termination of your employment; provided, that if any such award is subject to any performance criteria, then (i) if the measurement period for such performance criteria has not yet been fully completed, then the payment amount shall be at the target amount for such award and (ii) if the measurement period for such performance criteria has already been fully completed, then the payment of such award shall be at the same time and to the extent that other similarly situated executives receive payment as determined by the Compensation Committee (subject to satisfaction of the applicable performance criteria).
(b) If, prior to or after the Scheduled Expiration Date, you cease to be employed by the Company for any reason other than your being terminated for Cause, you shall have three years to exercise outstanding stock options and stock appreciation awards, unless you are afforded a longer period for exercise pursuant to another provision of this Agreement or any applicable award letter, but in no event exercisable after the end of the applicable regularly scheduled term (except in the case of death, as may otherwise be permitted under the applicable Employee Stock Plan or award letter).
(c) If, after the Scheduled Expiration Date, your employment with the Company is terminated (i) by the Company, (ii) by you for Good Reason, or (iii) as a result of your death or Disability, and at the time of any such termination described in clause (i), (ii) or (iii), Cause does not exist, then, subject (other than in the case of your death) to your execution and delivery, within 60 days after the date of termination of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement, each of your then outstanding long term cash awards and equity awards (including restricted stock, restricted stock units, options and stock appreciation rights) that was awarded prior to the Scheduled Expiration Date shall vest and/or be payable as set forth in Paragraphs 6(c), (d), and (e) above.
(d) Upon the termination of your employment with the Company, the Company shall pay you any unpaid base salary through the date of termination by no later than the next payroll period, and shall reimburse you for any unreimbursed expenses incurred through the date of termination in accordance with the Company’s reimbursement policy. Except as otherwise specifically provided in this Agreement, your rights to benefits and payments under the Company’s pension and welfare plans (other than severance benefits) and any outstanding long-term
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 5
 
cash or equity awards shall be determined in accordance with the then current terms and provisions of such plans, agreements and awards under which such benefits and payments (including such long-term cash or equity awards) were granted.
8. For purposes hereof, “Separation Agreement” shall mean the Company’s standard severance agreement (modified to reflect the terms of this Agreement) which will include, without limitation, the provisions set forth in Paragraphs 6, 7 and 9 hereof and Annex A hereto regarding non-compete (limited to one year), non-disparagement, non-hire/non-solicitation, confidentiality (including, without limitation, the last paragraph of Section 3 of Annex A), and further cooperation obligations and restrictions on you (with Company reimbursement of your associated expenses and payment for your services as described in Annex A in connection with any required post-employment cooperation) as well as a general release by you of the Company and its affiliates (and their respective directors and officers), but shall otherwise contain no post-employment covenants unless agreed to by you. The Company shall provide you with the form of Separation Agreement within seven days of your termination of employment. For avoidance of doubt, your rights of indemnification under the Company’s Amended and Restated Certificate of Incorporation, under your indemnification agreement with the Company and under any insurance policy, or under any other resolution of the Board of Directors of the Company shall not be released, diminished or affected by any Separation Agreement or release or any termination of your employment.
9. Except as otherwise set forth in Paragraphs 6 and 7 hereof, in connection with any termination of your employment, your then outstanding equity and cash incentive awards shall be treated in accordance with their terms and, other than as provided in this Agreement, you shall not be eligible for severance benefits under any other plan, program or policy of the Company. Nothing in this Agreement is intended to limit any more favorable rights that you may be entitled to under your equity and cash incentive award agreements, including, without limitation, your rights in the event of a termination of your employment, a “Going Private Transaction” or a “Change in Control” (as those terms are defined in the applicable award agreement).
10. For purposes of this Agreement, “Cause” means your (i) commission of an act of fraud, embezzlement, misappropriation, willful misconduct, gross negligence or breach of fiduciary duty against the Company or an affiliate thereof, or (ii) commission of any act or omission that results in a conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any crime involving moral turpitude or any felony.
For purposes of this Agreement, “Good Reason” means that (1) without your written consent and other than by your own causation, (A) your annual base salary or annual target bonus (as each may be increased from time to time in the Compensation Committee’s sole discretion) is reduced, (B) you are no longer the Executive Chairman of the Company, (C) you no longer report directly to the Board of Directors of the Company, (D) the Company requires that your principal office be located outside of Nassau County or the Borough of Manhattan, (E) the Company materially breaches its obligations to you under this Agreement; or (F) your responsibilities are materially diminished, (2) you have given the Company written notice, referring specifically to this Agreement and definition, that you do not consent to such action, (3) the Company has not corrected such action within 30 days of receiving such notice, and (4) you voluntarily terminate your employment with the Company within 90 days following the happening of the action described in subsection (1) above.
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 6
 
11. This Agreement does not constitute a guarantee of employment for any definite period. Your employment is at will and may be terminated by you or the Company at any time, with or without notice or reason.
12. The Company may withhold from any payment due to you any taxes required to be withheld under any law, rule or regulation. If any payment otherwise due to you hereunder would result in the imposition of the excise tax imposed by Section 4999 of the Code, the Company will instead pay you either (i) such amount or (ii) the maximum amount that could be paid to you without the imposition of the excise tax, depending on whichever amount results in your receiving the greater amount of after-tax proceeds. In the event that the payments and benefits payable to you would be reduced as provided in the previous sentence, then such reduction will be determined in a manner which has the least economic cost to you and, to the extent the economic cost is equivalent, such payments or benefits will be reduced in the inverse order of when the payments or benefits would have been made to you (i.e. later payments will be reduced first) until the reduction specified is achieved. If the Company elects to retain any accounting or similar firm to provide assistance in calculating any such amounts, the Company shall be responsible for the costs of any such firm.
13. It is intended that this Agreement will comply with Section 409A to the extent this Agreement is subject thereto, and that this Agreement shall be interpreted on a basis consistent with such intent. If and to the extent that any payment or benefit under this Agreement, or any plan, award or arrangement of the Company or its affiliates, constitutes “non-qualified deferred compensation” subject to Section 409A and is payable to you by reason of your termination of employment, then (a) such payment or benefit shall be made or provided to you only upon a “separation from service” as defined for purposes of Section 409A under applicable regulations and (b) if you are a “specified employee” (within the meaning of Section 409A as determined by the Company), (i) any payments will not be made to you and instead will be made to a trust in compliance with Rev. Proc. 92-64 (the “Rabbi Trust”), provided, however, that no payment will be made to the Rabbi Trust if it would be contrary to law or cause you to incur additional tax under Section 409A, (ii) any benefits will be delayed, and (iii) such payments or benefits shall not be made or provided to you before the date that is six months after the date of your separation from service (or your earlier death). Any amount not paid or benefit not provided in respect of the six month period specified in the preceding sentence will be paid to you, together with interest on such delayed amount at a rate equal to the average of the one-year LIBOR fixed rate equivalent for the ten business days prior to the date of your employment termination, in a lump sum or provided to you as soon as practicable after the expiration of such six month period. Each payment or benefit provided under this Agreement shall be treated as a separate payment for purposes of Section 409A to the extent Section 409A applies to such payment. If the Rabbi Trust has not been established at the time of the termination of your employment, you may select an institution to serve as the trustee of the Rabbi Trust (so long as the institution is reasonably acceptable to the Company). You may negotiate such terms with the trustee as are customary for such arrangements and reasonably acceptable to the Company. The Company will bear all costs related to the establishment and operation of the Rabbi Trust, including your attorney’s fees.
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 7
 
14. To the extent you are entitled to any expense reimbursement from the Company that is subject to Section 409A, (i) the amount of any such expenses eligible for reimbursement in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable year (except under any lifetime limit applicable to expenses for medical care), (ii) in no event shall any such expense be reimbursed after the last day of the calendar year following the calendar year in which you incurred such expense, and (iii) in no event shall any right to reimbursement be subject to liquidation or exchange for another benefit.
15. The Company will not take any action, or omit to take any action, that would expose any payment or benefit to you to the additional tax of Section 409A, unless (i) the Company is obligated to take the action under an agreement, plan or arrangement to which you are a party, (ii) you request the action, (iii) the Company advises you in writing that the action may result in the imposition of the additional tax and (iv) you subsequently request the action in a writing that acknowledges you will be responsible for any effect of the action under Section 409A. The Company will hold you harmless for any action it may take or omission in violation of this Paragraph 15, including any attorney’s fees you may incur in enforcing your rights.
16. It is our intention that the benefits and rights to which you could become entitled in connection with termination of employment be exempt from or comply with Section 409A. If you or the Company believes, at any time, that any of such benefit or right is not exempt or does not comply, it will promptly advise the other and will negotiate reasonably and in good faith to amend the terms of such arrangement such that it complies (with the most limited possible economic effect on you and on the Company).
17. This Agreement is personal to you and without the prior written consent of the Company shall not be assignable by you. This Agreement shall inure to the benefit of and be enforceable by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The rights or obligations of the Company under this Agreement may only be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of Company; provided, however, that the assignee or transferee is the successor to all or substantially all of the assets of Company and such assignee or transferee assumes the liabilities and duties of Company, as contained in this Agreement, either contractually or as a matter of law.
18. To the extent permitted by law, you and the Company waive any and all rights to a jury trial with respect to any matter relating to this Agreement (including the covenants set forth in Annex A hereof). This Agreement will be governed by and construed in accordance with the law of the State of New York applicable to contracts made and to be performed entirely within that State.
19. Both the Company and you hereby irrevocably submit to the jurisdiction of the courts of the State of New York and the federal courts of the United States of America in each case located in the City of New York, Borough of Manhattan, solely in respect of the interpretation and enforcement of the provisions of this Agreement, and each party hereby waives, and agrees not to assert, as a defense that either party, as appropriate, is not subject thereto or that the venue thereof may not be appropriate. You and the Company each agree that mailing of process or other papers in connection with any such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof.
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 8
 
20. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. It is the parties’ intention that this Agreement not be construed more strictly with regard to you or the Company.
21. This Agreement reflects the entire understanding and agreement of you and the Company with respect to the subject matter hereof and supersedes all prior understandings or agreements relating thereto, including but not limited to the September 16, 2016 Employment Agreement with the Company; provided, however, that you shall be entitled to the benefits under the indemnification agreement between you and the Company.
22. This Agreement will automatically terminate, and be of no further force or effect, on the Scheduled Expiration Date; provided, however, that the provisions of Paragraphs 6 through 10, 12 through 23, Annex A and any amounts earned but not yet paid to you pursuant to the terms of this Agreement as of the Scheduled Expiration Date shall survive the termination of the Agreement and remain binding on you and the Company in accordance with their terms.
[Signature Page Follows]
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 9
 
Sincerely,
MSG NETWORKS INC.
/s/ Andrea Greenberg
By:   Andrea Greenberg
Title:   President & Chief Executive Officer
 
Accepted and Agreed:
/s/ James L. Dolan
James L. Dolan
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 10
 
ANNEX A
ADDITIONAL COVENANTS
(This Annex constitutes part of the Agreement)
You agree to comply with the following covenants in addition to those set forth in the Agreement.
1. CONFIDENTIALITY
You agree to retain in strict confidence and not divulge, disseminate, copy or disclose to any third party any Confidential Information, other than for legitimate business purposes of the Company and its subsidiaries. As used herein, “Confidential Information” means any non-public information that is material or of a confidential, proprietary, commercially sensitive or personal nature of, or regarding, the Company or any of its subsidiaries or any current or former director, officer or member of senior management of any of the foregoing (collectively “Covered Parties”). The term Confidential Information includes information in written, digital, oral or any other format and includes, but is not limited to (i) information designated or treated as confidential; (ii) budgets, plans, forecasts or other financial or accounting data; (iii) subscriber, customer, guest, fan, vendor, sponsor, marketing affiliate or shareholder lists or data; (iv) financial, technical or strategic information regarding the Covered Parties’ programming, carriage agreements and arrangements, affiliation and/or other distribution arrangements, live streaming, advertising, sports, entertainment, or other businesses; (v) advertising, sponsorship, business, sales or marketing tactics, strategies or information; (vi) policies, practices, procedures or techniques; (vii) trade secrets or other intellectual property; (viii) information, theories or strategies relating to litigation, arbitration, mediation, investigations or matters relating to governmental authorities; (ix) terms of agreements with third parties and third party trade secrets; (x) information regarding employees, talent, announcers and commentators, players, coaches, agents, consultants, advisors or representatives, including their compensation or other human resources policies and procedures; (xi) information or strategies relating to any potential or actual business development transactions and/or any potential or actual business acquisition, divestiture or joint venture, and (xii) any other information the disclosure of which may have an adverse effect on the Covered Parties’ business reputation, operations or competitive position, reputation or standing in the community.
If disclosed, Confidential Information or Other Information could have an adverse effect on the Company’s standing in the community, its business reputation, operations or competitive position or the standing, reputation, operations or competitive position of any of its affiliates, subsidiaries, officers, directors, employees, consultants or agents or any of the Covered Parties.
Notwithstanding the foregoing, the obligations of this section, other than with respect to subscriber information, shall not apply to Confidential Information which is:
a) already in the public domain or which enters the public domain other than by your breach of this Paragraph 1;
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 11
 
b) disclosed to you by a third party with the right to disclose it in good faith; or
c) specifically exempted in writing by the Company from the applicability of this Agreement.
Notwithstanding anything elsewhere in this Agreement, including this Paragraph 1 and Paragraph 3 below, you are authorized to make any disclosure required of you by any federal, state and local laws or judicial, arbitral or governmental agency proceedings (including making truthful statements in connection with a judicial or arbitral proceeding to enforce your rights under this Agreement, to the extent reasonably required and made in good faith), after, to the extent legal and practicable, providing the Company with prior written notice and an opportunity to respond prior to such disclosure. In addition, this Agreement in no way restricts or prevents you from providing truthful testimony concerning the Company to judicial, administrative, regulatory or other governmental authorities. You have also been provided with a copy of the Company’s Code of Conduct and Ethics.
2. NON-COMPETE
You acknowledge that due to your executive position in the Company and your knowledge of the Company’s confidential and proprietary information, your employment or affiliation with certain entities would be detrimental to the Company. You agree that, without the prior written consent of the Company, you will not represent, become employed by, consult to, advise in any manner or have any material interest in any business directly or indirectly in any Competitive Entity (as defined below). A “Competitive Entity” shall mean any person or entity that (i) owns or operates any regional sports programming network or other online or mobile sports programming platform, in any case, primarily distributed in the New York metropolitan area, or (ii) directly competes with any other business of the Company or one of its subsidiaries that produced greater than 10% of the Company’s revenues in the calendar year immediately preceding the year in which the determination is made. An entity shall be deemed to compete with the on-line content business of the Company, or any of its affiliates only if the entity directly competes against the television programming and/or on-line content business of the Company or its affiliate(s); provided, however, that an entity’s business shall not be deemed to directly compete merely by the fact that the business sells ads on-line, unless the business specifically targets such ads to the same customers or potential customers as being targeted by the on-line content business of the Company, its subsidiary or affiliate. Ownership of not more than 1% of the outstanding stock of any publicly traded company shall not be a violation of this Paragraph. This agreement not to compete will expire upon the one year anniversary of the date of a termination of your employment with the Company.
3. ADDITIONAL UNDERSTANDINGS
You agree, for yourself and others acting on your behalf, that you (and they) have not disparaged and will not disparage, make negative statements about, or act in any manner which is intended to or does damage to the good will of, or the business or personal reputations of the Company or any of its incumbent officers, directors, agents, consultants, employees, successors and assigns or any of the Covered Parties.
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 12
 
The Company agrees that, except as necessary to comply with applicable law or the rules of the New York Stock Exchange or any other stock exchange on which the Company’s stock may be traded (and any public statements made in good faith by the Company in connection therewith), it and its corporate officers and directors, employees in its public relations department or third party public relations representatives retained by the Company will not disparage you or make negative statements in the press or other media which are damaging to your business or personal reputation. In the event that the Company so disparages you or makes such negative statements, then notwithstanding the “Additional Understandings” provision to the contrary, you may make a proportional response thereto.
In addition, you agree that the Company is the owner of all rights, title and interest in and to all documents, tapes, videos, designs, plans, formulas, models, processes, computer programs, inventions (whether patentable or not), schematics, music, lyrics and other technical, business, financial, advertising, sales, marketing, customer or product development plans, forecasts, strategies, information and materials (in any medium whatsoever) developed or prepared by you or with your cooperation in connection with your employment by the Company (the “Materials”). For purposes of clarity, Materials shall not include any music or lyrics written (in the past or in the future) by you, and shall not include any documents, tapes or videos that relate to such music or lyrics or the performance of such music or lyrics other than music or lyrics written in connection with your employment. The Company will have the sole and exclusive authority to use the Materials in any manner that it deems appropriate, in perpetuity, without additional payment to you.
If requested by the Company, you agree to deliver to the Company upon the termination of your employment, or at any earlier time the Company may request, all memoranda, notes, plans, files, records, reports, and software and other documents and data (and copies thereof regardless of the form thereof (including electronic copies)) containing, reflecting or derived from Confidential Information or the Materials of the Company or any of its affiliates which you may then possess or have under your control. If so requested, you shall provide to the Company a signed statement confirming that you have fully complied with this Paragraph. Notwithstanding the foregoing, you shall be entitled to retain your contacts, calendars and personal diaries and any materials needed for your tax return preparation or related to your compensation.
4. FURTHER COOPERATION
Following the date of termination of your employment with the Company (the “Expiration Date”), you will no longer provide any regular services to the Company or represent yourself as a Company agent. If, however, the Company so requests, you agree to cooperate fully with the Company in connection with any matter with which you were involved prior to the Expiration Date, or in any litigation or administrative proceedings or appeals (including any preparation therefore) where the Company believes that your personal knowledge, attendance and participation could be beneficial to the Company. This cooperation includes, without limitation, participation on behalf of the Company in any litigation or administrative proceeding brought by any former or existing Company employees, representatives, agents or vendors. The Company will pay you for your services rendered under this provision at the rate of $8,400 per day for each day or part thereof, within 30 days of the approval of the invoice therefor; provided that if you provide services on the same day for the Company, MSGS and/or MSGE, your daily rate shall not exceed $8,400 in the aggregate.
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400




Mr. James L. Dolan
Page 13
 
The Company will provide you with reasonable notice in connection with any cooperation it requires in accordance with this section and will take reasonable steps to schedule your cooperation in any such matters so as not to materially interfere with your other professional and personal commitments. The Company will reimburse you for any reasonable out-of-pocket expenses you reasonably incur in connection with the cooperation you provide hereunder as soon as practicable after you present appropriate documentation evidencing such expenses. You agree to provide the Company with an estimate of such expense before you incur the same.
5. NON-HIRE OR SOLICIT
You agree not to hire, seek to hire, or cause any person or entity to hire or seek to hire (without the prior written consent of the Company), directly or indirectly (whether for your own interest or any other person or entity’s interest) any person who is or was in the prior six months an employee of the Company, or any of its subsidiaries, until the first anniversary of the date of your termination of employment with the Company. This restriction does not apply to any former employee who was discharged by the Company or any of its affiliates. In addition, this restriction will not prevent you from providing references.
6. ACKNOWLEDGMENTS
You acknowledge that the restrictions contained in this Annex A, in light of the nature of the Company’s business and your position and responsibilities, are reasonable and necessary to protect the legitimate interests of the Company. You acknowledge that the Company has no adequate remedy at law and would be irreparably harmed if you breach or threaten to breach the provisions of this Annex A, and therefore agree that the Company shall be entitled to injunctive relief, to prevent any breach or threatened breach of any of those provisions and to specific performance of the terms of each of such provisions in addition to any other legal or equitable remedy it may have. You further agree that you will not, in any equity proceeding relating to the enforcement of the provisions of this Annex A, raise the defense that the Company has an adequate remedy at law. Nothing in this Annex A shall be construed as prohibiting the Company from pursuing any other remedies at law or in equity that it may have or any other rights that it may have under any other agreement. If it is determined that any of the provisions of this Annex A or any part thereof, is unenforceable because of the duration or scope (geographic or otherwise) of such provision, it is the intention of the parties that the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.
7. SURVIVAL
The provisions of this Annex A shall survive any termination of your employment by the Company or the expiration of the Agreement except as otherwise provided herein.
*        *         *
 
MSG NETWORKS INC.
ELEVEN PENNSYLVANIA PLAZA – 3rd FLOOR, NEW YORK, NY 10001
TEL 212-465-6400


Exhibit 10.29
 
MSGNETWORKSLOGOA15B.JPG
September 6, 2018
Ms. Andrea Greenberg
MSG Networks Inc.
Eleven Pennsylvania Plaza
New York, NY 10121
Dear Andrea:
This letter agreement (the “Agreement”), effective as of September 1, 2018 (the “Effective Date”), will confirm the terms of your continued employment with MSG Networks Inc. (the “Company”).
1. Your title will be President & Chief Executive Officer and you will report to the Executive Chairman of the Company. You agree to continue to devote all of your business time and attention to the business and affairs of the Company and to perform your duties in a diligent, competent, professional and skillful manner and in accordance with applicable law.
2. As of the Effective Date, your annual base salary will be increased to not less than $1,200,000 annually, paid bi-weekly, subject to annual review and potential increase by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) in its discretion. The Compensation Committee will continue to review your compensation package on an annual basis to ensure that you are paid consistently with other similarly situated executives as well as external peers.
3. You will also continue to participate in our discretionary annual bonus program with an annual target bonus opportunity equal to not less than 100% of your then annual base salary. Bonus payments are based on actual salary dollars paid during the fiscal year and depend on a number of factors including Company, unit and individual performance. However, the decision of whether or not to pay a bonus, and the amount of that bonus, if any, is made by the Compensation Committee in its sole discretion. Annual bonuses are typically paid early in the subsequent fiscal year. Except as otherwise provided herein, in order to receive a bonus, you must be employed by the Company at the time bonuses are being paid. Notwithstanding the foregoing, if your employment with the Company ends on the Scheduled Expiration Date (as defined below), you shall be paid your bonus for the fiscal year ending June 30, 2021, if any, even if such payment is not made to you prior to the Scheduled Expiration Date, which bonus shall be subject to Company and your business unit performance for that fiscal year as determined by the Company in its sole discretion, but without adjustment for your individual performance.
4. You will also continue, subject to your continued employment by the Company and actual grant by the Compensation Committee, to participate in such equity and other long-term incentive programs that are made available in the future to similarly situated executives at the Company. It is expected that such awards will consist of annual grants of cash and/or equity awards with an annual target value of not less than $3,400,000, all as determined by the Compensation Committee in its discretion. All awards described in this Paragraph, in addition to being subject to actual grant by the Compensation Committee, would be pursuant to the applicable plan document and would be subject to any terms and conditions established by the Compensation Committee
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 2
 
in its sole discretion that would be detailed in separate agreements you would receive after any award is actually made; provided, however, that such terms and conditions shall be consistent with those in awards granted to similarly situated executives. Long-term incentive awards are currently expected to be subject to three-year vesting.
5. You will also continue to be eligible to participate in our standard benefits program, subject to meeting the relevant eligibility requirements, payment of the required premiums, and the terms of the plans themselves. We currently offer medical, dental, vision, life, and accidental death and dismemberment insurance; short- and long- term disability insurance; a savings and retirement program; and ten paid holidays. You will also continue to be eligible for paid time off to be accrued and used in accordance with Company policy, which currently allows for time off on a flexible and unlimited basis.
6. If your employment with the Company is terminated on or prior to the third anniversary of the Effective Date (the “Scheduled Expiration Date”) (i) by the Company (other than for “Cause”); or (ii) by you for “Good Reason” (other than if “Cause” then exists); then, subject to your execution and delivery, within 60 days after the date of termination of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement (as defined below), the Company will provide you with the following:
 
  (a) Severance in an amount to be determined by the Company (the “Severance Amount”), but in no event less than two (2) times the sum of your annual base salary and your annual target bonus as in effect at the time your employment terminates. Sixty percent (60%) of the Severance Amount will be payable to you on the six-month anniversary of the date your employment so terminates (the “Termination Date”) and the remaining forty percent (40%) of the Severance Amount will be payable to you on the twelve-month anniversary of the Termination Date;
 
  (b)
Any unpaid annual bonus for the Company’s fiscal year prior to the fiscal year which includes your Termination Date, and a pro rated bonus based on the amount of your base salary actually earned by you during the Company’s fiscal year through the Termination Date, each of which will be paid to you when such bonuses are generally paid to similarly situated active executives and will be based on your then current annual target bonus as well as Company and your business unit performance for the applicable fiscal year as determined by the Company in its sole discretion, but without adjustment for your individual performance;
 
  (c) Each of your outstanding long-term cash awards granted under the plans of the Company shall immediately vest in full and shall be payable to you at the same time as such awards are paid to active executives of the Company and the payment amount of such award shall be to the same extent that other similarly situated active executives receive payment as determined by the Compensation Committee (subject to satisfaction of any applicable performance criteria but without adjustment for your individual performance);
 
  (d) (i) All of the time-based restrictions on each of your outstanding restricted stock or restricted stock unit awards granted to you under the plans of the Company shall immediately be eliminated, (ii) deliveries with respect to your restricted stock that are not subject to performance criteria or are subject to performance criteria that have previously been satisfied (as certified by the Compensation Committee) shall be made immediately after the effective date of the Separation Agreement, (iii) payment and deliveries with respect to your restricted stock units that are not subject to performance criteria or are subject to performance criteria that have previously
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 3
 
 
been satisfied (as certified by the Compensation Committee) shall be made on the 90 th day after the termination of your employment and (iv) payments or deliveries with respect to your restricted stock and restricted stock units that are subject to performance criteria that have not yet been satisfied shall be made on the 90 th day after the applicable performance criteria is certified by the Compensation Committee as having been satisfied; and
 
  (e) Each of your outstanding stock options and stock appreciation awards, if any, under the plans of the Company shall immediately vest and become exercisable, and you shall have the right to exercise each of those options and stock appreciation awards for the remainder of the term of such option or award.
(f)      Notwithstanding any provisions of this Paragraph 6 to the contrary, to the extent that (i) any awards granted prior to the date hereof that are payable under this Paragraph 6 constitute “nonqualified deferred compensation” subject to Section 409A of the Code and any regulations and guidelines promulgated thereunder (collectively, “Section 409A”); and (ii) accelerated payout pursuant to the terms of this Paragraph 6 of such awards is not permitted by Section 409A, then such awards shall be payable to you at such time as is provided under the terms of such awards or otherwise in compliance with Section 409A.
If you die after a termination of your employment that is subject to this Paragraph 6, your estate or beneficiaries will be provided with any remaining benefits and rights under this Paragraph 6.
7. If you cease to be an employee of the Company prior to the Scheduled Expiration Date as a result of your death or your Disability (as defined in the Company’s Long Term Disability Plan), and at such time Cause does not exist then, subject (other than in the case of death) to your execution and delivery, within 60 days after the date of termination of your employment, and non-revocation (within any applicable revocation period) of the Separation Agreement, you or your estate or beneficiary shall be provided with the benefits and rights set forth in Paragraphs 6(b), (d) and (e) above, and each of your outstanding long-term cash awards granted under the plans of the Company shall immediately vest in full, whether or not subject to performance criteria and shall be payable on the 90 th day after the termination of your employment; provided, that if any such award is subject to any performance criteria, then (i) if the measurement period for such performance criteria has not yet been fully completed, then the payment amount shall be at the target amount for such award and (ii) if the measurement period for such performance criteria has already been fully completed, then the payment of such award shall be at the same time and to the extent that other similarly situated executives receive payment as determined by the Compensation Committee (subject to satisfaction of the applicable performance criteria).
8. For purposes hereof, “Separation Agreement” shall mean the Company’s standard severance agreement (modified to reflect the terms of this Agreement) which will include, without limitation, the provisions set forth in Paragraphs 6, 7 and 9 hereof and Annex A hereto regarding non-compete (limited to one year), non-disparagement, non-hire/non-solicitation, confidentiality (including, without limitation, the last paragraph of Section 3 of Annex A), and further cooperation obligations and restrictions on you (with Company reimbursement of your associated expenses and payment for your services as described in Annex A in connection with any required post-employment cooperation) as well as a general release by you of the Company and its affiliates (and their respective directors and officers), but shall otherwise contain no post-employment covenants unless agreed to by you. The Company shall provide you with the form of Separation Agreement within seven days of your termination of employment. For avoidance of doubt, your rights of indemnification under the Company’s Amended and Restated Certificate of Incorporation, under your indemnification agreement with the Company and under any insurance policy, or under any other resolution of the Board of Directors of the Company shall not be released, diminished or affected by any Separation Agreement or release or any termination of your employment.
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 4
 
9. Except as otherwise set forth in Paragraphs 6 and 7 hereof, in connection with any termination of your employment, your then outstanding equity and cash incentive awards shall be treated in accordance with their terms and, other than as provided in this Agreement, you shall not be eligible for severance benefits under any other plan, program or policy of the Company. Nothing in this Agreement is intended to limit any more favorable rights that you may be entitled to under your equity and cash incentive award agreements, including, without limitation, your rights in the event of a termination of your employment, a “Going Private Transaction” or a “Change of Control” (as those terms are defined in the applicable award agreement).
10. For purposes of this Agreement, “ Cause ” means your (i) commission of an act of fraud, embezzlement, misappropriation, willful misconduct, gross negligence or breach of fiduciary duty against the Company or an affiliate thereof, or (ii) commission of any act or omission that results in a conviction, plea of no contest, plea of nolo contendere , or imposition of unadjudicated probation for any crime involving moral turpitude or any felony.
For purposes of this Agreement, “ Good Reason ” means that (1) without your written consent, (A) your annual base salary or annual target bonus (as each may be increased from time to time in the Compensation Committee’s sole discretion) is reduced, (B) your title (as in effect from time to time) is diminished, (C) you report to someone other than to the Executive Chairman of the Board of the Company, (D) the Company requires that your principal office be located outside of the Borough of Manhattan, (E) the Company materially breaches its obligations to you under this Agreement; or (F) your responsibilities as in effect immediately after the date hereof are thereafter materially diminished, (2) you have given the Company written notice, referring specifically to this Agreement and definition, that you do not consent to such action, (3) the Company has not corrected such action within 15 days of receiving such notice, and (4) you voluntarily terminate your employment with the Company within 90 days following the happening of the action described in subsection (1) above.
11. This Agreement does not constitute a guarantee of employment for any definite period. Your employment is at will and may be terminated by you or the Company at any time, with or without notice or reason.
12. The Company may withhold from any payment due to you any taxes required to be withheld under any law, rule or regulation. If any payment otherwise due to you hereunder would result in the imposition of the excise tax imposed by Section 4999 of the Code, the Company will instead pay you either (i) such amount or (ii) the maximum amount that could be paid to you without the imposition of the excise tax, depending on whichever amount results in your receiving the greater amount of after-tax proceeds. In the event that the payments and benefits payable to you would be reduced as provided in the previous sentence, then such reduction will be determined in a manner which has the least economic cost to you and, to the extent the economic cost is equivalent, such payments or benefits will be reduced in the inverse order of when the payments or benefits would have been made to you ( i.e. later payments will be reduced first) until the reduction specified is achieved. If the Company elects to retain any accounting or similar firm to provide assistance in calculating any such amounts, the Company shall be responsible for the costs of any such firm.
13. It is intended that this Agreement will comply with Section 409A to the extent this Agreement is subject thereto, and that this Agreement shall be interpreted on a basis consistent with such intent. If and to the extent that any payment or benefit under this Agreement, or any plan, award or arrangement of the Company or its
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 5
 
affiliates, constitutes “non-qualified deferred compensation” subject to Section 409A and is payable to you by reason of your termination of employment, then (a) such payment or benefit shall be made or provided to you only upon a “separation from service” as defined for purposes of Section 409A under applicable regulations and (b) if you are a “specified employee” (within the meaning of Section 409A as determined by the Company), such payment or benefit shall not be made or provided before the date that is six months after the date of your separation from service (or your earlier death). Any amount not paid or benefit not provided in respect of the six month period specified in the preceding sentence will be paid to you, together with interest on such delayed amount at a rate equal to the average of the one-year LIBOR fixed rate equivalent for the ten business days prior to the date of your employment termination, in a lump sum or provided to you as soon as practicable after the expiration of such six month period. Each payment or benefit provided under this Agreement shall be treated as a separate payment for purposes of Section 409A to the extent Section 409A applies to such payment.
14. To the extent you are entitled to any expense reimbursement from the Company that is subject to Section 409A, (i) the amount of any such expenses eligible for reimbursement in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable year (except under any lifetime limit applicable to expenses for medical care), (ii) in no event shall any such expense be reimbursed after the last day of the calendar year following the calendar year in which you incurred such expense, and (iii) in no event shall any right to reimbursement be subject to liquidation or exchange for another benefit.
15. The Company will not take any action, or omit to take any action, that would expose any payment or benefit to you to the additional tax of Section 409A, unless (i) the Company is obligated to take the action under an agreement, plan or arrangement to which you are a party, (ii) you request the action, (iii) the Company advises you in writing that the action may result in the imposition of the additional tax and (iv) you subsequently request the action in a writing that acknowledges you will be responsible for any effect of the action under Section 409A. The Company will hold you harmless for any action it may take or omission in violation of this Paragraph 15, including any attorney’s fees you may incur in enforcing your rights.
16. It is our intention that the benefits and rights to which you could become entitled in connection with termination of employment be exempt from or comply with Section 409A. If you or the Company believes, at any time, that any of such benefit or right is not exempt or does not comply, it will promptly advise the other and will negotiate reasonably and in good faith to amend the terms of such arrangement such that it complies (with the most limited possible economic effect on you and on the Company).
17. This Agreement is personal to you and without the prior written consent of the Company shall not be assignable by you. This Agreement shall inure to the benefit of and be enforceable by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The rights or obligations of the Company under this Agreement may only be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of Company; provided, however, that the assignee or transferee is the successor to all or substantially all of the assets of Company and such assignee or transferee assumes the liabilities and duties of Company, as contained in this Agreement, either contractually or as a matter of law.
18. To the extent permitted by law, you and the Company waive any and all rights to a jury trial with respect to any matter relating to this Agreement (including the covenants set forth in Annex A hereof). This Agreement will be governed by and construed in accordance with the law of the State of New York applicable to contracts made and to be performed entirely within that State.
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 6
 
19. Both the Company and you hereby irrevocably submit to the jurisdiction of the courts of the State of New York and the federal courts of the United States of America in each case located in the City of New York, Borough of Manhattan, solely in respect of the interpretation and enforcement of the provisions of this Agreement, and each party hereby waives, and agrees not to assert, as a defense that either party, as appropriate, is not subject thereto or that the venue thereof may not be appropriate. You and the Company each agree that mailing of process or other papers in connection with any such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof.
20. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. The Company and you have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Company and you and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
21. This Agreement reflects the entire understanding and agreement of you and the Company with respect to the subject matter hereof and supersedes all prior understandings or agreements relating thereto, including, without limitation, the employment agreement dated September 11, 2015 by and between you and the Company; provided, however, that you shall continue to be entitled to any compensation, payments or other benefits to which you became entitled prior to the date hereof which have not been paid or delivered to you as of the date hereof (without duplication of any compensation, payment or other benefit payable to you pursuant to this Agreement).
22. This Agreement will automatically terminate, and be of no further force or effect, on the Scheduled Expiration Date; provided, however, that the provisions of Paragraphs 6 through 9, 12 through 22 and Annex A, and any amounts earned but not yet paid to you pursuant to the terms of this Agreement as of the Scheduled Expiration Date shall survive the termination of the Agreement and remain binding on you and the Company in accordance with their terms.
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 7
 
      Sincerely,   
      MSG NETWORKS INC.   
      /s/ James L. Dolan   
      By: James L. Dolan   
      Title: Executive Chairman   
 
Accepted and Agreed:
/s/ Andrea Greenberg
Andrea Greenberg
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 8
 
ANNEX A
ADDITIONAL COVENANTS
(This Annex constitutes part of the Agreement)
You agree to comply with the following covenants in addition to those set forth in the Agreement.
1. CONFIDENTIALITY
You agree to retain in strict confidence and not divulge, disseminate, copy or disclose to any third party any Confidential Information, other than for legitimate business purposes of the Company and its subsidiaries. As used herein, “Confidential Information” means any non-public information that is material or of a confidential, proprietary, commercially sensitive or personal nature of, or regarding, the Company or any of its subsidiaries or any current or former director, officer or member of senior management of any of the foregoing (collectively “Covered Parties”). The term Confidential Information includes information in written, digital, oral or any other format and includes, but is not limited to (i) information designated or treated as confidential; (ii) budgets, plans, forecasts or other financial or accounting data; (iii) customer, broadcast affiliate, fan, vendor, sponsor, marketing affiliate or shareholder lists or data; (iv) technical or strategic information regarding the Covered Parties’ television, programming, advertising, or other businesses; (v) advertising, sponsorship, business, sales or marketing tactics, strategies or information; (vi) policies, practices, procedures or techniques; (vii) trade secrets or other intellectual property; (viii) information, theories or strategies relating to litigation, arbitration, mediation, investigations or matters relating to governmental authorities; (ix) terms of agreements with third parties and third party trade secrets; (x) information regarding employees, talent, agents, consultants, advisors or representatives, including their compensation or other human resources policies and procedures; (xi) information or strategies relating to any potential or actual business development transactions and/or any potential or actual business acquisition, divestiture or joint venture, and (xii) any other information the disclosure of which may have an adverse effect on the Covered Parties’ business reputation, operations or competitive position, reputation or standing in the community.
If disclosed, Confidential Information or Other Information could have an adverse effect on the Company’s standing in the community, its business reputation, operations or competitive position or the standing, reputation, operations or competitive position of any of its affiliates, subsidiaries, officers, directors, employees, consultants or agents or any of the Covered Parties.
Notwithstanding the foregoing, the obligations of this section, other than with respect to subscriber information, shall not apply to Confidential Information which is:
a) already in the public domain or which enters the public domain other than by your breach of this Paragraph 1;
b) disclosed to you by a third party with the right to disclose it in good faith; or
c) specifically exempted in writing by the Company from the applicability of this Agreement.
Notwithstanding anything elsewhere in this Agreement, including this Paragraph 1 and Paragraph 3 below, you are authorized to make any disclosure required of you by any federal, state and local laws or judicial, arbitral or governmental agency proceedings (including making truthful statements in connection with a judicial or arbitral proceeding to enforce your rights under this Agreement, to the extent reasonably required and made in good
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 9
 
faith), after, to the extent legal and practicable, providing the Company with prior written notice and an opportunity to respond prior to such disclosure. In addition, this Agreement in no way restricts or prevents you from providing truthful testimony concerning the Company to judicial, administrative, regulatory or other governmental authorities.
2. NON-COMPETE
You acknowledge that due to your executive position in the Company and the knowledge of the Company’s and its affiliates’ confidential and proprietary information which you will obtain during the term of your employment hereunder, your employment by certain businesses would be irreparably harmful to the Company and/or its affiliates. During your employment with the Company and thereafter through the first anniversary of the date on which your employment with the Company has terminated for any reason, you agree not to (other than with the prior written consent of the Company), become employed by, advise, consult, have any material interest in or otherwise perform services for any Competitive Entity (as defined below). A “Competitive Entity” shall mean any (A) (i) regional sports network that operates primarily in New York, New Jersey or Connecticut, or (ii) national sports television (e.g., ESPN) or national “over-the-top” sports network in the United States, or (B) affiliate of any person or entity that operates any of the types of businesses described in clause (A) above, provided that you may become employed or otherwise provide services to such an affiliate of a Competitive Entity, so long as (x) your services are neither provided to, nor substantially benefit, such Competitive Entity described in clause (A) and (y) the affiliate is not a direct or indirect parent company of the Competitive Entity described in clause (A) if the Competitive Entity subsidiary constitutes more than 30% of the total revenue of the parent company consolidated family of companies. Additionally, the ownership by you of not more than 1% of the outstanding equity of any publicly traded company shall not, by itself, be a violation of this Paragraph.
3. ADDITIONAL UNDERSTANDINGS
You agree, for yourself and others acting on your behalf, that you (and they) have not disparaged and will not disparage, make negative statements about (either “on the record” or “off the record”) or act in any manner which is intended to or does damage to the good will of, or the business or personal reputations of the Company or any of its affiliates or any of their respective incumbent or former officers, directors, agents, consultants, employees, successors and assigns or any of the Covered Parties.
The Company agrees that, except as necessary to comply with applicable law or the rules of the New York Stock Exchange or any other stock exchange on which the Company’s stock may be traded (and any public statements made in good faith by the Company in connection therewith), it and its corporate officers and directors, employees in its public relations department or third party public relations representatives retained by the Company will not disparage you or make negative statements in the press or other media which are damaging to your business or personal reputation. In the event that the Company so disparages you or makes such negative statements, then notwithstanding the “Additional Understandings” provision to the contrary, you may make a proportional response thereto.
In addition, you agree that the Company is the owner of all rights, title and interest in and to all documents, tapes, videos, designs, plans, formulas, models, processes, computer programs, inventions (whether patentable or not), schematics, music, lyrics and other technical, business, financial, advertising, sales, marketing, customer or product development plans, forecasts, strategies, information and materials (in any medium whatsoever) developed or prepared by you or with your cooperation in connection with your employment by the Company (the “Materials”). The Company will have the sole and exclusive authority to use the Materials in any manner that it deems appropriate, in perpetuity, without additional payment to you.
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 10
 
If requested by the Company, you agree to deliver to the Company upon the termination of your employment, or at any earlier time the Company may request, all memoranda, notes, plans, files, records, reports, and software and other documents and data (and copies thereof regardless of the form thereof (including electronic copies)) containing, reflecting or derived from Confidential Information or the Materials of the Company or any of its affiliates which you may then possess or have under your control. If so requested, you shall provide to the Company a signed statement confirming that you have fully complied with this Paragraph. Notwithstanding the foregoing, you shall be entitled to retain your contacts, calendars and personal diaries and any materials needed for your tax return preparation or related to your compensation.
In addition, you agree for yourself and others acting on your behalf, that you (and they) shall not, at any time, participate in any way in the writing or scripting (including, without limitation, any “as told to” publications) of any book, periodical story, movie, play, or other similar written or theatrical work or video that (i) relates to your services to the Company or any of its affiliates or (ii) otherwise refers to the Company or its respective businesses, activities, directors, officers, employees or representatives (other than identifying your biographical information), without the prior written consent of the Company.
4. FURTHER COOPERATION
Following the date of termination of your employment with the Company (the “Expiration Date”), you will no longer provide any regular services to the Company or represent yourself as a Company agent. If, however, the Company so requests, you agree to cooperate fully with the Company in connection with any matter with which you were involved prior to the Expiration Date, or in any litigation or administrative proceedings or appeals (including any preparation therefore) where the Company believes that your personal knowledge, attendance and participation could be beneficial to the Company. This cooperation includes, without limitation, participation on behalf of the Company in any litigation or administrative proceeding brought by any former or existing Company employees, representatives, agents or vendors. The Company will pay you for your services rendered under this provision at the rate of $7,700 per day for each day or part thereof, within 30 days of the approval of the invoice therefor.
The Company will provide you with reasonable notice in connection with any cooperation it requires in accordance with this section and will take reasonable steps to schedule your cooperation in any such matters so as not to materially interfere with your other professional and personal commitments. The Company will reimburse you for any reasonable out-of-pocket expenses you reasonably incur in connection with the cooperation you provide hereunder as soon as practicable after you present appropriate documentation evidencing such expenses. You agree to provide the Company with an estimate of such expense before you incur the same.
5. NON-HIRE OR SOLICIT
You agree not to hire, seek to hire, or cause any person or entity to hire or seek to hire (without the prior written consent of the Company), directly or indirectly (whether for your own interest or any other person or entity’s interest) any person who is or was in the prior six months an employee of the Company, or any of its subsidiaries, until the first anniversary of the date of your termination of employment with the Company. This restriction does not apply to any former employee who was discharged by the Company or any of its affiliates.
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001




Ms. Andrea Greenberg
Page 11
 
In addition, this restriction will not prevent you from providing references. If you remain continuously employed with the Company through the Scheduled Expiration Date, then this agreement not to hire or solicit will expire on the Scheduled Expiration Date.
6. ACKNOWLEDGMENTS
You acknowledge that the restrictions contained in this Annex A, in light of the nature of the Company’s business and your position and responsibilities, are reasonable and necessary to protect the legitimate interests of the Company. You acknowledge that the Company has no adequate remedy at law and would be irreparably harmed if you breach or threaten to breach the provisions of this Annex A, and therefore agree that the Company shall be entitled to injunctive relief, to prevent any breach or threatened breach of any of those provisions and to specific performance of the terms of each of such provisions in addition to any other legal or equitable remedy it may have. You further agree that you will not, in any equity proceeding relating to the enforcement of the provisions of this Annex A, raise the defense that the Company has an adequate remedy at law. Nothing in this Annex A shall be construed as prohibiting the Company from pursuing any other remedies at law or in equity that it may have or any other rights that it may have under any other agreement. If it is determined that any of the provisions of this Annex A or any part thereof, is unenforceable because of the duration or scope (geographic or otherwise) of such provision or because of applicable rules of professional responsibility, it is the intention of the parties that the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.
7. SURVIVAL
The provisions of this Annex A shall survive any termination of your employment by the Company or the expiration of the Agreement except as otherwise provided herein.
 
MSG Networks Inc.
ELEVEN PENNSYLVANIA PLAZA – 3 rd Floor, NEW YORK, NY 10001





Exhibit 10.47

AMENDMENT NO. 1 TO AIRCRAFT SUPPORT SERVICES AGREEMENT
THIS AMENDMENT NO. 1, effective as of July 1, 2020 (this “Amendment No. 1”), to that certain Aircraft Support Services Agreement (the “Agreement”), effective as of July 1, 2018, by and between MSG SPORTS & ENTERTAINMENT, LLC (n/k/a MSG ENTERTAINMENT GROUP, LLC) a Delaware limited liability company with an office at 2 Pennsylvania Plaza, New York 10121 (“MSG”); and JD & THE STRAIGHT SHOT, LLC, a New York limited liability company, with an address at P.O. Box 420, Oyster Bay, New York 11771 (“Client”). All capitalized terms used in this Amendment No. 1 but not defined herein shall have the meaning assigned to such terms in the Agreement.
Section 2.1 of the Agreement is hereby amended by replacing the words “three (3) Pilots” with the word “two (2) pilots” and the defined term “Flight Support Personnel Costs” shall be amended accordingly.
Except as set forth herein this Amendment No. 1, the Agreement shall remain in effect in accordance with its terms.
(the remainder of this page has been left blank)




IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 on this 21st day of June 2021.

JD & THE STRAIGHT SHOT, LLC
MSG SPORTS & ENTERTAINMENT, LLC (n/k/a MSG ENTERTAINMENT GROUP, LLC)
By: /s/ James L. Dolan
By: /s/ Mark H. FitzPatrick
Name: James L. Dolan Name: Mark H. FitzPatrick
Title: Managing Member Title: EVP & Chief Financial Office
2
Exhibit 10.54
AMENDED AND RESTATED TIME SHARING AGREEMENT
THIS AMENDED AND RESTATED TIME SHARING AGREEMENT is entered into effective as of the 18th day of August, 2021, by and between MSG ENTERTAINMENT GROUP, LLC, a Delaware limited liability company with a place of business at 2 Penn Plaza, New York, New York 10121 (“Lessor”), and ANDREW LUSTGARTEN, with a mailing address c/o of Madison Square Garden Entertainment Corp., 2 Penn Plaza, New York, NY 10121 (“Lessee”).
W I T N E S S E T H:
WHEREAS, Lessor is the lessee and the operator of a Bombardier BD100-1A10 Challenger 350 aircraft, manufacturer’s serial number 20611, United States registration 350 PD (the “Aircraft”); and
WHEREAS, Lessor has engaged fully-qualified and credentialed flight crew to operate the Aircraft; and
WHEREAS, Lessor has agreed to lease the Aircraft, with flight crew, to Lessee on a “time sharing” basis as defined in Section 91.501(c)(1) of the Federal Aviation Regulations (“FAR”) upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, and the covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Lessor and Lessee, intending to be legally bound, hereby agree as follows:
1.Lease of Aircraft. Lessor agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR Section 91.501(b)(6) and Section 91.501(c)(1) and this Agreement, and to provide a fully-qualified and credentialed flight crew for all flights to be conducted hereunder during the Term (as defined in Section 13) hereof. The parties acknowledge and agree that this Agreement did not result in any way from any direct or indirect advertising, holding out or soliciting on the part of Lessor or any person purportedly acting on behalf of Lessor. Lessor and Lessee intend that the lease of the Aircraft effected by this Agreement shall be treated as a “wet lease” pursuant to which Lessor provides transportation services to Lessee in accordance with FAR Section 91.501(b)(6) and Section 91.501(c)(1).
2.Payment for Use of Aircraft. Lessee shall pay Lessor the following listed actual expenses of each flight (the “Reimbursement Amount”) conducted under this Agreement (i.e. non-business flights for which reimbursement is required in accordance with Lessor’s policies), not to exceed the maximum amount legally payable for such flight under FAR Section 91.501(d)(1)-(10):
(a)fuel, oil, lubricants and other additives;
(b)travel expenses of crew, including food, lodging and ground transportation;
(c)hangar and tie-down costs away from the Aircraft’s base of operation;
(d)additional insurance obtained for the specific flight at the request of Lessee;
(e)landing fees, airport taxes and similar assessments;
(f)customs, foreign permit and similar fees directly related to the flight;
(g)in-flight food and beverages;
(h)in-flight telecommunication expenses;
(i)passenger ground transportation; and
(j)flight planning and weather contract services.
Notwithstanding the foregoing, in the event that any income is required to be imputed to Lessee with respect to personal use of the Aircraft, calculated using the Standard Industry Fare Level method in


accordance with Internal Revenue Service Regulation §1.61-21, the amount payable by Lessee pursuant to this Section 2 shall not be reduced, and Lessee shall also pay the related employee share of (withholding) taxes on any such imputed income.
3.Operational Control of Aircraft. Lessor and Lessee intend and agree that on all flights conducted under this Agreement, Lessor shall have complete and exclusive operational control over the Aircraft, its flight crews and maintenance, and complete and exclusive possession, command and control of the Aircraft. Lessor shall have complete and exclusive responsibility for scheduling, dispatching and flight following of the Aircraft on all flights conducted under this Agreement, which responsibility includes the sole and exclusive right over initiating, conducting and terminating such flights. Lessee shall have no responsibility for scheduling, dispatching or flight following on any flight conducted under this Agreement, nor any right over initiating, conducting or terminating any such flight. Nothing in this Agreement is intended or shall be construed so as to convey to Lessee any operational control over, or possession, command and control of, the Aircraft, all of which are expressly retained by Lessor.
4.Scheduling.
(a)Lessee will provide Lessor with requests for flight time and proposed flight schedules as far in advance of any given flight as possible. Lessee or the designated authorized representative(s) of Lessee shall submit scheduling requests under this Agreement to the designated authorized representative(s) of Lessor. Requests for flight time shall be in such form (whether oral or written) mutually convenient to, and agreed upon by, the parties. In addition to proposed schedules and flight times, Lessee shall upon request provide Lessor with the following information for each proposed flight prior to scheduled departure: (i) proposed departure point; (ii) destination; (iii) date and time of flight; (iv) the number of anticipated passengers; (v) the nature and extent of luggage to be carried; (vi) the date and time of a return flight, if any; and (vii) any other pertinent information concerning the proposed flight that Lessor or the flight crew may request.
(b)Subject to Aircraft and crew availability and to any usage limitations established by Lessor, Lessor shall use its good faith efforts, consistent with Lessor’s approved policies, in order to accommodate the needs of Lessee, to avoid conflicts in scheduling, and to enable Lessee to enjoy the benefits of this Agreement; however, Lessee acknowledges and agrees that notwithstanding anything in this Agreement to the contrary, (i) Lessor shall have sole and exclusive final authority over the scheduling of the Aircraft; and (ii) the needs of Lessor for the Aircraft shall take precedence over Lessee’s rights and Lessor’s obligations under this Agreement.
(c)Although every good faith effort shall be made to avoid its occurrence, any flight scheduled under this Agreement is subject to cancellation by either party without incurring liability to the other party. In the event that cancellation is necessary, the canceling party shall provide the maximum notice practicable.
5.Billing. Lessor shall pay all expenses relating to the operation of the Aircraft under this Agreement (in accordance with Section 2 hereof) on a monthly basis. As soon as possible after the end of each monthly period during the Term, Lessor shall provide to Lessee an invoice showing all use of the Aircraft by Lessee under this Agreement during that month and a complete accounting detailing all amounts payable by Lessee pursuant to Section 2 for that month, including such detail supporting all expenses paid or incurred by Lessor for which reimbursement is sought as Lessee may reasonably request. Lessee shall pay all amounts due to Lessor under this Section 5 not later than 30 days after receipt of the invoice therefor.
6.Maintenance of Aircraft. Lessor shall be solely responsible for securing maintenance, preventive maintenance and inspections of the Aircraft (utilizing an inspection program listed in FAR Section 91.409(f)), and shall take such requirements into account in scheduling the Aircraft hereunder.
7.Flight Crew.
(a)Lessor shall employ or engage and as between Lessor and Lessee shall be responsible for the payment of all salaries, benefits and/or compensation for a fully-qualified flight crew with appropriate credentials to conduct each flight undertaken under this Agreement. All flight crewmembers shall be included on any insurance policies that Lessor is required to maintain hereunder.
(b)The qualified flight crew provided by Lessor shall exercise all of its duties and
2


responsibilities with regard to the safety of each flight conducted hereunder in accordance with applicable FAR’ s. The Aircraft shall be operated under the standards and policies established by Lessor. Final authority to initiate or terminate each flight, and otherwise to decide all matters relating to the safety of any given flight or requested flight, shall rest with the pilot-incommand of that flight. The flight crew may, in its sole discretion, terminate any flight, refuse to commence any flight, or take any other action that, in the judgment of the pilot-in-command, is necessitated by considerations of safety. No such termination or refusal to commence by the pilot-in-command shall create or support any liability for loss, injury, damage or delay in favor of Lessee or any other person. Lessor shall not be liable to Lessee or any other person for loss, injury or damage occasioned by the delay or failure to furnish the Aircraft and flight crew pursuant to this Agreement for any reason.
8.Insurance.
(a)At all times during the Term of this Agreement , Lessor shall maintain at its sole cost and expense (i) comprehensive aircraft and liability insurance against bodily injury and property damage claims, including, without limitation, contractual liability, premises damage, personal property liability, personal injury liability, death and property damage liability, public and passenger legal liability coverage, in an amount not less than $100,000,000 for each single occurrence and (ii) hull insurance for the full replacement cost of the aircraft.
(b)Any policies of aircraft and liability insurance carried in accordance with this Section 8 and any policies taken out in substitution or replacement of any such policies (i) shall name Lessee and his employees, agents, licensees and guests as additional insured; (ii) shall provide for 30 days’ written notice to Lessee by such insurer of cancellation, change, non-renewal or reduction (seven days in the case of war risk and allied perils coverage or such shorter period as is customarily available in the industry); (iii) shall provide that in respect of the interests of Lessee in such policies, the insurance shall not be invalidated by any action or inaction of Lessor regardless of any breach or violation of any warranties, declarations or conditions contained in such policies by or binding upon Lessor; and (iv) shall permit the use of the Aircraft by Lessor for compensation or hire to the extent permitted under applicable law. Each such policy shall be primary insurance, not subject to any co-insurance clause and shall be without right of contribution from any other insurance.
(c)Lessor shall use reasonable commercial efforts to provide such additional insurance coverage for specific flights under this Agreement, if any, as Lessee may request in writing. Lessee also acknowledges that any trips scheduled to the European Union may require Lessor to purchase additional insurance to comply with local regulations. The cost of all additional flight-specific insurance shall be borne by Lessee as set forth in Section 2(d) hereof.
(d)Each party agrees that it will not do any act or voluntarily suffer or permit any act to be done whereby any insurance required hereunder shall or may be suspended, impaired or defeated. In no event shall Lessor suffer or permit the Aircraft to be used or operated under this Agreement without such insurance being fully in effect.
(e)Lessor shall ensure that worker’s compensation insurance with all-states coverage is provided for the Aircraft’s crew and maintenance personnel.
(f)Lessor shall deliver certificates of insurance to Lessee with respect to the insurance required or permitted to be provided by it hereunder not later than the first flight of the Aircraft under this Agreement and upon the renewal date of each policy.
9.Taxes.    Lessee shall be responsible for paying, and Lessor shall be responsible for collecting from Lessee and paying over to the appropriate authorities, all applicable Federal transportation taxes and sales, use or other excise taxes imposed by any governmental authority in connection with any use of the Aircraft by Lessee hereunder. Each party shall indemnify the other party against any and all claims, liabilities, costs and expenses (including attorney’s fees as and when incurred) arising out of its breach of this undertaking.
10.Lessee’s Representations and Warranties. Lessee represents and warrants that:
(a)He will not use the Aircraft for the purposes of providing transportation of passengers or cargo in air commerce for compensation or hire or for common carriage.
(b)He shall refrain from incurring any mechanic’s or other liens in connection with
3


inspection, preventive maintenance, maintenance or storage of the Aircraft, and shall not attempt to convey, mortgage, assign, lease or in any way alienate the Aircraft or create any kind of lien or security interest involving the Aircraft or do anything or take any action that might mature into such a lien.
(c)He shall not lien or otherwise encumber or create or place any lien or other encumbrance of any kind whatsoever, on or against the Aircraft for any reason. He also will ensure that no liens or encumbrances of any kind whatsoever are created or placed against the Aircraft for claims against Lessee or by Lessee.
(d)He will abide by and conform to all laws, governmental and airport orders, rules and regulations, as shall be imposed upon the lessee of an aircraft under a time sharing agreement, and applicable company policies of Lessor.
11.Lessor’s Representations and Warranties. Lessor represents and warrants that it will abide by and conform to all such laws, governmental and airport orders, rules and regulations, as shall from time to time be in effect relating in any way to the operation and use of the Aircraft pursuant to this Agreement.
12.Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LESSOR HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT, INCLUDING ANY WITH RESPECT TO ITS CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON FOR ANY INCIDENTIAL, CONSEQUENTIAL OR SPECIAL DAMAGES, HOWEVER ARISING.
13.Term.    The term of this Agreement (the “Term”) shall commence on the effective date hereof and, unless terminated in accordance with the provisions hereof, shall remain in full force and effect for so long as you remain employed by Madison Square Garden Entertainment Corp. or any of its subsidiaries or affiliates. Notwithstanding the foregoing, either party shall have the right to terminate this Agreement for any reason or no reason by written notice given to the other party not less than 30 days prior to the proposed termination date.
14.Limitation of Liability. Lessee, for himself and on behalf of his agents, guests, invitees, licensees and employees, covenants and agrees that the insurance described in Section 8 hereof shall be the sole recourse for any and all liabilities, claims, demands, suits, causes of action, losses, penalties, fines, expenses or damages, including attorneys’ fees, court costs and witness fees, attributable to the use, operation or maintenance of the Aircraft pursuant to this Agreement or performance of or failure to perform any obligation under this Agreement.
15.Relationship of Parties. Lessor is strictly an independent contractor lessor/provider of transportation services with respect to Lessee. Nothing in this Agreement is intended, nor shall it be construed so as, to constitute the parties as partners or joint venturers or principal and agent. All persons furnished by Lessor for the performance of the operations and activities contemplated by this Agreement shall at all times and for all purposes be considered Lessor’s employees or agents.
16.Governing Law; Severability. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, without regard to its choice of law rules. If any provision of this Agreement conflicts with any statute or rule of law of the State of New York, or is otherwise unenforceable, such provision shall be deemed null and void only the extent of such conflict or unenforceability, and shall be deemed separate from, and shall not invalidate, any other provision of this Agreement.
17.Amendment. This Agreement may not be amended, supplemented, modified or terminated, or any of its terms varied, except by an agreement in writing signed by each of the parties hereto.
18.Counterparts. This Time Sharing Agreement may be executed in counterparts, each of which shall, for all purposes, be deemed an original and all such counterparts, taken together, shall constitute one and the same agreement, even though all parties may not have executed the same counterpart. Each party may transmit its signature by facsimile, and such faxed signature shall have the same force and effect as an original signature.
19.Successors and Assigns. This Time Sharing Agreement shall be binding upon the parties hereto, and their respective heirs, executors, administrators, other legal representatives, successors and assigns, and shall inure to the benefit of the parties hereto, and, except as otherwise provided herein, to their respective heirs,
4


executors, administrators, other legal representatives, successors and permitted assigns. Lessee agrees that he shall not directly or indirectly sublease, assign, transfer, pledge or hypothecate this Agreement or any part hereof (including any assignment or transfer pursuant to the laws of intestacy) without the prior written consent of Lessor, which may be given or withheld by Lessor in its sole and absolute discretion.
20.Notices. All notices or other communications delivered or given under this Agreement shall be in writing and shall be deemed to have been duly given if hand delivered, sent by certified or registered mail, return receipt requested, or nationally-utilized overnight delivery service, or confirmed facsimile transmission, as the case may be. Such notices shall be addressed to the parties at the addresses set forth above, or to such other address as may be designated by any party in a writing delivered to the other in the manner set forth in this Section 20. In the case of notices to Lessor, a copy of each such notice shall be sent to MSG Sports & Entertainment, 2 Penn Plaza, New York, New York 10121, attention: General Counsel. Notices sent by certified or registered mail shall be deemed received three business days after being mailed. All other notices shall be deemed received on the date delivered. Routine communications may be made by e-mail or fax to the addresses set forth therein.
21.Truth-in-Leasing Compliance. Lessor, on behalf of the Lessee, shall (i) mail a copy of this Agreement to the Aircraft Registration Branch, Technical Section, of the FAA in Oklahoma City within 24 hours of its execution; (ii) notify the Farmingdale Flight Standards District Office at least 48 hours prior to the first flight by Lessor under this Agreement of the registration number of the Aircraft, and the location of the airport of departure and departure time of the first flight; and (iii) carry a copy of this Agreement onboard the Aircraft at all times when the Aircraft is being operated under this Agreement.
22.TRUTH IN LEASING STATEMENT UNDER FAR SECTION 91.23:
(A)LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12-MONTH PERIOD PRECEDING THE DATE OF EXECUTION OF THIS AGREEMENT. THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED IN COMPLIANCE WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS OF FAR PART 91 FOR ALL OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.
(B)MSG SPORTS & ENTERTAINMENT, LLC, 2 PENN PLAZA, NEW YORK, NEW YORK 10121, HEREBY CERTIFIES THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT FOR ALL OPERATIONS UNDER THIS AGREEMENT.
(C)EACH PARTY HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
(D)THE PARTIES UNDERSTAND THAT AN EXPLANATION OF THE FACTORS BEARING ON OPERATIONAL CONTROL AND THE PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

5


IN WITNESS WHEREOF, Lessor and Lessee have executed this Amended and Restated Time Sharing Agreement effective as of the date first above written.
LESSOR:
MSG ENTERTAINMENT GROUP, LLC
By: /s/ Mark FitzPatrick                
Name: Mark FitzPatrick
Title: EVP & Chief Financial Officer

LESSEE:
/s/ Andrew Lustgarten                
Andrew Lustgarten
6

Exhibit 10.55
AMENDED AND RESTATED TIME SHARING AGREEMENT
THIS AMENDED AND RESTATED TIME SHARING AGREEMENT is entered into effective as of the 18th day of August, 2021, by and between MSG ENTERTAINMENT GROUP, LLC, a Delaware limited liability company with a place of business at 2 Penn Plaza, New York, New York 10121 (“Lessor”), and ANDREW LUSTGARTEN, with a mailing address c/o of Madison Square Garden Entertainment Corp., 2 Penn Plaza, New York, NY 10121 (“Lessee”).
W I T N E S S E T H:
WHEREAS, Lessor is the lessee and the operator of a Gulfstream Aerospace G450 aircraft, manufacturer’s serial number 4179, United States registration N919 AM (the “Aircraft”); and
WHEREAS, Lessor has engaged fully-qualified and credentialed flight crew to operate the Aircraft; and
WHEREAS, Lessor has agreed to lease the Aircraft, with flight crew, to Lessee on a “time sharing” basis as defined in Section 91.501(c)(1) of the Federal Aviation Regulations (“FAR”) upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, and the covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Lessor and Lessee, intending to be legally bound, hereby agree as follows:
1.Lease of Aircraft. Lessor agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR Section 91.501(b)(6) and Section 91.501(c)(1) and this Agreement, and to provide a fully-qualified and credentialed flight crew for all flights to be conducted hereunder during the Term (as defined in Section 13) hereof. The parties acknowledge and agree that this Agreement did not result in any way from any direct or indirect advertising, holding out or soliciting on the part of Lessor or any person purportedly acting on behalf of Lessor. Lessor and Lessee intend that the lease of the Aircraft effected by this Agreement shall be treated as a “wet lease” pursuant to which Lessor provides transportation services to Lessee in accordance with FAR Section 91.501(b)(6) and Section 91.501(c)(1).
2.Payment for Use of Aircraft. Lessee shall pay Lessor the following listed actual expenses of each flight (the “Reimbursement Amount”) conducted under this Agreement (i.e. non-business flights for which reimbursement is required in accordance with Lessor’s policies), not to exceed the maximum amount legally payable for such flight under FAR Section 91.501(d)(1)-(10):
(a)fuel, oil, lubricants and other additives;
(b)travel expenses of crew, including food, lodging and ground transportation;
(c)hangar and tie-down costs away from the Aircraft’s base of operation;
(d)additional insurance obtained for the specific flight at the request of Lessee;
(e)landing fees, airport taxes and similar assessments;
(f)customs, foreign permit and similar fees directly related to the flight;
(g)in-flight food and beverages;
(h)in-flight telecommunication expenses;
(i)passenger ground transportation; and
(j)flight planning and weather contract services.
Notwithstanding the foregoing, in the event that any income is required to be imputed to Lessee with respect to personal use of the Aircraft, calculated using the Standard Industry Fare Level method in
1

accordance with Internal Revenue Service Regulation §1.61-21, the amount payable by Lessee pursuant to this Section 2 shall not be reduced, and Lessee shall also pay the related employee share of (withholding) taxes on any such imputed income.
3.Operational Control of Aircraft. Lessor and Lessee intend and agree that on all flights conducted under this Agreement, Lessor shall have complete and exclusive operational control over the Aircraft, its flight crews and maintenance, and complete and exclusive possession, command and control of the Aircraft. Lessor shall have complete and exclusive responsibility for scheduling, dispatching and flight following of the Aircraft on all flights conducted under this Agreement, which responsibility includes the sole and exclusive right over initiating, conducting and terminating such flights. Lessee shall have no responsibility for scheduling, dispatching or flight following on any flight conducted under this Agreement, nor any right over initiating, conducting or terminating any such flight. Nothing in this Agreement is intended or shall be construed so as to convey to Lessee any operational control over, or possession, command and control of, the Aircraft, all of which are expressly retained by Lessor.
4.Scheduling.
(a)Lessee will provide Lessor with requests for flight time and proposed flight schedules as far in advance of any given flight as possible. Lessee or the designated authorized representative(s) of Lessee shall submit scheduling requests under this Agreement to the designated authorized representative(s) of Lessor. Requests for flight time shall be in such form (whether oral or written) mutually convenient to, and agreed upon by, the parties. In addition to proposed schedules and flight times, Lessee shall upon request provide Lessor with the following information for each proposed flight prior to scheduled departure: (i) proposed departure point; (ii) destination; (iii) date and time of flight; (iv) the number of anticipated passengers; (v) the nature and extent of luggage to be carried; (vi) the date and time of a return flight, if any; and (vii) any other pertinent information concerning the proposed flight that Lessor or the flight crew may request.
(b)Subject to Aircraft and crew availability and to any usage limitations established by Lessor, Lessor shall use its good faith efforts, consistent with Lessor’s approved policies, in order to accommodate the needs of Lessee, to avoid conflicts in scheduling, and to enable Lessee to enjoy the benefits of this Agreement; however, Lessee acknowledges and agrees that notwithstanding anything in this Agreement to the contrary, (i) Lessor shall have sole and exclusive final authority over the scheduling of the Aircraft; and (ii) the needs of Lessor for the Aircraft shall take precedence over Lessee’s rights and Lessor’s obligations under this Agreement.
(c)Although every good faith effort shall be made to avoid its occurrence, any flight scheduled under this Agreement is subject to cancellation by either party without incurring liability to the other party. In the event that cancellation is necessary, the canceling party shall provide the maximum notice practicable.
5.Billing. Lessor shall pay all expenses relating to the operation of the Aircraft under this Agreement (in accordance with Section 2 hereof) on a monthly basis. As soon as possible after the end of each monthly period during the Term, Lessor shall provide to Lessee an invoice showing all use of the Aircraft by Lessee under this Agreement during that month and a complete accounting detailing all amounts payable by Lessee pursuant to Section 2 for that month, including such detail supporting all expenses paid or incurred by Lessor for which reimbursement is sought as Lessee may reasonably request. Lessee shall pay all amounts due to Lessor under this Section 5 not later than 30 days after receipt of the invoice therefor.
6.Maintenance of Aircraft. Lessor shall be solely responsible for securing maintenance, preventive maintenance and inspections of the Aircraft (utilizing an inspection program listed in FAR Section 91.409(f)), and shall take such requirements into account in scheduling the Aircraft hereunder.
7.Flight Crew.
(a)Lessor shall employ or engage and as between Lessor and Lessee shall be responsible for the payment of all salaries, benefits and/or compensation for a fully-qualified flight crew with appropriate credentials to conduct each flight undertaken under this Agreement. All flight crewmembers shall be included on any insurance policies that Lessor is required to maintain hereunder.
(b)The qualified flight crew provided by Lessor shall exercise all of its duties and
2


responsibilities with regard to the safety of each flight conducted hereunder in accordance with applicable FAR’ s. The Aircraft shall be operated under the standards and policies established by Lessor. Final authority to initiate or terminate each flight, and otherwise to decide all matters relating to the safety of any given flight or requested flight, shall rest with the pilot-incommand of that flight. The flight crew may, in its sole discretion, terminate any flight, refuse to commence any flight, or take any other action that, in the judgment of the pilot-in-command, is necessitated by considerations of safety. No such termination or refusal to commence by the pilot-in-command shall create or support any liability for loss, injury, damage or delay in favor of Lessee or any other person. Lessor shall not be liable to Lessee or any other person for loss, injury or damage occasioned by the delay or failure to furnish the Aircraft and flight crew pursuant to this Agreement for any reason.
8.Insurance.
(a)At all times during the Term of this Agreement , Lessor shall maintain at its sole cost and expense (i) comprehensive aircraft and liability insurance against bodily injury and property damage claims, including, without limitation, contractual liability, premises damage, personal property liability, personal injury liability, death and property damage liability, public and passenger legal liability coverage, in an amount not less than $100,000,000 for each single occurrence and (ii) hull insurance for the full replacement cost of the aircraft.
(b)Any policies of aircraft and liability insurance carried in accordance with this Section 8 and any policies taken out in substitution or replacement of any such policies (i) shall name Lessee and his employees, agents, licensees and guests as additional insured; (ii) shall provide for 30 days written notice to Lessee by such insurer of cancellation, change, non-renewal or reduction (seven days in the case of war risk and allied perils coverage or such shorter period as is customarily available in the industry); (iii) shall provide that in respect of the interests of Lessee in such policies, the insurance shall not be invalidated by any action or inaction of Lessor regardless of any breach or violation of any warranties, declarations or conditions contained in such policies by or binding upon Lessor; and (iv) shall permit the use of the Aircraft by Lessor for compensation or hire to the extent permitted under applicable law. Each such policy shall be primary insurance, not subject to any co-insurance clause and shall be without right of contribution from any other insurance.
(c)Lessor shall use reasonable commercial efforts to provide such additional insurance coverage for specific flights under this Agreement, if any, as Lessee may request in writing. Lessee also acknowledges that any trips scheduled to the European Union may require Lessor to purchase additional insurance to comply with local regulations. The cost of all additional flight-specific insurance shall be borne by Lessee as set forth in Section 2(d) hereof.
(d)Each party agrees that it will not do any act or voluntarily suffer or permit any act to be done whereby any insurance required hereunder shall or may be suspended, impaired or defeated. In no event shall Lessor suffer or permit the Aircraft to be used or operated under this Agreement without such insurance being fully in effect.
(e)Lessor shall ensure that worker’s compensation insurance with all-states coverage is provided for the Aircraft’s crew and maintenance personnel.
(f)Lessor shall deliver certificates of insurance to Lessee with respect to the insurance required or permitted to be provided by it hereunder not later than the first flight of the Aircraft under this Agreement and upon the renewal date of each policy.
9.Taxes.    Lessee shall be responsible for paying, and Lessor shall be responsible for collecting from Lessee and paying over to the appropriate authorities, all applicable Federal transportation taxes and sales, use or other excise taxes imposed by any governmental authority in connection with any use of the Aircraft by Lessee hereunder. Each party shall indemnify the other party against any and all claims, liabilities, costs and expenses (including attorney’s fees as and when incurred) arising out of its breach of this undertaking.
10.Lessee’s Representations and Warranties. Lessee represents and warrants that:
(a)He will not use the Aircraft for the purposes of providing transportation of passengers or cargo in air commerce for compensation or hire or for common carriage.
(b)He shall refrain from incurring any mechanic’s or other liens in connection with
3


inspection, preventive maintenance, maintenance or storage of the Aircraft, and shall not attempt to convey, mortgage, assign, lease or in any way alienate the Aircraft or create any kind of lien or security interest involving the Aircraft or do anything or take any action that might mature into such a lien.
(c)He shall not lien or otherwise encumber or create or place any lien or other encumbrance of any kind whatsoever, on or against the Aircraft for any reason. He also will ensure that no liens or encumbrances of any kind whatsoever are created or placed against the Aircraft for claims against Lessee or by Lessee.
(d)He will abide by and conform to all laws, governmental and airport orders, rules and regulations, as shall be imposed upon the lessee of an aircraft under a time sharing agreement, and applicable company policies of Lessor.
11.Lessor’s Representations and Warranties. Lessor represents and warrants that it will abide by and conform to all such laws, governmental and airport orders, rules and regulations, as shall from time to time be in effect relating in any way to the operation and use of the Aircraft pursuant to this Agreement.
12.Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LESSOR HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT, INCLUDING ANY WITH RESPECT TO ITS CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON FOR ANY INCIDENTIAL, CONSEQUENTIAL OR SPECIAL DAMAGES, HOWEVER ARISING.
13.Term.    The term of this Agreement (the “Term”) shall commence on the effective date hereof and, unless terminated in accordance with the provisions hereof, shall remain in full force and effect for so long as you remain employed by Madison Square Garden Entertainment Corp. or any of its subsidiaries or affiliates. Notwithstanding the foregoing, either party shall have the right to terminate this Agreement for any reason or no reason by written notice given to the other party not less than 30 days prior to the proposed termination date.
14.Limitation of Liability. Lessee, for himself and on behalf of his agents, guests, invitees, licensees and employees, covenants and agrees that the insurance described in Section 8 hereof shall be the sole recourse for any and all liabilities, claims, demands, suits, causes of action, losses, penalties, fines, expenses or damages, including attorneys’ fees, court costs and witness fees, attributable to the use, operation or maintenance of the Aircraft pursuant to this Agreement or performance of or failure to perform any obligation under this Agreement.
15.Relationship of Parties. Lessor is strictly an independent contractor lessor/provider of transportation services with respect to Lessee. Nothing in this Agreement is intended, nor shall it be construed so as, to constitute the parties as partners or joint venturers or principal and agent. All persons furnished by Lessor for the performance of the operations and activities contemplated by this Agreement shall at all times and for all purposes be considered Lessor’s employees or agents.
16.Governing Law; Severability. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, without regard to its choice of law rules. If any provision of this Agreement conflicts with any statute or rule of law of the State of New York, or is otherwise unenforceable, such provision shall be deemed null and void only the extent of such conflict or unenforceability, and shall be deemed separate from, and shall not invalidate, any other provision of this Agreement.
17.Amendment. This Agreement may not be amended, supplemented, modified or terminated, or any of its terms varied, except by an agreement in writing signed by each of the parties hereto.
18.Counterparts. This Time Sharing Agreement may be executed in counterparts, each of which shall, for all purposes, be deemed an original and all such counterparts, taken together, shall constitute one and the same agreement, even though all parties may not have executed the same counterpart. Each party may transmit its signature by facsimile, and such faxed signature shall have the same force and effect as an original signature.
19.Successors and Assigns. This Time Sharing Agreement shall be binding upon the parties hereto, and their respective heirs, executors, administrators, other legal representatives, successors and assigns, and shall inure to the benefit of the parties hereto, and, except as otherwise provided herein, to their respective heirs,
4


executors, administrators, other legal representatives, successors and permitted assigns. Lessee agrees that he shall not directly or indirectly sublease, assign, transfer, pledge or hypothecate this Agreement or any part hereof (including any assignment or transfer pursuant to the laws of intestacy) without the prior written consent of Lessor, which may be given or withheld by Lessor in its sole and absolute discretion.
20.Notices. All notices or other communications delivered or given under this Agreement shall be in writing and shall be deemed to have been duly given if hand delivered, sent by certified or registered mail, return receipt requested, or nationally-utilized overnight delivery service, or confirmed facsimile transmission, as the case may be. Such notices shall be addressed to the parties at the addresses set forth above, or to such other address as may be designated by any party in a writing delivered to the other in the manner set forth in this Section 20. In the case of notices to Lessor, a copy of each such notice shall be sent to MSG Sports & Entertainment, 2 Penn Plaza, New York, New York 10121, attention: General Counsel. Notices sent by certified or registered mail shall be deemed received three business days after being mailed. All other notices shall be deemed received on the date delivered. Routine communications may be made by e-mail or fax to the addresses set forth therein.
21.Truth-in-Leasing Compliance. Lessor, on behalf of the Lessee, shall (i) mail a copy of this Agreement to the Aircraft Registration Branch, Technical Section, of the FAA in Oklahoma City within 24 hours of its execution; (ii) notify the Farmingdale Flight Standards District Office at least 48 hours prior to the first flight by Lessor under this Agreement of the registration number of the Aircraft, and the location of the airport of departure and departure time of the first flight; and (iii) carry a copy of this Agreement onboard the Aircraft at all times when the Aircraft is being operated under this Agreement.
22.TRUTH IN LEASING STATEMENT UNDER FAR SECTION 91.23:
(A)LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12-MONTH PERIOD PRECEDING THE DATE OF EXECUTION OF THIS AGREEMENT. THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED IN COMPLIANCE WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS OF FAR PART 91 FOR ALL OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.
(B)MSG SPORTS & ENTERTAINMENT, LLC, 2 PENN PLAZA, NEW YORK, NEW YORK 10121, HEREBY CERTIFIES THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT FOR ALL OPERATIONS UNDER THIS AGREEMENT.
(C)EACH PARTY HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
(D)THE PARTIES UNDERSTAND THAT AN EXPLANATION OF THE FACTORS BEARING ON OPERATIONAL CONTROL AND THE PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

5


IN WITNESS WHEREOF, Lessor and Lessee have executed this Amended and Restated Time Sharing Agreement effective as of the date first above written.
LESSOR:
MSG ENTERTAINMENT GROUP, LLC
By: /s/ Mark FitzPatrick                
Name: Mark FitzPatrick
Title: EVP & Chief Financial Officer

LESSEE:
/s/ Andrew Lustgarten                
Andrew Lustgarten
6

Exhibit 10.56
AMENDED AND RESTATED TIME SHARING AGREEMENT
THIS AMENDED AND RESTATED TIME SHARING AGREEMENT is entered into effective as of the 18th day of August, 2021, by and between MSG ENTERTAINMENT GROUP, LLC, a Delaware limited liability company with a place of business at 2 Penn Plaza, New York, New York 10121 (“Lessor”), and ANDREW LUSTGARTEN, with a mailing address c/o of Madison Square Garden Entertainment Corp., 2 Penn Plaza, New York, NY 10121 (“Lessee”).
W I T N E S S E T H:
WHEREAS, Lessor is the lessee and the operator of a Gulfstream Aerospace G550 aircraft, manufacturer’s serial number 5264, United States registration N551TG (the “Aircraft”); and
WHEREAS, Lessor has engaged fully-qualified and credentialed flight crew to operate the Aircraft; and
WHEREAS, Lessor has agreed to lease the Aircraft, with flight crew, to Lessee on a “time sharing” basis as defined in Section 91.501(c)(1) of the Federal Aviation Regulations (“FAR”) upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, and the covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Lessor and Lessee, intending to be legally bound, hereby agree as follows:
1.Lease of Aircraft. Lessor agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR Section 91.501(b)(6) and Section 91.501(c)(1) and this Agreement, and to provide a fully-qualified and credentialed flight crew for all flights to be conducted hereunder during the Term (as defined in Section 13) hereof. The parties acknowledge and agree that this Agreement did not result in any way from any direct or indirect advertising, holding out or soliciting on the part of Lessor or any person purportedly acting on behalf of Lessor. Lessor and Lessee intend that the lease of the Aircraft effected by this Agreement shall be treated as a “wet lease” pursuant to which Lessor provides transportation services to Lessee in accordance with FAR Section 91.501(b)(6) and Section 91.501(c)(1).
2.Payment for Use of Aircraft. Lessee shall pay Lessor the following listed actual expenses of each flight (the “Reimbursement Amount”) conducted under this Agreement (i.e. non-business flights for which reimbursement is required in accordance with Lessor’s policies), not to exceed the maximum amount legally payable for such flight under FAR Section 91.501(d)(1)-(10):
(a)fuel, oil, lubricants and other additives;
(b)travel expenses of crew, including food, lodging and ground transportation;
(c)hangar and tie-down costs away from the Aircraft’s base of operation;
(d)additional insurance obtained for the specific flight at the request of Lessee;
(e)landing fees, airport taxes and similar assessments;
(f)customs, foreign permit and similar fees directly related to the flight;
(g)in-flight food and beverages;
(h)in-flight telecommunication expenses;
(i)passenger ground transportation; and
(j)flight planning and weather contract services.
Notwithstanding the foregoing, in the event that any income is required to be imputed to Lessee with respect to personal use of the Aircraft, calculated using the Standard Industry Fare Level method in


accordance with Internal Revenue Service Regulation §1.61-21, the amount payable by Lessee pursuant to this Section 2 shall not be reduced, and Lessee shall also pay the related employee share of (withholding) taxes on any such imputed income.
3.Operational Control of Aircraft. Lessor and Lessee intend and agree that on all flights conducted under this Agreement, Lessor shall have complete and exclusive operational control over the Aircraft, its flight crews and maintenance, and complete and exclusive possession, command and control of the Aircraft. Lessor shall have complete and exclusive responsibility for scheduling, dispatching and flight following of the Aircraft on all flights conducted under this Agreement, which responsibility includes the sole and exclusive right over initiating, conducting and terminating such flights. Lessee shall have no responsibility for scheduling, dispatching or flight following on any flight conducted under this Agreement, nor any right over initiating, conducting or terminating any such flight. Nothing in this Agreement is intended or shall be construed so as to convey to Lessee any operational control over, or possession, command and control of, the Aircraft, all of which are expressly retained by Lessor.
4.Scheduling.
(a)Lessee will provide Lessor with requests for flight time and proposed flight schedules as far in advance of any given flight as possible. Lessee or the designated authorized representative(s) of Lessee shall submit scheduling requests under this Agreement to the designated authorized representative(s) of Lessor. Requests for flight time shall be in such form (whether oral or written) mutually convenient to, and agreed upon by, the parties. In addition to proposed schedules and flight times, Lessee shall upon request provide Lessor with the following information for each proposed flight prior to scheduled departure: (i) proposed departure point; (ii) destination; (iii) date and time of flight; (iv) the number of anticipated passengers; (v) the nature and extent of luggage to be carried; (vi) the date and time of a return flight, if any; and (vii) any other pertinent information concerning the proposed flight that Lessor or the flight crew may request.
(b)Subject to Aircraft and crew availability and to any usage limitations established by Lessor, Lessor shall use its good faith efforts, consistent with Lessor’s approved policies, in order to accommodate the needs of Lessee, to avoid conflicts in scheduling, and to enable Lessee to enjoy the benefits of this Agreement; however, Lessee acknowledges and agrees that notwithstanding anything in this Agreement to the contrary, (i) Lessor shall have sole and exclusive final authority over the scheduling of the Aircraft; and (ii) the needs of Lessor for the Aircraft shall take precedence over Lessee’s rights and Lessor’s obligations under this Agreement.
(c)Although every good faith effort shall be made to avoid its occurrence, any flight scheduled under this Agreement is subject to cancellation by either party without incurring liability to the other party. In the event that cancellation is necessary, the canceling party shall provide the maximum notice practicable.
5.Billing. Lessor shall pay all expenses relating to the operation of the Aircraft under this Agreement (in accordance with Section 2 hereof) on a monthly basis. As soon as possible after the end of each monthly period during the Term, Lessor shall provide to Lessee an invoice showing all use of the Aircraft by Lessee under this Agreement during that month and a complete accounting detailing all amounts payable by Lessee pursuant to Section 2 for that month, including such detail supporting all expenses paid or incurred by Lessor for which reimbursement is sought as Lessee may reasonably request. Lessee shall pay all amounts due to Lessor under this Section 5 not later than 30 days after receipt of the invoice therefor.
6.Maintenance of Aircraft. Lessor shall be solely responsible for securing maintenance, preventive maintenance and inspections of the Aircraft (utilizing an inspection program listed in FAR Section 91.409(f)), and shall take such requirements into account in scheduling the Aircraft hereunder.
7.Flight Crew.
(a)Lessor shall employ or engage and as between Lessor and Lessee shall be responsible for the payment of all salaries, benefits and/or compensation for a fully-qualified flight crew with appropriate credentials to conduct each flight undertaken under this Agreement. All flight crewmembers shall be included on any insurance policies that Lessor is required to maintain hereunder.
(b)The qualified flight crew provided by Lessor shall exercise all of its duties and
2


responsibilities with regard to the safety of each flight conducted hereunder in accordance with applicable FAR’ s. The Aircraft shall be operated under the standards and policies established by Lessor. Final authority to initiate or terminate each flight, and otherwise to decide all matters relating to the safety of any given flight or requested flight, shall rest with the pilot-incommand of that flight. The flight crew may, in its sole discretion, terminate any flight, refuse to commence any flight, or take any other action that, in the judgment of the pilot-in-command, is necessitated by considerations of safety. No such termination or refusal to commence by the pilot-in-command shall create or support any liability for loss, injury, damage or delay in favor of Lessee or any other person. Lessor shall not be liable to Lessee or any other person for loss, injury or damage occasioned by the delay or failure to furnish the Aircraft and flight crew pursuant to this Agreement for any reason.
8.Insurance.
(a)At all times during the Term of this Agreement , Lessor shall maintain at its sole cost and expense (i) comprehensive aircraft and liability insurance against bodily injury and property damage claims, including, without limitation, contractual liability, premises damage, personal property liability, personal injury liability, death and property damage liability, public and passenger legal liability coverage, in an amount not less than $100,000,000 for each single occurrence and (ii) hull insurance for the full replacement cost of the aircraft.
(b)Any policies of aircraft and liability insurance carried in accordance with this Section 8 and any policies taken out in substitution or replacement of any such policies (i) shall name Lessee and his employees, agents, licensees and guests as additional insured; (ii) shall provide for 30 days written notice to Lessee by such insurer of cancellation, change, non-renewal or reduction (seven days in the case of war risk and allied perils coverage or such shorter period as is customarily available in the industry); (iii) shall provide that in respect of the interests of Lessee in such policies, the insurance shall not be invalidated by any action or inaction of Lessor regardless of any breach or violation of any warranties, declarations or conditions contained in such policies by or binding upon Lessor; and (iv) shall permit the use of the Aircraft by Lessor for compensation or hire to the extent permitted under applicable law. Each such policy shall be primary insurance, not subject to any co-insurance clause and shall be without right of contribution from any other insurance.
(c)Lessor shall use reasonable commercial efforts to provide such additional insurance coverage for specific flights under this Agreement, if any, as Lessee may request in writing. Lessee also acknowledges that any trips scheduled to the European Union may require Lessor to purchase additional insurance to comply with local regulations. The cost of all additional flight-specific insurance shall be borne by Lessee as set forth in Section 2(d) hereof.
(d)Each party agrees that it will not do any act or voluntarily suffer or permit any act to be done whereby any insurance required hereunder shall or may be suspended, impaired or defeated. In no event shall Lessor suffer or permit the Aircraft to be used or operated under this Agreement without such insurance being fully in effect.
(e)Lessor shall ensure that worker’s compensation insurance with all-states coverage is provided for the Aircraft’s crew and maintenance personnel.
(f)Lessor shall deliver certificates of insurance to Lessee with respect to the insurance required or permitted to be provided by it hereunder not later than the first flight of the Aircraft under this Agreement and upon the renewal date of each policy.
9.Taxes.    Lessee shall be responsible for paying, and Lessor shall be responsible for collecting from Lessee and paying over to the appropriate authorities, all applicable Federal transportation taxes and sales, use or other excise taxes imposed by any governmental authority in connection with any use of the Aircraft by Lessee hereunder. Each party shall indemnify the other party against any and all claims, liabilities, costs and expenses (including attorney’s fees as and when incurred) arising out of its breach of this undertaking.
10.Lessee’s Representations and Warranties. Lessee represents and warrants that:
(a)He will not use the Aircraft for the purposes of providing transportation of passengers or cargo in air commerce for compensation or hire or for common carriage.
(b)He shall refrain from incurring any mechanic’s or other liens in connection with
3


inspection, preventive maintenance, maintenance or storage of the Aircraft, and shall not attempt to convey, mortgage, assign, lease or in any way alienate the Aircraft or create any kind of lien or security interest involving the Aircraft or do anything or take any action that might mature into such a lien.
(c)He shall not lien or otherwise encumber or create or place any lien or other encumbrance of any kind whatsoever, on or against the Aircraft for any reason. He also will ensure that no liens or encumbrances of any kind whatsoever are created or placed against the Aircraft for claims against Lessee or by Lessee.
(d)He will abide by and conform to all laws, governmental and airport orders, rules and regulations, as shall be imposed upon the lessee of an aircraft under a time sharing agreement, and applicable company policies of Lessor.
11.Lessor’s Representations and Warranties. Lessor represents and warrants that it will abide by and conform to all such laws, governmental and airport orders, rules and regulations, as shall from time to time be in effect relating in any way to the operation and use of the Aircraft pursuant to this Agreement.
12.Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LESSOR HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT, INCLUDING ANY WITH RESPECT TO ITS CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON FOR ANY INCIDENTIAL, CONSEQUENTIAL OR SPECIAL DAMAGES, HOWEVER ARISING.
13.Term.    The term of this Agreement (the “Term”) shall commence on the effective date hereof and, unless terminated in accordance with the provisions hereof, shall remain in full force and effect for so long as you remain employed by Madison Square Garden Entertainment Corp. or any of its subsidiaries or affiliates. Notwithstanding the foregoing, either party shall have the right to terminate this Agreement for any reason or no reason by written notice given to the other party not less than 30 days prior to the proposed termination date.
14.Limitation of Liability. Lessee, for himself and on behalf of his agents, guests, invitees, licensees and employees, covenants and agrees that the insurance described in Section 8 hereof shall be the sole recourse for any and all liabilities, claims, demands, suits, causes of action, losses, penalties, fines, expenses or damages, including attorneys’ fees, court costs and witness fees, attributable to the use, operation or maintenance of the Aircraft pursuant to this Agreement or performance of or failure to perform any obligation under this Agreement.
15.Relationship of Parties. Lessor is strictly an independent contractor lessor/provider of transportation services with respect to Lessee. Nothing in this Agreement is intended, nor shall it be construed so as, to constitute the parties as partners or joint venturers or principal and agent. All persons furnished by Lessor for the performance of the operations and activities contemplated by this Agreement shall at all times and for all purposes be considered Lessor’s employees or agents.
16.Governing Law: Severability. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, without regard to its choice of law rules. If any provision of this Agreement conflicts with any statute or rule of law of the State of New York, or is otherwise unenforceable, such provision shall be deemed null and void only the extent of such conflict or unenforceability, and shall be deemed separate from, and shall not invalidate, any other provision of this Agreement.
17.Amendment. This Agreement may not be amended, supplemented, modified or terminated, or any of its terms varied, except by an agreement in writing signed by each of the parties hereto.
18.Counterparts. This Time Sharing Agreement may be executed in counterparts, each of which shall, for all purposes, be deemed an original and all such counterparts, taken together, shall constitute one and the same agreement, even though all parties may not have executed the same counterpart. Each party may transmit its signature by facsimile, and such faxed signature shall have the same force and effect as an original signature.
19.Successors and Assigns. This Time Sharing Agreement shall be binding upon the parties hereto, and their respective heirs, executors, administrators, other legal representatives, successors and assigns, and shall inure to the benefit of the parties hereto, and, except as otherwise provided herein, to their respective heirs,
4


executors, administrators, other legal representatives, successors and permitted assigns. Lessee agrees that he shall not directly or indirectly sublease, assign, transfer, pledge or hypothecate this Agreement or any part hereof (including any assignment or transfer pursuant to the laws of intestacy) without the prior written consent of Lessor, which may be given or withheld by Lessor in its sole and absolute discretion.
20.Notices. All notices or other communications delivered or given under this Agreement shall be in writing and shall be deemed to have been duly given if hand delivered, sent by certified or registered mail, return receipt requested, or nationally-utilized overnight delivery service, or confirmed facsimile transmission, as the case may be. Such notices shall be addressed to the parties at the addresses set forth above, or to such other address as may be designated by any party in a writing delivered to the other in the manner set forth in this Section 20. In the case of notices to Lessor, a copy of each such notice shall be sent to MSG Sports & Entertainment, 2 Penn Plaza, New York, New York 10121, attention: General Counsel. Notices sent by certified or registered mail shall be deemed received three business days after being mailed. All other notices shall be deemed received on the date delivered. Routine communications may be made by e-mail or fax to the addresses set forth therein.
21.Truth-in-Leasing Compliance. Lessor, on behalf of the Lessee, shall (i) mail a copy of this Agreement to the Aircraft Registration Branch, Technical Section, of the FAA in Oklahoma City within 24 hours of its execution; (ii) notify the Farmingdale Flight Standards District Office at least 48 hours prior to the first flight by Lessor under this Agreement of the registration number of the Aircraft, and the location of the airport of departure and departure time of the first flight; and (iii) carry a copy of this Agreement onboard the Aircraft at all times when the Aircraft is being operated under this Agreement.
22.TRUTH IN LEASING STATEMENT UNDER FAR SECTION 91.23:
(A)LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12-MONTH PERIOD PRECEDING THE DATE OF EXECUTION OF THIS AGREEMENT. THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED IN COMPLIANCE WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS OF FAR PART 91 FOR ALL OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.
(B)MSG SPORTS & ENTERTAINMENT, LLC, 2 PENN PLAZA, NEW YORK, NEW YORK 10121, HEREBY CERTIFIES THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT FOR ALL OPERATIONS UNDER THIS AGREEMENT.
(C)EACH PARTY HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
(D)THE PARTIES UNDERSTAND THAT AN EXPLANATION OF THE FACTORS BEARING ON OPERATIONAL CONTROL AND THE PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

5


IN WITNESS WHEREOF, Lessor and Lessee have executed this Amended and Restated Time Sharing Agreement effective as of the date first above written.
LESSOR:
MSG ENTERTAINMENT GROUP, LLC
By: /s/ Mark FitzPatrick                
Name: Mark FitzPatrick
Title: EVP & Chief Financial Officer

LESSEE:
/s/ Andrew Lustgarten                
Andrew Lustgarten
6

Exhibit 10.57

AMENDED AND RESTATED TIME SHARING AGREEMENT
THIS AMENDED AND RESTATED TIME SHARING AGREEMENT is entered into effective as of the 18th day of August, 2021, by and between MSG ENTERTAINMENT GROUP, LLC, a Delaware limited liability company with a place of business at 2 Penn Plaza, New York, New York 10121 (“Lessor”), and ANDREW LUSTGARTEN, with a mailing address c/o of Madison Square Garden Entertainment Corp., 2 Penn Plaza, New York, NY 10121 (“Lessee”).
W I T N E S S E T H:
WHEREAS, Lessor is the lessee and the operator of a Gulfstream Aerospace GV-SP (G550) aircraft, manufacturer’s serial number 5043, United States registration N107VS (the “Aircraft”); and
WHEREAS, Lessor has engaged fully-qualified and credentialed flight crew to operate the Aircraft; and
WHEREAS, Lessor has agreed to lease the Aircraft, with flight crew, to Lessee on a “time sharing” basis as defined in Section 91.501(c)(1) of the Federal Aviation Regulations (“FAR”) upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, and the covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Lessor and Lessee, intending to be legally bound, hereby agree as follows:
1.Lease of Aircraft. Lessor agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR Section 91.501(b)(6) and Section 91.501(c)(1) and this Agreement, and to provide a fully-qualified and credentialed flight crew for all flights to be conducted hereunder during the Term (as defined in Section 13) hereof. The parties acknowledge and agree that this Agreement did not result in any way from any direct or indirect advertising, holding out or soliciting on the part of Lessor or any person purportedly acting on behalf of Lessor. Lessor and Lessee intend that the lease of the Aircraft effected by this Agreement shall be treated as a “wet lease” pursuant to which Lessor provides transportation services to Lessee in accordance with FAR Section 91.501(b)(6) and Section 91.501(c)(1).
2.Payment for Use of Aircraft. Lessee shall pay Lessor the following listed actual expenses of each flight (the “Reimbursement Amount”) conducted under this Agreement (i.e. non-business flights for which reimbursement is required in accordance with Lessor’s policies), not to exceed the maximum amount legally payable for such flight under FAR Section 91.501(d)(1)-(10):
(a)fuel, oil, lubricants and other additives;
(b)travel expenses of crew, including food, lodging and ground transportation;
(c)hangar and tie-down costs away from the Aircraft’s base of operation;
(d)additional insurance obtained for the specific flight at the request of Lessee;
(e)landing fees, airport taxes and similar assessments;
(f)customs, foreign permit and similar fees directly related to the flight;
(g)in-flight food and beverages;
(h)in-flight telecommunication expenses;
(i)passenger ground transportation; and
(j)flight planning and weather contract services.
Notwithstanding the foregoing, in the event that any income is required to be imputed to Lessee with respect to personal use of the Aircraft, calculated using the Standard Industry Fare Level method in
1

accordance with Internal Revenue Service Regulation §1.61-21, the amount payable by Lessee pursuant to this Section 2 shall not be reduced, and Lessee shall also pay the related employee share of (withholding) taxes on any such imputed income.
3.Operational Control of Aircraft. Lessor and Lessee intend and agree that on all flights conducted under this Agreement, Lessor shall have complete and exclusive operational control over the Aircraft, its flight crews and maintenance, and complete and exclusive possession, command and control of the Aircraft. Lessor shall have complete and exclusive responsibility for scheduling, dispatching and flight following of the Aircraft on all flights conducted under this Agreement, which responsibility includes the sole and exclusive right over initiating, conducting and terminating such flights. Lessee shall have no responsibility for scheduling, dispatching or flight following on any flight conducted under this Agreement, nor any right over initiating, conducting or terminating any such flight. Nothing in this Agreement is intended or shall be construed so as to convey to Lessee any operational control over, or possession, command and control of, the Aircraft, all of which are expressly retained by Lessor.
4.Scheduling.
(a)Lessee will provide Lessor with requests for flight time and proposed flight schedules as far in advance of any given flight as possible. Lessee or the designated authorized representative(s) of Lessee shall submit scheduling requests under this Agreement to the designated authorized representative(s) of Lessor. Requests for flight time shall be in such form (whether oral or written) mutually convenient to, and agreed upon by, the parties. In addition to proposed schedules and flight times, Lessee shall upon request provide Lessor with the following information for each proposed flight prior to scheduled departure: (i) proposed departure point; (ii) destination; (iii) date and time of flight; (iv) the number of anticipated passengers; (v) the nature and extent of luggage to be carried; (vi) the date and time of a return flight, if any; and (vii) any other pertinent information concerning the proposed flight that Lessor or the flight crew may request.
(b)Subject to Aircraft and crew availability and to any usage limitations established by Lessor, Lessor shall use its good faith efforts, consistent with Lessor’s approved policies, in order to accommodate the needs of Lessee, to avoid conflicts in scheduling, and to enable Lessee to enjoy the benefits of this Agreement; however, Lessee acknowledges and agrees that notwithstanding anything in this Agreement to the contrary, (i) Lessor shall have sole and exclusive final authority over the scheduling of the Aircraft; and (ii) the needs of Lessor for the Aircraft shall take precedence over Lessee’s rights and Lessor’s obligations under this Agreement.
(c)Although every good faith effort shall be made to avoid its occurrence, any flight scheduled under this Agreement is subject to cancellation by either party without incurring liability to the other party. In the event that cancellation is necessary, the canceling party shall provide the maximum notice practicable.
5.Billing. Lessor shall pay all expenses relating to the operation of the Aircraft under this Agreement (in accordance with Section 2 hereof) on a monthly basis. As soon as possible after the end of each monthly period during the Term, Lessor shall provide to Lessee an invoice showing all use of the Aircraft by Lessee under this Agreement during that month and a complete accounting detailing all amounts payable by Lessee pursuant to Section 2 for that month, including such detail supporting all expenses paid or incurred by Lessor for which reimbursement is sought as Lessee may reasonably request. Lessee shall pay all amounts due to Lessor under this Section 5 not later than 30 days after receipt of the invoice therefor.
6.Maintenance of Aircraft. Lessor shall be solely responsible for securing maintenance, preventive maintenance and inspections of the Aircraft (utilizing an inspection program listed in FAR Section 91.409(f)), and shall take such requirements into account in scheduling the Aircraft hereunder.
7.Flight Crew.
(a)Lessor shall employ or engage and as between Lessor and Lessee shall be responsible for the payment of all salaries, benefits and/or compensation for a fully-qualified flight crew with appropriate credentials to conduct each flight undertaken under this Agreement. All flight crewmembers shall be included on any insurance policies that Lessor is required to maintain hereunder.
(b)The qualified flight crew provided by Lessor shall exercise all of its duties and
2


responsibilities with regard to the safety of each flight conducted hereunder in accordance with applicable FAR’ s. The Aircraft shall be operated under the standards and policies established by Lessor. Final authority to initiate or terminate each flight, and otherwise to decide all matters relating to the safety of any given flight or requested flight, shall rest with the pilot-incommand of that flight. The flight crew may, in its sole discretion, terminate any flight, refuse to commence any flight, or take any other action that, in the judgment of the pilot-in-command, is necessitated by considerations of safety. No such termination or refusal to commence by the pilot-in-command shall create or support any liability for loss, injury, damage or delay in favor of Lessee or any other person. Lessor shall not be liable to Lessee or any other person for loss, injury or damage occasioned by the delay or failure to furnish the Aircraft and flight crew pursuant to this Agreement for any reason.
8.Insurance.
(a)At all times during the Term of this Agreement , Lessor shall maintain at its sole cost and expense (i) comprehensive aircraft and liability insurance against bodily injury and property damage claims, including, without limitation, contractual liability, premises damage, personal property liability, personal injury liability, death and property damage liability, public and passenger legal liability coverage, in an amount not less than $100,000,000 for each single occurrence and (ii) hull insurance for the full replacement cost of the aircraft.
(b)Any policies of aircraft and liability insurance carried in accordance with this Section 8 and any policies taken out in substitution or replacement of any such policies (i) shall name Lessee and his employees, agents, licensees and guests as additional insured; (ii) shall provide for 30 days’ written notice to Lessee by such insurer of cancellation, change, non-renewal or reduction (seven days in the case of war risk and allied perils coverage or such shorter period as is customarily available in the industry); (iii) shall provide that in respect of the interests of Lessee in such policies, the insurance shall not be invalidated by any action or inaction of Lessor regardless of any breach or violation of any warranties, declarations or conditions contained in such policies by or binding upon Lessor; and (iv) shall permit the use of the Aircraft by Lessor for compensation or hire to the extent permitted under applicable law. Each such policy shall be primary insurance, not subject to any co-insurance clause and shall be without right of contribution from any other insurance.
(c)Lessor shall use reasonable commercial efforts to provide such additional insurance coverage for specific flights under this Agreement, if any, as Lessee may request in writing. Lessee also acknowledges that any trips scheduled to the European Union may require Lessor to purchase additional insurance to comply with local regulations. The cost of all additional flight-specific insurance shall be borne by Lessee as set forth in Section 2(d) hereof.
(d)Each party agrees that it will not do any act or voluntarily suffer or permit any act to be done whereby any insurance required hereunder shall or may be suspended, impaired or defeated. In no event shall Lessor suffer or permit the Aircraft to be used or operated under this Agreement without such insurance being fully in effect.
(e)Lessor shall ensure that worker’s compensation insurance with all-states coverage is provided for the Aircraft’s crew and maintenance personnel.
(f)Lessor shall deliver certificates of insurance to Lessee with respect to the insurance required or permitted to be provided by it hereunder not later than the first flight of the Aircraft under this Agreement and upon the renewal date of each policy.
9.Taxes.    Lessee shall be responsible for paying, and Lessor shall be responsible for collecting from Lessee and paying over to the appropriate authorities, all applicable Federal transportation taxes and sales, use or other excise taxes imposed by any governmental authority in connection with any use of the Aircraft by Lessee hereunder. Each party shall indemnify the other party against any and all claims, liabilities, costs and expenses (including attorney’s fees as and when incurred) arising out of its breach of this undertaking.
10.Lessee’s Representations and Warranties. Lessee represents and warrants that:
(a)He will not use the Aircraft for the purposes of providing transportation of passengers or cargo in air commerce for compensation or hire or for common carriage.
(b)He shall refrain from incurring any mechanic’s or other liens in connection with
3


inspection, preventive maintenance, maintenance or storage of the Aircraft, and shall not attempt to convey, mortgage, assign, lease or in any way alienate the Aircraft or create any kind of lien or security interest involving the Aircraft or do anything or take any action that might mature into such a lien.
(c)He shall not lien or otherwise encumber or create or place any lien or other encumbrance of any kind whatsoever, on or against the Aircraft for any reason. He also will ensure that no liens or encumbrances of any kind whatsoever are created or placed against the Aircraft for claims against Lessee or by Lessee.
(d)He will abide by and conform to all laws, governmental and airport orders, rules and regulations, as shall be imposed upon the lessee of an aircraft under a time sharing agreement, and applicable company policies of Lessor.
11.Lessor’s Representations and Warranties. Lessor represents and warrants that it will abide by and conform to all such laws, governmental and airport orders, rules and regulations, as shall from time to time be in effect relating in any way to the operation and use of the Aircraft pursuant to this Agreement.
12.Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LESSOR HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT, INCLUDING ANY WITH RESPECT TO ITS CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON FOR ANY INCIDENTIAL, CONSEQUENTIAL OR SPECIAL DAMAGES, HOWEVER ARISING.
13.Term.    The term of this Agreement (the “Term”) shall commence on the effective date hereof and, unless terminated in accordance with the provisions hereof, shall remain in full force and effect for so long as you remain employed by Madison Square Garden Entertainment Corp. or any of its subsidiaries or affiliates. Notwithstanding the foregoing, either party shall have the right to terminate this Agreement for any reason or no reason by written notice given to the other party not less than 30 days prior to the proposed termination date.
14.Limitation of Liability. Lessee, for himself and on behalf of his agents, guests, invitees, licensees and employees, covenants and agrees that the insurance described in Section 8 hereof shall be the sole recourse for any and all liabilities, claims, demands, suits, causes of action, losses, penalties, fines, expenses or damages, including attorneys’ fees, court costs and witness fees, attributable to the use, operation or maintenance of the Aircraft pursuant to this Agreement or performance of or failure to perform any obligation under this Agreement.
15.Relationship of Parties. Lessor is strictly an independent contractor lessor/provider of transportation services with respect to Lessee. Nothing in this Agreement is intended, nor shall it be construed so as, to constitute the parties as partners or joint venturers or principal and agent. All persons furnished by Lessor for the performance of the operations and activities contemplated by this Agreement shall at all times and for all purposes be considered Lessor’s employees or agents.
16.Governing Law; Severability. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, without regard to its choice of law rules. If any provision of this Agreement conflicts with any statute or rule of law of the State of New York, or is otherwise unenforceable, such provision shall be deemed null and void only the extent of such conflict or unenforceability, and shall be deemed separate from, and shall not invalidate, any other provision of this Agreement.
17.Amendment. This Agreement may not be amended, supplemented, modified or terminated, or any of its terms varied, except by an agreement in writing signed by each of the parties hereto.
18.Counterparts. This Time Sharing Agreement may be executed in counterparts, each of which shall, for all purposes, be deemed an original and all such counterparts, taken together, shall constitute one and the same agreement, even though all parties may not have executed the same counterpart. Each party may transmit its signature by facsimile, and such faxed signature shall have the same force and effect as an original signature.
19.Successors and Assigns. This Time Sharing Agreement shall be binding upon the parties hereto, and their respective heirs, executors, administrators, other legal representatives, successors and assigns, and shall inure to the benefit of the parties hereto, and, except as otherwise provided herein, to their respective heirs,
4


executors, administrators, other legal representatives, successors and permitted assigns. Lessee agrees that he shall not directly or indirectly sublease, assign, transfer, pledge or hypothecate this Agreement or any part hereof (including any assignment or transfer pursuant to the laws of intestacy) without the prior written consent of Lessor, which may be given or withheld by Lessor in its sole and absolute discretion.
20.Notices. All notices or other communications delivered or given under this Agreement shall be in writing and shall be deemed to have been duly given if hand delivered, sent by certified or registered mail, return receipt requested, or nationally-utilized overnight delivery service, or confirmed facsimile transmission, as the case may be. Such notices shall be addressed to the parties at the addresses set forth above, or to such other address as may be designated by any party in a writing delivered to the other in the manner set forth in this Section 20. In the case of notices to Lessor, a copy of each such notice shall be sent to MSG Sports & Entertainment, 2 Penn Plaza, New York, New York 10121, attention: General Counsel. Notices sent by certified or registered mail shall be deemed received three business days after being mailed. All other notices shall be deemed received on the date delivered. Routine communications may be made by e-mail or fax to the addresses set forth therein.
21.Truth-in-Leasing Compliance. Lessor, on behalf of the Lessee, shall (i) mail a copy of this Agreement to the Aircraft Registration Branch, Technical Section, of the FAA in Oklahoma City within 24 hours of its execution; (ii) notify the Farmingdale Flight Standards District Office at least 48 hours prior to the first flight by Lessor under this Agreement of the registration number of the Aircraft, and the location of the airport of departure and departure time of the first flight; and (iii) carry a copy of this Agreement onboard the Aircraft at all times when the Aircraft is being operated under this Agreement.
22.TRUTH IN LEASING STATEMENT UNDER FAR SECTION 91.23:
(A)LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12-MONTH PERIOD PRECEDING THE DATE OF EXECUTION OF THIS AGREEMENT. THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED IN COMPLIANCE WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS OF FAR PART 91 FOR ALL OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.
(B)MSG SPORTS & ENTERTAINMENT, LLC, 2 PENN PLAZA, NEW YORK, NEW YORK 10121, HEREBY CERTIFIES THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT FOR ALL OPERATIONS UNDER THIS AGREEMENT.
(C)EACH PARTY HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
(D)THE PARTIES UNDERSTAND THAT AN EXPLANATION OF THE FACTORS BEARING ON OPERATIONAL CONTROL AND THE PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

5


IN WITNESS WHEREOF, Lessor and Lessee have executed this Amended and Restated Time Sharing Agreement effective as of the date first above written.
LESSOR:
MSG ENTERTAINMENT GROUP, LLC
By: /s/ Mark FitzPatrick                
Name: Mark FitzPatrick
Title: EVP & Chief Financial Officer

LESSEE:
/s/ Andrew Lustgarten                
Andrew Lustgarten
6



Exhibit 10.67
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of May 24, 2021 (this “Amendment”), to that certain Credit Agreement, dated as of November 12, 2020 (as amended, supplemented or otherwise modified, renewed or replaced from time to time, the “Credit Agreement”), among MSG NATIONAL PROPERTIES, LLC, as the Company, the Guarantors identified therein, the Lenders from time to time party thereto and JPMORGAN CHASE BANK, N.A., as the Administrative Agent.
INTRODUCTORY STATEMENT
WHEREAS, Section 10.01 of the Credit Agreement permits the Credit Agreement to be modified from time to time by the Company and the Administrative Agent, acting together, to cure any ambiguity, omission, mistake, typographical error or other defect in any provision of this Credit Agreement or any other Loan Document.
NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, the undersigned hereby agree as follows:
1.Defined Terms. Capitalized terms used herein (including in the Introductory Statement hereto) but not defined shall have the meanings ascribed to such terms in the Credit Agreement.
2.Amendments. Subject to the satisfaction of the conditions precedent set forth in Section 3 hereof, the Credit Agreement is hereby amended by replacing the words “first anniversary” with the words “eighteen month anniversary” in clause (a)(ii) of the definition of “Applicable Premium”.
3.Conditions to Effectiveness. The effectiveness of this Amendment is subject to the satisfaction in full of each of the following conditions precedent: (i) receipt by the Administrative Agent of a duly executed counterpart to this Amendment from the Company and (ii) execution by the Administrative Agent of this Amendment; provided that, the Administrative Agent shall post this Amendment to the Lenders reasonably promptly after the effectiveness hereof.
4.Full Force and Effect. Except as expressly set forth herein, this Amendment does not constitute an amendment, waiver or modification of any other provision of the Credit Agreement and does not constitute a waiver of timely compliance with the provisions of the Credit Agreement or any provision of any other Loan Document. Except as expressly amended hereby, the Credit Agreement and the other Loan Documents shall continue in full force and effect in accordance with the provisions thereof on the date hereof. As used in the Credit Agreement, the terms “Agreement,” “this Agreement,” “this Credit Agreement,” “herein,” “hereafter,” “hereto,” “hereof’ and words of similar import, shall, unless the context otherwise requires, mean the Credit Agreement as amended by this Amendment.
5.APPLICABLE LAW; WAIVER OF JURY TRIAL.
a.THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
b.EACH PARTY HERETO HEREBY AGREES AS SET FORTH IN SECTIONS 10.13 AND 10.14 OF THE CREDIT AGREEMENT AS IF SUCH SECTIONS WERE SET FORTH IN FULL HEREIN.
6.Counterparts. This Amendment may be executed in one or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument.





The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Amendment and/or any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include Electronic Signatures (as defined below), deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be. “Electronic Signatures” means any electronic symbol or process attached to, or associated with, any contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record.
7.Headings. The headings of this Amendment are for the purposes of reference only and shall not affect the construction of or be taken into consideration in interpreting this Amendment.
8.No Novation. Nothing herein contained is intended to be, nor shall it be construed as, a termination, substitution or novation of the Obligations outstanding under the Credit Agreement or the other Loan Documents, but rather a substitution of certain of the terms contained therein, as set forth herein.
[Signature Pages Follow]
2





IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized officers, all as of the date and year first written above.


MSG NATIONAL PROPERTIES, LLC,
as the Company



By: /s/ Philip D’Ambrosio
Name: Philip D’Ambrosio
Title: SVP & Treasurer


[Signature Page to Amendment No. 1 to Credit Agreement]




JPMORGAN CHASE BANK, N.A.,
as the Administrative Agent



By: /s/ Joon Hur
Name: Joon Hur
Title: Executive Director
[Signature Page to Amendment No. 1 to Credit Agreement]

Exhibit 10.74
EXECUTION VERSION
CREDIT AGREEMENT
dated as of September 28, 2015
among
MSG HOLDINGS, L.P. (to be renamed MSGN HOLDINGS, L.P.),
as the Company,
CERTAIN SUBSIDIARIES OF THE COMPANY,
MSGN EDEN, LLC, and REGIONAL MSGN HOLDINGS LLC
as Guarantors,
THE LENDERS PARTY HERETO,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and Collateral Agent,
J.P. MORGAN SECURITIES LLC,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
MUFG UNION BANK, N.A.,
THE BANK OF NOVA SCOTIA,
U.S. BANK NATIONAL ASSOCIATION,
FIFTH THIRD BANK,
TD BANK, N.A.,
WELLS FARGO BANK, N.A.,
NATIXIS, NEW YORK BRANCH,
BNP PARIBAS, and
GOLDMAN SACHS BANK USA,
as Joint Book Runners,
BANK OF AMERICA, N.A., MUFG UNION BANK N.A.,
THE BANK OF NOVA SCOTIA,
U.S. BANK NATIONAL ASSOCIATION, and FIFTH THIRD BANK,
as Co-Syndication Agents,
TD BANK, N.A., WELLS FARGO BANK, N.A.,
NATIXIS, NEW YORK BRANCH, BNP PARIBAS, and
GOLDMAN SACHS BANK USA,
as Co-Documentation Agents
and
SOCIÉTÉ GÉNÉRALE, BARCLAYS BANK PLC,
SUNTRUST ROBINSON HUMPHREY, INC.,
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
MORGAN STANLEY SENIOR FUNDING, INC., and
CRÉDIT INDUSTRIEL ET COMMERCIAL,
as Senior Managing Agents




TABLE OF CONTENTS
 
        
Page
 
ARTICLE I
  
DEFINITIONS AND ACCOUNTING MATTERS
  
Section 1.01  
Certain Defined Terms
     1   
Section 1.02  
Other Interpretive Provisions
     44   
Section 1.03  
Accounting Terms
     45   
Section 1.04  
Rounding
     45   
Section 1.05  
Times of Day
     45   
Section 1.06  
Letter of Credit Amounts
     45   
Section 1.07  
Currency Equivalents Generally
     46   
ARTICLE II
  
THE COMMITMENTS AND CREDIT EXTENSIONS
  
Section 2.01  
The Loans
     46   
Section 2.02  
Borrowings, Conversions and Continuations of Loans
     47   
Section 2.03  
Letters of Credit
     48   
Section 2.04  
Swing Line Loans
     57   
Section 2.05  
Prepayments
     60   
Section 2.06  
Termination or Reduction of Commitments
     62   
Section 2.07  
Repayment of Loans
     63   
Section 2.08  
Interest
     64   
Section 2.09  
Fees
     65   
Section 2.10  
Computation of Interest and Fees
     65   
Section 2.11  
Evidence of Debt
     66   
Section 2.12  
Payments Generally; Administrative Agent’s Clawback
     66   
Section 2.13  
Sharing of Payments by Lenders
     68   
Section 2.14  
Incremental Revolving Credit Facilities
     69   
Section 2.15  
Incremental Term Facilities
     70   
Section 2.16  
Defaulting Lenders
     72   
ARTICLE III
  
TAXES, YIELD PROTECTION AND ILLEGALITY
  
Section 3.01  
Taxes
     75   
Section 3.02  
Illegality
     77   
Section 3.03  
Inability to Determine Rates
     77   
Section 3.04  
Increased Costs; Reserves on Eurodollar Rate Loans
     78   
Section 3.05  
Compensation for Losses
     80   
Section 3.06  
Mitigation Obligations; Replacement of Lenders
     80   
Section 3.07  
Survival
     81   
 
i





ARTICLE IV
  
GUARANTY
  
Section 4.01  
Guaranty
     81   
Section 4.02  
Rights of Lenders
     81   
Section 4.03  
Certain Waivers
     82   
Section 4.04  
Obligations Independent
     82   
Section 4.05  
Subrogation
     82   
Section 4.06  
Termination; Reinstatement
     83   
Section 4.07  
Subordination
     83   
Section 4.08  
Stay of Acceleration
     83   
Section 4.09  
Condition of Company
     83   
Section 4.10  
Limitation on Guaranty
     83   
Section 4.11  
Keepwell
     84   
ARTICLE V
  
CONDITIONS PRECEDENT
  
Section 5.01  
Conditions of Initial Credit Extension
     84   
Section 5.02  
Conditions to all Credit Extensions
     88   
ARTICLE VI
  
REPRESENTATIONS AND WARRANTIES
  
Section 6.01  
Existence, Qualification and Power
     89   
Section 6.02  
Subsidiaries; Loan Parties
     89   
Section 6.03  
Authority; No Conflict
     90   
Section 6.04  
Financial Condition; Absence of Material Adverse Effect
     90   
Section 6.05  
Litigation, Compliance with Laws
     91   
Section 6.06  
Titles and Liens
     91   
Section 6.07  
Regulation U; Investment Company Act
     91   
Section 6.08  
Taxes
     91   
Section 6.09  
Other Credit Agreements
     91   
Section 6.10  
Full Disclosure
     92   
Section 6.11  
No Default
     92   
Section 6.12  
Approval of Government, Regulatory Authorities and Third Parties
     92   
Section 6.13  
Binding Agreements
     92   
Section 6.14  
Collective Bargaining Agreements
     93   
Section 6.15  
Investments
     93   
Section 6.16  
Solvency
     93   
Section 6.17  
Collateral Documents
     93   
Section 6.18  
Maintenance of Insurance
     93   
 
ii





Section 6.19  
Subordinated Debt
     93   
Section 6.20  
ERISA Compliance
     93   
Section 6.21  
Environmental Compliance
     94   
Section 6.22  
Intellectual Property, Licenses, Etc.
     94   
Section 6.23  
Compliance Matters
     94   
Section 6.24  
Anti-Corruption Laws and Sanctions
     94   
ARTICLE VII
  
COVENANTS OF THE COMPANY
AND THE RESTRICTED SUBSIDIARIES
  
Section 7.01  
Financial Statements and Other Information
     95   
Section 7.02  
Taxes and Claims
     98   
Section 7.03  
Insurance
     99   
Section 7.04  
Maintenance of Existence; Conduct of Business
     99   
Section 7.05  
Maintenance of and Access to Collateral
     99   
Section 7.06  
Compliance with Applicable Laws
     99   
Section 7.07  
[Intentionally Omitted.]
     99   
Section 7.08  
Subsidiaries
     99   
Section 7.09  
Use of Proceeds
     100   
Section 7.10  
Covenant to Guarantee Obligations and Give Security
     100   
Section 7.11  
Books and Records
     101   
Section 7.12  
[Intentionally Omitted.]
     101   
Section 7.13  
Further Assurances and Post-Closing Matters
     101   
Section 7.14  
Indebtedness
     102   
Section 7.15  
Contingent Liabilities
     104   
Section 7.16  
Liens
     106   
Section 7.17  
Investments
     107   
Section 7.18  
Restricted Payments
     108   
Section 7.19  
Business
     109   
Section 7.20  
Transactions with Affiliates
     109   
Section 7.21  
Amendments of Certain Instruments
     109   
Section 7.22  
Issuance of Stock
     110   
Section 7.23  
Fundamental Changes
     110   
Section 7.24  
Dispositions
     110   
Section 7.25  
Accounting Changes
     110   
Section 7.26  
Negative Pledge
     111   
Section 7.27  
Anti-Corruption Laws and Sanctions
     111   
Section 7.28  
Total Leverage Ratio
     111   
Section 7.29  
Interest Coverage Ratio
     112   
Section 7.30  
Minimum Liquidity
     112   
Section 7.31  
Holdings Entities Covenants
     112   
 
iii





ARTICLE VIII
  
EVENTS OF DEFAULT AND REMEDIES
  
Section 8.01  
Events of Default
     113   
Section 8.02  
Remedies upon Event of Default
     116   
Section 8.03  
Application of Funds
     116   
ARTICLE IX
  
THE ADMINISTRATIVE AGENT
  
Section 9.01  
Appointment and Authority
     117   
Section 9.02  
Rights as a Lender
     118   
Section 9.03  
Exculpatory Provisions
     118   
Section 9.04  
Reliance by Administrative Agent
     119   
Section 9.05  
Delegation of Duties
     119   
Section 9.06  
Resignation of Administrative Agent
     120   
Section 9.07  
Non-Reliance on Administrative Agent and Other Lenders
     121   
Section 9.08  
No Other Duties, Etc.
     121   
Section 9.09  
Administrative Agent May File Proofs of Claim
     121   
Section 9.10  
Collateral and Guaranty Matters
     122   
ARTICLE X
  
MISCELLANEOUS
  
Section 10.01  
Amendments, Etc.
     123   
Section 10.02  
Notices; Effectiveness; Electronic Communications
     125   
Section 10.03  
No Waiver; Cumulative Remedies
     127   
Section 10.04  
Expenses; Indemnity; Damage Waiver
     127   
Section 10.05  
Payments Set Aside
     129   
Section 10.06  
Successors and Assigns
     129   
Section 10.07  
Right of Setoff
     135   
Section 10.08  
Interest Rate Limitation
     135   
Section 10.09  
Counterparts; Integration; Effectiveness
     136   
Section 10.10  
Survival of Representations and Warranties
     136   
Section 10.11  
Severability
     136   
Section 10.12  
Replacement of Lenders
     136   
Section 10.13  
Governing Law; Jurisdiction; Etc.
     137   
Section 10.14  
Waiver of Jury Trial
     138   
Section 10.15  
No Advisory or Fiduciary Responsibility
     138   
Section 10.16  
USA PATRIOT Act Notice
     139   
Section 10.17  
Senior Indebtedness
     139   
Section 10.18  
Liability of General Partners and Other Persons
     139   
Section 10.19  
Authorization of Third Parties to Deliver Information and Discuss Affairs
     140   
Section 10.20  
Treatment of Certain Information; Confidentiality
     140   
Section 10.21  
No Fiduciary Duty
     141   
 
iv





Schedule 1.01(a)  
Guarantors
  
Schedule 1.01(b)  
Excluded Assets
  
Schedule 1.01(c)  
Affiliation Agreements
  
Schedule 1.01(d)  
Sports Telecast Rights Agreements
  
Schedule 1.01(e)  
Cablevision Spin Agreements
  
Schedule 1.01(f)  
MSG Spin Agreements
  
Schedule 1.01(g)  
Subsidiaries Excluded for Financial Statement Variance Purposes
  
Schedule 2.01  
Commitments and Applicable Percentages
  
Schedule 2.03  
Existing Letters of Credit
  
Schedule 6.02(i)  
Restricted Subsidiaries
  
Schedule 6.02(ii)  
Unrestricted Subsidiaries
  
Schedule 6.02(iii)  
Excluded Subsidiaries
  
Schedule 6.03  
Required Consents, League and Regulatory Approvals
  
Schedule 6.05  
Existing Litigation
  
Schedule 6.14  
Collective Bargaining Agreements
  
Schedule 6.15  
Existing Investments
  
Schedule 7.14  
Existing Indebtedness
  
Schedule 7.15  
Existing Guarantees
  
Schedule 7.16  
Existing Liens
  
Schedule 7.20  
Transactions with Affiliates
  
Schedule 7.26  
Negative Pledge
  
Schedule 10.02  
Administrative Agent’s Office, Certain Addresses for Notices
  
EXHIBIT A-1  
Form of Committed Revolving Loan Notice
  
EXHIBIT A-2  
Form of Swing Line Loan Notice
  
EXHIBIT A-3  
Form of Committed Term Loan Notice
  
EXHIBIT B-1  
Form of Revolving Credit Note
  
EXHIBIT B-2  
Form of Incremental Revolving Credit Note
  
EXHIBIT B-3  
Form of Term Note
  
EXHIBIT B-4  
Form of Incremental Term Loan Note
  
EXHIBIT C  
Form of Compliance Certificate
  
EXHIBIT D-1  
Form of Certificate as to Quarterly Financial Statements
  
EXHIBIT D-2  
Form of Certificate as to Annual Financial Statements
  
EXHIBIT E  
Form of Opinion of Counsel for the Company and the Restricted Subsidiaries
  
EXHIBIT F  
Form of Opinion of Special New York Counsel to the Loan Parties
  
EXHIBIT G  
Form of Assignment and Assumption Agreement
  
EXHIBIT H-1  
Form of Incremental Revolving Credit Supplement
  
EXHIBIT H-2  
Form of Incremental Term Loan A Supplement (Term Loan A)
  
EXHIBIT H-3  
Form of Incremental Term Loan B Supplement (Term Loan B)
  
EXHIBIT I  
Master Subordinated Intercompany Note
  
 
v




CREDIT AGREEMENT
This CREDIT AGREEMENT (this “ Credit Agreement ”) is entered into as of September 28, 2015, among MSG HOLDINGS, L.P. (to be renamed MSGN HOLDINGS, L.P.), a Delaware limited partnership (the “ Company ”), the Restricted Subsidiaries (such term and each other capitalized term used but not defined in these recitals having the meaning ascribed thereto in Section 1.01 of this Credit Agreement) identified herein, as Guarantors, MSGN EDEN, LLC, a Delaware limited liability company (“ MSGN Eden ”), and REGIONAL MSGN HOLDINGS LLC, a Delaware limited liability company (together with MSGN Eden, the “ Holdings Entities ” and individually each a “ Holdings Entity ”), the banks, financial institutions and other Persons which are parties hereto, together with their respective successors and assigns, as Lenders, the L/C Issuers from time to time party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and an L/C Issuer.
WHEREAS, the Company, the Restricted Subsidiaries party thereto, the banks, financial institutions and other Persons party thereto as lenders and JPMorgan Chase Bank, N.A., as administrative agent, were parties to the Credit Agreement, dated as of May 6, 2014 (such agreement amended, modified or otherwise supplemented prior to the date hereof, the “ Existing Credit Agreement ”);
WHEREAS, the Company and the Restricted Subsidiaries have been engaged in the ownership and operation of sports franchises (including the New York Knicks and the New York Rangers), the creation, production, promotion, performance, distribution and presentation of a variety of live productions, production and content development for multiple media distribution platforms and activities related to the foregoing;
WHEREAS, the Company and its Restricted Subsidiaries terminated the Existing Credit Agreement and have contributed the assets comprising the entertainment and sports businesses to MSG SpinCo in contemplation of the Spin-Off; and
WHEREAS, the Company and the Restricted Subsidiaries have requested that the Lenders provide new senior secured credit facilities for the purposes set forth in Section 7.09 , including providing capital to MSG SpinCo prior to the consummation of the Spin-Off and providing for working capital and other general corporate purposes of the Company, and the Lenders are willing to do so on the terms and conditions set forth herein, and each of the Guarantors expects to derive benefit, directly or indirectly, from such extensions of credit;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Certain Defined Terms . As used herein, the following terms shall have the following meanings:
 
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“ Adjusted Operating Cash Flow ” means for any period, the following for the Company and the Restricted Subsidiaries for such period, each component determined on a consolidated basis in accordance with GAAP: (i) aggregate revenues, minus (ii) aggregate operating expenses (including direct operating and selling, general administrative), such expenses to exclude impairments of property, equipment and intangible assets, depreciation and amortization and charges and credits relating to employee and director stock plans and restructuring charges and credits, and in each case without duplication to exclude expenses allocated to Affiliates that are not Restricted Subsidiaries; provided , however , that for purposes of determining Adjusted Operating Cash Flow for any period (A) there shall be included any dividends and distributions to the extent paid in cash by an Unrestricted Subsidiary to the Company or any Restricted Subsidiary to the extent such dividend or distribution relates to net income earned or cash realized from operating activities by such Unrestricted Subsidiary in the immediately preceding 12 month period, (B) there shall be excluded all management fees paid by any Unrestricted Subsidiary to the Company or any Restricted Subsidiary during such period other than any such amounts settled in cash to the extent not in excess of 5% of Adjusted Operating Cash Flow as determined without including any such fees, (C) Adjusted Operating Cash Flow for such period shall be increased or reduced, as the case may be, by the Adjusted Operating Cash Flow of assets or businesses acquired or disposed of ( provided that in each case it has an impact on Adjusted Operating Cash Flow of at least $500,000) (including by means of any re-designation of any subsidiary) by the Company or any Restricted Subsidiary on or after the first day of such period, determined on a pro forma basis reasonably satisfactory to the Administrative Agent (it being agreed that it shall be satisfactory to the Administrative Agent that such pro forma calculations may be based upon GAAP as applied in the preparation of the financial statements for the Company, delivered or deemed delivered pursuant to Section 7.01 rather than as applied in the financial statements of the company whose assets were acquired and may include, in the Company’s discretion, a reasonable estimate of savings under existing contracts resulting from any such acquisitions), as though the Company or such Restricted Subsidiary acquired or disposed of such assets on the first day of such period, and (D) there shall be excluded any gains or losses on sales or dispositions of businesses by the Company or any of its Restricted Subsidiaries. For purposes of this definition, operating revenues and operating expenses may exclude the following, provided that all exclusions for cash items (whether representing a cash item in the period in question or in a future period) shall be limited to an aggregate of $40,000,000 per year and $75,000,000 during the entire term of the Facility (the “ Cash Basket Amount ”): (1) provisions for severance obligations; (2) losses resulting from any write-off or write-down of Investments by the Company or any of its Restricted Subsidiaries; (3) the effect of the loss of any currently held real estate tax exemptions; (4) costs and expenses incurred to implement the Spin-Off, (5) amortization of production and development costs associated with shows or other content or the costs resulting from the cancellation of shows or other content or abandonment of shows or other content under development or write-off of any deferred production costs associated with shows; (6) losses resulting from currency fluctuations and any unrealized losses from hedging transactions; (7) pension curtailment or settlements; (8) other non-recurring, non-cash items in excess of $1,000,000; and (9) changes to US GAAP that would cause a covenant default ( provided that the Company shall provide reconciliations to demonstrate compliance under previous US GAAP and the parties shall agree to negotiate in good faith to amend covenants accordingly). In the case of clauses (1) through (3)  above, if the expense is required to be recognized in one period but paid in subsequent periods, such exclusion
 
2




shall apply only to such initial period and such expense shall be considered an expense for purposes of clause (ii) of this definition when paid to the extent such cash amounts are in excess of the Cash Basket Amount. In the event of any suspension of carriage by any party to an Affiliation Agreement during renewal negotiations of such Affiliation Agreement or expiration or termination of or disputes under such Affiliation Agreements, the Adjusted Operating Cash Flow calculation, for purposes of complying with the Financial Covenants (but not for any other purpose), may be adjusted (the “ Carriage Suspension Adjustment ”) to add back the Adjusted Operating Cash Flow attributable to the affected Affiliation Agreement from the corresponding period one year prior to each period during which such suspension of carriage continues, but in any event not to exceed six months; provided that the Carriage Suspension Adjustment shall be limited only to the Adjusted Operating Cash Flow attributable to one Affiliation Agreement during any period; provided , further , that with respect to any Carriage Suspension Adjustment, the Company shall provide reports with reasonably detailed supporting calculations showing the “lost” Adjusted Operating Cash Flow attributable to the affected Affiliation Agreement for each corresponding monthly period of the prior year, in each case certified by a financial officer of the Company.
“ Administrative Agent ” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder and its successors in such capacity.
“ Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 , or such other address or account as the Administrative Agent may from time to time notify to the Company and the Lenders.
“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“ Affiliate ” means, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition, “ control ” (including, with its correlative meanings, “ controlled by ” and “ under common control with ”) means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that for purposes of this definition, in any event, any Person which owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person; and provided further that no individual shall be an Affiliate of a corporation or partnership solely by reason of his or her being an officer, director or partner of such entity, except in the case of a partner if his or her interests in such partnership shall qualify him or her as an Affiliate.
“ Affiliated Lender ” means the Parent or any Affiliate of the Parent, other than (a) the Company or (b) any Subsidiary of the Company.
“ Affiliation Agreements ” means the agreements listed on Schedule 1.01(c) and all other existing and future agreements of the Company or any Restricted Subsidiary for the distribution of the Program Services by multichannel video television programming distributors (e.g., Comcast, Time Warner, DirecTV, Cablevision, Verizon).
 
3




“ Agent Parties ” has the meaning set forth Section 10.02(c) .
“ Aggregate Commitments ” means the Commitments of all the Lenders.
“ Anti-Corruption Laws ” means all published laws, rules and regulations of any jurisdiction applicable to the Company or its Subsidiaries from time to time penalizing actions in connection with to bribery or other corrupt actions.
“ Applicable Percentage ” means (a) in respect of the Initial Term Facility, with respect to any Term Lender at any time, the percentage (carried out to the ninth decimal place) of the Initial Term Facility represented by such Term Lender’s Term Commitment at such time (including any Incremental Term Commitments that increase the Term Commitments under the Initial Term Facility), (b) in respect of any Incremental Term Facility that is a separate tranche of Term Commitments and Term Loans, with respect to any Incremental Term Lender thereunder at any time, the percentage (carried out to the ninth decimal place) of such Incremental Term Facility represented by such Incremental Term Lender’s Incremental Term Commitment at such time, (c) in respect of the Initial Revolving Credit Facility, with respect to any Revolving Credit Lender at any time, the percentage (carried out to the ninth decimal place) of the Initial Revolving Credit Facility represented by such Revolving Credit Lender’s Revolving Credit Commitment at such time (including any Incremental Revolving Loan Commitments that increase the Revolving Credit Commitments under the Initial Revolving Credit Facility), and (d) in respect of any Incremental Revolving Credit Facility that is a separate tranche of Revolving Credit Commitments and Revolving Credit Loans, with respect to any Incremental Revolving Credit Lender thereunder at any time, the percentage (carried out to the ninth decimal place) of such Incremental Revolving Credit Facility represented by such Incremental Revolving Credit Lender’s Incremental Revolving Credit Commitment at such time. If the commitment of each Revolving Credit Lender to make Revolving Credit Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 8.02 , or if the Revolving Credit Commitments have expired, then the Applicable Percentage of each Revolving Credit Lender in respect of a Revolving Credit Facility shall be determined based on the Applicable Percentage of such Revolving Credit Lender in respect of such Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender in respect of each Facility is set forth opposite the name of such Lender on Schedule 2.01 (or, in the case of any Incremental Lender, on Schedule I to the applicable Incremental Supplement, if any) or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.
“ Applicable Rate ” means (a) (i) initially, in respect of the Initial Term Facility and the Initial Revolving Credit Facility, 1.00% per annum for Base Rate Loans and 2.00% per annum for Eurodollar Rate Loans, and (ii) following the delivery of the Compliance Certificate for the second full fiscal quarter of the Company following the Closing Date, as determined by the Company’s Total Leverage Ratio, as follows:
 
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Level   
Total Leverage Ratio
  
Revolving Credit Facility and Term Facility
 
     
Eurodollar Rate Loans
Applicable Margin
   
Base Rate Loans
Applicable Margin
 
Level 4
   Greater than or equal to 5.50: 1.00      2.25 %      1.25 % 
Level 3
   Greater than or equal to 4.50: 1.00 but less than 5.50: 1.00      2.00 %      1.00 % 
Level 2
   Greater than or equal to 3.50: 1.00, but less than 4.50: 1.00      1.75 %      0.75 % 
Level 1
   Less than 3.50: 1.00      1.50 %      0.50 % 
(b) (i) initially, in respect of the Swing Line Sublimit, 1.00% per annum, and (ii) following the delivery of the Compliance Certificate for the second full fiscal quarter of the Company following the Closing Date, as determined by the Company’s Total Leverage Ratio as set forth in clause (a)(ii) above for Base Rate Loans, and (c) in respect of any Incremental Facility, the percentages per annum for Base Rate Loans and for Eurodollar Rate Loans that are agreed by the Company and the applicable Incremental Lenders and specified in the applicable Incremental Supplement with respect to such Incremental Facility.
“ Applicable Revolving Credit Percentage ” means with respect to any Revolving Credit Lender at any time, such Revolving Credit Lender’s Applicable Percentage in respect of the applicable Revolving Credit Facility at such time.
“ Appropriate Lender ” means, at any time, (a) with respect to the Initial Term Facility, the Initial Revolving Credit Facility or an Incremental Facility, if any, a Lender that has a Commitment with respect to such Facility or holds a Term Loan, a Revolving Credit Loan or an Incremental Loan, respectively, at such time, (b) with respect to the Letter of Credit Sublimit, (i) each L/C Issuer and (ii) if any Letters of Credit have been issued pursuant to Section 2.03(a) , the Revolving Credit Lenders, and (c) with respect to the Swing Line Sublimit, (i) any Swing Line Lender and (ii) if any other Revolving Credit Lender shall have made Swing Line Loans pursuant to Section 2.04 that are outstanding at such time, each such other Revolving Credit Lender.
“ Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“ Assignee Group ” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.
“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b) ), and accepted by the Administrative Agent, in substantially the form of Exhibit G or any other form approved by the Administrative Agent.
 
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“ Availability Period ” means (a) in respect of the Initial Revolving Credit Facility, the period from and including the Closing Date to the earliest of (i) the Maturity Date for the Initial Revolving Credit Facility, (ii) the date of termination of the Revolving Credit Commitments under the Initial Revolving Credit Facility pursuant to Section 2.06 , and (iii) the date of termination of the commitment of each Revolving Credit Lender to make Revolving Credit Loans and of the obligation of each L/C Issuer to make L/C Credit Extensions under the Initial Revolving Credit Facility pursuant to Section 8.02 , (b) in respect of any Incremental Revolving Credit Facility that is a separate tranche of Revolving Credit Commitments and Revolving Credit Loans, the period from and including the applicable Incremental Closing Date to the earliest of (i) the Maturity Date for such Incremental Revolving Credit Facility, (ii) the date of termination of the Revolving Credit Commitments under such Incremental Revolving Credit Facility pursuant to Section 2.06 , and (iii) the date of termination of the commitment of each Incremental Revolving Credit Lender to make Revolving Credit Loans and of the obligation of each L/C Issuer to make L/C Credit Extensions under such Incremental Revolving Credit Facility pursuant to Section 8.02 .
“ Bank of America ” means Bank of America, N.A. and its successors.
“ Base Rate ” means for any day a fluctuating rate per annum equal to the highest of (a) the New York Fed Bank Rate plus  1 ⁄ 2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its “prime rate,” and (c) one-month floating Eurodollar Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%; provided that the Eurodollar Rate for any day shall be based on the Eurodollar Base Rate at approximately 11:00 a.m. London time on such day, subject to the interest rate floor set forth in the definition of the term “Eurodollar Base Rate”. Any change in the Base Rate due to a change in the Prime Rate, the New York Fed Bank Rate or the Eurodollar Rate shall be effective from and including the effective date of such change in the Prime Rate, the New York Fed Bank Rate or the Eurodollar Rate, respectively. The “ Prime Rate ” is a rate set by the Administrative Agent based upon various factors including JPMorgan’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by JPMorgan shall take effect at the opening of business on the day specified in the public announcement of such change.
“ Base Rate Loan ” means a Term Loan, Revolving Credit Loan or an Incremental Loan that bears interest based on the Base Rate.
“ Borrowing ” means a Term Borrowing, Revolving Credit Borrowing, a Swing Line Borrowing or an Incremental Borrowing, if any, as the context may require.
“ Business ” has the meaning specified in Section 7.19 .
“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the State of New York and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.
 
6




“ Cablevision Affiliation Agreement ” means the agreement dated as of December 31, 2009 between the Company and CSC Holdings, Inc. with respect to the carriage of the Program Services known as MSG/MSG Plus in substantially the form attached as Exhibit 10.12 to the Cablevision Form 10, as amended or modified from time to time in accordance with Section 7.21 .
“ Cablevision Form 10 ” means the Form 10 filed by Parent on November 24, 2009 in connection with the Cablevision Spin Transaction.
“ Cablevision Spin Agreements ” means the agreements listed on Schedule 1.01(e) .
“ Cablevision Spin Transaction ” means the transaction in which the equity interests in the general and limited partners of the Company were contributed to a corporation held by a subsidiary of CVC which were then distributed to CVC and by CVC to its then existing shareholders on January 28, 2010.
“ Capitalized Lease Obligations ” means, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property, which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP and, for purposes of this Credit Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“ Carriage Suspension Adjustment ” has the meaning specified in the definition of “Adjusted Operating Cash Flow.”
“ Cash Basket Amount ” has the meaning specified in the definition of “Adjusted Operating Cash Flow”.
“ Cash Collateral ” has the meaning specified in Section 2.03(g) .
“ Cash Collateralize ” has the meaning specified in Section 2.03(g) .
“ Cash Equivalents ” means any of the following types of Investments, to the extent owned by the Company or any of its Restricted Subsidiaries (and, where applicable, the Parent or any of its consolidated Subsidiaries) free and clear of all Liens (other than Liens created under the Collateral Documents and other Liens permitted hereunder):
(a) Marketable, direct obligations of the United States of America or United States government agencies;
(b) bonds, notes and/or commercial paper outstanding at any time issued by any Person organized under the laws of any state of the United States of America, ;
(c) fully collateralized repurchase agreements in such amounts and with such financial institutions, as the Company may select from time to time;
 
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(d) bank deposits, certificates of deposit, banker’s acceptances and time deposits, which are issued by any Lender or by a United States national or state bank or foreign bank; and
(e) money market funds that comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act.
Such Investments will be measured as of the date the Investment is acquired with the maximum maturity of any individual investment not exceeding 24 months, and a maximum portfolio average maturity of 12 months.
Such Investments will also bear at least two credit ratings, including (i) for commercial paper, minimum ratings of “A2” by S&P and “P2” by Moody’s, (ii) for longer term bonds and notes, average long-term equivalent ratings of “A+” by S&P and “A1” by Moody’s for the portfolio of this investment class, (iii) for repurchase agreements, bank deposits, certificates of deposit, banker’s acceptances and time deposits, a minimum rating of “BBB” by S&P and “Baa” by Moody’s is required, unless, with respect to U.S. bank deposits and U.S. certificates of deposit, the amount invested is less than $250,000. To the extent that S&P or Moody’s credit ratings for such instruments are not available, equivalent credit ratings from Fitch Ratings, Inc. are acceptable.
“ Cash Management Agreement ” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.
“ Cash Management Bank ” means any Person that, (i) at the time it enters into a Cash Management Agreement with a Loan Party, is a Lender or an Affiliate of a Lender or (ii) is a Lender or an Affiliate of a Lender as of the Closing Date and is a party to a Cash Management Agreement with a Loan Party on the Closing Date, in each case in its capacity as a party to such Cash Management Agreement.
“ CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.
“ Change in Law ” means the occurrence, after the date of this Credit Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything to the contrary herein, it is understood and agreed that any changes resulting from requests, rules, guidelines or directives (x) issued under, or in connection with, the Dodd-Frank Wall Street Reform and Consumer Protection Act or (y) promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall, for the purposes of this Credit Agreement, be deemed to be adopted subsequent to the date hereof.
 
8




“ Change of Control ” means an event or series of events by which:
(a) Dolan Family Interests shall cease at any time to have beneficial ownership (within the meaning of Rule 13d-3 (as in effect on the Closing Date) promulgated under the Securities and Exchange Act of 1934, as amended) of shares of the capital stock of Parent, having sufficient votes to elect (or otherwise designate) at such time a majority of the members of the Board of Directors of Parent, or
(b) Parent shall cease to own (free and clear of all Liens), indirectly, 100% of the Equity Interests of the Company, or any Person (other than Parent or a wholly-owned Subsidiary of Parent) shall obtain the legal or contractual right to own, or to cause the transfer of the ownership of, any of the Equity Interests of the Company, without regard to any required approval of any other Person.
“ Closing Date ” means the first date all the conditions precedent in Section 5.01 are satisfied or waived in accordance with Section 10.01 .
“ Co-Documentation Agents ” means TD Bank, N.A., Natixis, New York Branch, BNP Paribas and Goldman Sachs Bank USA, in each case acting in its capacity as a co-documentation agent.
“ Co-Syndication Agents ” means Bank of America, N.A., MUFG Union Bank, N.A., The Bank of Nova Scotia, U.S. Bank National Association and Fifth Third Bank, in each case acting in its capacity as a co-syndication agent.
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Collateral ” means all of the “ Collateral ” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties and for the avoidance of doubt, shall exclude all Excluded Assets.
“ Collateral Agent ” means JPMorgan in its capacity as collateral agent for the Lenders under the Security Agreement and its successors in such capacity.
“ Collateral Documents ” means, collectively, the Security Agreement, the Intellectual Property Security Agreement, and each of the collateral assignments, Security Agreement Supplements, Intellectual Property Security Agreement Supplements, security agreements, pledge agreements or other similar agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.
“ Committed Loan Notice ” means a Committed Revolving Loan Notice or a Committed Term Loan Notice, as the context may require.
“ Committed Revolving Loan Notice ” means a notice of (a) a Revolving Credit Borrowing (including an Incremental Revolving Credit Borrowing), (b) a conversion of Revolving Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a) , which, if in writing, shall be substantially in the form of Exhibit A-1 .
 
9




“ Committed Term Loan Notice ” means a notice of (a) a Term Borrowing (including an Incremental Term Borrowing), (b) a conversion of Term Loans from one Type to another, or (c) a continuation of Eurodollar Rate Loans pursuant to Section 2.02(a), which, if in writing, shall be in substantially in the form of Exhibit A-3 .
“ Commitment ” means a Term Loan Commitment, a Revolving Credit Commitment, a Letter of Credit Commitment, any Incremental Term Loan Commitment (if any) or any Incremental Revolving Commitment (if any) as the context may require.
“ Commitment Fee ” has the meaning given to such term in Section 2.09(a) .
“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“ Company ” has the meaning given to such term in the preamble to this Credit Agreement.
“ Company Materials ” has the meaning specified in Section 7.01 .
“ Compliance Certificate ” means a certificate of a senior financial executive of the Company in substantially the form of Exhibit C .
“ Consolidated Net Indebtedness ” means, as of any date of determination, an amount equal to (a) the aggregate amount, without duplication, of all Indebtedness of the Holdings Entities, the Company and any Restricted Subsidiary that would be reflected as debt on a consolidated balance sheet of the Company (and, where applicable, of the applicable Holdings Entity) prepared in accordance with GAAP, minus (b) the amount of cash and Cash Equivalents in deposit or securities accounts of the Company and its Restricted Subsidiaries as of such date in an aggregate amount not to exceed the greater of (i) $150,000,000 and (ii) 50% of Adjusted Operating Cash Flow for the most recently completed four fiscal quarter period for which financial statements were required to have been delivered pursuant to Section 7.01 , giving full pro forma effect to all Specified Transactions (as provided in such definition) that have occurred since the last day of the most recently completed Measurement Period for which financial statements were required to have been delivered pursuant to Section 7.01 and to the application of the proceeds of any proposed transaction, in each case without duplication; provided that for purposes of calculating Adjusted Operating Cash Flow in this definition: (a) for the most recently completed four fiscal quarter period ended December 31, 2015, such amount shall equal Adjusted Operating Cash Flow for the quarter ended December 31, 2015 multiplied by four; (b) for the most recently completed four fiscal quarter period ended March 31, 2016, such amount shall equal Adjusted Operating Cash Flow for the two quarters ended March 31, 2016 multiplied by two; and (c) for the most recently completed four fiscal quarter period ended June 30, 2016, such amount shall equal Adjusted Operating Cash Flow for the three quarters ended June 30, 2016 multiplied by 4/3; provided , further , that to the extent that any calculation of “Consolidated Net Indebtedness” is used in determining pro forma compliance with a Total Leverage Ratio test and/or the Financial Covenants, under Section 2.14 , 2.15 or 7.14(xii) , then in
 
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no event shall any of the proceeds of the Indebtedness permitted to be incurred as a result of compliance with such test be included in the cash and Cash Equivalents pursuant to the preceding clause (b) when determining such compliance under such aforementioned sections.
“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is legally bound.
“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.
“ Credit Agreement ” has the meaning given to such term in the preamble to this Credit Agreement.
“ Credit Extension ” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.
“ Cumulative AOCF ” means an amount, determined on the date of any proposed Restricted Payment equal to Adjusted Operating Cash Flow for the period from October 1, 2015 through the end of the most recently ended Quarter as to which financial statements have been delivered pursuant to Section 7.01 .
“ Cumulative Interest Expense ” means for the period from October 1, 2015 through the end of the most recently ended quarter as to which financial statements have been delivered pursuant to Section 7.01 , the aggregate of the interest expense of the Company and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“ CVC ” means Cablevision Systems Corporation, a Delaware corporation.
“ Debt Instruments ” means, collectively, the respective notes and debentures evidencing, and indentures and other agreements governing, any Indebtedness.
“ Debtor Relief Laws ” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“ Default ” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“ Default Rate ” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided , however , that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate
 
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(including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.
“ Defaulting Lender ” any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Company in writing that such failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any L/C Issuer, any Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in L/C Obligations or Swing Line Loans) within two Business Days of the date when due, (b) has notified the Company, the Administrative Agent or any L/C Issuer or Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s good faith determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), or (c) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (c) above shall be made by the Administrative Agent in its reasonable discretion acting in good faith, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Company, each L/C Issuer, each Swing Line Lender and each Lender.
“ Deposit Account Control Agreement ” means an agreement, substantially in the form attached as Exhibit E to the Security Agreement or otherwise reasonably satisfactory to the Administrative Agent, among a Loan Party, a depository institution holding the funds of such Loan Party, and the Administrative Agent with respect to collection and control of the deposits and balances held in a deposit account maintained by such Loan Party.
“ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any Collateral (for purposes of Section 7.24 , including (x) Related Documents and (y) agreements under which the Company or any Restricted Subsidiary has rights to content or rights to obtain content for distribution as part of the Program Services, in each case under clauses (x) and (y)  that are not Collateral solely as a
 
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result of the application of clause (vi) of the definition of Excluded Assets whether in this Credit Agreement or through an equivalent provision in any other Loan Document) (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that the term Disposition specifically excludes (i) dispositions of property, whether now owned or hereafter acquired, that is obsolete, worn out, damaged, surplus or otherwise no longer used or useful in the ordinary course of business, (ii) dispositions of inventory (including advertising, sponsorship, tickets, air time, signage and similar items) in the ordinary course of business, (iii) dispositions of cash and Cash Equivalents in the ordinary course of business and the conversion of cash into Cash Equivalents and Cash Equivalents into cash, (iv) dispositions of property by any Subsidiary to the Company or to a Restricted Subsidiary (provided that in the case of this clause (iv) if the transferor of such property is a Loan Party, the transferee thereof must be a Loan Party), (v) sales or other dispositions without recourse and in the ordinary course of business of overdue accounts receivable of financially troubled debtors in connection with the compromise or collection thereof, (vi) the licensing or sublicensing of intellectual property rights and other transfers of copyrighted material in the ordinary course of business, (vii) the settlement of tort or other litigation claims in the ordinary course of business or determined by the Board of Directors or similar governing entity to be fair and reasonable in light of the circumstances, (viii) charitable contributions in amounts that in the aggregate are not material to the Company and its Restricted Subsidiaries taken as a whole, (ix) all actions necessary or advisable to consummate the Spin-Off, and (x) the sale, transfer, license, lease or other disposition of property involving property or assets having a fair market value of less than $5,000,000 in a single transaction or a series of related transactions.
“ Dolan ” means Charles F. Dolan.
“ Dolan Family Interests ” means (i) any Dolan Family Member, (ii) any trusts for the benefit of any Dolan Family Members, (iii) any estate or testamentary trust of any Dolan Family Member for the benefit of any Dolan Family Members, (iv) any executor, administrator, trustee, conservator or legal or personal representative of any Person or Persons specified in clauses (i) , (ii)  and (iii)  above to the extent acting in such capacity on behalf of any Dolan Family Member or Members and not individually and (v) any corporation, partnership, limited liability company or other similar entity, in each case 80% of which is owned and controlled by any of the foregoing or combination of the foregoing.
“ Dolan Family Members ” means Dolan, his spouse, his descendants and any spouse of any of such descendants.
“ Dollars ” and “ $ ” means lawful money of the United States of America.
“ Eligible Assignee ” has the meaning specified in Section 10.06(b)(iii)(A) ; provided that, notwithstanding the foregoing, the term “Eligible Assignee” shall, solely with respect to an assignment of any Incremental Term Loan, include the Company, any Affiliated Lender or any of the Company’s Subsidiaries, provided , that:
 
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(a) none of the Company, any Affiliated Lender or any of the Company’s Subsidiaries holding Incremental Term Loans shall have any right to (i) attend (including by telephone) any meeting or discussions (or portion thereof) among the Administrative Agent and/or any Lenders to which representatives of the Company are not then present, or (ii) receive any information or material prepared by the Administrative Agent or any Lender or any communication by or among Administrative Agent and one or more Lenders, except to the extent such information or materials have been made available to the Company or its representatives;
(b) notwithstanding anything in Section 10.01 or the definition of “Required Lenders” to the contrary, for purposes of determining whether the Required Lenders have (i) consented (or not consented) to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Loan Document or any departure by any Loan Party therefrom, or subject to clause (c) below, any plan of reorganization pursuant to the Bankruptcy Code of the Unites States, (ii) otherwise acted on any matter related to any Loan Document, or (iii) directed or required the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document, no Affiliated Lender shall have any right to consent (or not consent), otherwise act or direct or require the Administrative Agent or any Lender to take (or refrain from taking) any such action, and (x) all Term Loans held by any Affiliated Lender shall be deemed to be not outstanding for all purposes of calculating whether the Required Lenders have taken any actions and (y) all Term Loans held by Affiliated Lenders shall be deemed to be not outstanding for all purposes of calculating whether all Lenders have taken any action unless the action in question affects such Affiliated Lender in a disproportionately adverse manner than its effect on other Lenders;
(c) notwithstanding anything in this Credit Agreement or the other Loan Documents to the contrary, each Affiliated Lender, by its purchase of any Term Loans, hereby agrees that if a proceeding under any Debtor Relief Laws shall be commenced by or against the Company or any other Loan Party at a time when such Lender is an Affiliated Lender, such Affiliated Lender irrevocably authorizes and empowers the Administrative Agent to vote on behalf of such Affiliated Lender with respect to the Term Loans held by such Affiliated Lender in any manner in the Administrative Agent’s sole discretion, unless the Administrative Agent instructs such Affiliated Lender to vote, in which case such Affiliated Lender shall vote with respect to the Term Loans held by it as the Administrative Agent directs, provided that such Affiliated Lender shall be entitled to vote in accordance with its sole discretion (and not in accordance with the direction of the Administrative Agent) in connection with any plan of reorganization to the extent any such plan of reorganization proposes to treat any Obligations held by such Affiliated Lender in a disproportionately adverse manner than the proposed treatment of similar Obligations held by Term Lenders that are not Affiliated Lenders.
(d) any purchase of Term Loans by the Company or any of its Subsidiaries shall (i) be effected by an offer to purchase Term Loans pro rata from each Term Lender under the applicable Term Facility in a manner reasonably acceptable to the Administrative Agent, (ii) result in such Term Loans being immediately retired upon such assignment, and (iii) not be funded with a borrowing of Revolving Credit Loans; and
 
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(e) the aggregate principal amount of all Term Loans under any Term Loan Facility purchased by assignment pursuant to Section 10.06 and held at any one time by all Affiliated Lenders shall not exceed 10% of the aggregate outstanding principal amount of all Term Loans under such Term Loan Facility.
“ Environmental Laws ” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Company, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Laws, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ Equity Interests ” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
“ ERISA Affiliate ” means, when used with respect to a Plan, ERISA, the PBGC or a provision of the Code pertaining to employee benefit plans, any Person that is a member of any group of organizations within the meaning of Sections 414(b), (c), (m) or (o) of the Code of which the Company is a member.
“ Eurodollar Base Rate ” means, for such Interest Period, the rate per annum equal to the London interbank offered rate as administered by the ICE Benchmark Administration (or any other Person that takes over the administration of such rate) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar
 
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deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period as displayed on the Reuters Screen LIBOR01 Page or LIBOR02 Page (or, in the event such rate does not appear on any of such Reuters pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time, as selected by the Administrative Agent in its reasonable discretion). If such rate is not available at such time for any other reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by JPMorgan and with a term equivalent to such Interest Period would be offered by JPMorgan’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period; provided that if the Eurodollar Base Rate for any Interest Period would be a rate per annum of less than zero, then such rate shall be deemed to be 0.0% per annum.
“ Eurodollar Rate ” means, for any Interest Period with respect to a Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:
 
Eurodollar Rate    #VALUE!   
Eurodollar Base Rate
     
1.00 – Eurodollar Reserve Percentage
“ Eurodollar Rate Loan ” means a Term Loan or a Revolving Credit Loan that bears interest at a rate based on the Eurodollar Rate.
“ Eurodollar Reserve Percentage ” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.
“ Event of Default ” means any of the events described in Article VIII hereof.
“ Event of Loss ” means, with respect to any property of the Company or a Restricted Subsidiary, (i) the actual or constructive total loss of such property or the use thereof, resulting from destruction, damage beyond repair, or the rendition of such property permanently unfit for normal use from any casualty or similar occurrence whatsoever, (ii) the destruction or damage of a material portion of such property from any casualty or similar occurrence whatsoever under circumstances in which such damage cannot reasonably be expected to be repaired, or such property cannot reasonably be expected to be restored to its condition immediately prior to such destruction or damage, within 180 days after the occurrence of such destruction or damage, (iii) the condemnation, confiscation or seizure of, or requisition of title to or use of, any property, or (iv) in the case of any property located upon a leasehold, the termination or expiration of such leasehold.
 
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“ Excluded Asset ” means any and all of the following: (i) those assets set forth on Schedule 1.01(b) , (ii) intellectual property that is necessary to or utilized in connection with an Excluded Asset as defined under clause (i) , (iii) , (iv)  or ( viii)  of this definition, (iii) interests in Teams, (iv) Leases to the extent that such Leases require the consent of the lessor or any third party for the granting of a security interest therein, (v) motor vehicles and other assets subject to certificates of title, (vi) assets consisting of contract rights pursuant to contracts containing enforceable restrictions on the granting of security interests therein except to the extent such restrictions are rendered ineffective under Section 9-406, 9-407 or 9-408 of the UCC or other applicable law, (vii) voting stock of or other equity interests (A) in excess of 65% of the voting stock or other equity interests held by the Company or Guarantors in first tier non-US subsidiaries, (B) in non-wholly owned subsidiaries if the pledge of such stock or equity interest is prohibited by agreement, organizational documents or applicable law or regulation, (C) in Unrestricted Subsidiaries, (D) in Excluded Subsidiaries, or (E) in any other Subsidiary of the Company (1) existing as of the Closing Date, whose assets primarily consist of direct ownership interests in one or more Teams (or indirect ownership interests in one or more Teams, so long as the sole purpose of such indirect owner is to directly hold ownership interests in the direct owner of one or more Teams), or (2) that is formed after the Closing Date for the primary purpose of holding direct ownership interests in one or more Teams (or indirect ownership interests, so long as the sole purpose of such indirect owner is to hold ownership interests in the direct owner of one or more Teams) and whose assets primarily consist of ownership interests in one or more Teams, (viii) Real Property, (ix) Excluded Non-Pledged Accounts; (x) any Affiliation Agreements, Sports Telecast Rights Agreements and Related Documents to the extent that the relevant agreement requires the consent of any entity other than an Affiliate of the Company for the pledge thereof, or if the pledge thereof is prohibited by, or constitutes a breach or default under any provision of, or results in the termination of, the relevant agreement existing prior to the Closing Date (or the date of acquisition of the Grantor party to such agreement, if applicable); provided , (i) in no event shall any Media Rights Agreement be excluded from the Collateral pursuant hereto and (ii) that all rights to payment, cash flow, proceeds, payments and products of such Affiliation Agreements, Sports Telecast Rights Agreements and Related Documents are considered Collateral hereunder, and (xi) those assets as to which the Administrative Agent and the Company agree that the cost of obtaining such a security interest or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby.
“ Excluded Consolidated Subsidiaries ” has the meaning specified in the definition of “ Financial Statement Variance ”.
“ Excluded Indebtedness ” has the meaning given to such term in Section 8.01(e) .
“ Excluded Non-Pledged Accounts ” means (x) deposit or securities accounts maintained solely as tax accounts, payroll accounts, escrow accounts, trust accounts, operational disbursements accounts, petty cash accounts or flexible spending and other benefits and healthcare accounts (including healthcare claims funding accounts), and (y) other deposit or securities accounts so long as they contain less than $1,000,000 individually and $5,000,000 in the aggregate at any time.
 
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“ Excluded Subsidiary ” means a Restricted Subsidiary that is not a Foreign Subsidiary and is not a Guarantor.
“ Excluded Swap Obligation ” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such related Swap Obligation.
“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Company hereunder, (a) any taxes imposed on or measured by its overall net income (however denominated), branch profits taxes, and franchise taxes imposed on it (in lieu of net income taxes), as a result of a present or former connection between such Administrative Agent, Lender or L/C Issuer, as the case may be, and the jurisdiction of the Governmental Authority imposing such tax or any taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent, such Lender or such L/C Issuer having executed, delivered or performed its obligations or received a payment under, or enforced, any Loan Document), (b) any Tax imposed pursuant to FATCA, and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Company under Section 10.12 ), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e) , except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Company with respect to such withholding tax pursuant to Section 3.01(a) .
“ Existing Credit Agreement ” has the meaning specified in the recitals to this Credit Agreement.
“ Existing Indebtedness ” means Indebtedness of each Loan Party and its subsidiaries outstanding immediately before the occurrence of the Closing Date.
“ Existing Letters of Credit ” means those letters of credit listed on Schedule 2.03 .
“ Facility ” means any Term Facility, Revolving Credit Facility, the Swing Line Sublimit or an Incremental Facility, if any, as the context may require.
“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Credit Agreement, including any regulations or official interpretations thereof, whether issued before or after the date of this Credit Agreement.
 
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“ Federal Funds Effective Rate ” means, for any day, the rate calculated by the New York Fed based on such day’s federal funds transactions by depository institutions (as determined in such manner as the New York Fed shall set forth on its public website from time to time) and published on the next succeeding Business Day by the New York Fed as the federal funds effective rate.
“ Fee Letters ” means, collectively, each letter agreement made between the Company and the Administrative Agent or a Joint Book Runner for the payment of fees in connection with this Credit Agreement.
“ Financial Covenants ” means the covenants contained in Sections 7.28 through 7.30 , inclusive.
“ Financial Statement Variance ” means, for any financial reporting period, a difference of (a) greater than 5.0% between the cumulative revenues of the Parent and its consolidated Subsidiaries for the most recently completed Measurement Period and the cumulative revenues of the Company and its Restricted Subsidiaries for the most recently completed Measurement Period; (b) greater than 5.0% between the total assets of the Parent and its consolidated Subsidiaries for the last reporting period and the total assets of the Company and its Restricted Subsidiaries for the last reporting period; or (c) greater than 10.0% between the Parent Adjusted Operating Cash Flow of the Parent and its consolidated Subsidiaries for the most recently completed Measurement Period and the Adjusted Operating Cash Flow of the Company and its Restricted Subsidiaries for the most recently completed Measurement Period. Notwithstanding anything to the contrary elsewhere in this Credit Agreement, references to “consolidated Subsidiaries” of the Parent in the immediately preceding sentence shall exclude (x) those consolidated Subsidiaries of the Parent listed on Schedule 1.01(g) , and (y) such other consolidated Subsidiaries of the Parent that are not Restricted Subsidiaries whose assets primarily consist of investments in and/or loans to non-consolidated Affiliates so long as the aggregate assets of all consolidated Subsidiaries of the Parent excluded from the immediately preceding sentence pursuant this sentence does not exceed 20% of the aggregate assets of the Parent and its consolidated Subsidiaries (determined without giving effect to any exclusions pursuant to this sentence) (such consolidated Subsidiaries of the Parent excluded pursuant to this sentence at any time of determination being the “ Excluded Consolidated Subsidiaries ”).
“ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than that in which the Company is resident for tax purposes (including such a Lender when acting in the capacity of an L/C Issuer). For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“ Foreign Subsidiary ” means (i) any Subsidiary that is not a United States Person and (ii) any Subsidiary of an entity that is a Foreign Subsidiary under clause (i) of this definition.
“ Form 10 ” means the SEC Form 10 General Form for Registration of Securities pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934.
 
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“ Fronting Exposure ” means, at any time there is a Defaulting Lender, (a) with respect to any L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such L/C Issuer other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to any Swing Line Lender, such Defaulting Lender’s Applicable Percentage of outstanding Swing Line Loans made by such Swing Line Lender other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.
“ Fund ” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
“ Governmental Authority ” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“ Granting Lenders ” has the meaning given to such term in Section 10.06(h) .
“ Grantor ” has the meaning given to such term in the Security Agreement.
“ Guarantee ” has the meaning given to such term in Section 7.15 .
“ Guarantors ” means the Persons set forth on Schedule 1.01(a) , each Holdings Entity and New Restricted Subsidiary required to become a Guarantor pursuant to Section 7.10 .
“ Guaranty ” means the Guaranty made by the Guarantors under Article IV in favor of the Secured Parties.
“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Laws.
“ Hedge Bank ” means any Person that, at the time it enters into a Secured Hedge Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Secured Hedge Agreement.
 
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“ Holdings Entities ” has the meaning specified in the recital of parties to this Credit Agreement.
“ Honor Date ” has the meaning given to such term in Section 2.03(c)(i) .
“ Incremental Borrowing ” means an Incremental Term Borrowing or an Incremental Revolving Credit Borrowing, as the context may require.
“ Incremental Closing Date ” means, with respect to any Incremental Facility, the first date all of the conditions precedent set forth in the Incremental Supplement applicable to such Incremental Facility are satisfied or waived in accordance with Section 10.01 .
“ Incremental Facility ” means an Incremental Term Facility or an Incremental Revolving Credit Facility, as the context may require.
“ Incremental Lender ” means an Incremental Term Lender or an Incremental Revolving Credit Lender, as the context may require.
“ Incremental Loan ” means an Incremental Term Loan or an Incremental Revolving Credit Loan, as the context may require.
“ Incremental Note ” means an Incremental Term Note or an Incremental Revolving Credit Note, as the context may require.
“ Incremental Revolving Credit Borrowing ” means a borrowing consisting of simultaneous Incremental Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the applicable Incremental Revolving Credit Lenders pursuant to Section 2 of any Incremental Revolving Credit Supplement.
“ Incremental Revolving Credit Commitment ” means, subject to the terms and conditions of Section 2.14 as to each Incremental Revolving Credit Lender, its obligation to make Incremental Revolving Credit Loans to the Company pursuant to Section 2 of the applicable Incremental Revolving Credit Supplement in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule I to such Incremental Supplement under the caption “Incremental Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Incremental Revolving Credit Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Credit Agreement.
“ Incremental Revolving Credit Facility ” has the meaning specified in Section 2.14(a) .
“ Incremental Revolving Credit Lender ” means at any time, (a) on or prior to the applicable Incremental Closing Date, any Lender that has Incremental Revolving Credit Commitments at such time, and (b) at any time after the applicable Incremental Closing Date, any Lender that holds Incremental Revolving Credit Commitments and/or Incremental Revolving Credit Loans at such time.
 
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“ Incremental Revolving Credit Loan ” means an advance made by any Incremental Revolving Credit Lender under an Incremental Revolving Credit Facility.
“ Incremental Revolving Credit Note ” means a promissory note made by the Company in favor of an Incremental Revolving Credit Lender, evidencing Incremental Revolving Credit Loans made by such Incremental Revolving Credit Lender, substantially in the form of Exhibit B-2 .
“ Incremental Revolving Credit Supplement ” has the meaning specified in Section 2.14(b) .
“ Incremental Supplement ” means an Incremental Term Supplement or an Incremental Revolving Credit Supplement, as the context may require.
“ Incremental Term Borrowing ” means a borrowing consisting of simultaneous Incremental Term Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period, made by each of the applicable Incremental Term Lenders pursuant to Section 2 of any Incremental Term Supplement.
“ Incremental Term Commitment ” means, subject to the terms and conditions of Section 2.15 as to each Incremental Term Lender, its obligation to make Incremental Term Loans to the Company on the applicable Incremental Closing Date, pursuant to Section 2 of the applicable Incremental Term Supplement in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Incremental Term Lender’s name on Schedule I to such Incremental Term Supplement under the caption “Incremental Term Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Incremental Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Credit Agreement.
“ Incremental Term Facility ” has the meaning specified in Section 2.15(a) .
“ Incremental Term Lender ” means at any time, (a) on or prior to the applicable Incremental Term Closing Date, any Lender that has an Incremental Term Commitment at such time and (b) at any time after the applicable Incremental Closing Date, any Lender that holds Incremental Term Loans at such time.
“ Incremental Term Loan ” means an advance made by any Incremental Term Lender under an Incremental Term Facility.
“ Incremental Term Loan Note ” means a promissory note made by the Company in favor of an Incremental Term Lender, evidencing Incremental Term Loans made by such Incremental Term Lender, substantially in the form of Exhibit B-4 .
“ Incremental Term Supplement ” has the meaning specified in Section 2.15(b) .
“ Indebtedness ” means, as to any Person, Capitalized Lease Obligations of such Person and other indebtedness of such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for the deferred purchase or acquisition price of property
 
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or services in respect of which such Person is the purchaser, other than accounts payable (other than for borrowed money) incurred in the ordinary course of business of such Person. Without limiting the generality of the foregoing, for the avoidance of doubt, (a) such term shall include (1) when applied to the Parent, the Company and/or any Subsidiary of the Parent (other than an Unrestricted Subsidiary of the Company), all obligations of the Parent, the Company and/or any Subsidiary of the Parent (other than an Unrestricted Subsidiary of the Company) under Swap Contracts and (2) when applied to the Parent, the Company and/or any or any other Person, all Indebtedness of others Guaranteed by such Person and (b) such term shall exclude (1) deferred revenue (including advance ticket sales), (2) obligations to make or pay advances, deposits or deferred compensation to announcers, broadcasters, on-air talent, promoters, producers or other third parties in connection with the development, booking, production, broadcast, promotion, execution, staging or presentations of shows, events or other entertainment activities or related merchandising, concessions or licensing and (3) obligations to pay advances, deposits or deferred compensation to the holders of rights to content or intellectual property in connection with the development, broadcast, distribution or license of content or underlying intellectual property.
“ Indemnified Taxes ” means Taxes other than Excluded Taxes.
“ Information ” has the meaning specified in Section 10.20 .
“ Initial L/C Issuer ” has the meaning specified in the definition of “L/C Issuer.”
“ Initial Facilities ” means the Initial Revolving Credit Facility and the Initial Term Facility.
“ Initial Revolving Credit Facility ” means, initially, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments on the date hereof, and hereafter on any date of determination, the aggregate amount of the Revolving Credit Commitments of the Revolving Credit Lenders on such date.
“ Initial Term Facility ” means, initially, the aggregate amount of the Term Lenders’ Term Commitments on the date hereof, and hereafter on any date of determination, the aggregate principal amount of the Term Loans made on the Closing Date outstanding on such date.
“ Intellectual Property Security Agreement ” means the Intellectual Property Security Agreement, duly executed by each Loan Party.
“ Intellectual Property Security Agreement Supplement ” has the meaning specified in Section 13(b) of the Security Agreement.
“ Interest Coverage Ratio ” means, as of any date of determination, the ratio of (a) Adjusted Operating Cash Flow to (b) Net Interest Expense for the most recently completed Measurement Period.
“ Interest Payment Date ” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided , however , that if any Interest Period for a Eurodollar Rate Loan
 
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exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan or Swing Line Loan, the last Business Day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made.
“ Interest Period ” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one week, or one, two, three or six months thereafter, as selected by the Company in its Committed Loan Notice; provided that:
(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Maturity Date of the applicable Facility.
“ Investments ” has the meaning given to such term in Section 7.17 .
“ ISP ” means the International Standby Practices (ISP98) International Chamber of Commerce Publication No. 590, as the same may be amended and as in effect from time to time.
“ Issuer Documents ” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by any L/C Issuer and the Company or any Subsidiary or in favor of any L/C Issuer and relating to any such Letter of Credit.
“ JPMorgan ” means JPMorgan Chase Bank, N.A. and its successors.
“ JPMorgan Securities ” means J.P. Morgan Securities LLC and its successors.
“ Joint Book Runners ” means JPMorgan Securities, Merrill, Lynch, Pierce, Fenner & Smith Incorporated, MUFG Union Bank, N.A., The Bank of Nova Scotia, U.S. Bank National Association, Fifth Third Bank, TD Bank, N.A., Natixis, New York Branch, BNP Paribas and Goldman Sachs Bank USA, in each case acting in its capacity as a joint book runner.
“ Labor Controversy ” means any strike, lock-out or other labor controversy, including (i) any work stoppage or other actions or proceedings involving any teams or unions representing any employees or agents of the Company or any of its Subsidiaries, MSG SpinCo or any of its Subsidiaries or any teams or (ii) any individual disputes with employees or agents (including players, coaches or scouts) of the Company or any of its Subsidiaries, MSG SpinCo or
 
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any of its Subsidiaries or any teams, whether (1) in negotiating extensions or renewals of contracts or (2) related to any such employee or agent seeking an improvement in such individual’s arrangements with the Company or any of its Subsidiaries, MSG SpinCo or any of its Subsidiaries or any team in advance of scheduled contract extensions or renewals.
“ Labor Controversy Step Up ” has the meaning specified in Section 7.28 .
“ Labor Dispute ” means any strike, lockout, work stoppage, or other similar action involving any labor organization representing any employees of (i) the Company or any of its Restricted Subsidiaries or (ii) MSG SpinCo or any of its Subsidiaries. For the avoidance of doubt, “Labor Dispute” does not include any individual disputes with employees or agents (including players, coaches or scouts) of (i) the Company or any of its Restricted Subsidiaries or (ii) MSG SpinCo or any of its Subsidiaries.
“ Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directives, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“ L/C Advance ” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Revolving Credit Percentage.
“ L/C Borrowing ” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.
“ L/C Credit Extension ” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.
“ L/C Issuer ” means JPMorgan, Bank of America, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Bank of Nova Scotia and U.S. Bank National Association (each an “ Initial L/C Issuer ”), any Eligible Assignee to which a portion of the Letter of Credit Commitment under this Credit Agreement has been assigned pursuant to Section 10.06 , or any other Lender that is a bank and that agrees to act as an L/C Issuer hereunder, so long as (1) such Initial L/C Issuer, Eligible Assignee or other Lender is not a Defaulting Lender, and (2) such Eligible Assignee or other Lender expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Credit Agreement are required to be performed by it as an L/C Issuer and notifies the Administrative Agent of its Letter of Credit Commitment and Lending Office, for so long as such Initial L/C Issuer, Eligible Assignee or other Lender, as the case may be, shall have a Letter of Credit Commitment.
“ L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount
 
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available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . For all purposes of this Credit Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“ League ” means (i) an organization governing, administering or regulating the participation of teams or participants in any professional sport, including the National Basketball Association, the National Hockey League and the Women’s National Basketball Association and any minor league teams associated therewith, including, in each case, the Commissioner, management council, executive committee or similar governing body of each such organization and (ii) any entity through which each such organization conducts business or that may be formed generally by the member clubs of such organization.
“ League Rules ” means (a) the constitution and by-laws of each League, (b) the governing documents of each League, (c) all present and future rules, regulations, interpretations, memoranda, procedures, resolutions, directives, policies and guidelines of each League, (d) any agreements and arrangements to which the Company or any of its subsidiaries is (or after the Closing Date may become) subject or by which it or its assets are (or may become) bound with or in favor of any League, (e) any agreements and arrangements to which any League’s teams generally are (or after the Closing Date may become) subject or by which they or their assets are (or may become) bound, in each case as such agreements or arrangements may be amended or adopted from time to time and including the custom and practice thereunder, including, but not limited to, League Rules relating to membership relocation, indebtedness and ownership transfers, territorial rights and limitations, the telecast or broadcast, by over-the-air television, non-broadcast television, radio or any other means, whether on a local, regional, national or international basis, of team games and the use of League or team logos, names or other intellectual property and (f) any conditions that the League may impose with respect to transactions in which the Teams may engage.
“ League-wide Labor Controversy ” means any Labor Controversy affecting any entire League involving Teams with respect to which the Company or any Restricted Subsidiaries has one or more Media Rights Agreements and/or Sports Telecast Rights Agreements.
“ Leases ” means those leases and subleases pursuant to which any of the Loan Parties has been granted or holds the right to use and occupy Real Property demised thereunder, together with all amendments, modifications, extensions, renewals and restatements thereof.
“ Lenders ” means the banks or other financial institutions which are parties hereto, as well as any Persons that become a “Lender” hereunder pursuant to Section 10.06 and, as the context requires, includes any Incremental Lender and Swing Line Lender, together with their respective successors and assigns.
“ Lending Office ” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Company and the Administrative Agent.
 
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“ Letter of Credit ” means (i) any letter of credit issued hereunder and (ii) any Existing Letter of Credit issued by an issuer that is also a Lender hereunder. A Letter of Credit may be a Trade Letter of Credit or a Standby Letter of Credit.
“ Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by an L/C Issuer.
“ Letter of Credit Commitment ” means, as to any L/C Issuer, (a) the amount set forth opposite such L/C Issuer’s name on Schedule 2.01 under the caption “Letter of Credit Commitment” or (b) if such L/C Issuer has entered into one or more Assignment and Assumptions, the amount set forth for such L/C Issuer in the Register as such L/C Issuer’s “Letter of Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.06(a) ; provided that if any L/C Issuer shall become a Defaulting Lender, the Company may use its commercially reasonable efforts to reallocate the Letter of Credit Commitment of such Defaulting Lender among other Lenders; provided , further that if, after 20 Business Days of the Company attempting to reallocate such Letter of Credit Commitments (or such longer period as the Company may decide in its sole discretion), the Letter of Credit Commitments of such Defaulting Lender have not been fully reallocated among other Lenders, then at the option of the Company (which shall be exercised by a written notice thereof to the Administrative Agent), the Letter of Credit Commitment of each other L/C Issuer (but excluding any L/C Issuer who shall have only become an L/C Issuer as a result of the Company’s reallocation efforts) that is not a Defaulting Lender shall be increased by a pro rata amount of the remaining unallocated amount of such Defaulted Lender’s Letter of Credit Commitment, such that the aggregate Letter of Credit Commitments are not reduced as a result thereof, or the Company shall be permitted to replace such L/C Issuer in accordance with Section 10.12 .
“ Letter of Credit Expiration Date ” means (1) initially, the day that is seven days prior to the Maturity Date then in effect for the Initial Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day) and (2) after the consummation of any Incremental Revolving Credit Facility with a Maturity Date that is later than the Maturity Date of the Initial Revolving Credit Facility, if an Incremental Revolving Credit Lender thereunder agrees to be an L/C Issuer and issue a Letter of Credit with a Letter of Credit Expiration Date that is the day that is seven days prior to the Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day) with the latest Maturity Date, the day that is seven days prior to the Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day) with the latest Maturity Date.
“ Letter of Credit Fee ” has the meaning specified in Section 2.03(i) .
“ Letter of Credit Sublimit ” means an amount equal to the lesser of (a) $35,000,000 and (b) the aggregate amount of the L/C Issuers’ Letter of Credit Commitments at such time, as such amount may be reduced pursuant to Section 2.06(a) . The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.
“ Liens ” has the meaning given to such term in Section 7.16 .
 
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“ Liquidity ” means at any time the sum of unrestricted cash and Cash Equivalents on the balance sheet of the Company and the unused commitments under the Revolving Credit Facility at such time.
“ Loan ” means an extension of credit by a Lender to the Company under Article II in the form of a Term Loan, a Revolving Credit Loan or a Swing Line Loan (including Incremental Loans, if any).
“ Loan Documents ” means, collectively, (a) this Credit Agreement, (b) the Notes, (c) the Collateral Documents, (d) the Fee Letters, (e) each Issuer Document, (f) each Incremental Supplement, if any and (g) solely for purposes of the Collateral Documents and Article IV hereof, each Secured Hedge Agreement and each Secured Cash Management Agreement.
“ Loan Parties ” means, collectively, the Company and each Guarantor.
“ Mandatory Prepayment Disposition ” has the meaning given to such term in Section 2.05(b)(i) .
“ Margin Stock ” means “margin stock” as defined in Regulation U.
“ Master Agreement ” has the meaning specified in the definition of “Swap Contract.”
“ Master Subordinated Intercompany Note ” means an intercompany note substantially in the form of Exhibit I .
“ Material Adverse Effect ” means a materially adverse effect upon (i) the property, business, assets, condition (financial or otherwise), liabilities or operations of the Company and its Restricted Subsidiaries taken as a whole on a combined basis in accordance with GAAP, (ii) the Facility or Collateral (with respect to clauses (i) and (ii) , other than changes resulting from industry wide developments affecting companies in similar businesses that do not have a disproportionate impact on the Company and its Restricted Subsidiaries, suspension of carriage during negotiation of Affiliation Agreements, or changes resulting from a League-wide Labor Controversy; provided that any Labor Controversy shall not, in and of itself, be deemed to constitute a Material Adverse Effect; provided further that the Spin-Off shall not, in and of itself, be deemed to constitute a Material Adverse Effect), (iii) the ability of the Company and the Restricted Subsidiaries taken as a whole to perform the Obligations hereunder, or (iv) the legality, validity, binding nature or enforceability of this Credit Agreement or any other Loan Document or the validity, perfection, priority or enforceability of the security interest created, or purported to be created, by the Security Agreement.
“ Maturity Date ” means (a) with respect to the Initial Facilities, September 28, 2020, (b) with respect to each Incremental Facility, the maturity date for such Incremental Facility set forth in the applicable Incremental Supplement ( provided , that the maturity date of any Incremental Term Facility shall be subject to the provisions of Section 2.15(b) ) and (c) with respect to the Swing Line Facility, the latest Maturity Date of the Initial Revolving Credit Facility.
 
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“ Measurement Period ” means, as of each date of determination, the period of four consecutive fiscal quarters of the Company (or Parent, where applicable), then most recently ended for which financial statements are required to have been delivered by the Company pursuant to Section 7.01 ; provided that: (a) for purposes of determining an amount of any item included in the calculation of a financial ratio or financial covenant for the Quarter ended December 31, 2015, such amount for the Measurement Period then ended shall equal such item for such Quarter multiplied by four; (b) for purposes of determining an amount of any item included in the calculation of a financial ratio or financial covenant for the Quarter ended March 31, 2016, such amount for the Measurement Period then ended shall equal such item for the two Quarters then ended multiplied by two; and (c) for purposes of determining an amount of any item included in the calculation of a financial ratio or financial covenant for the Quarter ended June 30, 2016, such amount for the Measurement Period then ended shall equal such item for the three Quarters then ended multiplied by 4/3.
“ Media Rights Agreement ” means, with respect to the New York Knicks or the New York Rangers, a written telecast rights agreement made between the Company or a Guarantor (other than the Holdings Entities), on the one hand, and such Team, on the other hand, (a) pursuant to which the Company or such Guarantor is granted exclusive local telecast rights to exhibit games of such Team on the terms set forth in Section 5.01(l)(A) , as such Media Rights Agreement may be terminated, amended or otherwise modified in accordance with Section 7.21 , (b) which shall be pledged as Collateral, and (c) having a term that expires no earlier than 180 days after the latest Maturity Date then in effect at the time such Media Rights Agreement is entered into.
“ Minimum Liquidity Condition ” means the requirement that, after giving pro forma effect to the Spin-Off and the related transactions (including the Company using proceeds of the Initial Term Facility and cash on hand to provide an estimated $1,450,000,000 of capital to MSG SpinCo prior to the consummation of the Spin-Off and paying fees, costs and expenses incurred in connection with the Transactions), the aggregate amount of unrestricted cash and Cash Equivalents on the balance sheet of the Company and all unused Revolving Credit Commitments shall not be less than $300,000,000.
“ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.
“ MSG Form 10 ” means the Form 10, dated September 11, 2015, that MSG SpinCo filed with the SEC, as such filing has been amended, modified or otherwise supplemented prior to the date hereof.
“ MSG Spin Agreements ” means the agreements listed on Schedule 1.01(f ).
“ MSG SpinCo ” means MSG SpinCo, Inc., a Delaware corporation, which, in connection with the Spin-Off, will change its name to The Madison Square Garden Company.
“ Multiemployer Plan ” means a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“ Net Cash Proceeds ” means proceeds received by the Company or any of the Restricted Subsidiaries in cash as and when received from (x) any Disposition or the incurrence
 
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or issuance of Indebtedness of the Company or any of the Restricted Subsidiaries, in each case after deduction of (i) the costs of selling, recovery or other transaction expenses payable by the Company or any of the Restricted Subsidiaries in connection with obtaining such proceeds (including banking, professional or other fees, commissions, discounts and expenses, transfer and similar taxes incurred in connection with such Disposition, incurrence or issuance, and the Company’s good faith reasonable estimate of any income, franchise, transfer or other tax liability and reserves for indemnification) arising from, such Disposition, incurrence or issuance and (ii) the principal amount of, and the premium or penalty, if any, plus the interest and other amounts on any Indebtedness that is secured by the applicable asset and that is required to be repaid by the terms of such Indebtedness (unless permitted by such terms to be reinvested) in connection with such transaction (other than Indebtedness under the Loan Documents) or (y) any casualty insurance or condemnation awards with respect to an Event of Loss, after deduction of (i) the costs of obtaining such award with respect to an Event of Loss (including fees and costs of experts, consultants and/or attorneys), and any income, franchise, transfer or other tax liability arising therefrom and (ii) the principal amount of, and the premium or penalty, if any, plus the interest and other amounts on any financing permitted under this Credit Agreement that is secured by the applicable assets and is required to be repaid by the terms of such Indebtedness (unless permitted by such terms to be reinvested) in connection with such Event of Loss. If any amount payable to the Company or any such Restricted Subsidiary in respect of any such incurrence or issuance shall be or become evidenced by any promissory note or other negotiable or non-negotiable instrument, the cash proceeds received on any such note or instrument shall constitute Net Cash Proceeds as and when received.
“ Net Interest Expense ” means, for any Measurement Period, the sum of (a) all interest expense, premium payments, debt discount, fees, charges and related expenses incurred in connection with (x) borrowed money (including capitalized interest) or (y) the deferred purchase price of assets, and in each case to the extent treated as interest in accordance with GAAP during such Measurement Period (including all interest paid or payable with respect to discontinued operations only to the extent the revenues and expenses of such operations are included in the Adjusted Operating Cash Flow) and (b) the portion of rent under Capitalized Lease Obligations that is treated as interest in accordance with GAAP during such Measurement Period, in the case of each of clauses (a) and (b) , of the Holdings Entities, the Company and its Restricted Subsidiaries determined on a consolidated basis without duplication and in accordance with GAAP for the most recently completed Measurement Period; provided , however , that there shall be deducted from Net Interest Expense all interest income for such Measurement Period of the Holdings Entities, the Company and its Restricted Subsidiaries determined on a consolidated basis without duplication and in accordance with GAAP.
“ Network Assets ” means all assets of the Company and its Restricted Subsidiaries, including but not limited to the Affiliation Agreements, the Media Rights Agreements and the Sports Telecast Rights Agreements, used or necessary to the operation of the Network Business (other than the Excluded Assets under clauses (i) through (v)  and (vii)  through (ix)  of the definition of Excluded Assets).
“ Network Business ” means the business of providing Program Services pursuant to the Affiliation Agreements.
 
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“ New Restricted Subsidiary ” means any Unrestricted Subsidiary designated as a Restricted Subsidiary pursuant to Section 7.08(b) or any New Subsidiary who is required to become a Guarantor or Restricted Subsidiary pursuant to Section 7.10 .
“ New Subsidiary ” means any Person which becomes a Subsidiary of the Company after the Closing Date.
“ New York Fed ” means the Federal Reserve Bank of New York.
“ New York Fed Bank Rate ” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day; provided that if both such rates are not so published for any day that is a Business Day, the term “New York Fed Bank Rate” means the rate quoted for such day for a federal funds transaction at 11:00 a.m. on such day received by the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided , further , that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Credit Agreement.
“ Non-Defaulting Lender ” means, at any time, each Lender that is not a Defaulting Lender at such time.
“ Non-Required Consents ” means the consent of any counterparty to a Contractual Obligation to the grant of a security interest in the agreement constituting the Contractual Obligation.
“ Note ” means Term Loan Note, a Revolving Credit Note, an Incremental Term Loan Note, if any, or an Incremental Revolving Credit Note, if any, as the context may require.
“ Obligations ” means all advances to, and debts, liabilities, obligations (but, with respect to any Guarantor at any time, excluding all Excluded Swap Obligations with respect to such Guarantor at such time), covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Restricted Subsidiary thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“ Other Taxes ” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Credit Agreement or any other Loan Document.
“ Outstanding Amount ” means (a) with respect to Term Loans, Revolving Credit Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans, Revolving Credit Loans and Swing Line Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date
 
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after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Company of Unreimbursed Amounts.
“ Overnight Bank Funding Rate ” means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.–managed banking offices of depository institutions (as such composite rate shall be determined by the New York Fed as set forth on its public website from time to time) and published on the next succeeding Business Day by the New York Fed as an overnight bank funding rate (from and after such date as the New York Fed shall commence to publish such composite rate).
“ Parent ” means The Madison Square Garden Company, a Delaware corporation or its successor, which, in connection with the Spin-Off, will change its name to MSG Networks Inc.
“ Parent Adjusted Operating Cash Flow ” means for any period, the following for the Parent and its consolidated Subsidiaries for such period, each component determined on a consolidated basis in accordance with GAAP: (i) aggregate revenues, minus (ii) aggregate operating expenses (including direct operating and selling, general administrative), such expenses to exclude impairments of property, equipment and intangible assets, depreciation and amortization and charges and credits relating to employee and director stock plans and restructuring charges and credits, and in each case without duplication to exclude expenses allocated to Parent Affiliates; provided , however , that for purposes of determining Parent Adjusted Operating Cash Flow for any period (A) there shall be included any dividends and distributions to the extent paid in cash by any Parent Affiliate to the Parent or any of its consolidated Subsidiaries to the extent such dividend or distribution relates to net income earned or cash realized from operating activities by such Parent Affiliate in the immediately preceding 12 month period, (B) there shall be excluded all management fees paid by any Parent Affiliate to the Parent or any of its consolidated Subsidiaries during such period other than any such amounts settled in cash to the extent not in excess of 5% of Parent Adjusted Operating Cash Flow as determined without including any such fees, (C) Parent Adjusted Operating Cash Flow for such period shall be increased or reduced, as the case may be, by the Parent Adjusted Operating Cash Flow of assets or businesses acquired or disposed of ( provided that in each case it has an impact on Parent Adjusted Operating Cash Flow of at least $500,000) by the Parent or any of its consolidated Subsidiaries on or after the first day of such period, determined on a pro forma basis reasonably satisfactory to the Administrative Agent (it being agreed that it shall be satisfactory to the Administrative Agent that such pro forma calculations may be based upon GAAP as applied in the preparation of the financial statements for the Parent, delivered or deemed delivered pursuant to Section 7.01 rather than as applied in the financial statements of the company whose assets were acquired and may include, in the Parent’s discretion, a reasonable estimate of savings under existing contracts resulting from any such acquisitions), as though the Parent or such consolidated Subsidiary acquired or disposed of such assets on the first day of such period, and (D) there shall be excluded any gains or losses on sales or dispositions of businesses by the Parent or any of its consolidated Subsidiaries. For purposes of this definition, operating revenues and operating expenses may exclude the following, provided that all exclusions for cash items (whether representing a cash item in the period in question or in a future period) shall be limited to an aggregate of $40,000,000 per year and $75,000,000 during
 
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the entire term of the Facility (the “ Parent Cash Basket Amount ”): (1) provisions for severance obligations; (2) losses resulting from any write-off or write-down of Investments by the Parent or any of its consolidated Subsidiaries; (3) the effect of the loss of any currently held real estate tax exemptions; (4) costs and expenses incurred to implement the Spin-Off, (5) amortization of production and development costs associated with shows or other content or the costs resulting from the cancellation of shows or other content or abandonment of shows or other content under development or write-off of any deferred production costs associated with shows; (6) losses resulting from currency fluctuations and any unrealized losses from hedging transactions; (7) pension curtailment or settlements; (8) other non-recurring, non-cash items in excess of $1,000,000; and (9) changes to US GAAP that would cause a covenant default ( provided that the Parent shall provide reconciliations to demonstrate compliance under previous US GAAP and the parties shall agree to negotiate in good faith to amend covenants accordingly). In the case of clauses (1) through (3)  above, if the expense is required to be recognized in one period but paid in subsequent periods, such exclusion shall apply only to such initial period and such expense shall be considered an expense for purposes of clause (ii) of this definition when paid to the extent such cash amounts are in excess of the Parent Cash Basket Amount.
“ Parent Affiliate ” means an Affiliate of the Parent that is not a Subsidiary of the Parent.
“ Parent Cash Basket Amount ” has the meaning specified in the definition of “Parent Adjusted Operating Cash Flow”.
“ Participant ” has the meaning given to such term in Section 10.06(d) .
“ Participant Register ” has the meaning given to such term in Section 10.06(d) .
“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“ Permitted Investments ” means (a) Investments in cash and Cash Equivalents; (b) accounts receivable arising in the ordinary course of business, (c) accounts receivable owing to the Company or any Restricted Subsidiary from any Unrestricted Subsidiary for management or other services or other overhead or shared expenses allocated in the ordinary course of business provided by the Company or any Restricted Subsidiary to such Unrestricted Subsidiary, (d) any Investment constituting Indebtedness permitted under Section 7.14(v) , Guarantees permitted under Section 7.15 , Restricted Payments permitted under Section 7.18 , or any sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) that is not a Disposition or that is a Disposition permitted under Section 7.24 , (e) any Investment constituting a Permitted Parent Payment, (f) any Permitted Restricted Subsidiary Transaction, (g) Investments in existence as of the Closing Date and set forth on Schedule 6.15 , (h) Investments received in settlement of overdue amounts or amounts owed by a Person that is insolvent or distributions in insolvency proceedings of any such Person or received by foreclosure or enforcement of any Lien in favor of the Company or any Restricted Subsidiary, (i) any Investment under any of the Cablevision Spin Agreements and, following the Spin-Off, the MSG Spin Agreements, (j) Investments consisting of advances, deposits or deferred compensation to (i) announcers, broadcasters, on-air talent, promoters, producers or other third
 
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parties in connection with the development, booking, production, broadcast, promotion, execution, staging or presentations of shows, events or other entertainment activities or related merchandising, concessions or licensing, or (ii) holders of rights to content or intellectual property in connection with the development, broadcast, distribution or license of content or underlying intellectual property, (k) Investments in one or more Unrestricted Subsidiaries, Excluded Subsidiaries or joint ventures; provided that the aggregate amount of all such Investments, when combined with the aggregate amount of Guarantees permitted pursuant to Section 7.15(xii) , does not exceed $75,000,000, (l) advances of payroll payments to employees in the ordinary course of business, and (m) Investments consisting of notes, other similar instruments or non-cash consideration received in connection with any disposition not prohibited by Section 7.24 .
“ Permitted Liens ” means, with respect to any Person: (i) (A) pledges or deposits of cash to secure obligations of such Person under workers’ compensation laws, unemployment insurance laws or similar legislation, or (B) good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or Leases to which such Person is a party, or (C) deposits of cash to secure public or statutory obligations of such Person or (D) deposits of cash or U.S. Government bonds to secure surety or appeal bonds to which such Person is a party, or (E) deposits as security for contested taxes or import, customs or similar duties or for the payment of rent or royalties; (ii) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, setoff and recoupment rights or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be prosecuting appeal or other proceedings for review (and as to which all foreclosures and other enforcement proceedings shall have been fully bonded or otherwise effectively stayed); (iii) Liens for (x) Taxes (other than property taxes), assessments, charges or other governmental levies not overdue by more than 30 days or which if more than 30 days overdue, (1) the period of grace, if any, related thereto has not expired or which are being contested in good faith by appropriate proceeding ( provided that a reserve or other appropriate provision shall have been made therefor as appropriate in accordance with GAAP) or (2) the aggregate principal outstanding amount of the obligations secured thereby does not exceed $5,000,000, and (y) property taxes not yet subject to penalties for non-payment or which are being contested in good faith and by appropriate proceedings (and as to which all foreclosures and other enforcement proceedings shall have been fully bonded or otherwise effectively stayed); (iv) Liens in favor of issuers of performance bonds issued pursuant to the request of and for the account of such Person in the ordinary course of its business; (v) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness or other extensions of credit and which do not in the aggregate materially detract from the value of said properties or materially impair their use in the operation of the business of such Person; (vi) Liens on cash created in the ordinary course of business and customary in the Business consisting of pledges to, deposits with or advances to announcers, broadcasters, on-air talent, promoters, producers or other third parties in connection with the development, booking, production, broadcast, promotion, execution, staging or presentations of shows, events or other entertainment activities or related merchandising, concessions or licensing; (vii) Liens on cash created in the ordinary course of business and customary in the Business consisting of obligations to pay advances,
 
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deposits or deferred compensation to the holders of rights to content or intellectual property in connection with the development, broadcast, distribution or license of content or underlying intellectual property; or (viii) Liens created in the ordinary course of business and customary in the relevant industry securing obligations of any of the Company and its Restricted Subsidiaries not to exceed $20,000,000 in the aggregate.
“ Permitted Parent Payments ” means (a) payments consisting of the issuance of common equity interests in the Company, (b) payments sufficient to permit Parent to pay dividends unpaid to equity holders of Parent but declared within the 60 days preceding such payment and permitted to be paid under this Credit Agreement at time of such declaration, (c) tax payments under customary intercompany tax sharing arrangements for payment, not to exceed the lesser of (x) the amount of taxes that would have been paid by the Company had the Company been a taxpayer and (y) the amount of taxes actually owed by Parent as a result of its ownership of the Company, (d) payments under equity and other compensation incentive programs to employees and directors of the Company or any of its current or former Affiliates in the ordinary course of business; provided that, in the case of employees or directors of former Affiliates, such payments relate to awards granted prior to the consummation of the Spin-Off or the Cablevision Spin Transaction, (e) payment of overhead of Parent (including the salaries, bonuses, and incentive and other compensation payable to officers and employees of Parent), directors’ fees and other out of pocket fees, costs, expenses and indemnities incurred by Parent on behalf of or in managing the business of the Company or any of its Restricted Subsidiaries, or otherwise in connection with Parent’s status as a public company and a parent holding company; and (f) payments due and payable under the Cablevision Spin Agreements and, following the consummation of the Spin-Off, the MSG Spin Agreements.
“ Permitted Restricted Subsidiary Transaction ” means any transaction by which any Restricted Subsidiary shall (i) pay dividends or make any distribution on its capital stock or other equity securities or pay any of its Indebtedness owed to the Company or any other Restricted Subsidiaries, (ii) make any loans or advances to the Company or any other Restricted Subsidiaries or (iii) transfer any of its properties or assets to, merge or consolidate with or into, or liquidate or dissolve into the Company or any other Restricted Subsidiaries; provided that if the Restricted Subsidiary making such payment, loan, advance or transfer is a Guarantor, then the Restricted Subsidiary receiving the same shall be the Company or a Guarantor as well.
“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“ Plan ” means, at any time, an employee pension benefit plan (other than a Multi-Employer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is maintained by the Company or an ERISA Affiliate.
“ Platform ” has the meaning given to such term in Section 7.01 .
“ Pledged Account ” means a deposit account subject to a Deposit Account Control Agreement or a securities account that is the subject of a Securities Account Control Agreement.
 
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“ Pledged Equity Interests ” has the meaning given to such term in the Security Agreement.
“ Proceedings ” has the meaning given to such term in Section 7.01(g) .
“ Program Services ” means, collectively, the program services currently known as MSG, MSG Plus, MSG HD and MSG Plus HD and all substitutions, replacements, extensions and expansions thereof and “Program Service” means any of them.
“ Prohibited Transaction ” means a transaction that is prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt under Section 4975 of the Code or Section 408 of ERISA.
“ Public Lender ” has the meaning given to such term in Section 7.01 .
“ Qualified ECP Guarantor ” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section la(l8)(A)(v)(II) of the Commodity Exchange Act.
“ Quarter ” means a fiscal quarterly period of the Company.
“ Real Property ” means all real property and all rights benefiting such real property, specifically including (without intending to limit the generality of the foregoing) the following, whether now or hereafter existing, except to the extent that any of the following or the foregoing constitutes personal property relating primarily to, pertaining primarily to, used primarily in, or necessary for, the Network Business including, without limitation, the Related Documents (1) all buildings, structures and other improvements erected or located on such real property (collectively, the “ Real Property Improvements ”); (2) all easements, rights-of-way or use, air rights and development rights, and other estates, right, title, interest, privileges and appurtenances of any nature whatsoever, in any way belonging, relating or pertaining to or benefiting such real property or the Improvements (collectively, the “ Real Property Other Interests ”); (3) fixtures located in or upon such real property, Real Property Improvements or Real Property Other Interests; (4) all leases, subleases, licenses, concessions or other agreements with respect to all or any portion of such real property, Real Property Improvements or Real Property Other Interests, and all other rights, powers, privileges, options and benefits thereunder; (5) all agreements, contracts, certificates, permits, approvals, guaranties, supporting obligations, warranties, instruments, plans, specifications and other records and documents with respect to all or any part of such real property, Real Property Improvements or Real Property Other Interests, and all rights, powers, privileges, options and benefits thereunder; (6) all rights to appear in and defend, and to commence, any action or proceeding with respect to all or any portion of such real property, Real Property Improvements or Real Property Other Interests; (7) all right, title and interest in or to (i) insurance proceeds, (ii) all awards with by reason of any condemnation, eminent domain or other taking (or any disposition made in lieu thereof) of all or any portion of
 
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such real property, Real Property Improvements or Real Property Other Interests (in the case of such Real Property Other Interests, excluding any personal property not constituting (x) licenses or (y) rights of ingress or egress), or (iii) any causes of action, awards, damages, claims, payments, proceeds and other compensation, rights, benefits, and advantages on account of any other event with respect to all or any portion of such real property, Real Property Improvements or Real Property Other Interests (in the case of such Real Property Other Interests, excluding any personal property not constituting (x) licenses or (y) rights of ingress or egress); and (8) all refunds, rebates, reimbursements, reserves, deferred payments, deposits, cost savings, credits, waivers and payments, whether in cash or in kind, due or payable by any governmental or quasi-governmental entity or any insurance or utility company relating to or arising out of such real property, Real Property Improvements or Real Property Other Interests, or in connection with any taxes, assessments, charges or levies with respect to such real property, Real Property Improvements or Real Property Other Interests.
“ Receipts ” means cash, cash equivalents, funds, instruments, securities, securities entitlements, financial assets, and other similar items or property.
“ Reduction Amount ” has the meaning set forth in Section 2.05(b)(v) .
“ Register ” has the meaning given to such term in Section 10.06(c) .
“ Registered Public Accounting Firm ” has the meaning specified by the Securities Laws and shall be independent of the Company as prescribed by the Securities Laws.
“ Regulation U ” means Regulation U of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time.
“ Related Documents ” means all Affiliation Agreements, Sports Telecast Rights Agreements and Media Rights Agreements.
“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“ Reportable Event ” means (i) any of the events set forth in Section 4043(b) (other than a Reportable Event as to which the provision of 30 days’ notice to the PBGC is waived under applicable regulations), 4068(f) or 4063(a) of ERISA or the regulations thereunder and (ii) any failure to make payments required by Section 412(m) of the Code if such failure continues for 30 days following the due date for any required installment.
“ Request for Credit Extension ” means (a) with respect to a Borrowing, conversion or continuation of Term Loans or Revolving Credit Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.
“ Required Lenders ” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Lender’s risk participation, funded participation in L/C Obligations and Swing Line Loans being
 
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deemed “held” by such Lender for purposes of this definition) and (b) aggregate unused Commitments; provided that the unused Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“ Required Revolver Lenders ” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) the Total Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Revolving Credit Lender for purposes of this definition) less the Outstanding Amount of the Incremental Term Loans, if any, and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolver Lenders.
“ Restricted Payments ” means direct or indirect distributions, dividends or other payments by the Company or any Restricted Subsidiary on account of (including, without limitation, sinking fund or other payments on account of the redemption, retirement, purchase or acquisition of) any general or limited partnership or joint venture interest in, or any capital stock of, the Company or such Restricted Subsidiary, as the case may be (whether made in cash, property or other obligations), other than any such distributions, dividends and other payments made by a Restricted Subsidiary to the Company or a Guarantor in respect of such interest in or stock of the former held by the latter.
“ Restricted Subsidiaries ” means the Persons set forth on Schedule 6.02(i) and any New Restricted Subsidiary, provided that any Restricted Subsidiary designated as an Unrestricted Subsidiary pursuant to and in compliance with Section 7.08(a) shall cease to be a Restricted Subsidiary.
“ Revolving Credit Borrowing ” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Revolving Credit Lenders pursuant to Section 2.01 , including any Incremental Revolving Credit Borrowing.
“ Revolving Credit Commitment ” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans to the Company pursuant to Section 2.01 , and (b) purchase participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Credit Agreement, including any Incremental Revolving Credit Commitment.
“ Revolving Credit Exposure ” means, as to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Revolving Credit Lender’s participation in L/C Obligations and Swing Line Loans at such time.
 
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“ Revolving Credit Facility ” means the Initial Revolving Credit Facility, an Incremental Revolving Credit Facility or, collectively, the Initial Revolving Credit Facility and the Incremental Revolving Credit Facilities, as the context may require.
“ Revolving Credit Lender ” means, at any time, any Lender that has a Revolving Credit Commitment at such time, including any Incremental Revolving Credit Lender.
“ Revolving Credit Loan ” has the meaning specified in Section 2.01(b) and shall include any Incremental Revolving Credit Loan.
“ Revolving Credit Note ” means a promissory note made by the Company in favor of a Revolving Credit Lender evidencing Revolving Credit Loans made by such Revolving Credit Lender under the Initial Revolving Credit Facility, substantially in the form of Exhibit B-1 .
“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.
“ Sanctioned Country ” means, at any time, a country or territory which is the target of any Sanctions.
“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any EU member state, (b) any Person organized under the laws of or resident in a Sanctioned Country or (c) any Person controlled by any such Person.
“ Sanctions ” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
“ Sarbanes-Oxley ” means the Sarbanes-Oxley Act of 2002.
“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“ Secured Cash Management Agreement ” means any Cash Management Agreement that is entered into by and between any Loan Party and any Cash Management Bank and which provides by its terms that it is intended to be secured as an Obligation hereunder.
“ Secured Hedge Agreement ” means any Swap Contract permitted under Article VII that is entered into by and between the Company and any Hedge Bank and which provides by its terms that (x) it is intended to be secured as an Obligation hereunder and (y) the counterparty to such agreement has expressly agreed to be bound by the provisions of Article IX as if it were a Lender.
 
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“ Secured Parties ” means, collectively, the Administrative Agent, the Lenders, the L/C Issuers, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05 , and the other Persons the Obligations owing to which are or are stated to be secured by the Collateral under the terms of the Collateral Documents.
“ Securities Account Control Agreement ” means an agreement, substantially in the form attached as Exhibit F to the Security Agreement or otherwise reasonably satisfactory to the Administrative Agent, among the Company or a Guarantor, a financial institution holding certain securities of the Company or such Guarantor, and the Administrative Agent with respect to collection and control of securities held in a securities account maintained by the Company or such Guarantor.
“ Securities Laws ” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board.
“ Security Agreement ” means that certain Security Agreement, dated as of the date hereof, made by and among the Company, the other Loan Parties and the Collateral Agent, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Credit Agreement.
“ Security Agreement Supplement ” has the meaning specified in Section 22(b ) of the Security Agreement.
“ Solvent ” and “ Solvency ” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“ Solvency Certificate ” means a certificate of a senior financial executive of the Company in form and substance satisfactory to the Administrative Agent in its sole discretion.
“ Specified Transaction ” means any acquisition or disposition of an asset or business by the Company or any of its Restricted Subsidiaries, in each case only to the extent that such acquisition or disposition has the effect of increasing or decreasing the Company’s Adjusted Operating Cash Flow by at least $500,000 when such acquisition or disposition is given full pro forma effect for the most recently completed Measurement Period, assuming that such acquisition or disposition had occurred on the first day of such Measurement Period.
 
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“ Spin-Off ” means a series of transactions in which the entertainment and sports businesses, together with an estimated $1,450,000,000 of proceeds from the Initial Term Facility, would be contributed to MSG SpinCo and the interests in MSG SpinCo would then be distributed through a series of transactions to the Parent and then distributed by the Parent to its then existing shareholders, on substantially the same terms and subject to the conditions described in the MSG Form 10 (with any differences not being, in the aggregate, materially adverse to the interests of the Lenders).
“ Spin-Off Date ” means the date on which the consummation of the Spin-Off occurs.
“ Sports Telecast Rights Agreements ” means the agreements listed on Schedule 1.01(d) and all other existing and future agreements of the Company or any Restricted Subsidiary for the exhibition by the Program Services of live games of the New York Islanders, New Jersey Devils, Buffalo Sabres or any other Major League Baseball, National Basketball Association (other than the New York Knicks), National Hockey League (other than the New York Rangers) or National Football League team.
“ Spot Rate ” has the meaning specified in Section 1.07 .
“ Standby Letter of Credit ” means any Letter of Credit issued hereunder, other than a Trade Letter of Credit.
“ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares or securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “ Subsidiary ” or to “ Subsidiaries ” shall refer to a Subsidiary or Subsidiaries of the Company.
“ Subsidiary Redesignation ” has the meaning specified in Section 7.08(b) .
“ Supplemental Collateral Documents ” means Security Agreement Supplements, Intellectual Property Security Agreement Supplements and other security and pledge agreements securing payment of the Obligations of a newly-formed or newly-acquired Guarantor under the Loan Documents and constituting Liens as required pursuant to the terms of Section 7.10 , in each case covering the types of property constituting Collateral, subject to exclusions for Excluded Assets.
“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index
 
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transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.
“ Swap Obligation ” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“ Swing Line Borrowing ” means a borrowing of a Swing Line Loan pursuant to Section 2.04 .
“ Swing Line Lender ” means JPMorgan in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.
“ Swing Line Loan ” has the meaning specified in Section 2.04(a) .
“ Swing Line Loan Notice ” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b) which, if in writing, shall be substantially in the form of Exhibit A-2 .
“ Swing Line Sublimit ” means an amount equal to the lesser of (a) $15,000,000 and (b) the Revolving Credit Facility. The Swing Line Sublimit is part of, and not in addition to, the Revolving Credit Facility.
“ Taxes ” means all present or future taxes, assessments or other charges (including withholdings) imposed by any Governmental Authority with authority to impose the same, including any interest, additions to tax or penalties applicable thereto.
“ Teams ” means a member club or team of any League, including The New York Knicks, The New York Rangers, The New York Liberty, the Westchester Knicks and The Hartford Wolf Pack.
“ Term Borrowing ” means a borrowing consisting of simultaneous Term Loans of the same type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01(a) , including any Incremental Term Borrowing.
“ Term Commitment ” means, as to each Term Lender, its obligation to make Term Loans to the Company pursuant to Section 2.01 , as such amount may be adjusted from time to time in accordance with this Credit Agreement, including any Incremental Term Commitment.
 
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“ Term Facility ” means the Initial Term Facility, an Incremental Term Facility or, collectively, the Initial Term Facility and the Incremental Term Facilities, as the context may require.
“ Term Lender ” means, (a) at any time on or prior to the Closing Date, any Lender that has a Term Commitment at such time and (b) at any time after the Closing Date, any Lender that holds Term Loans at such time.
“ Term Loan ” means an advance made by any Term Lender under any Term Facility and shall include any Incremental Term Loan.
“ Term Loan Note ” means a promissory note made by the Company in favor of a Term Lender evidencing Term Loans made by such Term Lender under the Initial Term Facility, substantially in the form of Exhibit B-3 .
“ Termination Event ” means (i) a Reportable Event, (ii) the termination of a Plan, or the filing of a notice of intent to terminate a Plan, or the treatment of a Plan amendment as a termination under Section 4041(c) of ERISA, (iii) the institution of proceedings to terminate a Plan under Section 4042 of ERISA or (iv) the appointment of a trustee to administer any Plan under Section 4042 of ERISA.
“ Total Leverage Ratio ” means, at any date of determination, the ratio of Consolidated Net Indebtedness at such date to Adjusted Operating Cash Flow of the Company and its Restricted Subsidiaries for the most recently completed Measurement Period. Notwithstanding the foregoing, for purposes of calculating the Total Leverage Ratio, there shall be excluded from Indebtedness, to the extent otherwise included as Indebtedness, (A) any deferred or contingent obligation of the Company to pay the consideration for an Investment not prohibited by Section 7.17 ; (B) any deferred purchase price in connection with any acquisition not prohibited by Section 7.17 ; (C) all obligations under any Swap Contract; and (D) all obligations under any Guarantee not prohibited by Section 7.15 ; in each of clauses (A) , (B)  and (D)  above, such exclusion to apply only to the extent that such obligation can be satisfied with the delivery of common stock of the Parent or other common equity interests of the Parent (and the Company hereby covenants and agrees that such obligation shall be satisfied solely by the delivery of such common stock or other common equity interests).
“ Total Outstandings ” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.
“ Total Revolving Credit Outstandings ” means the aggregate Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/C Obligations.
“ Trade Letter of Credit ” means any Letter of Credit issued hereunder for the benefit of a supplier of inventory to the Company or any of its Subsidiaries to effect payment for such inventory.
“ Transaction ” means, collectively, (a) the entering into by the Loan Parties and their applicable Subsidiaries of the Loan Documents to which they are or are intended to be a party, (b) the payment of all fees and expenses incurred in connection with the Loan Documents and (c) consummation of the Spin-Off and all related transactions.
 
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“ Type ” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.
“ UCP ” means the Uniform Customs and Practice for Documentary Credits, 2007 revision, International Chamber of Commerce Publication No. 600, as the same may be amended and in effect from time to time.
“ United States Person ” means a corporation, partnership or other entity created, organized or incorporated under the laws of the United States of America or a State thereof (including the District of Columbia).
“ Unreimbursed Amount ” has the meaning specified in Section 2.03(c)(i) .
“ Unrestricted Subsidiaries ” means the Persons set forth on Schedule 6.02(ii) and any Subsidiary of the Company designated by the Company as an Unrestricted Subsidiary pursuant to and in compliance with Section 7.08 .
Section 1.02 Other Interpretive Provisions . With reference to this Credit Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “ include ,” “ includes ” and “ including ” shall be deemed to be followed by the phrase “without limitation.” The word “ will ” shall be construed to have the same meaning and effect as the word “ shall .” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any organization document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “ herein ,” “ hereof ” and “ hereunder ,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “ asset ” and “ property ” (except when used as accounting terms, in which case GAAP shall apply) shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
 
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(b) In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ;” the words “ to ” and “ until ” each mean “ to but excluding ;” and the word “ through ” means “ to and including .”
(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Credit Agreement or any other Loan Document.
Section 1.03 Accounting Terms . (a)  Generally . All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Credit Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein.
(b) Changes in GAAP . If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Company or in the case of any financial ratio, the Administrative Agent or the Required Lenders, shall so request, the Administrative Agent, the applicable Lenders and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders, as applicable); provided that, in the event of a request for an amendment, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Company shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Credit Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
Section 1.04 Rounding . Any financial ratios required to be maintained by the Company pursuant to this Credit Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
Section 1.05 Times of Day . Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
Section 1.06 Letter of Credit Amounts . Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided , however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.
 
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Section 1.07 Currency Equivalents Generally . Any amount specified in this Credit Agreement (other than in Articles II , IV and IX ) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this Section 1.07 , the “ Spot Rate ” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.
 
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
Section 2.01 The Loans .
(a) The Term Borrowing . Subject to the terms and conditions hereof, each Term Lender severally agrees to make a single loan in Dollars to the Company on the Closing Date in a principal amount not to exceed its Term Commitment under the Initial Term Facility on the Closing Date. The Term Borrowing under the Initial Term Facility shall consist of Term Loans made simultaneously by the Term Lenders in accordance with their respective Applicable Percentage of the Initial Term Facility. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed. Term Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
(b) Revolving Credit Borrowings . Subject to the terms and conditions set forth herein, each Revolving Credit Lender severally agrees to make loans in Dollars (each such loan, a “ Revolving Credit Loan ”) to the Company from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Revolving Credit Commitment; provided , however , that after giving effect to any Revolving Credit Borrowing, (i) the Total Outstandings shall not exceed the Revolving Credit Facility, and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment. Within the limits of each Revolving Credit Lender’s Revolving Credit Commitment, and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.01 , prepay under Section 2.05 , and reborrow under this Section 2.01 . Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
 
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Section 2.02 Borrowings, Conversions and Continuations of Loans . (a) Each Term Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Company’s irrevocable notice to the Administrative Agent, which may be given by telephone (a “ Committed Loan Notice ”). Each such notice must be received by the Administrative Agent not later than (i) 11:00 a.m. three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) 11:00 a.m. on the requested date of any Borrowing of Base Rate Loans; provided , however , that notice of (x) the initial Borrowing of Base Rate Loans may be received by the Administrative Agent at such time as agreed by the Administrative Agent on the requested date of Borrowing and (y) any conversion of such initial Borrowing to Eurodollar Rate Loans may be received by the Administrative Agent no later than 11:00 a.m. on the third Business Day prior to the requested date of conversion. Each telephonic notice by the Company pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a senior executive of the Company. In the case of any discrepancies between telephonic and written notices received by the Administrative Agent, the telephonic notice shall be effective as understood in good faith by the Administrative Agent. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c) each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Company is requesting a Term Borrowing, Revolving Credit Borrowing, an Incremental Borrowing, if available, a conversion of Term Loans or Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Company fails to specify a Type of Loan in a Committed Loan Notice or if the Company fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Company requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a Eurodollar Rate Loan.
(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage under the applicable Facility of the applicable Term Loans, Revolving Credit Loans or Incremental Loans, if any, and if no timely notice of a conversion or continuation is provided by the Company, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base
 
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Rate Loans described in Section 2.02(a) . In the case of a Term Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than (i) one hour after receipt of notice from the Administrative Agent on the Closing Date in the case of the initial Borrowing of Base Rate Loans (as long as such notice is received prior to 1:30 p.m. on such day) or (ii) 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 5.02 (and, (x) if such Borrowing is the initial Credit Extension, Section 5.01 and (y) if such Borrowing is an Incremental Borrowing, the applicable conditions set forth in the Incremental Supplement), the Administrative Agent shall make all funds so received available to the Company in like funds as received by the Administrative Agent either by (i) crediting the account of the Company on the books of JPMorgan with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Company; provided , however , that if, on the date a Committed Loan Notice with respect to a Revolving Credit Borrowing is given by the Company, there are L/C Borrowings outstanding, then the proceeds of such Revolving Credit Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the Company as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, the Administrative Agent may notify the Company that Loans may only be converted into or continued as Loans of certain specified Types and, thereafter, until no Default shall continue to exist, Loans may not be converted into or continued as Loans of any Type other than one or more of such specified Types.
(d) The Administrative Agent shall promptly notify the Company and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Company and the Lenders of any change in JPMorgan’s prime rate used in determining the Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than twelve (12) Interest Periods in effect in respect of the Facilities.
Section 2.03 Letters of Credit . (a)  The Letter of Credit Commitment . (i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03 , (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Company or its Subsidiaries, and to amend Letters of Credit previously issued by it, in accordance with Section 2.03(b) , and (2) to honor drawings under the Letters of Credit issued by it; and (B) the Revolving Credit Lenders severally agree to participate in Letters of Credit issued for the account of the Company or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (w) the Total
 
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Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, (x) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment, (y) the aggregate amount available to be drawn under all Letters of Credit issued by the applicable L/C Issuer issuing such Letter of Credit shall not exceed (I) such L/C Issuer’s Letter of Credit Commitment ( provided , that any L/C Issuer may, following a request from the Company, in its sole discretion, issue Letters of Credit in an aggregate available amount in excess of such L/C Issuer’s Letter of Credit Commitment so long as the Outstanding Amount of all L/C Obligations shall not exceed the Letter of Credit Sublimit) and (II) the aggregate amount of such L/C Issuer’s unused Revolving Credit Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Company for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Company that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Company’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Company may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) No L/C Issuer shall issue any Letter of Credit if:
(A) the expiry date of such requested Letter of Credit would occur more than (x) in the case of Standby Letters of Credit, twelve months after the date of issuance or (y) in the case of Trade Letters of Credit, 180 days after the date of issuance, unless the Required Revolver Lenders have approved such expiry date;
(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date; or
(C) such Letter of Credit is to be denominated in a currency other than Dollars;
(iii) No L/C Issuer shall be under any obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital
 
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requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;
(B) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer generally applicable to the issuance of letters of credit;
(C) except as otherwise agreed by the Administrative Agent and such L/C Issuer, such Letter of Credit is in an initial stated amount less than $50,000;
(D) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(E) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender, unless such L/C Issuer has entered into arrangements satisfactory to such L/C Issuer with the Company or such Lender to eliminate such L/C Issuer’s risk with respect to such Lender.
(iv) No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v) No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(vi) Each L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included such L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit . (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Company delivered to any L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a senior executive of the Company. Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission as provided in Section 10.02(b), by personal delivery or by any other means acceptable to the L/C Issuer. Such Letter of Credit Application must be
 
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received by the applicable L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the applicable L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the applicable L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the applicable L/C Issuer may require. Additionally, the Company shall furnish to each L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as any L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Company and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the applicable L/C Issuer has received written notice from any Revolving Credit Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article V shall not then be satisfied, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Company (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the applicable L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such Letter of Credit.
(iii) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the Company and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations . (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable L/C Issuer shall notify the Company and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by such L/C Issuer under a Letter
 
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of Credit (each such date, an “ Honor Date ”), the Company shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Company fails to so reimburse the applicable L/C Issuer by such time, the Administrative Agent shall promptly notify each Revolving Credit Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and the amount of such Revolving Credit Lender’s Applicable Revolving Credit Percentage thereof. In such event, the Company shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Revolving Credit Commitments and the conditions set forth in Section 5.02 (other than the delivery of a Committed Loan Notice). Any notice given by any L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Revolving Credit Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the applicable L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Revolving Credit Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii) , each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the applicable L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 5.02 cannot be satisfied or for any other reason, the Company shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Revolving Credit Lender’s payment to the Administrative Agent for the account of such L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03 .
(iv) Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Revolving Credit Percentage of such amount shall be solely for the account of such L/C Issuer.
(v) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans to the Company or L/C Advances to reimburse any L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c) , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have
 
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against the applicable L/C Issuer, the Company or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 5.02 (other than delivery by the Company of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Company to reimburse any L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.
(vi) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of any L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii) , such L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the greater of the New York Fed Bank Rate and a rate determined by such L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by such L/C Issuer in connection with the foregoing. A certificate of the applicable L/C Issuer submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.
(d) Repayment of Participations . (i) At any time after any L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c) , if the Administrative Agent receives for the account of the applicable L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Company or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Revolving Credit Percentage thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the account of any L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the applicable L/C Issuer in its discretion), each Revolving Credit Lender shall pay to the Administrative Agent for the account of the applicable L/C Issuer its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the New York Fed Bank Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Credit Agreement.
 
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(e) Obligations Absolute . The obligation of the Company to reimburse each L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Credit Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit, this Credit Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or other right that the Company or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), any L/C Issuer or any other Person, whether in connection with this Credit Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;
(iv) any payment by the applicable L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the applicable L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;
(v) waiver by the L/C Issuer of any requirement that exists for the L/C Issuer’s protection and not the protection of the Company or any waiver by the L/C Issuer which does not materially prejudice the Company;
(vi) honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft; or
(vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Company or any of its Subsidiaries.
The Company shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Company’s instructions or other irregularity, the Company will immediately notify the L/C Issuers. The Company shall be conclusively deemed to have waived any such claim against any L/C Issuer and its correspondents unless such notice is given as aforesaid.
 
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(f) Role of L/C Issuer . Each Lender and the Company agree that, in paying any drawing under a Letter of Credit, no L/C Issuer shall have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of any L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Credit Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Company hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude the Company’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of any L/C Issuer shall be liable or responsible for any of the matters described in clauses (i)  through (v)  of Section 2.03(e) ; provided , however , that anything in such clauses to the contrary notwithstanding, the Company may have a claim against an L/C Issuer, and an L/C Issuer may be liable to the Company, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Company which the Company proves were caused by such L/C Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, an L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and no L/C Issuer shall be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. The L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.
(g) Cash Collateral . Upon the request of the Administrative Agent, (i) if an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Company shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations. In addition, if any Revolving Credit Lender shall become a Defaulting Lender, then upon a request of the Administrative Agent (made on behalf of itself or at the direction of any L/C Issuer), the Company shall immediately Cash Collateralize all of such Defaulting Lender’s Pro Rata Share of the then Outstanding Amount of all L/C Obligations (in an amount equal to such Defaulting Lender’s Pro Rata Share of such Outstanding Amount, determined as of the date of such request from the Administrative Agent Section 2.05 and Section 8.02 set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this Section 2.03 ,
 
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Section 2.05 and Section 8.02 , “ Cash Collateralize ” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuers (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Company hereby grants to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at JPMorgan. If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the Company will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate Outstanding Amount over (y) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Laws, to reimburse the L/C Issuers.
(h) Applicability of ISP and UCP . Unless otherwise expressly agreed by the applicable L/C Issuer and the Company when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each Standby Letter of Credit, and (ii) the rules of the UCP, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each Trade Letter of Credit.
(i) Letter of Credit Fees . The Company shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Applicable Revolving Credit Percentage a Letter of Credit Fee (the “ Letter of Credit Fee ”) for each Letter of Credit equal to the Applicable Rate for Revolving Credit Loans maintained as Eurodollar Rate Loans times the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . Letter of Credit Fees shall be (A) computed on a quarterly basis in arrears and (B) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers . The Company shall pay directly to each L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued by it, at the rate of  1 ⁄ 4 of 1.00% per annum (but in no event less than $500 per annum for each Letter of Credit) (i) with respect to each Trade Letter of
 
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Credit, computed on the amount of such Letter of Credit, and payable upon the issuance thereof, (ii) with respect to any amendment of a Trade Letter of Credit increasing the amount of such Trade Letter of Credit, computed on the amount of such increase, and payable upon the effectiveness of such amendment ( provided , that the $500 per annum minimum set forth in the previous parenthetical shall not apply to an amendment of a Trade Letter of Credit), and (iii) with respect to each Standby Letter of Credit, computed on the daily amount available to be drawn under such Standby Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . In addition, the Company shall pay directly to each L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.
(k) Conflict with Issuer Documents . In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.
(l) Letters of Credit Issued for Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Company shall be obligated to reimburse any L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Company hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Company, and that the Company’s business derives substantial benefits from the businesses of such Subsidiaries.
Section 2.04 Swing Line Loans . (a)  The Swing Line . Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.04 , to make loans (each such loan, a “ Swing Line Loan ”) to the Company from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit; provided , however , that after giving effect to any Swing Line Loan, (i) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility at such time, (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender (including the Swing Line Lender) at such time, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations at such time, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans at such time shall not exceed such Lender’s Revolving Credit Commitment and (iii) the aggregate Outstanding Amount under the Swingline Facility shall not exceed the aggregate amount of Swingline Lender’s unused Revolving Credit Commitment, and provided further that the Company shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.04 , prepay under Section 2.05 , and reborrow under this Section 2.04 . Each
 
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Swing Line Loan shall bear interest only at a rate based on the Base Rate. Immediately upon the making of a Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such Swing Line Loan. Notwithstanding anything to the contrary contained in this Section 2.04 or elsewhere in this Credit Agreement, the Swing Line Lender shall not be obligated to make any Swing Line Loan at a time when a Revolving Credit Lender is a Defaulting Lender unless the Swing Line Lender has entered into arrangements satisfactory to it to eliminate the Swing Line Lender’s risk with respect to the Defaulting Lender’s or Defaulting Lenders’ participation in such Swing Line Loans.
(b) Borrowing Procedures . Each Swing Line Borrowing shall be made upon the Company’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone (a “ Swing Line Loan Notice ”). Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 11:00 a.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a senior executive of the Company. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Credit Lender) prior to 12:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a) , or (B) that one or more of the applicable conditions specified in Article V is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Company.
(c) Refinancing of Swing Line Loans . (i) The Swing Line Lender at any time in its sole and absolute discretion may request and no less frequently than weekly shall request, in each case, on behalf of the Company (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount equal to such Lender’s Applicable Revolving Credit Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02 , without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Revolving Credit Facility and the conditions set forth in Section 5.02 . The Swing Line Lender shall furnish the Company with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Credit Lender shall make an amount equal to its Applicable Revolving Credit Percentage of the amount specified in such
 
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Committed Loan Notice available to the Administrative Agent in immediately available funds for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii) , each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i) , the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Credit Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Credit Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.
(iii) If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i) , the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the New York Fed Bank Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.
(iv) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Company or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 5.02 . No such funding of risk participations shall relieve or otherwise impair the obligation of the Company to repay Swing Line Loans, together with interest as provided herein.
(d) Repayment of Participations . (i) At any time after any Revolving Credit Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Credit Lender its Applicable Revolving Credit Percentage thereof in the same funds as those received by the Swing Line Lender.
 
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(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Credit Lender shall pay to the Swing Line Lender its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the New York Fed Bank Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Credit Agreement.
(e) Interest for Account of Swing Line Lender . The Swing Line Lender shall be responsible for invoicing the Company for interest on the Swing Line Loans. Until each Revolving Credit Lender funds its Base Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Revolving Credit Lender’s Applicable Revolving Credit Percentage of any Swing Line Loan, interest in respect of such Applicable Revolving Credit Percentage shall be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender . The Company shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.
Section 2.05 Prepayments . (a)  Optional . (i) The Company may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Term Loans and Revolving Credit Loans in whole or in part without premium or penalty; provided that (x) such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans, and (B) one Business Day prior to any date of prepayment of Base Rate Loans; (y) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof; and (z) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment, the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment. If such notice is given by the Company, the Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05 . Each prepayment of the outstanding Loans pursuant to this Section 2.05(a) shall be applied to the principal repayment installments thereof as directed by the Company (and if not so directed, on a pro-rata basis), and, subject to Section 2.16 , each such prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages in the relevant Facility.
 
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(ii) The Company may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (B) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Company, the Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.
(b) Mandatory . (i) If (A) the Company or any of its Subsidiaries Disposes of any Collateral other than (x) Dispositions under Section 7.24(i) or Section 7.24(ii) , (y) any Disposition of Equity Interests in a Restricted Subsidiary that hold only Excluded Assets or (z) as a result of the consummation of the Spin-Off (a “ Mandatory Prepayment Disposition ”), or (B) the Company or any of its Restricted Subsidiaries suffers an Event of Loss, which in each case, together with all other Mandatory Prepayment Dispositions made and Events of Loss suffered at any time since the Closing Date, result in the realization by the Loan Parties, collectively, of Net Cash Proceeds from Mandatory Prepayment Dispositions and Events of Loss in an aggregate amount in excess of $75,000,000 (for the avoidance of doubt, excluding any Net Cash Proceeds excluded under the preceding subclause (i)(A)(x)), the Company shall in each case prepay, within three Business Days after receipt thereof by such Person, an aggregate principal amount of Loans equal to 100% of such Net Cash Proceeds; provided that (x) with respect to all or a portion of any Net Cash Proceeds realized under a Disposition described in this Section 2.05(b)(i)(A) , at the election of the Company (as notified by the Company to the Administrative Agent on or prior to such third Business Day following receipt of such Net Cash Proceeds of Dispositions of Collateral), and so long as no Default shall have occurred and be continuing, the Company or such Subsidiary may reinvest Net Cash Proceeds arising from such Disposition in operating assets which constitute Collateral within 365 days after the receipt of such Net Cash Proceeds and (y) with respect to any Net Cash Proceeds of casualty insurance or condemnation awards realized due to an Event of Loss described in this Section 2.05(b)(i)(B ), at the election of the Company (as notified by the Company to the Administrative Agent on or prior to such third Business Day following receipt of such Net Cash Proceeds of casualty insurance or condemnation awards), and so long as no Default shall have occurred and be continuing, the Company or such Subsidiary may apply within 365 days (or, if such replacement or repair could not reasonably completed within 365 days, such period shall be extended for a reasonable period of time to permit completion of such replacement and repair so long as the replacement or repair of the asset or assets that suffered the Event of Loss is being diligently pursued by the Company or such Subsidiary) after the receipt of such Net Cash Proceeds to replace or repair the equipment, fixed assets or real property in respect of which such Net Cash Proceeds were received; and provided further , that any Net Cash Proceeds not so reinvested shall be immediately applied to the prepayment of the Loans.
(ii) Upon the incurrence or issuance by the Company or any of its Restricted Subsidiaries of any Indebtedness (other than Indebtedness permitted under Section 7.14 ), the Company shall prepay an aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds received therefrom immediately upon receipt thereof by the Company or such Restricted Subsidiary.
 
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(iii) If for any reason the Total Outstandings at any time exceed the Revolving Credit Facility at such time, the Company shall immediately prepay Revolving Credit Loans, Swing Line Loans and L/C Borrowings and/or Cash Collateralize the L/C Obligations (other than the L/C Borrowings) in an aggregate amount equal to such excess.
(iv) If the Spin-Off is not consummated within 60 days following the Closing Date on terms consistent in all material respects with the information contained in the MSG Form 10, the Company shall on such date prepay in full all Obligations in respect of the Initial Term Facility.
(v) Prepayments made pursuant to this Section 2.05(b) , first , except to the extent that the Incremental Term Lenders under an Incremental Term Facility have otherwise agreed, shall be applied ratably to the outstanding Loans under the Initial Term Facility and each Incremental Term Facility, if any, second , shall be applied ratably to the L/C Borrowings and the Swing Line Loans, third , except to the extent that the Incremental Revolving Lenders under an Incremental Revolving Credit Facility have otherwise agreed, shall be applied ratably to the outstanding Loans under the Initial Revolving Credit Facility and each Incremental Revolving Credit Facility, if any, and, fourth , shall be used to Cash Collateralize the remaining L/C Obligations; and, in the case of prepayments required pursuant to clause (i) through (iv)  of this Section 2.05(b) , the amount remaining, if any, after the prepayment in full of all L/C Borrowings, Swing Line Loans and Loans outstanding at such time and the Cash Collateralization of the remaining L/C Obligations in full (the sum of such prepayment amounts, cash collateralization amounts and remaining amount being, collectively, the “ Reduction Amount ”) may be retained by the Company for use in the ordinary course of its business, and the Revolving Credit Facility and any Incremental Revolving Credit Facility shall be automatically and permanently reduced on a pro rata basis by the Reduction Amount as set forth in Section 2.06(b)(i) . Upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from the Company or any other Loan Party) to reimburse the L/C Issuers or the Revolving Credit Lenders, as applicable.
Section 2.06 Termination or Reduction of Commitments . (a)  Optional . The Company may, upon notice to the Administrative Agent, terminate any Revolving Credit Facility, the Letter of Credit Sublimit or the Swing Line Sublimit, or from time to time permanently reduce any Revolving Credit Facility, Letter of Credit Sublimit or the Swing Line Sublimit; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. three Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Company shall not terminate or reduce (A) any Revolving Credit Facility if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Revolving Credit Facility, (B) the Letter of Credit Sublimit if, after giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder would exceed the Letter of Credit Sublimit, or (C) the Swing Line Sublimit if, after giving effect thereto and to any concurrent prepayments hereunder, the Outstanding Amount of Swing Line Loans would exceed the Swing Line Sublimit, and (iv) to the extent practicable, each partial reduction in the Letter of Credit Sublimit shall be allocated ratably among the L/C Issuers in accordance with their respective Letter of Credit Commitments.
 
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(b) Mandatory . (i) The aggregate Term Commitments under the Initial Term Facility and any Incremental Term Facility shall be automatically and permanently reduced to zero on the date of the applicable Term Borrowing.
(ii) The Revolving Credit Facility and any Incremental Revolving Credit Facility shall be automatically and permanently reduced on each date on which the prepayment of Loans outstanding thereunder would be required to be made pursuant to Section 2.05(b)(i) through (iv) , whether or not any Loans or L/C Obligations are then outstanding, by an amount equal to the applicable Reduction Amount.
(iii) If after giving effect to any reduction or termination of Revolving Credit Commitments under this Section 2.06 , the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the Revolving Credit Facility at such time, the Letter of Credit Sublimit or the Swing Line Sublimit, as the case may be, shall be automatically reduced by the amount of such excess.
(c) Application of Commitment Reductions; Payment of Fees . The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Letter of Credit Sublimit, Swing Line Sublimit or the Revolving Credit Commitments under this Section 2.06 . Upon any reduction of the Revolving Credit Commitments, the Revolving Credit Commitment of each Revolving Credit Lender under the Revolving Credit Facility and any Incremental Revolving Credit Facility shall be reduced by such Revolving Credit Lender’s Applicable Percentage of such reduction amount with respect to each such Revolving Credit Facility. All fees in respect of any Revolving Credit Facility accrued until the effective date of any termination of such Facility shall be paid on the effective date of such termination.
Section 2.07 Repayment of Loans . (a)  Initial Term Facility . (i) The Company shall make a one-time amortization payment of $50,000,000.00 on or before March 31, 2016, and this one-time amortization payment will reduce the principal amount of the Initial Term Facility for subsequent amortization.
(ii) The Company shall, on each date set forth below, pay a principal amount of the Initial Term Facility in an aggregate amount equal to the percentage set forth below for such date of the original principal amount of the Initial Term Facility (less the principal payment made pursuant to Section 2.07(a)(i) ):
 
Date
  
Principal Amortization Payment
  
Date
  
Principal Amortization Payment
June 30, 2016
  
0.75%
  
September 30, 2018
  
1.25%
September 30, 2016
  
0.75%
  
December 31, 2018
  
1.25%
December 31, 2016
  
1.25%
  
March 31, 2019
  
1.25%
March 31, 2017
  
1.25%
  
June 30, 2019
  
1.25%
June 30, 2017
  
1.25%
  
September 30, 2019
  
1.25%
September 30, 2017
  
1.25%
  
December 31, 2019
  
2.125%
December 31, 2017
  
1.25%
  
March 31, 2020
  
2.125%
March 31, 2018
  
1.25%
  
June 30, 2020
  
2.125%
June 30, 2018
  
1.25%
  
Maturity Date
  
Outstanding Principal
Amount
 
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(b) Revolving Credit Loans and Incremental Revolving Credit Loans . The Company shall repay to the Revolving Credit Lenders and Incremental Revolving Credit Lenders on the Maturity Date applicable to each such Facility, the aggregate principal amount of all Revolving Credit Loans and Incremental Revolving Credit Loans, as applicable, outstanding on such date.
(c) Swing Line Loans . The Company shall repay each Swing Line Loan on the earlier to occur of (i) the date that is five Business Days after such Loan is made, and (ii) the Maturity Date applicable to the Revolving Credit Facility with the latest Maturity Date.
(d) Incremental Term Loans . The Company shall repay to the Incremental Term Lenders the principal amount of the Incremental Term Loans in such amounts and at such times as shall be set forth in the applicable Incremental Term Supplement.
Section 2.08 Interest . (a) Subject to the provisions of Section 2.08(b) , (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate for such Facility; (ii) each Base Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for such Facility; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for the applicable Revolving Credit Facility.
(b)(i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by the Company under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
 
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(c) Interest on each (x) Base Rate Loan shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter, (y) Eurodollar Rate Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto.
(d) Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
Section 2.09 Fees . In addition to certain fees described in Section 2.03(i) and (j) :
(a) Commitment Fee . The Company shall pay to the Administrative Agent for the account of each Revolving Credit Lender that is not a Defaulting Lender in accordance with its Applicable Revolving Credit Percentage, a commitment fee (the “ Commitment Fee ”) on the actual daily amount by which the Initial Revolving Credit Facility exceeds the Total Outstandings under the Initial Revolving Credit Facility, at a rate equal to 0.30% per annum; provided , however , that any Commitment Fee accrued with respect to any of the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Company so long as such Lender shall be a Defaulting Lender except to the extent that such Commitment Fee shall otherwise have been due and payable by the Company prior to such time, and provided , further , that no Commitment Fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender. The Commitment Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article V is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period for the Revolving Credit Facility. The Commitment Fee shall be calculated quarterly in arrears. For the purposes of calculating the Commitment Fee, outstanding Swing Line Loans shall be disregarded as a utilization of the Revolving Credit Facility.
(b) Other Fees . The Company shall pay to the Administrative Agent, the Joint Book Runners and the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
Section 2.10 Computation of Interest and Fees . All computations of interest for Base Rate Loans, when the Base Rate is determined by JPMorgan’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a) , bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
 
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Section 2.11 Evidence of Debt . (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Company and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Company hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Company shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in Section 2.11(a) , each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.
Section 2.12 Payments Generally; Administrative Agent’s Clawback . (a)  General . All payments to be made by the Company shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Company hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Company shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected on computing interest or fees, as the case may be.
(b)(i) Funding by Lenders; Presumption by Administrative Agent . Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02 ) and may, in reliance
 
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upon such assumption, make available to the Company a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Company severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Company to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the New York Fed Bank Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by the Company, the interest rate applicable to Base Rate Loans. If the Company and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Company the amount of such interest paid by the Company for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Company shall be without prejudice to any claim the Company may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii) Payments by Company; Presumptions by Administrative Agent . Unless the Administrative Agent shall have received notice from the Company prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuers hereunder that the Company will not make such payment, the Administrative Agent may assume that the Company has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Appropriate Lenders or the L/C Issuers, as the case may be, the amount due. In such event, if the Company has not in fact made such payment, then each of the Appropriate Lenders or the L/C Issuers, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the New York Fed Bank Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
A notice of the Administrative Agent to any Lender or the Company with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
(c) Failure to Satisfy Conditions Precedent . If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II , and such funds are not made available to the Company by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article V are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.
(d) Obligations of Lenders Several . The obligations of the Lenders hereunder to make Term Loans and Revolving Credit Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint.
 
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The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c) .
(e) Funding Source . Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
(f) Insufficient Funds . If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i)  first , toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii)  second , toward payment of principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties.
Section 2.13 Sharing of Payments by Lenders . If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations in respect of any of the Facilities due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of such Facility due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations in respect of such Facility due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations in respect of such Facility owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of such Facility owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payments on account of the Obligations in respect of such Facility owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans or other Obligations and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations in respect of the Facilities then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:
(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
 
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(ii) the provisions of this Section shall not be construed to apply to (A) any payment made by the Company pursuant to and in accordance with the express terms of this Credit Agreement or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than to the Company or any Subsidiary thereof (as to which the provisions of this Section shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation or subparticipation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation or subparticipation.
Section 2.14 Incremental Revolving Credit Facilities .
(a) Request for an Incremental Revolving Credit Facility . At the request of the Company to the Administrative Agent and without the consent of any Lender, an increase in the Revolving Credit Commitments or a separate tranche of revolving credit commitments and revolving loans under this Credit Agreement (an “ Incremental Revolving Credit Facility ”) shall be established; provided that at the time of such request, upon the effectiveness of any increase or any Incremental Revolving Credit Supplement referred to below, and at the time any Incremental Revolving Credit Loan is made (and after giving full pro forma effect thereto), (i) no Default or Event of Default shall exist, (ii) the Company shall be in pro forma compliance with the Financial Covenants, and (iii) the Company shall have a Total Leverage Ratio of no greater than 4.65:1.00 (and compliance with the preceding clauses (ii) and (iii)  shall be determined (A) assuming that the full amounts of all Revolving Credit Facilities (including the proposed Incremental Revolving Credit Facility and all other then-existing Incremental Revolving Facilities) have been drawn, (B) utilizing the financial statements most recently delivered or deemed delivered pursuant to Section 7.01 , (C) giving full pro forma effect to (1) all Specified Transactions (as provided in such definition) that have occurred since the last day of the most recently completed Measurement Period for which financial statements have been delivered or deemed delivered pursuant to Section 7.01 (including, for the avoidance of doubt, but without duplication, any acquisitions constituting Specified Transactions that are to be consummated contemporaneously with the closing of, and using the proceeds of, such proposed Incremental Revolving Credit Facility), and (2) the application of the proceeds of the proposed Incremental Revolving Credit Facility, and (D) otherwise in accordance with the applicable definitions therein).
(b) Conditions to Effectiveness of an Incremental Revolving Credit Facility . As a condition precedent to the establishment of any Incremental Revolving Credit Facility, the Company, the Administrative Agent and the Incremental Revolving Credit Lenders thereunder shall enter into a supplement to this Credit Agreement in substantially the form of Exhibit H-1 (an “ Incremental Revolving Credit Supplement ”), duly completed such that such Incremental
 
69




Revolving Credit Supplement shall set forth the terms and conditions relating to the Incremental Revolving Credit Facility; provided that, in any event, each Incremental Revolving Credit Facility shall (i) be Guaranteed only by the Guarantors under this Credit Agreement and (ii) rank pari passu in right of both payment and of security with the Initial Facilities and each other Incremental Facility. Upon the effective date of such Incremental Revolving Credit Supplement, each lender thereunder shall become an Incremental Revolving Credit Lender hereunder and such Incremental Revolving Credit Supplement shall be deemed part of this Credit Agreement for all purposes thereafter. Each Incremental Revolving Credit Supplement may, without the consent of any Lender (other than the applicable Incremental Revolving Lenders thereunder and the Administrative Agent), effect such amendments to this Credit Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Company, to effect the provisions of this Section 2.14 .
(c) Incremental Revolving Credit Lenders . The Revolving Credit Lenders shall initially have the right, but not the obligation, to commit up to their pro rata portion of any Incremental Revolving Credit Facility; provided that, if after giving full pro forma effect to such proposed Incremental Revolving Credit Facility (assuming that the full amount of the Initial Revolving Credit Facility, the full amount of each then-existing Incremental Revolving Credit Facility, and the full amount of the proposed Incremental Revolving Credit Facility, have all been drawn), the Company would be in pro forma compliance with the Financial Covenants, then such Incremental Revolving Credit Commitments may, at the election of the Company, be offered to new lenders, subject to the consent of the Administrative Agent (which consent shall not be unreasonably withheld), if such Administrative Agent consent would be required under Section 10.06(b)(iii) for an assignment of Loans or Commitments to such Incremental Revolving Credit Lender.
Section 2.15 Incremental Term Facilities .
(a) Request for an Incremental Term Facility . At the request of the Company to the Administrative Agent, and without the consent of any Lender, on one or more occasions, an increase in the aggregate principal amount of any existing Term Facility or a separate tranche of term loan commitments and term loans may be established under this Credit Agreement; provided that at the time of such request, upon the effectiveness of any Incremental Term Supplement referred to below, and at the time any Incremental Term Loan is made (and after giving full pro forma effect to the incurrence thereof and the application of proceeds thereof), (i) no Default or Event of Default shall then exist, (ii) the Company shall be in pro forma compliance with the Financial Covenants, and (iii) the Company shall have a Total Leverage Ratio of no greater than 4.65:1.00 (and compliance with the preceding clauses (ii) and (iii)  shall be determined (A) assuming that the full amounts of all Revolving Credit Facilities (including all then-existing Incremental Revolving Facilities) have all been drawn, (B) utilizing the financial statements most recently most recently delivered or deemed delivered pursuant to Section 7.01 , (C) giving full pro forma effect to (1) all Specified Transactions (as provided in such definition) that have occurred since the last day of the most recently completed Measurement Period for which financial statements have been delivered or deemed delivered pursuant to Section 7.01 (including, for the avoidance of doubt, but without duplication, any acquisitions constituting Specified Transactions that are to be consummated contemporaneously with the closing of, and using the proceeds of, such proposed Incremental Term Facility), and (2) the application of the proceeds of the proposed Incremental Term Facility, and (D) otherwise in accordance with the applicable definitions therein).
 
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(b) Conditions to Effectiveness of an Incremental Term Facility . As a condition precedent to the establishment of any Incremental Term Facility, the Company, the Administrative Agent and the Incremental Term Lenders thereunder shall enter into a supplement to this Credit Agreement in substantially the form of either Exhibit H-2 or Exhibit H-3 (an “ Incremental Term Supplement ”), duly completed, and with such provisions (including changes to the provisions set forth therein) as may be agreed to by the Company and the Incremental Term Lenders ( provided , that notwithstanding anything to the contrary set forth in this sentence, (A) the prior written consent of the Administrative Agent shall be required for any changes to Section 12 (Conditions Precedent) of any form of Incremental Term Supplement, other than completing the required information in clause (e) (Opinions of Counsel to the Company) thereof, (B) in no event shall any form of Incremental Term Supplement be changed to provide any additional, preferential or non-pro rata repayment or prepayment rights to any of Incremental Term Lenders thereunder (unless such Incremental Facility is to receive less than its ratable share of any repayment or prepayment) and (C) if the Administrative Agent reasonably determines that any proposed change to any form of Incremental Term Supplement would be contrary to, or conflict with, the provisions of this Credit Agreement or any other Loan Document, and the Administrative Agent provides written notice of such determination to the Company, then such proposed change shall be revised or removed in a manner reasonably satisfactory to the Administrative Agent), such that such Incremental Term Supplement shall set forth the terms and conditions relating to the Incremental Term Facility, which shall be reasonably acceptable to the Administrative Agent (except to the extent that they are consistent with the following provisos to this clause (b)); provided that, in any event, each Incremental Term Facility shall (i) not have (A) a final maturity date earlier than the later of (x) the “Maturity Date” then applicable to the Initial Facilities and (y) the latest “Maturity Date” then applicable to any then-outstanding Incremental Term Facility, or (B) a weighted average life to maturity shorter than the “Maturity Date” then applicable to the Initial Facilities; (ii) be Guaranteed only by the Guarantors under this Credit Agreement; (iii) rank pari passu in right of both payment and of security with the Initial Facilities and each other Incremental Facility; (iv) except as to pricing and amortization, have terms and documentation that are, when taken as a whole, no more restrictive than the terms applicable to the existing Facilities, unless such terms are reasonably acceptable to the Administrative Agent; (v) be in a minimum principal amount of $50,000,000, and any whole multiple of $5,000,000 in excess thereof; and (vi)(A) in the case of any Incremental Term Facility in substantially the form of Exhibit H-2 , or (B) in the case of any Incremental Term Facility in substantially the form of Exhibit H-3 entered into within 18 months after the Closing Date, not have total yield greater than 0.50% higher than the total yield for the Term Loans then in place unless (x) the Applicable Rate applicable to the Initial Term Facility (and, if applicable, each other then-existing Incremental Term Facility) shall be increased (to the extent such higher yield is in the form of interest rates) and (y) the Company shall pay to the Administrative Agent for the account of each of the Initial Term Lenders (and each other Incremental Term Lender (as applicable)) a fee (to the extent such higher yield is in the form of fees or original issue discount) so as to cause the total yield of the Initial Term Facility and each other then-existing Incremental Term Facility (if applicable) to be no more than 0.50% per annum lower than the total yield in respect of the new Incremental Term Facility. Upon the effective date of the Incremental Term Supplement, each lender thereunder shall become an
 
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Incremental Term Lender hereunder and such Incremental Term Supplement shall be deemed part of this Credit Agreement for all purposes thereafter. Each Incremental Term Supplement may, without the consent of any Lender (other than the applicable Incremental Term Lenders thereunder and the Administrative Agent), effect such amendments to this Credit Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Company, to effect the provisions of this Section 2.15 .
(c) Incremental Term Lenders . The Company shall be entitled to elect, in its own discretion, Incremental Term Lenders from among the existing Lenders, and any additional banks, financial institutions and other institutional lenders or investors, subject to the consent of the Administrative Agent (which consent shall not be unreasonably withheld), if such Administrative Agent consent would be required under Section 10.06(b)(iii) for an assignment of Loans to such Incremental Term Lender.
Section 2.16 Defaulting Lenders .
(a) Defaulting Lender Adjustments . Notwithstanding anything to the contrary contained in this Credit Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i) Waivers and Amendments . Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Credit Agreement shall be restricted as set forth in the definition of Required Lenders.
(ii) Defaulting Lender Waterfall . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.07 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second , to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any L/C Issuer or Swing Line Lender hereunder; third , to Cash Collateralize the L/C Issuers’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.03(g) ; fourth , as the Company may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Credit Agreement, as determined by the Administrative Agent; fifth , if so determined by the Administrative Agent and the Company, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Credit Agreement and (y) Cash Collateralize the L/C Issuers’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Credit Agreement, in accordance with Section 2.03(g) ; sixth , to the payment of any amounts owing to the Lenders, the
 
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L/C Issuers or Swing Line Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuers or Swing Line Lenders against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Credit Agreement; seventh , so long as no Default or Event of Default exists, to the payment of any amounts owing to the Company as a result of any judgment of a court of competent jurisdiction obtained by the Company against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Credit Agreement; and eighth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Advances in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Advances owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Advances owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments under the applicable Facility without giving effect to Section 2.16(a)(iv) . Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.16(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain Fees . (A) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.03(g) .
(B) With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A) above, the Company shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to each L/C Issuer and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer’s or Swing Line Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.
(iv) Reallocation of Participations to Reduce Fronting Exposure . All or any part of such Defaulting Lender’s participation in L/C Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such
 
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Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 5.02 are satisfied at the time of such reallocation (and, unless the Company shall have otherwise notified the Administrative Agent at such time, the Company shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.
(v) Cash Collateral, Repayment of Swing Line Loans . If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Company shall, without prejudice to any right or remedy available to it hereunder or under law, (x)  first , prepay Swing Line Loans in an amount equal to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 2.03(g) .
(b) Defaulting Lender Cure . If the Company, the Administrative Agent, each Swing Line Lender and each L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held pro rata by the Lenders in accordance with the Commitments under the applicable Facility (without giving effect to Section 2.16(a)(iv) ), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Company while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
(c) New Swing Line Loans/Letters of Credit . So long as any Lender is a Defaulting Lender, (i) no Swing Line Lender shall be required to fund any Swing Line Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swing Line Loan and (ii) no L/C Issuer shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.
 
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ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01 Taxes . (a)  Payments Free of Taxes . Any and all payments by or on account of any obligation of the Company hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the Company shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, any Lender or any L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Company shall make such deductions and (iii) the Company shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
(b) Payment of Other Taxes by the Company . Without limiting the provisions of subsection (a) above, the Company shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Company . The Company shall indemnify the Administrative Agent, each Lender and each L/C Issuer, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that the Company shall not indemnify the Administrative Agent, any Lender or any L/C Issuer for any penalties or interest that are imposed solely as a result of gross negligence or willful misconduct of the Administrative Agent, any Lender or any L/C Issuer. A certificate as to the amount of such payment or liability delivered to the Company by a Lender or an L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest error. If, in the reasonable discretion of the Company, any Indemnified Taxes or Other Taxes are incorrectly or not legally imposed or asserted by the relevant Governmental Authority, the Administrative Agent, each Lender or each L/C Issuer, as the case may be, shall, at the expense of the Company, use commercially reasonable efforts to cooperate with the Company to recover and promptly remit such Indemnified Taxes or Other Taxes to the Company in accordance with subsection (f) of this Section. Nothing contained herein shall derogate from the right of any Lender, the Administrative Agent or any L/C Issuer to arrange its tax affairs in whatever manner it sees fit nor shall require any Lender, the Administrative Agent or any L/C Issuer to disclose any information relating to its tax affairs that it deems confidential other than as required under Section 3.01(d) . For the avoidance of doubt, the Administrative Agent, a Lender and an L/C Issuer may not recover more than once with respect to the same amount of Taxes to which the Administrative Agent, Lender or L/C Issuer is entitled to indemnification under this Section.
 
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(d) Evidence of Payments . As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Company to a Governmental Authority, the Company shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders . Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Company is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Company (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Company or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the Company or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Company or the Administrative Agent as will enable the Company or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, if the Company is resident for tax purposes in the United States, any Foreign Lender shall deliver to the Company and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Credit Agreement (and from time to time thereafter upon the request of the Company or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN or Form W-8BEN-E claiming eligibility for benefits of an income tax treaty to which the United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (A) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Company within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly completed copies of Internal Revenue Service Form W-8BEN or Form W-8BEN-E, or
(iv) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Company to determine the withholding or deduction required to be made (including, for the avoidance of doubt, documentation necessary for the Company or the Administrative Agent to comply with its obligations under FATCA, to determine whether
 
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any recipient of amounts arising under this Credit Agreement has or has not complied with such recipient’s obligations under FATCA, or to determine the amount to deduct and/or withhold from such amounts under FATCA).
(f) Treatment of Certain Refunds . If the Administrative Agent, any Lender or any L/C Issuer determines, in its good faith discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Company or with respect to which the Company has paid additional amounts pursuant to this Section, it shall pay to the Company an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Company under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Company, upon the request of the Administrative Agent, such Lender or such L/C Issuer, agrees to repay the amount paid over to the Company (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or such L/C Issuer if the Administrative Agent, such Lender or such L/C Issuer is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will the Administrative Agent, any Lender or any L/C Issuer be required to pay any amount to the Company pursuant to this paragraph (f), the payment of which would place the Administrative Agent, such Lender or such L/C Issuer in a less favorable net after-tax position than the Administrative Agent, such Lender or such L/C Issuer would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This subsection shall not be construed to require the Administrative Agent, any Lender or any L/C Issuer to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Company or any other Person.
Section 3.02 Illegality . If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Company through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Company that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Company shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, and pay any amounts payable to such Lender under Section 3.04(e), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Company shall also pay accrued interest on the amount so prepaid or converted.
Section 3.03 Inability to Determine Rates . If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan
 
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or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Company and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Company may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Base Rate Loans in the amount specified therein.
Section 3.04 Increased Costs; Reserves on Eurodollar Rate Loans .
(a) Increased Costs Generally . If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurodollar Rate contemplated by Section 3.04(e) ) or any L/C Issuer;
(ii) subject any Lender or any L/C Issuer to any tax of any kind whatsoever with respect to this Credit Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender or such L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or such L/C Issuer); or
(iii) impose on any Lender or any L/C Issuer or the London interbank market any other condition, cost or expense affecting this Credit Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making, continuing, converting to or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or such L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or such L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or such L/C Issuer, the Company will pay to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or such L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered. Notwithstanding the foregoing, a Lender or an L/C Issuer shall
 
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be entitled to request compensation for increased costs or expenses described in this Section 3.04(a) only to the extent it is the general practice or policy of such Lender or such L/C Issuer to request such compensation from other borrowers under comparable facilities under similar circumstances; provided , that in no event shall such Lender or L/C Issuer be required to disclose any confidential or proprietary information regarding any such other borrower or comparable facility. For the avoidance of doubt, if a Lender or an L/C Issuer recovers an amount under this Section, such Lender or such L/C Issuer may not recover the same amount under Section 3.01 ; similarly, if a Lender or an L/C Issuer recovers an amount under Section 3.01, such Lender or such L/C Issuer may not recover the same amount under this Section.
(b) Capital Requirements . If any Lender or any L/C Issuer determines that any Change in Law affecting such Lender or such L/C Issuer or any Lending Office of such Lender or such Lender’s or such L/C Issuer’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such L/C Issuer’s capital or on the capital of such Lender’s or such L/C Issuer’s holding company, if any, as a consequence of this Credit Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by such L/C Issuer, to a level below that which such Lender or such L/C Issuer or such Lender’s or such L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such L/C Issuer’s policies and the policies of such Lender’s or such L/C Issuer’s holding company with respect to capital adequacy and liquidity), then from time to time the Company will pay to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or such L/C Issuer or such Lender’s or such L/C Issuer’s holding company for any such reduction suffered.
(c) Certificates for Reimbursement . A certificate of a Lender or an L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or such L/C Issuer or
its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Company shall be conclusive absent manifest error. The Company shall pay such Lender or such L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests . Failure or delay on the part of any Lender or any L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or such L/C Issuer’s right to demand such compensation, provided that the Company shall not be required to compensate a Lender or an L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or such L/C Issuer, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
(e) Reserves on Eurodollar Rate Loans . The Company shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or
 
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assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided the Company shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10 days from receipt of such notice.
Section 3.05 Compensation for Losses . Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Company shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b) any failure by the Company (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Company; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Company pursuant to Section 10.12 ;
including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Company shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Company to the Lenders under this Section 3.05 , each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining the Eurodollar Rate. Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.
Section 3.06 Mitigation Obligations; Replacement of Lenders . (a)  Designation of a Different Lending Office . If any Lender requests compensation under Section 3.04 , or the Company is required to pay any additional amount to any Lender, any L/C Issuer, or any Governmental Authority for the account of any Lender or any L/C Issuer pursuant to Section 3.01 , or if any Lender gives a notice pursuant to Section 3.02 , then such Lender or such L/C Issuer shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender or
 
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such L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or Section 3.04 , as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02 , as applicable, and (ii) in each case, would not subject such Lender or such L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or such L/C Issuer, as the case may be. The Company hereby agrees to pay all reasonable costs and expenses incurred by any Lender or any L/C Issuer in connection with any such designation or assignment.
(b) Replacement of Lenders . If any Lender requests compensation under Section 3.04 , or if the Company is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 , or if any Lender gives a notice pursuant to Section 3.02 , the Company may replace such Lender in accordance with Section 10.12 .
Section 3.07 Survival . All of the Company’s obligations under this Article III shall survive termination of the Aggregate Commitments, the assignment by a Lender of all or any portion of its Loans or Commitments hereunder, repayment of all other Obligations hereunder and resignation of the Administrative Agent.
ARTICLE IV
GUARANTY
Section 4.01 Guaranty . Each of the Guarantors hereby, jointly and severally, absolutely and unconditionally guarantees, as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all of the Obligations, whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of the Company to the Secured Parties, arising hereunder and under the other Loan Documents (including all renewals, extensions, amendments, refinancings and other modifications thereof and all costs, attorneys’ fees and expenses incurred by the Secured Parties in connection with the collection or enforcement thereof). The Administrative Agent’s books and records showing the amount of the Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon each Guarantor, and conclusive for the purpose of establishing the amount of the Obligations, absent manifest error. This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or any instrument or agreement evidencing any Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Obligations which might otherwise constitute a defense to the obligations of any Guarantor under this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing.
Section 4.02 Rights of Lenders . Each Guarantor consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or
 
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the terms of the Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Obligations; (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent, the L/C Issuers and the Lenders in their sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Obligations. Without limiting the generality of the foregoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of such Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of such Guarantor.
Section 4.03 Certain Waivers . Each Guarantor waives (a) any defense arising by reason of any disability, change in corporate existence or structure or other defense of the Company or any other Guarantor, or the cessation from any cause whatsoever (including any act or omission of any Secured Party) of the liability of the Company or any other Guarantor; (b) any defense based on any claim that such Guarantor’s obligations exceed or are more burdensome than those of the Company or any other Guarantor; (c) the benefit of any statute of limitations affecting such Guarantor’s liability hereunder; (d) any right to proceed against the Company, proceed against or exhaust any security for the Obligations, or pursue any other remedy in the power of any Secured Party whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by any Secured Party; (f) any defense based on any claim that any Obligations are invalid or unenforceable; (g) the amendment or waiver of any Obligations; (g) any defense based on any allegation of non-perfection or release of Collateral in the context of a secured transaction; and (h) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating the Company, the Guarantors or any other guarantors or sureties. Each Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Obligations.
Section 4.04 Obligations Independent . The obligations of each Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Obligations and the obligations of any other Guarantor, and a separate action may be brought against such Guarantor to enforce this Guaranty whether or not the Company or any other person or entity is joined as a party.
Section 4.05 Subrogation . Each Guarantor shall not exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guaranty until all of the Obligations and any amounts payable under this Guaranty have been indefeasibly paid and performed in full and the Commitments and the Facilities are terminated. If any amounts are paid to any Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to reduce the amount of the Obligations, whether matured or unmatured.
 
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Section 4.06 Termination; Reinstatement . This Guaranty is a continuing and irrevocable guaranty of all Obligations now or hereafter existing and shall remain in full force and effect until all Obligations and any other amounts payable under this Guaranty are indefeasibly paid in full in cash and the Commitments and the Facilities with respect to the Obligations are terminated. Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Company or any Guarantor is made, or any of the Secured Parties exercises its right of setoff, in respect of the Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Secured Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction. The obligations of each Guarantor under this paragraph shall survive termination of this Guaranty.
Section 4.07 Subordination . Each Guarantor hereby subordinates the payment of all obligations and indebtedness of the Company owing to such Guarantor, whether now existing or hereafter arising, including but not limited to any obligation of the Company to such Guarantor as subrogee of the Secured Parties or resulting from such Guarantor’s performance under this Guaranty, to the indefeasible payment in full in cash of all Obligations. If the Secured Parties so request, any such obligation or indebtedness of the Company to any Guarantor shall be enforced and performance received by such Guarantor as trustee for the Secured Parties and the proceeds thereof shall be paid over to the Secured Parties on account of the Obligations, but without reducing or affecting in any manner the liability of such Guarantor under this Guaranty.
Section 4.08 Stay of Acceleration . If acceleration of the time for payment of any of the Obligations is stayed, in connection with any case commenced by or against any Guarantor or the Company under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by such Guarantor immediately upon demand by the Secured Parties.
Section 4.09 Condition of Company . Each Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Company and any other Guarantor such information concerning the financial condition, business and operations of the Company and any such other Guarantor as such Guarantor requires, and that none of the Secured Parties has any duty, and such Guarantor is not relying on the Secured Parties at any time, to disclose to such Guarantor any information relating to the business, operations or financial condition of the Company or any other Guarantor (such Guarantor waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same).
Section 4.10 Limitation on Guaranty . It is the intention of the Guarantors, the Lenders and the Company that the obligations of each Guarantor hereunder shall be in, but not in excess of, the maximum amount permitted by applicable law. To that end, but
 
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only to the extent such obligations would otherwise be avoidable, the obligations of each Guarantor hereunder shall be limited to the maximum amount that, after giving effect to the incurrence thereof, would not render such Guarantor insolvent or unable to make payments in respect of any of its indebtedness as such indebtedness matures or leave such Guarantor with an unreasonably small capital. The need for any such limitation shall be determined, and any such needed limitation shall be effective, at the time or times that such Guarantor is deemed, under applicable law, to incur the Obligations hereunder. Any such limitation shall be apportioned amongst the Obligations pro rata in accordance with the respective amounts thereof. This paragraph is intended solely to preserve the rights of the Lenders under this Credit Agreement to the maximum extent permitted by applicable law, and neither the Guarantors, the Company nor any other Person shall have any right under this paragraph that it would not otherwise have under applicable law. The Company and each Guarantor agree not to commence any proceeding or action seeking to limit the amount of the obligation of such Guarantor under this Article IV by reason of this paragraph. For the purposes of this paragraph, “insolvency”, “unreasonably small capital” and “unable to make payments in respect of any of its indebtedness as such indebtedness matures” shall be determined in accordance with applicable law.
Section 4.11 Keepwell . Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Guaranty in respect of Obligations that are Swap Obligations ( provided , however , that each Qualified ECP Guarantor shall only be liable under this Section 4.11 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 4.11 , or otherwise under this Guaranty, as it relates to such other Loan Party, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect in accordance with Section 4.06 . Each Qualified ECP Guarantor intends that this Section 4.11 constitute, and this Section 4.11 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01 Conditions of Initial Credit Extension . The obligation of each L/C Issuer and each Lender to make the initial Credit Extension hereunder is subject to the satisfaction of the following conditions precedent on or prior to the date of such initial Credit Extension:
(a) Execution of Loan Documents and Notes . The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles or delivered by means of other electronic communication (including e-mail and Internet or intranet websites) (followed promptly by originals) unless otherwise specified, each properly executed by a senior executive of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing
 
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Date) and each in form and substance reasonably satisfactory to the Administrative Agent and each of the Lenders:
(i) this Credit Agreement duly executed and delivered by each of the Company, the Guarantors, the Lenders, the L/C Issuers and the Administrative Agent;
(ii) a Note executed by the Company in favor of each Lender requesting a Note;
(iii) the Security Agreement duly executed and delivered by each Loan Party and the Administrative Agent, together with:
(A) certificates representing the Pledged Equity Interests referred to therein accompanied by undated stock powers executed in blank;
(B) proper UCC-1 Financing Statements in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that the Administrative Agent may deem necessary in order to perfect the Liens created under the Security Agreement, covering the Collateral described in the Security Agreement;
(C) search results of financing statements filed under the UCC of the jurisdictions referred to in clause (B)  above that name any Loan Party as debtor;
(D) subject to Section 7.13(b ), the Securities Account Control Agreements and the Deposit Account Control Agreements, as referred to in the Security Agreement, have been duly executed by the appropriate parties; and
(E) evidence that all other action that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Security Agreement has been taken (including receipt of duly executed payoff letters, and UCC-3 termination statements);
(iv) the Intellectual Property Security Agreement, duly executed and delivered by each Loan Party (other than the Holdings Entities), together with evidence that all action that the Administrative Agent may deem necessary or desirable in order to perfect the Liens created under the Intellectual Property Security Agreement; and
(v) the Master Subordinated Intercompany Note, duly executed by the Company and each Restricted Subsidiary.
(b) Good Standing and Organizational Documents . The Administrative Agent shall have received a copy of a certificate of the Secretary of State of the jurisdiction of
 
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incorporation of each Loan Party (except with respect to an entity of the type for which good standing certificates are not provided by the Secretary of State in the jurisdiction in which it is formed), dated on or about the date hereof certifying (A) as to a true and correct copy of the charter, certificate of limited partnership, limited liability company agreement or other organizational document of such Loan Party and each amendment thereto on file in such Secretary’s office and (B) that (1) such amendments are the only amendments to such Loan Party’s charter, certificate of limited partnership, limited liability company agreement or other organizational document on file in such Secretary’s office, (2) such Loan Party has paid all franchise taxes due and payable to the date of such certificate, and (3) such Loan Party is duly organized or formed and in good standing or presently subsisting (or the equivalent thereof) under the laws of the State of the jurisdiction of its organization.
(c) Proof of Action . The Administrative Agent shall have received certified copies of all necessary action taken by each of the Company and the Loan Parties to authorize the execution, delivery and performance of each Loan Document to which it is a party.
(d) Secretary’s Certificate . The Administrative Agent shall have received a certificate of each Loan Party signed by its Assistant Secretary, dated the date hereof, certifying as to (A) the absence of any amendments to the charter, certificate of limited partnership, limited liability company agreement or other organizational document of such Loan Party since the date of the Secretary of State’s (or local equivalent’s) certificate referred to in Section 5.01(b) , (B) a true and correct copy of the organizational documents of such Loan Party as in effect on the date on which the resolutions or other proof of actions referred to in Section 5.01(c) were adopted and on the date hereof, (C) the due organization and good standing or valid existence of such Loan Party organized under the laws of the jurisdiction of its incorporation and the absence of any proceeding for the dissolution or liquidation of such Loan Party, and (D) certifying the names and true signatures of the officers of such Loan Party authorized to sign each Loan Document to which it is or is to be a party and the other documents to be delivered hereunder or thereunder.
(e) Opinions of Counsel to the Company and the Restricted Subsidiaries . The Lenders shall have received favorable opinions of:
(i) Lawrence J. Burian, Executive Vice President, General Counsel and Secretary, as counsel for the Company and the Restricted Subsidiaries, substantially in the form of Exhibit E ; and
(ii) Sullivan & Cromwell LLP, special New York counsel to the Loan Parties, substantially in the form of Exhibit F ;
and covering such other matters as any Lender or Lenders or special New York counsel to the Administrative Agent, may reasonably request (and for purposes of such opinions such counsel may rely upon opinions of counsel in other jurisdictions, provided that such other counsel are reasonably satisfactory to special counsel to the Administrative Agent and such other opinions state that the Lenders are entitled to rely thereon).
 
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(f) Solvency Certificate . The Lenders shall have received a certificate attesting to the Solvency of the Loan Parties (taken as a whole) on the Closing Date and after giving effect to the Transaction, from the senior financial executive of the Company.
(g) Material Agreements . The Lenders shall have: (i) received a certificate from an officer of the Company stating that true and correct copies of all (A) Related Documents (excluding Affiliation Agreements which are not individually or in the aggregate material to the interests of the Lenders), (B) MSG Spin Documents, and (C) other material agreements that the Administrative Agent may reasonably request, have been made available to counsel to the Administrative Agent (including all amendments and other modifications thereto as of the date of the certificate) and that no such agreements have been terminated and (ii) been given a reasonable opportunity to review, at the offices of counsel to the Administrative Agent, copies of each of the agreements and documents referred to in (A), (B) and (C) above, redacted as to economic terms and related other proprietary terms and subject to non-disclosure arrangements reasonably acceptable to the Company.
(h) Know Your Customer and Other Documents . The Administrative Agent and the Lenders shall have received documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA PATRIOT Act and such other documents, filings, instruments and papers relating to the documents referred to herein and the transactions contemplated hereby as any Lender or the Administrative Agent shall reasonably require.
(i) Certain Fees . All fees required to be paid to the Administrative Agent, the Joint Book Runners, the Initial Lenders and the other Lenders on or before the Closing Date shall have been paid. Unless waived by the Administrative Agent, the Company shall have paid all fees, charges and disbursements of counsel to the Administrative Agent to the extent properly invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings ( provided that such estimate shall not thereafter preclude a final settling of accounts between the Company and the Administrative Agent.
(j) Termination of Commitments Under Existing Credit Agreement . The Lenders shall have received satisfactory evidence that all commitments under the Existing Credit Agreement concurrently with the Closing Date have been terminated and that all security interests created in connection with the Existing Credit Agreement have been unconditionally and irrevocably discharged (including the filing of UCC-3 termination statements, intellectual property security agreement release documentation and any other filings necessary to effectuate such discharge).
 
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(k) Spin-Off . The Administrative Agent shall have received (i) the MSG Form 10, and (ii) final, execution-ready copies of the Distribution Agreement, Transition Services Agreement, Tax Disaffiliation Agreement and Employee Matters Agreement (each as described in the Form 10) between the Company and MSG SpinCo.
(l) Media Rights Agreement . (A) The Company (or the applicable Guarantor(s) (other than the Holdings Entities)) shall have entered into a Media Rights Agreement with each of the New York Rangers and the New York Knicks on the terms described in the MSG Form 10 in all material respects, and (B) the Company (or the applicable Guarantor(s) (other than the Holdings Entities)) shall have granted to the Collateral Agent a first priority, perfected security interest in such Media Rights Agreement as security for such grantor’s obligations under the Credit Facilities (or Guaranty thereof, as applicable).
(m) Minimum Liquidity . Solely with respect to the Initial Term Facility, the Administrative Agent shall have received evidence reasonably satisfactory that the Minimum Liquidity Condition shall be satisfied.
Without limiting the generality of the provisions of Section 9.04 , for purposes of determining compliance with the conditions specified in this Section 5.01 , each Lender that has signed this Credit Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or reasonably satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
Section 5.02 Conditions to all Credit Extensions . The obligation of each L/C Issuer and each Lender to make each Credit Extension hereunder (which shall not include any conversion or continuation of any outstanding Loan) is subject to the additional conditions precedent that:
(a) no Default or Event of Default shall have occurred and be continuing or would result from such proposed Credit Extension or from the application of proceeds thereof;
(b) the representations and warranties of the Company and each other Loan Party in Article VI hereof or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct, in all material respects, on and as of the date of the making of, and after giving effect to, such Credit Extension with the same force and effect as if made on and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct, in all material respects, as of such earlier date, and except that for purposes of this Section 5.02 , the representations and warranties contained in Section 6.04(a)(i) and (ii) shall be deemed to refer to the most recent statements furnished pursuant to Section 7.01(a) and (b) , respectively;
 
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(c) to the extent requested by the Administrative Agent or any Lender, a senior executive of the Company shall have certified compliance with clauses (a) and (b)  above to the Administrative Agent; and
(d) the Administrative Agent and, if applicable, the L/C Issuers or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.
The Company shall be deemed to have made a representation and warranty hereunder as of the time of each Credit Extension hereunder that the conditions specified in such clauses have been fulfilled as of such time.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Administrative Agent and the Lenders as follows:
Section 6.01 Existence, Qualification and Power . Each Holdings Entity and the Company and each of its Restricted Subsidiaries is a limited or general partnership, limited liability company or corporation duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and is duly qualified to transact business and is in good standing in all jurisdictions in which such qualification is necessary in view of the properties and assets owned and presently intended to be owned and the business transacted and presently intended to be transacted by it except for qualifications the lack of which, singly or in the aggregate, have not had and are not likely to have a Material Adverse Effect, and each of the Holdings Entities, the Company and the Restricted Subsidiaries has full power, authority and legal right to perform its obligations under this Credit Agreement, the Notes and the other Loan Documents to which it is a party.
Section 6.02 Subsidiaries; Loan Parties . Schedules 6.02(i) , 6.02(ii) and 6.02(iii) contain a complete and correct list, as at the Closing Date, of all Restricted Subsidiaries, Unrestricted Subsidiaries and Excluded Subsidiaries of the Company, respectively, and a description of the legal nature of such Subsidiaries (including, (x) with respect to each Subsidiary, the jurisdiction of its organization, the address of its principal place of business and its U.S. taxpayer identification number, the nature of the ownership interests (shares of stock or general or limited partnership or other interests) in such Subsidiaries and the holders of such interests and, except as disclosed to the Lenders in writing prior to the Closing Date, the Company and each of its Subsidiaries owns all of the ownership interests of its Subsidiaries indicated in such Schedules as being owned by the Company or such Subsidiary, as the case may be, free and clear of all Liens except those created under the Collateral Documents, and all such ownership interests are validly issued and, in the case of shares of stock, fully paid and non-assessable, and (y) with respect to each Excluded Subsidiary and Unrestricted Subsidiary, a list of its material assets and a description of its business activities).
 
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Section 6.03 Authority; No Conflict . The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party or by which it is bound, and each Credit Extension hereunder, have been duly authorized by all necessary corporate or other organizational action and do not and will not: (a) subject to the consummation of the action described in Section 6.12 , violate any Law or League Rule currently in effect (other than violations that, singly or in the aggregate, have not had and are not likely to have a Material Adverse Effect), or any provision of any of the Loan Parties’ respective partnership agreements, charters or by-laws certificate of limited partnership, limited liability company agreement, by-laws or other organizational documents presently in effect; (b) conflict with or result in the breach of, or constitute a default or require any consent (except for the consents described on Schedule 6.03 , each of which has been duly obtained) under, or require any payment to be made under (i) any Contractual Obligation or League Rule to which any Loan Party is a party or by which their respective properties may be bound or affected, or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Loan Parties or their respective properties are subject (in each case under subclause (i) and/or (ii)  above, other than any conflict, breach, default or required consent that, singly or in the aggregate, have not had and are not likely to have a Material Adverse Effect); or (c) except as provided under any Loan Document, result in, or require, the creation or imposition of any Lien upon or with respect to any of the properties or assets now owned or hereafter acquired by the Loan Parties.
Section 6.04 Financial Condition; Absence of Material Adverse Effect . (a) The Company has furnished to each Lender the consolidated balance sheet of the Parent and its consolidated Subsidiaries as at June 30, 2015, and the related consolidated statements of operations and stockholders’ equity for the fiscal year ended on said date, said financial statements having been certified by an independent Registered Public Accounting Firm of nationally recognized standing reasonably acceptable to the Required Lenders. Such financial statements are complete and correct in all material respects (subject, in the case of the unaudited financial statements referred to above, to year-end and audit adjustments), were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein and fairly present the financial condition of the respective entity or groups of entities which is or are the subject of such financial statements (as stated above), on a consolidated basis, as at the respective dates of the balance sheets included in such financial statements and the results of operations of such entity or groups of entities for the respective periods ended on said dates.
(b) None of the Holdings Entities or the Company or its Restricted Subsidiaries had any material contingent liabilities, liabilities for Taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments or operations which are substantial in amount, except as referred to or reflected or provided for in said financial statements of the Company and its consolidated Subsidiaries as at said respective dates or as disclosed to the Lenders in writing prior to the Closing Date.
(c) Since June 30, 2015, there has been no event, change, condition, occurrence or circumstance which either individually or in the aggregate, has or would reasonably be expected to have a Material Adverse Effect.
 
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Section 6.05 Litigation, Compliance with Laws . Except as disclosed to the Lenders on Schedule 6.05 , there are no actions, suits, proceedings, claims or disputes pending, or to the knowledge of the Company or any Restricted Subsidiary threatened, against the Company or any Restricted Subsidiary or any of their respective properties or assets, before any court or arbitrator or by or before any Governmental Authority that, singly or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Restricted Subsidiary is in default under or in violation of or with respect to any Laws or any writ, injunction or decree of any court, arbitrator or Governmental Authority except for such violations or defaults which, singly or in the aggregate, are not likely to have a Material Adverse Effect.
Section 6.06 Titles and Liens . Each of the Loan Parties has good title to the Collateral, free and clear of all Liens except in the case of the Holdings Entities, Permitted Liens, and in the case of the Company and its Restricted Subsidiaries, those permitted by Section 7.16 .
Section 6.07 Regulation U; Investment Company Act . (a) None of the proceeds of any of the Credit Extensions shall be used to purchase or carry, or to reduce or retire or refinance any credit incurred to purchase or carry, any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock; except that up to $10,000,000 in the aggregate of such proceeds may be used for such purposes; provided that both at the time of such use and thereafter compliance with Regulation U is maintained. The Company will notify the Administrative Agent promptly if any Loan Party purchases Margin Stock and, if requested by any Lender, the Company will furnish to the Lenders statements in conformity with the requirements of Regulation U.
(b) None of the Company, any Person Controlling the Company, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.
Section 6.08 Taxes . Each of the Company and the Restricted Subsidiaries has filed all Federal, state and other material tax returns which are required to be filed under any law applicable thereto except such returns as to which the failure to file, singly or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, and has paid, or made provision for the payment of, all Taxes shown to be due pursuant to said returns or pursuant to any assessment received by the Company or any of the Restricted Subsidiaries, except such Taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided or as to which the failure to pay, singly or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.
Section 6.09 Other Credit Agreements . Schedule 7.14 (Existing Indebtedness), Schedule 7.15 (Existing Guarantees) and Schedule 7.16 (Existing Liens) contain complete and correct lists, as at June 30, 2015, of all credit agreements, indentures, purchase agreements, obligations in respect of letters of credit, guarantees and other instruments presently in effect (including Capitalized Lease Obligations) providing for, evidencing, securing or otherwise relating to any Indebtedness of the Company and the Restricted Subsidiaries in a principal or face amount equal to $1,000,000 or more and such lists correctly set forth the names
 
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of the debtor or lessee and creditor or lessor with respect to the Indebtedness outstanding or to be outstanding thereunder, the rate of interest or rentals, a description of any security given or to be given therefor, and the maturity or maturities or expiration date or dates thereof.
Section 6.10 Full Disclosure . None of the financial statements referred to in Section 6.04 or delivered or deemed delivered from time to time pursuant to this Credit Agreement, certificates or any other written statements delivered or deemed delivered by or on behalf of the Company or any Restricted Subsidiary to the Administrative Agent or any Lender contains, as of the date of this Credit Agreement, any untrue statement of a material fact nor do such financial statements, certificates and such other written statements, taken as a whole, omit to state a material fact necessary to make the statements contained therein not misleading.
Section 6.11 No Default . None of the Company and the Restricted Subsidiaries is in default in the payment or performance or observance of any Contractual Obligation which default, either alone or in conjunction with all other such defaults, has had or is likely to have a Material Adverse Effect.
Section 6.12 Approval of Government, Regulatory Authorities and Third Parties . Except as set forth on Schedule 6.03 and other than any Non-Required Consents, no approval or consent of, or filing or registration with, (x) any Governmental Authority, (y) any League or (z) any other third party, in the case of this clause (z) pursuant to any Contractual Obligation governing Indebtedness for borrowed money or any other Contractual Obligation that is material to the Business of the Company or any of its Restricted Subsidiaries, is required in connection with (a) the execution, delivery and performance by, or enforcement against, any Loan Party of any Loan Document to which it is a party, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof) or (d) other than applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the exercise of creditors’ rights generally or principles of equity (which shall exclude any law, rule or regulation that is applicable to the Company and its Subsidiaries or the Loan Documents solely because such law, rule or regulation is part of a regulatory regime applicable to the Company or any of its Restricted Subsidiaries due to their specific assets or business), the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents. All approvals, consents, filings, registrations or other actions described in Schedule 6.03 have been duly obtained, taken, given or made and are in full force and effect (other than as set forth in Schedule 6.03 ).
Section 6.13 Binding Agreements . This Credit Agreement constitutes, and each other Loan Document when executed and delivered will constitute, the legal, valid and binding obligations of each of the Loan Parties which is a party thereto, enforceable in accordance with their respective terms (except for limitations on enforceability under bankruptcy, reorganization, insolvency and other similar laws affecting creditors’ rights generally and limitations on the availability of the remedy of specific performance imposed by the application of general equitable principles).
 
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Section 6.14 Collective Bargaining Agreements Except as set forth in Schedule 6.14 , as of the Closing Date, there are no collective bargaining agreements between the Company or the Restricted Subsidiaries and any trade or labor union or other employee collective bargaining agent.
Section 6.15 Investments . Schedule 6.15 contains a complete and correct list, as at June 30, 2015, of all Investments of the Company and the Restricted Subsidiaries (other than any Investments in other Restricted Subsidiaries) in excess of $5,000,000, showing the respective amounts of each such Investment and the respective entity (or group thereof) in which each such Investment has been made.
Section 6.16 Solvency . The Company and its Restricted Subsidiaries, taken as a whole, are Solvent.
Section 6.17 Collateral Documents . The provisions of the Collateral Documents are effective to create in favor of the Administrative Agent (or the Collateral Agent as applicable) for the benefit of the Secured Parties a legal, valid and enforceable first priority Lien (subject to Liens permitted by Section 7.16 ) on all right, title and interest of the respective Loan Parties in the Collateral described therein. Except for filings completed as contemplated hereby and by the Collateral Documents, no filing or other action is necessary to perfect or to continue the perfection of such Liens.
Section 6.18 Maintenance of Insurance . The Company and its Restricted Subsidiaries shall maintain with financially sound and reputable insurance companies that are not Affiliates of the Company, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.
Section 6.19 Subordinated Debt . The Loan Documents and all Obligations evidenced thereby constitute the “Senior Debt” and the “Designated Senior Debt” with respect to all subordinated Indebtedness of the Company and its Restricted Subsidiaries.
Section 6.20 ERISA Compliance . (a) Each Plan is in compliance with the applicable provisions of ERISA, the Code and other Federal or state Laws, except where such non-compliance would not result or reasonably be expected to result in a Material Adverse Effect. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the actual knowledge of a senior executive of the Company, nothing has occurred which would prevent, or cause the loss of, such qualification, except, in each case, where the absence or loss of such qualification would not result or reasonably be expected to result in a Material Adverse Effect. The Company and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan, except where any failure to make the required contributions would not result or reasonably be expected to result in a Material Adverse Effect.
 
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(b) There are no pending or, to the actual knowledge of a senior executive of the Company, threatened in writing claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that would reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or would reasonably be expected to result in a Material Adverse Effect.
(c)(i) No Termination Event has occurred or is reasonably expected to occur; (ii) neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iii) to the knowledge of the Company or its ERISA Affiliates, neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Company nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, which, in each case under this Section 6.20(c) , has resulted or would reasonably be expected to result in a Material Adverse Effect.
Section 6.21 Environmental Compliance . The Company and its Restricted Subsidiaries are in compliance with all applicable Environmental Laws and the Company has no knowledge of any environmental claims, except to the extent that any potential non-compliance with Environmental Laws or any such claims would not individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 6.22 Intellectual Property, Licenses, Etc. As of the Closing Date, the Company and its Restricted Subsidiaries own or have the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights and other intellectual property rights that are reasonably necessary for the operation of their business, in each case other than those the absence of which would not reasonably be expected to have a Material Adverse Effect.
Section 6.23 Compliance Matters . As of the Closing Date, (a) after giving effect to the Transaction, the Company is in compliance with the provisions of this Credit Agreement (including, without limitation the Financial Covenants) on a pro forma basis using the Adjusted Operating Cash Flow for the twelve months ended June 30, 2015, and (b) no Default or Event of Default has occurred and is continuing.
Section 6.24 Anti-Corruption Laws and Sanctions . The Company has implemented and maintains in effect policies and procedures designed to ensure compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Company, its Subsidiaries, and, to the knowledge of the Company, their respective officers, employees, directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Company or any Subsidiary or (b) to the knowledge of the Company, any of their respective directors, officers, or agents that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No
 
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Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by the Credit Agreement will result in a violation by the Loan Parties of Anti-Corruption Laws or applicable Sanctions.
ARTICLE VII
COVENANTS OF THE COMPANY
AND THE RESTRICTED SUBSIDIARIES
From the Closing Date and so long as the Commitments of the Lenders shall be in effect and until the payment in full of all Obligations hereunder, the expiration or termination of all Letters of Credit and the performance of all other Obligations of the Company under the Loan Documents, each of the Loan Parties (other than the Holdings Entities) and, with respect to Sections 7.10 and 7.31 , each of the Holdings Entities, agrees that:
A. Informational Covenants :
Section 7.01 Financial Statements and Other Information . The Company will deliver to the Administrative Agent and each Lender:
(a) Commencing on the Closing Date, as soon as available and in any event within 60 days after the end of each of the first three Quarters of each fiscal year of the Company: (A) consolidated statements of operations of (x) the Parent and its consolidated Subsidiaries, taken together, and (y) if there exists any Financial Statement Variance for such Quarter or if the Parent and Company do not have the same fiscal year at such time, the Company and the Restricted Subsidiaries, taken together, in each case for such Quarter and for the period from the beginning of such fiscal year to the end of such Quarter (all prepared in accordance with GAAP), (B) the related consolidated balance sheets and consolidated cash flow statements of (x) the Parent and its consolidated Subsidiaries, taken together, and (y) if there exists any Financial Statement Variance for such Quarter or if the Parent and Company do not have the same fiscal year at such time, the Company and the Restricted Subsidiaries, taken together, in each case as at the end of such Quarter (which financial statements (other than statements of cash flows) shall set forth in comparative form the corresponding figures as at the end of and for the corresponding preceding fiscal year) (all prepared in accordance with GAAP), (C) if the Parent is no longer filing periodic reports with the SEC, an accompanying management’s discussion and analysis, (D) commencing with the Quarter ended December 31, 2015, hold quarterly informational conference calls with the Lenders, and (E) a certificate in the form of Exhibit D-1 of a senior financial executive of the Company certifying such financial statements as fairly presenting the financial condition and results of operations of the respective entities covered thereby in accordance with GAAP, excluding accompanying footnotes to the consolidated financial statements and subject, however, to year-end and audit adjustments, which certificate shall include (i) a statement that the senior financial executive signing the same has no knowledge, except as specifically stated, that any Default has occurred and is continuing and (ii) if the Company’s financial statements are not being delivered pursuant to clauses (A)(y) and (B)(y)  above, a statement of the senior financial executive that no Financial Statement Variance exists for such Quarter.
 
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(b) As soon as available and in any event within 120 days after the end of each fiscal year of the Company commencing with the fiscal year ended June 30, 2016: (A) consolidated statements of operations of (x) the Parent and its consolidated Subsidiaries, taken together, and (y) if there exists any Financial Statement Variance for such fiscal year or if the Parent and Company do not have the same fiscal year at such time, the Company and the Restricted Subsidiaries, taken together, in each case for such fiscal year (all prepared in accordance with GAAP), (B) the related consolidated balance sheets and cash flow statements of (x) the Parent and its consolidated Subsidiaries, taken together, and (y) if there exists any Financial Statement Variance for such fiscal year or if the Parent and Company do not have the same fiscal year at such time, the Company and the Restricted Subsidiaries, taken together, in each case as at the end of such fiscal year (which financial statements (other than cash flow statements) shall set forth in comparative form the corresponding figures as at the end of and for the preceding fiscal year) (all prepared in accordance with GAAP), (C) if the Parent is no longer filing periodic reports with the SEC, an accompanying management’s discussion and analysis, (D) commencing with the year ended June 30, 2016, hold annual informational conference calls with Lenders, (E) an opinion of a Registered Public Accounting Firm of nationally recognized standing selected by the Parent or Company, as applicable, and reasonably acceptable to the Required Lenders as to said consolidated financial statements of the Parent and its consolidated Subsidiaries or the Company and the Restricted Subsidiaries, as applicable, and a certificate of such accountants stating that, in making the examination necessary for said opinion, they obtained no knowledge, except as specifically stated, of any failure by the Company or any Restricted Subsidiaries to comply with the covenants set forth in the Financial Covenants, (F) a certificate in the form of Exhibit D-2 of a senior financial executive of the Company certifying that such financial statements fairly present the financial condition and results of operations of the respective entities covered thereby as of the end of and for such fiscal year, respectively, in accordance with GAAP, which certificate shall include (i) a statement that the senior financial executive signing the same has no knowledge, except as specifically stated, that any Default has occurred and is continuing and (ii) if the Company’s financial statements are not being delivered pursuant to clauses  (A)(y) and (B)(y) above, a statement of the senior financial executive of the Company that no Financial Statement Variance exists for such fiscal year.
(c) As soon as available, and in any event no later than 90 days after the commencement of each fiscal year of the Company (beginning with fiscal year 2017), the budget of the Parent and its Subsidiaries by fiscal quarter for the following fiscal year in the form approved by the Board of Directors together with the reconciliation identifying material variances between the Parent and its consolidated Subsidiaries and the Company and its consolidated Subsidiaries.
(d) Promptly after their becoming available, copies of all financial statements and reports which the Parent, any Holdings Entity, the Company or any Restricted Subsidiary shall have sent to public shareholders generally (other than tax returns unless
 
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specifically requested under Section 7.01(h) ), copies of financial statements and reports which the Company shall have sent to the holders of any Indebtedness specified in Schedule 7.14 , to the extent such statements and reports contain information relating to the designation of the Company’s Subsidiaries as “restricted subsidiaries” under the Debt Instruments governing any such Indebtedness, and to the calculation of financial ratios thereunder and copies of all regular and periodic reports, if any, which the Parent, any Holdings Entity, the Company or any Restricted Subsidiary shall have filed with the SEC, or any governmental agency substituted therefor, or with any national securities exchange.
(e) Within seven days of the delivery of the financial statements referred to in Section 7.01(a) and (b) , a Compliance Certificate, duly completed signed by a senior financial executive of the Company and setting out the Adjusted Operating Cash Flow calculation for each quarter in any Measurement Period.
(f) As soon as practicable and in any event within ten days after any senior executive of the Company or any Restricted Subsidiary or of any general partner of any Restricted Subsidiary shall have obtained knowledge of the occurrence of a Default, a statement describing such Default and the action which is proposed to be taken with respect thereto.
(g) As soon as practicable and in any event within ten days after any senior executive of the Company or any Restricted Subsidiary or of any general partner of any Restricted Subsidiary shall have obtained knowledge of (x) the occurrence of, or any material development in respect of, any action, suit, proceeding, claim or dispute before any courts, arbitrators or Governmental Authority (collectively, “ Proceedings ”) against it or, to its knowledge, otherwise affecting it or any of its respective properties or assets, except Proceedings which are not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect and (y) any material Labor Dispute affecting the Company or a Restricted Subsidiary, a statement describing such Proceeding or Labor Dispute, as the case may be.
(h) From time to time, with reasonable promptness, such further information regarding the business, affairs and financial condition of the Company or any of the Restricted Subsidiaries as the Administrative Agent or any Lender, through the Administrative Agent, may reasonably request.
(i) Within seven days of the delivery of the financial statements referred to in Section 7.01(a) and (b) , a list of any new, or redesignation with respect to, Restricted Subsidiaries and Unrestricted Subsidiaries.
Documents or information required to be delivered pursuant to this Section 7.01 (to the extent any such documents or information are included in materials otherwise filed with the SEC) shall be deemed to have been delivered on the date on which (x) the Parent files quarterly reports on Form 10-Q and annual reports on Form 10-K, as applicable, with the SEC, or on the date on which the Company or Parent provides a link thereto on the Company’s or the Parent’s website on the Internet at the website address listed on Schedule 10.02 , and (y) if there
 
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exists any Financial Statement Variance for such financial reporting period or if the Parent and Company do not have the same fiscal year, the Company delivers unaudited consolidating balance sheets and statements of operations reflecting the results of the Company and its consolidated Restricted Subsidiaries on a stand-alone basis certified by a senior financial executive of the Company; provided that: (A) the Company shall deliver electronic copies of such documents to the Administrative Agent and any Lender that requests such and the Company will deliver paper copies upon a written request given by the Administrative Agent or such Lender and (B) the Company shall notify the Administrative Agent, each Lender (by facsimile or electronic mail) of the filing of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents, and the requirement that the Company hold quarterly informational conference calls with Lenders pursuant to Section 7.01(a) and (b)  shall be satisfied by a public quarterly earnings call by the Parent. Notwithstanding anything contained herein, in every instance the Company shall be required to provide electronic copies of the Compliance Certificates required by Section 7.01(e) to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Company with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
The Company represents and warrants that it, its controlling Person and any Subsidiary, in each case, if any, either (i) has no registered or publicly traded securities outstanding or (ii) files its financial statements with the SEC and/or makes its financial statements available to potential holders of its Rule 144A securities, and, accordingly, the Company hereby (i) authorizes the Administrative Agent to make the financial statements to be provided under Section 7.01 above, along with the Loan Documents, available to Public Lenders and (ii) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Company will not request that any other material be posted to Public Lenders without expressly representing and warranting to the Administrative Agent in writing that such materials do not constitute material non-public information within the meaning of the federal securities laws or that the Company has no outstanding publicly traded securities, including Rule 144A securities. Notwithstanding anything herein to the contrary, in no event shall the Company request that the Administrative Agent make available to Public Lenders budgets or any certificates, reports or calculations with respect to the Company’s compliance with the covenants contained herein.
B. Affirmative Covenants :
Section 7.02 Taxes and Claims . Each of the Company and the Restricted Subsidiaries will pay and discharge all Taxes imposed upon it or upon its income or profits, or upon any properties or assets belonging to it, and all other lawful claims which, if unpaid, could be reasonably expected to become a Lien (other than Permitted Liens) upon the property of the Company or any of the Restricted Subsidiaries except where a failure to do so, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, provided that none of the Company and the Restricted Subsidiaries shall be required to pay any such Tax, fee or other claim as to which the Company and the Restricted Subsidiaries have a good faith basis to believe is not due and owing and, to the extent then appropriate, the payment thereof is being contested in good faith and by proper proceedings, provided that it maintains adequate reserves in accordance with GAAP with respect thereto.
 
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Section 7.03 Insurance . Each of the Company and the Restricted Subsidiaries will maintain insurance issued by financially sound and reputable insurance companies with respect to its properties and business in such amounts and against such risks as is usually carried by owners of similar businesses and properties in the same general areas in which the Company or such Restricted Subsidiary operates. The Company will furnish to any Lender, upon the request of such Lender from time to time, full information as to the insurance maintained in accordance with this Section 7.03 .
Section 7.04 Maintenance of Existence; Conduct of Business . Each of the Company and the Restricted Subsidiaries will preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization, and all of its rights, privileges, permits, licenses approvals and franchises, except (i) where a failure to do so, singly or in the aggregate, is not likely to have a Material Adverse Effect or (ii) pursuant to a Permitted Restricted Subsidiary Transaction.
Section 7.05 Maintenance of and Access to Collateral . Each of the Company and the Restricted Subsidiaries will maintain, preserve and protect the Collateral in good working order and condition, ordinary wear and tear excepted, except where a failure to do so, singly or in the aggregate, is not likely to be materially adverse to the interests of the Lenders, and will permit representatives of the Lenders to visit and inspect such properties, and to examine and make extracts from its books and records, during normal business hours.
Section 7.06 Compliance with Applicable Laws . (a) Each of the Company and the Restricted Subsidiaries will comply with the requirements of all applicable Laws (including but not limited to Environmental Laws and ERISA) and all orders, writs, injunctions and decrees of any Governmental Authority a breach of which is likely to have, singly or in the aggregate, a Material Adverse Effect, except where contested in good faith and by proper proceedings if it maintains adequate reserves in accordance with GAAP with respect thereto.
(b) The Company will maintain in effect and enforce policies and procedures reasonably designed to ensure compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
Section 7.07 [Intentionally Omitted.]
Section 7.08 Subsidiaries . As of the Closing Date, all Subsidiaries of the Company (other than those set forth on Schedule 6.02(ii) ) shall be deemed to be Restricted Subsidiaries. Any New Subsidiary acquired or formed by the Company shall be deemed an Unrestricted Subsidiary unless the provisions of Section 7.17 would not permit the Investment in such Unrestricted Subsidiary at the time of its acquisition or formation.
(a) The Company may, at any time, designate any Restricted Subsidiary as an Unrestricted Subsidiary by prior written notice to the Administrative Agent; provided that the Company shall only be permitted to so designate a Subsidiary as an Unrestricted Subsidiary after
 
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the Closing Date so long as (i) no Default or Event of Default exists or would result therefrom, (ii) the Company is in pro forma compliance with the Financial Covenants, (iii) such Subsidiary does not own any Collateral or Network Assets, and (iv) such Unrestricted Subsidiary shall be capitalized (to the extent capitalized by the Company or any of its Restricted Subsidiaries) through Investments permitted by, and in compliance with, Section 7.17 with any assets owned by such Unrestricted Subsidiary at the time of the initial designation thereof to be treated as Investments pursuant to Section 7.17 .
(b) The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary for purposes of this Credit Agreement (each, a “ Subsidiary Redesignation ”); provided that (i) no Default or Event of Default then exists or would occur as a consequence of any such Subsidiary Redesignation, (ii) the Company is and will be in compliance with the Financial Covenants for the most recently completed Measurement Period giving pro forma effect to such redesignation, and (iii) the Company shall have delivered to the Administrative Agent an officer’s certificate executed by a senior executive, certifying to the best of such officer’s knowledge, compliance with the requirements of preceding clauses (i) through (iii) .
Section 7.09 Use of Proceeds . The Company shall (a)(i) use the proceeds of the Term Facility to (A) provide an estimated $1,450,000,000 of capital to MSG SpinCo prior to the consummation of the Spin-Off, and (B) pay fees, costs and expenses incurred in connection with the Spin-Off and the transactions contemplated herein, and (ii) retain any proceeds of the Term Facility not applied pursuant to the preceding clause (a)(i) to be used for working capital and other general corporate purposes of the Company; and (b) use the proceeds of the Revolving Credit Facility (i) to pay fees, costs and expenses incurred in connection with the Spin-Off and the other transactions contemplated herein and (ii) for working capital and other general corporate purposes of the Company.
Section 7.10 Covenant to Guarantee Obligations and Give Security . Upon (x) the formation or acquisition of any new Holdings Entity or any direct or indirect wholly-owned Subsidiary (other than an Unrestricted Subsidiary, any Foreign Subsidiary or a Subsidiary that is held directly or indirectly by a Foreign Subsidiary) by any Loan Party, (y) the acquisition of any property not constituting an Excluded Asset by any Loan Party (including Equity Interests in a first-tier Foreign Subsidiary) if such property, in the reasonable judgment of the Administrative Agent, shall not already be subject to a perfected first priority security interest in favor of the Administrative Agent for the benefit of the Secured Parties or the acquisition of any Network Assets by any Excluded Subsidiary or (z) the designation of any Unrestricted Subsidiary as a Restricted Subsidiary, then the Company shall, at the Company’s expense:
(a) at the time of delivery of the compliance certificate set forth in Section 7.01(e ), cause such Holdings Entity or Subsidiary (if it has not already done so), to duly execute and deliver to the Administrative Agent a guaranty or guaranty supplement, in form and substance reasonably satisfactory to the Administrative Agent, guaranteeing the Company’s obligations under the Loan Documents,
 
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(b) at the time of delivery of the compliance certificate set forth in Section 7.01(e ), furnish to the Administrative Agent a description of the personal properties of such Holdings Entity or Subsidiary or such newly-acquired property, in detail reasonably satisfactory to the Administrative Agent,
(c) at the time of delivery of the compliance certificate set forth in Section 7.01(e ), cause such Holdings Entity or Subsidiary (if it has not already done so) to duly execute and deliver to the Administrative Agent Supplemental Collateral Documents, as specified by and in form and substance reasonably satisfactory to the Administrative Agent (or in substantially the form attached to the Security Agreement, if applicable) (including delivery of all Pledged Equity Interests in and of the Company or such Subsidiary (limited to 65% of voting equity interests of any Foreign Subsidiary), and other instruments of the type specified in Section 5.01(a)(iii) ), and
(d) at the time of delivery of the compliance certificate set forth in Section 7.01(e) , cause such Holdings Entity or Subsidiary (if it has not already done so) to take any actions required under the Security Agreement (including the filing of UCC financing statements) as may be reasonably requested by the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the properties subject to the Supplemental Collateral Documents delivered pursuant to this Section 7.10 ;
provided, that with respect to after-acquired property of any Loan Party as to which an effective Uniform Commercial Code financing statement is on file in the appropriate jurisdiction and which does not constitute deposit or securities accounts (as to which the provisions above shall be applicable), such Loan Party may satisfy the requirements of this Section 7.10 at the time of delivery of the next certificate required pursuant to Section 7.01(b) .
Section 7.11 Books and Records . The Company and the Restricted Subsidiaries shall maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP consistently applied.
Section 7.12 [Intentionally Omitted.]
Section 7.13 Further Assurances and Post-Closing Matters . (a) The Company shall, promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, (i) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (w) carry out more effectively the purposes of the Loan Documents, (x) to the fullest extent permitted by applicable Law, subject any Loan Party’s properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (y) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (z) assure,
 
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convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries, to the extent applicable, to do so.
(b) To the extent such items have not been delivered as of the Closing Date, within 30 days after the Closing Date (as such time period may be extended from time to time by the Administrative Agent without any requirement for Lender consent), the applicable Loan Party shall deliver to the Collateral Agent, the Securities Account Control Agreements and the Deposit Account Control Agreements, as referred to in the Security Agreement, duly executed by the applicable parties thereto, and in the case of any Security Account Control Agreement or Deposit Account Control Agreement in respect of a deposit account or securities account of the Company, reflecting the renaming of the Company as described in the recitals to this Credit Agreement.
C. Negative Covenants :
Section 7.14 Indebtedness . Neither the Company nor any of its Restricted Subsidiaries will create, incur or suffer to exist any Indebtedness except:
(i) Indebtedness hereunder;
(ii) [intentionally omitted];
(iii) obligations under or in respect of (A) interest rate Swap Contracts up to an aggregate notional principal amount not to exceed at any time an amount equal to the Commitments of all the Lenders in the aggregate at such time, and (B) Swap Contracts entered into to hedge existing or anticipated foreign exchange or commodity price exposure not for speculative purposes;
(iv) Guarantees and letters of credit permitted by Section 7.15 ;
(v)(A) Indebtedness of the Company owed to any Guarantor and Indebtedness of any Guarantor owed to the Company or any other Guarantor, and (B) Indebtedness of the Company or any Restricted Subsidiary owed to any Restricted Subsidiary which is not a Guarantor; provided that such Indebtedness under this clause (B) shall be subordinated to the Obligations pursuant to the Master Subordinated Intercompany Note;
(vi) Indebtedness issued and outstanding on the Closing Date to the extent set forth on Schedule 7.14 and any renewals, extensions or refundings thereof in a principal amount not to exceed the amount so renewed, extended or refunded;
(vii) other Indebtedness of the Company or any Restricted Subsidiary of up to $175,000,000 at any time;
 
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(viii) Indebtedness constituting an Investment permitted under Section 7.17 provided that any Indebtedness of a Loan Party owed to any Subsidiary that is not a Loan Party shall be subordinated to the Obligations pursuant to the Master Subordinated Intercompany Note;
(ix) [intentionally omitted];
(x) Indebtedness of the Company and its Restricted Subsidiaries incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capitalized Lease Obligations and purchase money security interests, and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and any extension or renewal thereof; provided that (A) such Indebtedness is incurred prior to, or within 180 days after, such acquisition or the completion of such construction or improvement ( provided , that the Administrative Agent shall, without any requirement for Lender consent, extend such original 180 day period by an additional 180 days upon its receipt of a written extension request from the Company), and (B) the aggregate principal amount of outstanding Indebtedness permitted by this paragraph (x) shall not at any time exceed $50,000,000;
(xi) Indebtedness arising from netting services, overdraft protection, cash management services, endorsements or instruments and other items for deposit in the ordinary course of business;
(xii) Indebtedness of the Company or its Restricted Subsidiaries (including, for the avoidance of doubt, Guarantees of Indebtedness of the Parent); provided , that:
 
  (1) no Default or Event of Default shall have occurred and be continuing both immediately before and immediately after giving pro forma effect to such incurrence of Indebtedness and the application of the proceeds thereof;
 
  (2) the Total Leverage Ratio shall not be greater than 5.75:1.00 after giving pro forma effect to such incurrence of Indebtedness and the application of proceeds thereof;
 
  (3) the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants, both immediately before and immediately after giving pro forma effect to such incurrence of Indebtedness and the application of the proceeds thereof;
 
  (4) if such Indebtedness is subordinated in right of payment to the Indebtedness under this Credit Agreement, then such Indebtedness shall be subject to subordination provisions that are reasonably acceptable to the Administrative Agent;
 
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  (5) if such Indebtedness is secured Indebtedness that is junior in right of security to the Indebtedness under this Credit Agreement, then such Indebtedness shall be subject to an intercreditor agreement that is reasonably acceptable to the Administrative Agent; and
 
  (6)
if such Indebtedness is secured Indebtedness that is pari passu in right of security and payment with the Indebtedness under this Credit Agreement, then such Indebtedness shall only be incurred pursuant to Section 2.14 or Section 2.15 .
(xiii) Indebtedness secured by mortgages on Real Property; provided that the aggregate principal amount of outstanding Indebtedness permitted by this paragraph (xiii) shall not at any time exceed $50,000,000;
(xiv) Indebtedness consisting of the financing of insurance premiums or (ii) take-or-pay obligations of the Company or any of the Restricted Subsidiaries contained in supply arrangements, in each case, in the ordinary course of business;
(xv) Indebtedness of a Person existing at the time such Person became a Restricted Subsidiary or property was acquired from such Person to the extent such Indebtedness was not incurred in connection with or in contemplation of, such Person becoming a Restricted Subsidiary or the acquisition of such property, not to exceed in an aggregate principal amount at any time outstanding $100,000,000 and any renewals, extensions or refundings thereof in a principal amount not to exceed the amount so renewed, extended or refunded (it being understood that any accrued but unpaid interest and the amount of all expenses and premiums incurred in connection therewith added to any principal amount shall not constitute an increment in principal for purposes of this paragraph); provided that the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants, both immediately before and immediately after giving pro forma effect to such incurrence of such Indebtedness and after giving pro forma effect to the related acquisition; and
(xvi) any earnout obligation that comprises a portion of the consideration for an acquisition permitted hereunder.
Section 7.15 Contingent Liabilities . Neither the Company nor any Restricted Subsidiary will, directly or indirectly (including by means of causing a bank to open a letter of credit), guarantee, endorse, contingently agree to purchase or to furnish funds for the payment or maintenance of, or otherwise be or become contingently liable upon or with respect to, the Indebtedness, other obligations, net worth, working capital or earnings of any Person, or guarantee the payment of dividends or other distributions upon the stock or other ownership interests of any Person, or agree to purchase, sell or lease (as lessee or lessor) property, products, materials, supplies or services primarily for the purpose of enabling a debtor to make payment of its obligations or to assure a creditor against loss (all such transactions being herein called “ Guarantees ”, and each individually a “ Guarantee ” ), except:
(i) the Guarantees in Article IV ;
 
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(ii) endorsements of negotiable instruments for deposit or collection in the ordinary course of business;
(iii) the Guarantees described in Schedule 7.15 ;
(iv) Guarantees by the Company or one or more of the Guarantors of Indebtedness or other obligations (such other obligations incurred in the ordinary course of business) of the Company or another Guarantor, but only if such Indebtedness or other obligations are not prohibited by this Credit Agreement;
(v) other Guarantees, including, without duplication, surety bonds, by the Company or one or more Guarantors, provided that the outstanding aggregate amount of the obligations guaranteed does not exceed $75,000,000 at any time;
(vi) Capitalized Lease Obligations to the extent they constitute Guarantees by reason of having been assigned by the lessor to a lender to such lessor ( provided that the obligors in respect of such Capitalized Lease Obligations do not increase their liability by reason of such assignment);
(vii) the Letters of Credit;
(viii) Guarantees which would constitute Investments which are not prohibited by Section 7.17 or which if incurred directly by the Company or any Restricted Subsidiary would constitute Indebtedness permitted by Section 7.14 ;
(ix) obligations under contracts providing for the acquisition of or provision of goods or services (including leases or licenses of property) incurred in the ordinary course of business for which the Company or any of its Restricted Subsidiaries may be jointly and severally liable with other Subsidiaries of the Company as to which costs are allocated (as among the Company and its Subsidiaries) based on cost, usage or other reasonable method of allocation; provided that the undertaking of such liabilities are not intended as a guaranty or other credit support of such obligations;
(x) any Guarantee by the Company of any obligation to the extent such obligation can be satisfied (at the option of the Company) by the delivery of common stock of the Parent;
(xi) obligations under agreements to indemnify Persons who have issued bid or performance bonds or letters of credit issued in lieu of such bonds in the ordinary course of business of the Company or any Restricted Subsidiary securing performance by such Person of activities otherwise permissible hereunder;
(xii) any Guarantee by the Company or a Restricted Subsidiary of the obligations or Indebtedness of any Unrestricted Subsidiary, any Excluded Subsidiary or joint venture; provided that the aggregate amount of all such Guarantees, when combined with the aggregate amount of Investments in Unrestricted Subsidiaries, Excluded Subsidiaries and joint ventures made pursuant to clause (k) of the definition of Permitted Investments does not exceed $75,000,000;
 
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(xiii) Guarantees by the Company or a Restricted Subsidiary of the obligations of MSG SpinCo of pension liabilities; provided that the outstanding aggregate amount of the obligations guaranteed does not exceed $20,000,000 at any time; and
(xiv) Guarantees by the Company of Indebtedness of the Parent, to the extent permitted as Indebtedness of the Company under Section 7.14(xii) ; provided that in no event shall such Guarantees be secured by any mortgage on, pledge of or grant of a security interest in any assets of the Company or any of its Subsidiaries.
Section 7.16 Liens . Neither the Company nor any Restricted Subsidiary will create or suffer to exist, any mortgage, pledge, security interest, conditional sale or other title retention agreement, lien, charge or encumbrance upon any of its assets constituting Collateral or Network Assets, in each case now owned or hereafter acquired, securing any Indebtedness or other obligation (all such security being herein called “ Liens ”), except:
(i) Liens on property securing Indebtedness owed to the Company or any Guarantor;
(ii) purchase money mortgages or Liens, Liens securing Capitalized Lease Obligations or other Indebtedness for the deferred acquisition price of property or services to the extent such Liens attach solely to the property acquired with or subject to such Indebtedness and Liens consisting of precautionary filings by lessors under operating leases to the extent such Liens attach solely to (and such filings solely cover) leased property;
(iii) Liens securing all of the Obligations of the Company and the Restricted Subsidiaries hereunder (including, for the avoidance of doubt, Liens in favor of a Hedge Bank in connection with a Secured Hedge Agreement and Liens in favor of a Cash Management Bank in connection with a Secured Cash Management Agreement) and Liens on cash to Cash Collateralize Letters of Credit pursuant to Section 2.03(g) ;
(iv) Permitted Liens;
(v) other Liens on property in effect on the Closing Date to the extent set forth on Schedule 7.16 ;
(vi) Liens on shares of the capital stock of, or partnership interest in, any Unrestricted Subsidiary or Excluded Subsidiary;
(vii) Liens on cash consisting of pledges to, deposits with or advances to announcers, broadcasters, on-air talent, promoters, producers or other third parties in connection with the development, booking, production, broadcast, promotion, execution, staging or presentations of shows, events or other entertainment activities or related merchandising, concessions or licensing;
 
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(viii) [intentionally omitted];
(ix) [intentionally omitted];
(x) Liens on cash, Cash Equivalents, and other funds or securities on deposit or maintained with a depository institution, broker-dealer, securities or commodities broker or other financial intermediary, in each case arising in the ordinary course of business;
(xi) Liens to secure Indebtedness permitted by Section 7.14(vii) or Section 7.14(xii) , subject to the provisions thereof with respect to secured Indebtedness (and for the avoidance of doubt, other than in the case of any Guarantees of Indebtedness of the Parent); provided that, after giving pro forma effect to the incurrence of such secured Indebtedness and granting of such Liens and the application of proceeds thereof, the Company shall have a Total Leverage Ratio of no greater than 4.65:1.00; and
(xii) other Liens not otherwise permitted by this Section 7.16 securing obligations permitted under this Credit Agreement, so long as the aggregate outstanding principal amount of the obligations secured by such Liens do not exceed (as to the Company and all Restricted Subsidiaries) $50,000,000 at any one time outstanding.
Notwithstanding anything to the contrary in this Credit Agreement, neither the Company nor any Restricted Subsidiary will create, permit or suffer to exist any mortgage, pledge, security interest, conditional sale or other title retention agreement, lien, charge or encumbrance, in each case, securing Indebtedness upon or with respect to any telecast agreement, license or other contractual right to the local telecast rights to exhibit any games of any Team, in each case to the extent not constituting Collateral, other than (1) Permitted Liens and (2) purchase money obligations in an aggregate principal amount of up to $50,000,000.
Section 7.17 Investments . Neither the Company nor any Restricted Subsidiary will, directly or indirectly, (i) make any advances, loans, accounts receivable (other than (x) accounts receivable arising in the ordinary course of business of the Company or such Restricted Subsidiary and (y) accounts receivable owing to the Company or any Restricted Subsidiary from any Unrestricted Subsidiary for management or other services or other overhead or shared expenses allocated in the ordinary course of business provided by the Company or any Restricted Subsidiary to such Unrestricted Subsidiary) or other extensions of credit (excluding, however, accrued and unpaid interest in respect of any advance, loan or other extension of credit) or capital contributions to (by means of transfers of property to others, or payments for property or services for the account or use of others, or otherwise) any Person (other than the Company or any Guarantor)), (ii) purchase or own any stocks, bonds, notes, debentures or other securities (including any interests in any partnership, joint venture or any similar enterprise) of, or any bank accounts with any Person (other than the Company or any Guarantor), or (iii) purchase or acquire (in one transaction or a series of transactions) assets of another Person that constitute a business unit or all or a substantial part of the business of, such Person (other than the Company or any Guarantor) (all such transactions referred to in clauses (i), (ii) and (iii) being herein called “ Investments ”), except for (a) Investments in Excluded Subsidiaries in the ordinary course of business solely for the purposes of repairing,
 
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replacing or otherwise maintaining operating assets, (b) Permitted Investments, and (c) other Investments (which shall include the formation of any New Subsidiary unless such New Subsidiary is designated as a Restricted Subsidiary, with the capital contributions by the Company or any Restricted Subsidiary to such Unrestricted Subsidiary at such time being counted as an Investment hereunder) so long as (i) the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants, both immediately before and immediately after giving effect to such Investment, (ii) no Default shall have occurred and be continuing both immediately before and immediately after giving effect to such Investment, (iii) at the time of such Investment, the Total Leverage Ratio shall be less than or equal to 5.50:1.00 on a pro forma basis after giving effect to such Investment, and (iv) during any time that the Total Leverage Ratio is greater than or equal to 4.25:1.00 on a pro forma basis after giving effect to such Investment (such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 7.01(a) or (b) ), and at the time of such Investment after giving effect to the making thereof, the aggregate amount of Investments made pursuant to this clause (iv), together with the aggregate amount of Restricted Payments made pursuant to Section 7.18(iv) and not repaid or otherwise returned, shall not exceed the sum of (a) $50,000,000 plus (b) the net proceeds from any sale or issuance of Equity Interests by the Company to any Person (other than the Company or any of its Restricted Subsidiaries) after September 30, 2015 (with non-cash proceeds to be valued by the Company in good faith) plus (c) an amount equal to (1) Cumulative AOCF minus (2) 1.4 multiplied by Cumulative Interest Expense; provided , that any Investment constituting a transfer of property or assets other than cash and Cash Equivalents shall only be permitted to the extent that such transfer could be effected pursuant to Section 7.24 .
Section 7.18 Restricted Payments . Neither the Company nor any Restricted Subsidiary will, directly or indirectly, make or declare any Restricted Payment (other than the Restricted Payment to effect the Spin-Off or any Permitted Parent Payment) at any time, except that, such restriction shall not apply so long as: (i) no Default shall have occurred and be continuing at the time such Restricted Payment is made or would result from the making or declaration of such Restricted Payment, (ii) the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants both before and immediately after giving effect to such Restricted Payment, (iii) at the time of such Restricted Payment, the Total Leverage Ratio shall be less than or equal to 5.50:1.00 on a pro forma basis after giving effect to such Restricted Payment, and (iv) during any time that the Total Leverage Ratio is greater than or equal to 4.25:1.00 on a pro forma basis after giving effect to such Restricted Payment (such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 7.01(a) or (b) ), and at the time of such Restricted Payment after giving effect to the making thereof, the aggregate amount of Restricted Payments made pursuant to this clause (iv), together with the aggregate amount of Investments made pursuant to Section 7.17(iv) and not repaid or otherwise returned, shall not exceed the sum of (a) $50,000,000 plus (b) the net proceeds from any sale or issuance of Equity Interests by the Company to any Person (other than the Company or any of its Restricted Subsidiaries) after September 30, 2015 (with non-cash proceeds to be valued by the Company in good faith) plus (c) an amount equal to (1) Cumulative AOCF minus (2) 1.4 multiplied by Cumulative Interest Expense.
 
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Section 7.19 Business . Neither the Company nor any Restricted Subsidiary (but excluding any other Affiliate of the Company) shall directly engage in any material line of business substantially different from those lines of business conducted by the Company and its Restricted Subsidiaries on the Closing Date, other than any business reasonably related or incidental, complementary or ancillary thereto or a reasonable extension thereof (including any sports, media, advertising, internet or entertainment business) (collectively, the “ Business ”).
Section 7.20 Transactions with Affiliates . Neither the Company nor any Restricted Subsidiary will effect any transaction with any of its Affiliates that is not a Restricted Subsidiary on a basis less favorable to the Company or such Restricted Subsidiary than would at the time be obtainable for a comparable transaction in arms-length dealing with an unrelated third party other than (a) overhead and other ordinary course allocations of costs and services, in each case under this clause (a) , on a reasonable basis, (b) allocations of tax liabilities and other tax-related items among the Company and its Affiliates based in all material respects upon the financial income, taxable income, credits and other amounts directly related to the respective parties, to the extent that the share of such liabilities and other items allocable to the Company and its Restricted Subsidiaries shall not exceed the amount that such Persons would have been responsible for as a direct taxpayer, (c) Cablevision Spin Agreements, MSG Spin Agreements and agreements and arrangements set forth on Schedule 7.20 and amendments, renewals and extensions thereof on terms not materially less favorable in the aggregate to the interests of the Lenders than those in existence as of the date of this Credit Agreement, (d) Permitted Parent Payments, (e) Permitted Restricted Subsidiary Transactions, (f) Restricted Payments not prohibited under Section 7.18 , (g) Guarantees of Indebtedness of the Parent by the Company that are not prohibited under Sections 7.14 and 7.15 , and (h) any transaction entered into in connection with the Spin-Off.
Section 7.21 Amendments of Certain Instruments . Neither the Company nor any Restricted Subsidiary will (a) modify or supplement, or consent to any waiver of any of the provisions of, any Debt Instrument governing any Indebtedness permitted under Section 7.14(vi) , except to the extent, after giving effect thereto, that such Indebtedness could be incurred on such modified or supplemented terms by the Company or a Restricted Subsidiary on the effective date of the modification, supplement or consent, (b) enter into any amendment or terminate the Cablevision Affiliation Agreement or consent to any cancellation or termination thereof, amend, modify or change in any material respect, waive any default under or any breach of, or otherwise agree in any manner to any other amendment, modification or change, in each case, of the terms or conditions of the Cablevision Affiliation Agreement, in each case under this clause (b) if doing so, taken as a whole, would be materially adverse to the interests of the Lenders, (c) amend, modify or supplement any of the provisions of its certificate of incorporation or by-laws or other constitutive documents other than amendments that would not be materially adverse to the interests of the Lenders, or (d)(i) terminate any Media Rights Agreement (if any) or enter into or consent to any amendment, modification or arrangement, in each case, having the effect of terminating or shortening the tenor of any such agreement to less than 180 days after the latest Maturity Date then in effect, or (ii) amend, or otherwise agree in any manner to any other amendment, modification or change, in each case, of the terms or conditions of any Media Rights Agreement having the effect of making such terms or conditions not arms-length, in each case under this clause (d)  if doing so, taken as a whole, would be materially adverse to the interests of the Lenders.
 
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Section 7.22 Issuance of Stock . The Company will not permit any Restricted Subsidiary to issue any shares of stock or other ownership interests in such Restricted Subsidiary if, after giving effect thereto, the percentage of the ownership interests in such Restricted Subsidiary held by the Company and the Restricted Subsidiaries immediately prior to such issuance would be decreased unless such issuance is in connection with the designation of such Restricted Subsidiary as an Unrestricted Subsidiary in accordance with Section 7.08(a) or such issuance would be permitted to have been effected as a Disposition pursuant to Section 7.24 .
Section 7.23 Fundamental Changes . Neither the Company nor any Restricted Subsidiary shall merge, dissolve, liquidate, consolidate with or into another Person (collectively “ Merge ”), or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of the assets (whether now owned or hereafter acquired) of the Company and its Restricted Subsidiaries, taken as a whole, to or in favor of any Person, except that, (a) the Company may Merge into the Parent or Dispose of all or substantially all of its assets to the Parent so long as (i) both the Company and the Parent would be in pro forma compliance with the Financial Covenants both before and after giving effect to the merger, and (ii) the Parent assumes all obligations of the Company under the Loan Documents, (b) any Restricted Subsidiary may enter into a Permitted Restricted Subsidiary Transaction, and the (c) the Company and its Restricted Subsidiaries may take all actions necessary or advisable to consummate the Spin-Off.
Section 7.24 Dispositions . Neither the Company nor any Restricted Subsidiary shall make any Disposition or enter into any agreement to make any Disposition except:
(i) Dispositions to Excluded Subsidiaries by the Company or any Guarantor in the ordinary course of business for the purposes of maintenance, repair or replacement of operating assets;
(ii) Dispositions between and among the Loan Parties;
(iii) any Disposition that results in the concurrent or substantially concurrent repayment in full and termination of this Credit Agreement; and
(iv) other Dispositions; provided that (A) the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants, both immediately before and immediately after giving effect to such Disposition, (B) no Default shall have occurred and be continuing both immediately before and immediately after giving effect to such Disposition, and (C) such Disposition is not and does not include a transfer or assignment of the Related Documents; provided , however , that any Disposition pursuant to this Section 7.24(iv) shall be for fair market value.
Section 7.25 Accounting Changes . Make any change in (a) accounting policies or reporting practices, except as required or permitted by GAAP, or (b) the fiscal quarter or fiscal year, except that upon not less than 10 Business Days’ prior notice, the Company may change its fiscal year end from June 30 to December 31.
 
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Section 7.26 Negative Pledge . The Company shall not enter into or suffer to exist, or permit any of its Restricted Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of the Collateral except (i) agreements in favor of the Secured Parties, (ii) agreements governing Indebtedness secured by Liens permitted under Section 7.16(ii) so long as such restrictions extend only to the property acquired with or subject to such Indebtedness, (iii) agreements in existence on the Closing Date and set forth on Schedule 7.26 including any renewals, extensions or replacements of such agreements on terms not materially less favorable to the interests of the Lenders than those in effect on the date of this Credit Agreement, and (iv) Contractual Obligations solely to the extent that the lessor, licensor or counterparty imposes a negative pledge with respect to the Contractual Obligation.
Section 7.27 Anti-Corruption Laws and Sanctions . The Company will not request any Borrowing or Letter of Credit, and the Company shall not use, and shall use its reasonable best efforts to provide that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (C) in any other manner that would result in the violation of any Sanctions applicable to any party hereto.
D. Financial Covenants :
Section 7.28 Total Leverage Ratio . The Holdings Entities, Company and the Restricted Subsidiaries (on a consolidated basis) shall not permit the Total Leverage Ratio at any time to exceed the following respective amounts at any time during the following respective periods:
 
Period   
Ratio
 
From and including the Closing Date to and including September 30, 2016
     6.00:1.00   
On and after October 1, 2016
     5.50:1.00   
Notwithstanding the foregoing, and so long as the Company is in compliance with Section 7.30 , in the event of any League-wide Labor Controversy that continues for a minimum of five consecutive weeks, the then-applicable maximum Total Leverage Ratio shall, at the option of the Company, step up by 0.50:1.00 (the “ Labor Controversy Step Up ”). The Labor Controversy Step Up shall (a) commence at a time determined by the Company upon written notice to the Administrative Agent so long as the Measurement Period for which such step-up applies includes at least one quarter during which, or during any part of which, there was a League-wide Labor Controversy, and (b) continue for a number of consecutive fiscal quarters
 
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determined by the Company, not to exceed five consecutive fiscal quarters, and in any case only for so long as the Measurement Period being tested includes at least one quarter during which, or during any part of which, there was a League-wide Labor Controversy.
Section 7.29 Interest Coverage Ratio . The Holdings Entities, Company and the Restricted Subsidiaries (on a consolidated basis) shall maintain as at the end of each Measurement Period an Interest Coverage Ratio of not less than 2.00:1.00.
Section 7.30 Minimum Liquidity . The Company shall maintain Liquidity equal to at least $25,000,000 at all times while a Labor Controversy Step Up or a Carriage Suspension Adjustment is in effect and for all subsequent periods during which a quarter in which a Carriage Suspension Adjustment constitutes a part of the Measurement Period for which Financial Covenants are being tested; provided, that if at any time there is a Labor Controversy Step Up and a Carriage Suspension Adjustment in effect for the same fiscal quarter, the Company shall maintain Liquidity of $50,000,000 for such quarter. Notwithstanding anything to the contrary in the preceding sentence of this Section 7.30 , if a Carriage Suspension Adjustment is in effect for a period of more than four months, then immediately following the end of the fourth month, the Company shall maintain Liquidity equal to $50,000,000 at all times while such Carriage Suspension Adjustment is in effect; provided, that if at any time after such fourth month there is a Labor Controversy Step Up and a Carriage Suspension Adjustment in effect for the same fiscal quarter, the Company shall maintain Liquidity of $85,000,000 for such quarter. The Company may elect by notice to the Administrative Agent to cease the application of a Carriage Suspension Adjustment for any quarter still forming part of the then-current Measurement Period, in which case compliance with Section 7.28 will be measured without giving effect to such Carriage Suspension Adjustment and the provisions of this Section 7.30 shall cease to apply.
E. Holdings Entities Covenants :
Section 7.31 Holdings Entities Covenants . The Holdings Entities shall not engage in any business or activity other than (a) the ownership of outstanding Equity Interests in the Company, (b) maintaining their corporate existence, (c) participating in tax, accounting and other administrative activities as the parent of the consolidated group of companies including the Loan Parties, (d) the execution and delivery of documents (including the Loan Documents, the Cablevision Spin Agreements, the MSG Spin Agreements and other agreements) permitted under this Credit Agreement to which they are party and the performance of their obligations thereunder (including the Guarantees and pledge of Equity Interests under the Loan Documents), (e) issuing or incurring unsecured Indebtedness permitted to be issued or incurred by the Company or its Restricted Subsidiaries pursuant to Section 7.14(xii) of this Credit Agreement, and (f) incidental to the businesses or activities described in clauses (a) through (e) of this Section.
 
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01 Events of Default . Each of the following shall constitute an “ Event of Default ”:
(a) Any representation or warranty in this Credit Agreement or any other Loan Document or in any certificate, statement or other document furnished to the Lenders or the Administrative Agent pursuant hereto (including, without limitation, any amendment thereto), or any certification made or deemed to have been made by the Company or any Restricted Subsidiary to any Lender or the Administrative Agent hereunder, shall prove to have been incorrect, or shall be breached, in any material respect when made or deemed made; provided that any representation made pursuant to Section 5.02 in respect of the absence of any Default shall not constitute an Event of Default if (i) at the time of such representation, such Default was not known to a senior executive and (ii) prior to such Default, the absence of which is the subject of such representation, becoming an Event of Default, such Default has been cured or waived in accordance with this Credit Agreement; or
(b)(i) Default in (x) the payment when due of any principal of any Loan or L/C Obligation or default in the deposit when due of funds as Cash Collateral in respect of L/C Obligations, or (y) default in the payment when due of interest on any Loan or on any L/C Obligation, or any fee due hereunder or any other amount payable to any Lender hereunder, and the failure to pay such interest, fee or such other amount within two Business Days after the same becomes due or (ii) Default in (x) the payment when due of any principal of any Incremental Loan, or (y) default in the payment when due of interest on any Incremental Loan, or any fee due hereunder or any other amount payable to any Incremental Lender or the Administrative Agent hereunder, and the failure to pay such interest or such other amount within two Business Days after the same becomes due; or
(c)(i) Default by the Company or any of the Restricted Subsidiaries in the performance or observance of any of its agreements in Article VII hereof (other than Section 7.01 (excluding Section 7.01(f) ), Section 7.02 , Section 7.03 , Sections 7.05 through 7.13 (inclusive), Section 7.17 , Section 7.19 , Section 7.20 , and Section 7.24 or (ii) default by any of the Holdings Entities in the performance or observance of the requirements set forth in Section 7.31 ; or
(d) Default by the Company or any of the Restricted Subsidiaries in the performance or observance of any of its other agreements herein (other than those specified in Section 8.01(c) ) or in any other Loan Document, which in each case shall remain unremedied for 30 days after notice thereof shall have been given to the Company by any Lender or the Administrative Agent ( provided that such period shall be five days in the case of a default under Section 7.17 ); or
 
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(e) Any Indebtedness of any of the Holdings Entities or the Company (including any Indebtedness hereunder) or any of the Restricted Subsidiaries in an aggregate principal amount of $25,000,000 or more, excluding (i) any Indebtedness owing solely to the Company or a Restricted Subsidiary and (ii) any Indebtedness for the deferred purchase price of property or services owed to the Person providing such property or services as to which the Company or such Restricted Subsidiary has a good faith basis to believe is not due and owing and, to the extent then appropriate, is contesting its obligation to pay the same in good faith and by proper proceedings and for which the Company or such Restricted Subsidiary has established appropriate reserves (such Indebtedness under clauses (i) and (ii)  above herein called “ Excluded Indebtedness ”), shall (i) become due before stated maturity by the acceleration of the maturity thereof by reason of default or (ii) become due by its terms and shall not be promptly paid or extended; or
(f) Any default under any indenture, credit agreement or loan agreement or other agreement or instrument under which Indebtedness of any of the Holdings Entities or the Company or any of the Restricted Subsidiaries constituting indebtedness for borrowed money in an aggregate principal amount of $25,000,000 or more is outstanding (other than Excluded Indebtedness), or by which any such Indebtedness is evidenced, shall have occurred and shall continue for a period of time sufficient to permit the holder or holders of any such Indebtedness (or a trustee or agent on its or their behalf) to accelerate the maturity thereof or to enforce any Lien provided for by any such indenture, agreement or instrument, as the case may be, unless such default shall have been permanently waived by the respective holder of such Indebtedness; or
(g) Any of the Holdings Entities or the Company or any of the Restricted Subsidiaries shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated as bankrupt or insolvent, (v) commence a voluntary case under any Debtor Relief Law (as now or hereafter in effect), (vi) file a petition seeking to take advantage of any Debtor Relief Law, (vii) acquiesce in writing to, or fail to controvert in a timely and appropriate manner, any petition filed against the Company or any Restricted Subsidiary in any involuntary case under any such Debtor Relief Law, or (viii) take any action for the purpose of effecting any of the foregoing; or
(h) A case or other proceeding shall be commenced, without the application, approval or consent of any of the Holdings Entities or the Company or any of the Restricted Subsidiaries, in any court of competent jurisdiction, seeking the liquidation, reorganization, dissolution, winding up, or composition or readjustment or debts of any of the Holdings Entities or the Company or any Restricted Subsidiary, the appointment of a trustee, receiver, custodian, liquidator or the like of the Company or such Restricted Subsidiary or of all or any substantial part of its assets, or any other similar action with respect to such Holdings Entity or the Company or such Restricted Subsidiary under any Debtor Relief Law, and such case or proceeding shall continue undismissed, or unstayed and in effect, for any period of 30 consecutive days, or an order for relief against the Company or any Restricted Subsidiary shall be entered in an involuntary case under any Debtor Relief Law (as now or hereafter in effect); or
 
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(i)(i) A judgment for the payment of money in excess of $25,000,000 shall be rendered against the Company or any Restricted Subsidiary and such judgment shall remain unsatisfied and in effect for any period of 30 consecutive days without a stay of execution or (if a stay is not provided for by applicable law) without having been fully bonded, (ii) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any Restricted Subsidiary and either (x) an enforcement proceeding shall have been commenced by any creditor upon such judgment or (y) such judgment remains undischarged and unbonded for a period (during which execution shall not be effectively stayed) of 60 days, provided that, the aggregate of all judgments exceeds $50,000,000 or (iii) any one or more non-monetary final judgments shall be rendered against the Company or any Restricted Subsidiary that, individually or in the aggregate, have or would reasonably be expected to have a Material Adverse Effect; or
(j)(i) Any Termination Event shall occur; (ii) any Person shall engage in any Prohibited Transaction involving any Plan; (iii) the Company or any ERISA Affiliate is in “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan resulting from the Company’s or any ERISA Affiliate’s complete or partial withdrawal (as described in Section 4203 or 4205 of ERISA) from such Plan; (iv) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Plan; (v) a determination that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA) that would reasonably be expected to have a Material Adverse Effect; (vi) the Company or any ERISA Affiliate shall fail to pay when due an amount which is payable by it to the PBGC or to a Plan under Title IV of ERISA and which, when aggregated with all other such amounts with respect to the payment of which the Company and its ERISA Affiliates are at the time in default, exceeds $25,000,000; (vii) a proceeding shall be instituted by a fiduciary of any Plan against the Company or any ERISA Affiliate to enforce Section 515 of ERISA and such proceeding shall not have been dismissed within 30 days thereafter; (viii) the assumption of, or any material increase in, the contingent liability of the Company or any Restricted Subsidiary with respect to any post-retirement welfare liability and such assumption or material increase has had, or could reasonably be expected to have, a Material Adverse Effect; and by reason of any or all of such events described in clauses (i)  through (viii ) as applicable there shall or could result in actual or potential liability of the Company and any ERISA Affiliate in excess of $25,000,000 in the aggregate and, in the case of a Multiemployer Plan, such event or condition, taken together with all other events or conditions referred to in this subsection (j ), would reasonably be expected to have a Material Adverse Effect; or
(k) There occurs any Change of Control; or
(l) Any Collateral Document after delivery thereof pursuant to Sections 5.01 or 7.10 shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by Section 7.16 ) on a
 
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material portion of the Collateral covered thereby other than as a result of any action or inaction by the Administrative Agent, and such condition shall remain unremedied for a period of 30 days after the earlier of (i) knowledge of such Default by a senior executive of the Company and (ii) notice in writing thereof being given to the Company by any Lender or the Administrative Agent; or
(m) Any Holdings Entity or the Company or any Restricted Subsidiary asserts or any Person obtains a judgment establishing that (i) any provision of the Loan Documents is invalid, not binding or unenforceable or (ii) the Lien created, or purported to be created, by the Loan Documents is not a valid and perfected first priority security interest in the property in which such Lien is created, or purported to be created, pursuant to the Loan Documents.
Section 8.02 Remedies upon Event of Default . If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:
(i) declare the commitment of each Lender to make Loans and any obligation of each L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;
(ii) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable to any Lender hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company;
(iii) require that the Company Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and
(iv) exercise on behalf of itself, the Lenders, and the L/C Issuers all rights and remedies available to it and such Lenders under the Loan Documents;
provided , however , that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Company under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of each L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Company to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.
Section 8.03 Application of Funds . After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02 ), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
First , to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III ) payable to the Administrative Agent in its capacity as such;
 
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Second , to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuers (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuers and amounts payable under Article III ), ratably among them in proportion to the respective amounts described in this clause  Second payable to them;
Third , to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations, to the extent due and payable, ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause  Third payable to them;
Fourth , to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Borrowings and amounts owing under Secured Hedge Agreements and Secured Cash Management Agreements, and which have become due and owing, ratably among the Lenders, the L/C Issuers, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause  Fourth held by them;
Fifth , to the Administrative Agent for the account of the L/C Issuers, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit; and
Last , the balance, if any, after all of the Obligations have been paid in full, to the Company or as otherwise required by Law.
Subject to Section 2.03(c) , amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause  Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.
Notwithstanding the foregoing, no amounts received from any Guarantor shall be applied to any Excluded Swap Obligation of such Guarantor.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Section 9.01 Appointment and Authority . (a) Each of the Lenders and the L/C Issuers hereby irrevocably appoints JPMorgan to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are
 
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delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuers, and neither the Company nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.
(b) The Administrative Agent shall also act as the “ collateral agent ” under the Loan Documents, and each of the Lenders (in its capacities as a Lender, potential Hedge Bank and potential Cash Management Bank) and the L/C Issuers hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and such L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c) , as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.
Section 9.02 Rights as a Lender . The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Company or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
Section 9.03 Exculpatory Provisions . The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and
 
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(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 10.01 and Section 8.02 ) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Company, a Lender or an L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Credit Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Credit Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
Section 9.04 Reliance by Administrative Agent . The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or such L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or such L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
Section 9.05 Delegation of Duties . The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative
 
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Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
Section 9.06 Resignation of Administrative Agent . (a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuers and the Company. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Company, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Company and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuers under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Company to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After the retiring Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
(b) If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (c) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Company and such Person remove such Person as Administrative Agent and, in consultation with the Company, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “ Removal Effective Date ”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.
 
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(c) Any resignation by, or removal of, JPMorgan as Administrative Agent pursuant to this Section shall also constitute its resignation or removal as an L/C Issuer and Swing Line Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of such retiring L/C Issuer and Swing Line Lender, (ii) such retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) such successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to such retiring L/C Issuer to effectively assume the obligations of such retiring L/C Issuer with respect to such Letters of Credit.
Section 9.07 Non-Reliance on Administrative Agent and Other Lenders . Each Lender and each L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Credit Agreement. Each Lender and each L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Credit Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
Section 9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Joint Book Runners, Co-Syndication Agents or Co-Documentation Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Credit Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.
Section 9.09 Administrative Agent May File Proofs of Claim . In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Company) shall be entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their
 
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respective agents and counsel) and all other amounts due the Lenders, the L/C Issuers and the Administrative Agent under Section 2.03(i) and (j) , Section 2.09 allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each L/C Issuer to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuers, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 2.09 .
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or any L/C Issuer or to authorize the Administrative Agent to vote in respect of the claim of any Lender or any L/C Issuer or in any such proceeding.
Section 9.10 Collateral and Guaranty Matters . Each Lender, each L/C Issuer and each of the other Secured Parties irrevocably authorizes the Administrative Agent and the Collateral Agent to, and the Administrative Agent and the Collateral Agent each hereby agrees with the Company:
(a) to release any Lien on any Collateral and any other property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination or Cash Collateralization in accordance with Section 2.03(g) of all Letters of Credit, (ii) that is the subject of a Disposition or other transfer permitted under and accomplished in accordance with the terms of this Credit Agreement, or (iii) if approved, authorized or ratified in writing in accordance with Section 10.01 ; and
(b) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.
Upon request by the Company or the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10 . In each case as specified in this Section 9.10 , the Administrative Agent will, at the Company’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.10 .
 
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ARTICLE X
MISCELLANEOUS
Section 10.01 Amendments, Etc. No amendment or waiver of any provision of this Credit Agreement or any other Loan Document, and no consent to any departure by the Company or any other Loan Party therefrom, shall be effective unless in writing signed by the Company or the applicable Loan Party, as the case may be, and the Required Lenders, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 5.01 , or, in the case of the initial Credit Extension, Section 5.02 , without the written consent of each Lender;
(b) without limiting the generality of clause (a)  above, waive any condition set forth in Section 5.02 as to any Credit Extension under a Facility without the written consent of the Lenders holding more than 50% of the sum of the (i) Total Outstandings under such Facility (with the aggregate amount of each Lender’s risk participation, funded participation in L/C Obligations and Swing Line Loans under a Revolving Credit Facility being deemed “held” by such Lender under such Facility for purposes of this clause (b)) and (ii) aggregate unused Commitments under such Facility;
(c) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02 ) without the written consent of such Lender;
(d) postpone any date fixed by this Credit Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment;
(e) reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01 ) any fees or other amounts payable hereunder or under any other Loan Document; provided , however , that only the consent of the Required Lenders shall be necessary to amend the definition of “ Default Rate ” or to waive any obligation of the Company to pay interest or Letter of Credit Fees at the Default Rate;
(f) change (i)  Section 2.13 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each affected Lender or (ii) the order of application of any reduction in the Commitments or any prepayment of Loans among the Facilities from the application thereof set forth in the applicable provisions of Section 2.05(b) or Section 2.06(b) , respectively, in any manner that materially and adversely affects the Lenders under a Facility without the written consent of each affected Lender, or (iii)  Section 8.03 , without the written consent of each Lender;
 
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(g) change (i) any provision of this Section 10.01 or the definition of “ Required Lenders ” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder (other than the definitions specified in clauses (ii) and (iii)  of this Section 10.01(g) ), without the written consent of each Lender, (ii) the definition of Required Revolver Lenders without the written consent of each Revolving Credit Lender or (iii) the definition of “Required Term Lenders” without the written consent of each Term Lender;
(h) release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender;
(i) release or remove all or substantially all of the value of the Guaranty, without the written consent of each Lender;
(j) impose any greater restriction on the ability of any Lender under a Facility to assign any of its rights or obligations hereunder without the written consent of the Lenders holding more than 50% of the sum of the (i) Total Outstandings under such Facility (with the aggregate amount of each Lender’s risk participation, funded participation in L/C Obligations and Swing Line Loans under a Revolving Credit Facility being deemed “held” by such Lender under such Facility for purposes of this clause (j)) and (ii) aggregate unused Commitments under such Facility; or
(k) waive a Change of Control, without the written consent of Lenders holding commitments or outstandings representing 66 2/3 % of the aggregate commitments and outstandings under the Facilities;
provided , further , that (i) no amendment, waiver or consent shall, unless in writing and signed by each applicable L/C Issuer in addition to the Lenders required above, affect the rights or duties of such L/C Issuer under this Credit Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Credit Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Credit Agreement or any other Loan Document; and (iv) the Fee Letters may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that (w) the Commitment of such Lender may not be increased or extended without the consent of such Lender, (x) the principal amount owed to such Lender may not be decreased or forgiven without the consent of such Lender unless such decrease or forgiveness also applies on a pro rata basis to all of the other Loans under the relevant Facility, (y) the rate of interest applicable to the Loans of such Lender may not be decreased without the consent of such Lender unless such interest rate decrease also
 
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applies to all of the other Loans under the relevant Facility, and (z) the Maturity Date applicable to any Loans of such Lender under any Facility may not be extended unless such extension also applies to all of the other Loans under the relevant Facility.
If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender or each affected Lender and that has been approved by the Required Lenders, the Company may (i) replace such non-consenting Lender in accordance with Section 10.12 provided that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Company to be made pursuant to this paragraph) or (ii) with the prior written consent of the Required Lenders, terminate the Commitments of such Lender and repay all Obligations of the Company owing to such Lender relating to the Loans and participations (and Cash Collateralize all of the unfunded participations) held by such Lender as of the termination date.
Section 10.02 Notices; Effectiveness; Electronic Communications . (a)  Notices Generally . Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or electronic transmission as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i) if to the Company, the Guarantors, the Administrative Agent or the L/C Issuers or the Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 10.02 ; and
(ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire.
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b ).
(b) Electronic Communications . Notices and other communications to the Lenders and the L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or any L/C Issuer pursuant to Article II if such Lender or such L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Company may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.
 
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Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(c) The Platform . THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMPANY MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE COMPANY MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE COMPANY MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “ Agent Parties ”) have any liability to the Company, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Company’s or the Administrative Agent’s transmission of Company Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided , however , that in no event shall any Agent Party have any liability to the Company, any Lender, any L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
(d) Change of Address, Etc . Each of the Company, the Administrative Agent, the L/C Issuers and the Swing Line Lender may change its address, electronic mail address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, electronic mail address, facsimile or telephone number for notices and other communications hereunder by notice to the Company, the Administrative Agent, the L/C Issuers and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.
 
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(e) Reliance by Administrative Agent, L/C Issuers and Lenders . The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Company even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Company shall indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Company. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
Section 10.03 No Waiver; Cumulative Remedies . No failure on the part of the Administrative Agent, any L/C Issuer or any Lender to exercise, and no delay by any such Person in exercising, and no course of dealing with respect to, any right, remedy, power or privilege under this Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The right, remedy, power or privilege provided herein, and provided under any other Loan Document, are cumulative and not exclusive of any right, remedy, power or privilege provided by law.
Section 10.04 Expenses; Indemnity; Damage Waiver . (a)  Costs and Expenses . The Company shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facility provided for herein, the preparation, negotiation, execution, delivery and administration of this Credit Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by any L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all expenses incurred by the Administrative Agent, any Lender or any L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or any L/C Issuer) in connection with the enforcement or protection of its rights (A) in connection with this Credit Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) Indemnification by the Company . The Company shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender, each L/C Issuer and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time
 
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charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Company or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Credit Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Credit Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by any L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Company or any of its Subsidiaries, or any Environmental Liability related in any way to the Company or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Company or any other Loan Party or any of the Company’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto , in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee ; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or (y) result from a claim brought by the Company or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Company or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.
(c) Reimbursement by Lenders . To the extent that the Company for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), any L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or any L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or any L/C Issuer in connection with such capacity, other than, as to any Indemnitee, to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d) .
 
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(d) Waiver of Consequential Damages, Etc . To the fullest extent permitted by applicable law, the Company shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Credit Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Credit Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
(e) Payments . All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.
(f) Survival . The agreements in this Section 10.04 shall survive the resignation of the Administrative Agent, any L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.
Section 10.05 Payments Set Aside . To the extent that any payment by or on behalf of the Company is made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, any L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and each L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the New York Fed Bank Rate from time to time in effect. The obligations of the Lenders and the L/C Issuers under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Credit Agreement.
Section 10.06 Successors and Assigns . (a)  Successors and Assigns Generally . The provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Company nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of Section 10.06(b) , (ii) by way of participation in accordance with the provisions of Section 10.06(d) , (iii) by way of pledge or assignment of a security interest subject to the
 
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restrictions of Section 10.06(f) , or (iv) to an SPC in accordance with the provisions of Section 10.06(h) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Credit Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Credit Agreement.
(b) Assignments by Lenders . Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Credit Agreement (including all or a portion of its Commitment and Letter of Credit Commitments, and the Loans (including for purposes of this Section 10.06(b) , participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts .
(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it under such Facility or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Company otherwise consents (each such consent not to be unreasonably withheld or delayed); provided , however , that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;
(ii) Proportionate Amounts . Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Credit Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not (A) apply to the Swing Line Lender’s rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis;
 
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(iii) Required Consents . No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A) the consent of the Company (such consent not to be unreasonably withheld or delayed) shall be required for an assignment to any Person unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender, an Approved Fund, or solely with respect to the assignment of a Term Loan, the Company, an Affiliated Lender or a Subsidiary of the Company (each Person with respect to whom such Company consent has been received, or is not required under clause (1)  or clause (2)  of this sentence, an “ Eligible Assignee ”); provided that if a prospective assignee (x) is not a commercial bank, finance company, insurance company, financial institution or fund (a “ Non-Financial Entity ”), the Company shall be deemed to be acting reasonably in withholding its consent if such person is a direct or indirect competitor of the Company as notified by the Company to the Administrative Agent within five Business Days after being informed of the identity of such Non-Financial Entity or (y) is a Defaulting Lender or a Lender that is a non-consenting Lender that the Company is at such time permitted to replace pursuant to Section 10.01 or otherwise is a Lender that the Company is at such time permitted to replace pursuant to Section 10.12 , the Company shall be deemed to be acting reasonably in withholding its consent; provided , further , that solely with respect to an assignment of any Term Loans, the Company shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten Business Days after having received notice thereof;
(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) any Commitment if such assignment is to a Person that is not a Lender with a Commitment in respect of the applicable Facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender; provided that the Administrative Agent shall be deemed to be acting reasonably in withholding its consent to a prospective assignee that is a Defaulting Lender;
(C) the consent of each L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and
(D) the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Swing Line Loans (whether or not then outstanding).
(iv) Assignment and Assumption . The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together
 
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with a processing and recordation fee in the amount of $3,500; provided , however , that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining the processing and recordation fee; provided , further , that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Company . No such assignment shall be made to the Company or any of the Company’s Affiliates or Subsidiaries, except in accordance with the definition of “Eligible Assignee” set forth in Section 1.01 .
(vi) No Assignment to Natural Persons . No such assignment shall be made to a natural person.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Credit Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Credit Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Credit Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Credit Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 3.01 , Section 3.04 , Section 3.05 and Section 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, the Company (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Credit Agreement that does not comply with this subsection shall be treated for purposes of this Credit Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.06(d) .
(c) Register . The Administrative Agent, acting solely for this purpose as an agent of the Company, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and the Company, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Credit Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Company and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations . Any Lender may at any time, without the consent of, or notice to, the Company, the Administrative Agent or any L/C Issuer, sell participations to any
 
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Person (other than a natural person or the Company or any of the Company’s Affiliates or Subsidiaries) (each, a “ Participant ”) in all or a portion of such Lender’s rights and/or obligations under this Credit Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Credit Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Company, the Administrative Agent, the Lenders and the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Credit Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Credit Agreement and to approve any amendment, modification or waiver of any provision of this Credit Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant. Subject to subsection (e) of this Section, the Company agrees that each Participant shall be entitled to the benefits of Section 3.01 , Section 3.04 and Section 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.06(b) . To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.07 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation, acting solely for this purpose as a non-fiduciary agent of the Company, shall maintain a register analogous to the Register (a “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of a Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in the rights and/or obligations under this Credit Agreement) except to the extent that such disclosure is necessary to establish that such interest is in registered form under Treasury Regulations Section 5f.103-1(c). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Credit Agreement notwithstanding any notice to the contrary.
(e) Limitations upon Participant Rights . A Participant shall not be entitled to receive any greater payment under Section 3.01 or Section 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Company’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Company, to comply with Section 3.01(e) as though it were a Lender.
(f) Certain Pledges . Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Credit Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
 
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(g) Electronic Execution of Assignments . The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
(h) Special Purpose Funding Vehicles . Notwithstanding anything to the contrary contained herein, any Lender (a “ Granting Lender ”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Company (an “ SPC ”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Credit Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.12(b)(ii) . Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Company under this Credit Agreement (including its obligations under Section 3.04 ), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Credit Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Credit Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Company and the Administrative Agent and with the payment of a processing fee in the amount of $3,500 (which processing fee may be waived by the Administrative Agent in its sole discretion), assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.
(i) Resignation as L/C Issuer or Swing Line Lender after Assignment . Notwithstanding anything to the contrary contained herein, if at any time JPMorgan or any other L/C Issuer assigns all of its Revolving Credit Commitments and Revolving Credit Loans pursuant to Section 10.06(b) , (i) such L/C Issuer may upon 30 days’ notice to the Company and the Lenders, resign as an L/C Issuer and/or (ii) JPMorgan may upon 30 days’ notice to the Company resign as Swing Line Lender. In the event of any such resignation as an L/C Issuer or
 
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Swing Line Lender, the Company shall be entitled to appoint from among the Lenders a successor L/C Issuer (so long as such appointee agrees to act as an L/C Issuer hereunder) or Swing Line Lender hereunder; provided , however , that no failure by the Company to appoint any such successor shall affect the resignation of JPMorgan or any other L/C Issuer as an L/C Issuer or Swing Line Lender, as the case may be. If any L/C Issuer resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuers hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c) ). If JPMorgan resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c ). Upon the appointment and acceptance of a successor L/C Issuer or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) in the case of the appointment and acceptance of a successor L/C Issuer, the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of such retiring L/C Issuer with respect to such Letters of Credit.
Section 10.07 Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender, each L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, such L/C Issuer or any such Affiliate to or for the credit or the account of the Company or any other Loan Party against any and all of the obligations of the Company or such Loan Party now or hereafter existing under this Credit Agreement or any other Loan Document to such Lender or such L/C Issuer, irrespective of whether or not such Lender or such L/C Issuer shall have made any demand under this Credit Agreement or any other Loan Document and although such obligations of the Company or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or such L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender, each L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such L/C Issuer or their respective Affiliates may have. Each Lender and each L/C Issuer agrees to notify the Company and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
Section 10.08 Interest Rate Limitation . Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “ Maximum Rate ”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Company. In
 
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determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
Section 10.09 Counterparts; Integration; Effectiveness . This Credit Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Credit Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 5.01 , this Credit Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Credit Agreement by facsimile or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Credit Agreement.
Section 10.10 Survival of Representations and Warranties . All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
Section 10.11 Severability . If any provision of this Credit Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Credit Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10.12 Replacement of Lenders . If any Lender requests compensation under Section 3.04 , or if the Company is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 , or if any Lender gives a notice pursuant to Section 3.02 , or if any Lender is a Defaulting Lender, or if otherwise permitted under Section 10.01 , then the Company may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the
 
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restrictions contained in, and consents required by, Section 10.05 ), all of its interests, rights and obligations under this Credit Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(a) the Company shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b) ;
(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05 ) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01 , such assignment will result in a reduction in such compensation or payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply. Neither the Administrative Agent nor any Lender shall have any obligation to the Company to find a replacement Lender or other such Person.
Section 10.13 Governing Law; Jurisdiction; Etc. (a)  GOVERNING LAW . THIS CREDIT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION . EACH OF THE PARTIES TO THIS CREDIT AGREEMENT IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA SITTING IN THE BOROUGH OF MANHATTAN, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
 
137




OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS CREDIT AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE COMPANY OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE . EACH OF THE PARTIES TO THIS CREDIT AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS . EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02 . NOTHING IN THIS CREDIT AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
Section 10.14 Waiver of Jury Trial . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 10.15 No Advisory or Fiduciary Responsibility . In connection with all aspects of each transaction contemplated hereby, the Company acknowledges and agrees that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Company and its Affiliates, on the one hand, and the Administrative Agent, Joint Book Runners and Lenders on the other hand, and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions
 
138




contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent, Joint Book Runners and Lenders each are and have been acting solely as a principal and are not the financial advisor, agent or fiduciary, for the Company or any of its Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent, Joint Book Runners nor any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Company with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent, Joint Book Runners or any Lender has advised or is currently advising the Company or any of its Affiliates on other matters) and neither the Administrative Agent, Joint Book Runners nor any Lender has any obligation to the Company or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent, Joint Book Runners and Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and its Affiliates, and neither the Administrative Agent, Joint Book Runners nor any Lender has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent, Joint Book Runners and Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, Joint Book Runners and the Lenders with respect to any breach or alleged breach of agency, advisory or fiduciary duty.
Section 10.16 USA PATRIOT Act Notice . Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Company and the Guarantors that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the Act. The Company shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.
Section 10.17 Senior Indebtedness . The Obligations shall constitute “Senior Indebtedness” as such term is defined in all debt instruments to which the Company or any Restricted Subsidiary is a party and which contains such a definition.
Section 10.18 Liability of General Partners and Other Persons . No general partner of any Restricted Subsidiary that is a partnership, joint venture or joint adventure shall have any personal liability in respect of such Restricted Subsidiary’s obligation
 
139




under this Credit Agreement or the Notes by reason of his, her or its status as such general partner. In addition, no limited partner, officer, employee, director, stockholder or other holder of an ownership interest of or in the Company or any Restricted Subsidiary or any partnership, corporation or other entity which is a stockholder or other holder of an ownership interest of or in the Company or any Restricted Subsidiary shall have any personal liability in respect of such obligations by reason of his, her or its status as such limited partner, officer, employee, director, stockholder or holder.
Section 10.19 Authorization of Third Parties to Deliver Information and Discuss Affairs . The Company hereby confirms that it has authorized and directed each Person whose preparation or delivery to the Administrative Agent or the Lenders of any opinion, report or other information is a condition or covenant under this Credit Agreement (including under Article V and Article VII ) to so prepare or deliver such opinions, reports or other information for the benefit of the Administrative Agent and the Lenders. The Company agrees to confirm such authorizations and directions provided for in this Section 10.19 from time to time as may be requested by the Administrative Agent.
Section 10.20 Treatment of Certain Information; Confidentiality . Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives on a need to know basis (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Credit Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section (other than in the case of a pledge to any Federal Reserve Bank), to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Credit Agreement, (ii) any pledgee referred to in Section 10.06(f) , or (iii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Company and its obligations, (g) with the written consent of the Company or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a non-confidential basis from a source other than the Company or any other Loan Party.
For purposes of this Section, “ Information ” means all information received from any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a non-confidential basis prior to disclosure by any Loan Party or any Subsidiary thereof, provided that, in the case of information received from a Loan Party or any such Subsidiary after the Closing Date, such information is not marked “PUBLIC” or otherwise identified at the time of delivery as confidential.
 
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Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public information concerning the Company or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including Securities Laws.
Section 10.21 No Fiduciary Duty . The Company hereby acknowledges that neither the Administrative Agent nor any Lender has any fiduciary relationship with or fiduciary duty to the Company arising out of or in connection with this Credit Agreement or any of the other Loan Documents, and the relationship between the Administrative Agent and the Lenders, on the one hand, and the Company, on the other hand, in connection herewith or therewith is solely that of debtor and creditor.
[SIGNATURE PAGES FOLLOW]
 
141




IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed as of the day and year first above written.
 
MSG HOLDINGS, L.P. , as the Company
By:  
MSGN EDEN, LLC, as its General Partner
By:   /s/ DONNA COLEMAN
  Name:   Donna Coleman
  Title:   Interim Chief Financial Officer
MSGN EDEN, LLC , as a Guarantor
By:   /s/ DONNA COLEMAN
  Name:   Donna Coleman
  Title:   Interim Chief Financial Officer
REGIONAL MSGN HOLDINGS LLC , as a Guarantor
By:   /s/ DONNA COLEMAN
  Name:   Donna Coleman
  Title:   Interim Chief Financial Officer
 
MSGN INTERACTIVE, LLC ,
MSGN PUBLISHING, LLC ,
MSGN SONGS, LLC ,
SPORTSCHANNEL ASSOCIATES ,
THE 31 ST STREET COMPANY, L.L.C. ,
as Guarantors
By:  
MSGN EDEN, LLC , as the General Partner of MSG Holdings, L.P.
By:   /s/ DONNA COLEMAN
  Name:   Donna Coleman
  Title:   Interim Chief Financial Officer
[SIGNATURE PAGE]





JPMORGAN CHASE BANK, N.A., as
Administrative Agent
By:   /s/ JOHN G. KOWALCZUK
  Name:   John G. Kowalczuk
  Title:   Executive Director
JPMORGAN CHASE BANK, N.A.,
as L/C Issuer, Swing Line Lender and Lender
By:   /s/ JOHN G. KOWALCZUK
  Name:   John G. Kowalczuk
  Title:   Executive Director
[SIGNATURE PAGE]





BANK OF AMERICA, N.A.,
as L/C Issuer and Lender
By:   /s/ MARIE FORURIA
  Name:   Marie Foruria
  Title:   Vice President
[SIGNATURE PAGE]





THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
as L/C Issuer and Lender
By:   /s/ GIROLAMO PARISI
  Name:   Girolamo Parisi
  Title:   Managing Director
 
MUFG UNION BANK, N.A.,
as Lender
By:   /s/ GIROLAMO PARISI
  Name:   Girolamo Parisi
  Title:   Managing Director
[SIGNATURE PAGE]





THE BANK OF NOVA SCOTIA,
as L/C Issuer and Lender
By:   /s/ RAFAEL TOBON
  Name:   Rafael Tobon
  Title:   Director
[SIGNATURE PAGE]





U.S. BANK NATIONAL ASSOCIATION,
as L/C Issuer and Lender
By:   /s/ PAUL WEISSENBERGER
  Name:   Paul Weissenberger
  Title:   Senior Vice President
[SIGNATURE PAGE]





FIFTH THIRD BANK,
as Lender
By:   /s/ ALDO J. QUINI
  Name:   Aldo J. Quini
  Title:   Senior Vice President
[SIGNATURE PAGE]





TD BANK, N.A.,
as Lender
By:   /s/ SHIVANI AGARWAR
Name:   Shivani Agarwar
Title:   Senior Vice President
 
 
[SIGNATURE PAGE]
 



WELLS FARGO BANK, N.A.,
as Lender
By:   /s/ CRAIG DESOUSA
Name:   Craig DeSousa
Title:   Senior Vice President
 
 
[SIGNATURE PAGE]
 



NATIXIS, NEW YORK BRANCH,
as Lender
By:   /s/ GERARDO CANET
Name:   Gerardo Canet
Title:   Managing Director
By:   /s/ RONALD LEE
Name:   Ronald Lee
Title:   Vice President
 
 
[SIGNATURE PAGE]
 





BNP PARIBAS,
as Lender
By:   /s/ NICOLAS RABIER
Name:   Nicoloas Rabier
Title:   Managing Director
By:   /s/ NICOLE RODRIGUEZ
Name:   Nicole Rodriguez
Title:   Director
 
 
[SIGNATURE PAGE]
 



GOLDMAN SACHS BANK USA,
as Lender
By:   /s/ REBECCA KRATZ
Name:   Rebecca Kratz
Title:   Authorized Signatory
 
 
[SIGNATURE PAGE]
 
   



SOCIÉTÉ GÉNÉRALE,
as Lender
By:   /s/ LINDA TAM
Name:   Linda Tam
Title:   Director
 
 
[SIGNATURE PAGE]
 



BARCLAYS BANK PLC,
as Lender
By:   /s/ VANESSA A. KURBATSKY
Name:   Vanessa A. Kurbatsky
Title:   Vice President
 
 
[SIGNATURE PAGE]
 
   





SUNTRUST BANK, as Lender
By:   /s/ SHANNON OFFEN
Name:   Shannon Offen
Title:   Director
 
 
[SIGNATURE PAGE]
 



CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
as Lender
By:
  /s/ JUDITH SMITH
Name:
 
Judith Smith
Title:
 
Authorized Signatory
By:
  /s/ D. ANDREW MALETTA
Name:
 
D. Andrew Maletta
Title:
 
Authorized Signatory
 
 
[SIGNATURE PAGE]
 



MORGAN STANLEY BANK, N.A.,
as Lender
By:   /s/ MICHAEL KING
Name:   Michael King
Title:   Authorized Signatory
 
MORGAN STANLEY SENIOR FUNDING, INC.,
as Lender
By:   /s/ MICHAEL KING
Name:   Michael King
Title:   Vice President
 
 
[SIGNATURE PAGE]
 





CRÉDIT INDUSTRIEL ET COMMERCIAL,
as Lender
By:   /s/ MARCUS EDWARD
Name:   Marcus Edward
Title:   Managing Director
By:   /s/ CLIFFORD ABRAMSKY
Name:   Clifford Abramsky
Title:   Managing Director
 
 
[SIGNATURE PAGE]
 



Exhibit 10.75
EXECUTION VERSION
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of October 11, 2019
among
MSGN HOLDINGS, L.P.,
the Company,
CERTAIN SUBSIDIARIES OF THE COMPANY,
MSGN EDEN, LLC and REGIONAL MSGN HOLDINGS LLC
as Guarantors,
THE LENDERS PARTY HERETO,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and Collateral Agent,
JPMORGAN CHASE BANK, N.A.,
BOFA SECURITIES, INC.,
MUFG BANK, LTD.,
THE BANK OF NOVA SCOTIA,
WELLS FARGO BANK, N.A.,
FIFTH THIRD BANK,
SUNTRUST ROBINSON HUMPHREY, INC. and
TD BANK, N.A.,
as Joint Book Runners,
BOFA SECURITIES, INC.,
MUFG BANK, LTD.,
THE BANK OF NOVA SCOTIA and
WELLS FARGO BANK, N.A.,
as Co-Syndication Agents,
and
FIFTH THIRD BANK,
SUNTRUST ROBINSON HUMPHREY, INC. and
TD BANK, N.A.,
as Co-Documentation Agents




TABLE OF CONTENTS
 
         
Page
 
ARTICLE I
 
DEFINITIONS AND ACCOUNTING MATTERS
 
Section 1.01
   Certain Defined Terms      1
Section 1.02
   Other Interpretive Provisions      47
Section 1.03
   Accounting Terms      48
Section 1.04
   Rounding      49
Section 1.05
   Times of Day      49
Section 1.06
   Letter of Credit Amounts      49
Section 1.07
   Currency Equivalents Generally      49
Section 1.08
   Interest Rates; LIBOR Notification      49
Section 1.09
   Divisions      50
Section 1.10
   Limited Condition Acquisitions      50
ARTICLE II
 
THE COMMITMENTS AND CREDIT EXTENSIONS
 
Section 2.01
   The Loans      51
Section 2.02
   Borrowings, Conversions and Continuations of Loans      52
Section 2.03
   Letters of Credit      54
Section 2.04
   Swing Line Loans      63
Section 2.05
   Prepayments      66
Section 2.06
   Termination or Reduction of Commitments      68
Section 2.07
   Repayment of Loans      70
Section 2.08
   Interest      70
Section 2.09
   Fees      71
Section 2.10
   Computation of Interest and Fees      71
Section 2.11
   Evidence of Debt      72
Section 2.12
   Payments Generally; Administrative Agent’s Clawback      72
Section 2.13
   Sharing of Payments by Lenders      74
Section 2.14
   Incremental Revolving Credit Facilities      75
Section 2.15
   Incremental Term Facilities      76
Section 2.16
   Defaulting Lenders      78
Section 2.17
   Extension of Maturity Date      81
ARTICLE III
 
TAXES, YIELD PROTECTION AND ILLEGALITY
 
Section 3.01
   Taxes      83
Section 3.02
   Illegality      86
 
  
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   MSGN – A&R Credit Agreement (2019)





Section 3.03
   Inability to Determine Rates      87
Section 3.04
   Increased Costs; Reserves on Eurodollar Rate Loans      88
Section 3.05
   Compensation for Losses      90
Section 3.06
   Mitigation Obligations; Replacement of Lenders      90
Section 3.07
   Survival      91
ARTICLE IV
 
GUARANTY
 
Section 4.01
   Guaranty      91
Section 4.02
   Rights of Lenders      91
Section 4.03
   Certain Waivers      92
Section 4.04
   Obligations Independent      92
Section 4.05
   Subrogation      92
Section 4.06
   Termination; Reinstatement      92
Section 4.07
   Subordination      93
Section 4.08
   Stay of Acceleration      93
Section 4.09
   Condition of Company      93
Section 4.10
   Limitation on Guaranty      93
Section 4.11
   Keepwell      94
ARTICLE V
 
CONDITIONS PRECEDENT
 
Section 5.01
   Conditions of Credit Extensions on the Effective Date      94
Section 5.02
   Conditions to all Credit Extensions      97
Section 5.03
   Effectiveness of Amendment and Restatement      98
Section 5.04
   Acknowledgement and Reaffirmation of Security Interests      98
ARTICLE VI
 
REPRESENTATIONS AND WARRANTIES
 
Section 6.01
   Existence, Qualification and Power      99
Section 6.02
   Subsidiaries; Loan Parties      99
Section 6.03
   Authority; No Conflict      99
Section 6.04
   Financial Condition; Absence of Material Adverse Effect      100
Section 6.05
   Litigation, Compliance with Laws      100
Section 6.06
   Titles and Liens      101
Section 6.07
   Regulation U; Investment Company Act      101
Section 6.08
   Taxes      101
Section 6.09
   Other Credit Agreements      101
Section 6.10
   Full Disclosure      101
Section 6.11
   No Default      102
Section 6.12
   Approval of Government, Regulatory Authorities and Third Parties      102
 
  
iii            
   MSGN – A&R Credit Agreement (2019)





Section 6.13
   Binding Agreements      102
Section 6.14
   Collective Bargaining Agreements      102
Section 6.15
   Investments      103
Section 6.16
   Solvency      103
Section 6.17
   Collateral Documents      103
Section 6.18
   Maintenance of Insurance      103
Section 6.19
   Subordinated Debt      103
Section 6.20
   ERISA Compliance      103
Section 6.21
   Environmental Compliance      104
Section 6.22
   Intellectual Property, Licenses, Etc.      104
Section 6.23
   Compliance Matters      104
Section 6.24
   Anti-Corruption Laws and Sanctions      104
Section 6.25
   EEA Financial Institutions      105
ARTICLE VII
 
COVENANTS OF THE COMPANY
 
AND THE RESTRICTED SUBSIDIARIES
 
Section 7.01
   Financial Statements and Other Information      105
Section 7.02
   Taxes and Claims      109
Section 7.03
   Insurance      109
Section 7.04
   Maintenance of Existence; Conduct of Business      109
Section 7.05
   Maintenance of and Access to Collateral      109
Section 7.06
   Compliance with Applicable Laws      109
Section 7.07
   [Intentionally Omitted.]      110
Section 7.08
   Subsidiaries      110
Section 7.09
   Use of Proceeds      110
Section 7.10
   Covenant to Guarantee Obligations and Give Security      111
Section 7.11
   Books and Records      112
Section 7.12
   [Intentionally Omitted.]      112
Section 7.13
   Further Assurances and Post-Closing Matters      112
Section 7.14
   Indebtedness      112
Section 7.15
   Contingent Liabilities      115
Section 7.16
   Liens      116
Section 7.17
   Investments      118
Section 7.18
   Restricted Payments      118
Section 7.19
   Business      119
Section 7.20
   Transactions with Affiliates      119
Section 7.21
   Amendments of Certain Instruments      120
Section 7.22
   Issuance of Stock      120
Section 7.23
   Fundamental Changes      120
Section 7.24
   Dispositions      120
Section 7.25
   Accounting Changes      121
Section 7.26
   Negative Pledge      121
Section 7.27
   Anti-Corruption Laws and Sanctions      121
Section 7.28
   Total Leverage Ratio      121
 
  
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Section 7.29
   Interest Coverage Ratio      122
Section 7.30
   Holdings Entities Covenants      122
ARTICLE VIII
 
EVENTS OF DEFAULT AND REMEDIES
 
Section 8.01
   Events of Default      122
Section 8.02
   Remedies upon Event of Default      125
Section 8.03
   Application of Funds      126
ARTICLE IX
 
THE ADMINISTRATIVE AGENT
 
Section 9.01
   Appointment and Authority      127
Section 9.02
   Rights as a Lender      127
Section 9.03
   Exculpatory Provisions      128
Section 9.04
   Reliance by Administrative Agent      128
Section 9.05
   Delegation of Duties      129
Section 9.06
   Resignation of Administrative Agent      129
Section 9.07
   Non-Reliance on Administrative Agent and Other Lenders      130
Section 9.08
   No Other Duties, Etc.      130
Section 9.09
   Administrative Agent May File Proofs of Claim      131
Section 9.10
   Collateral and Guaranty Matters      131
Section 9.11
   Credit Bidding      132
Section 9.12
   Certain ERISA Matters      133
ARTICLE X
 
MISCELLANEOUS
 
Section 10.01
   Amendments, Etc.      135
Section 10.02
   Notices; Effectiveness; Electronic Communications      137
Section 10.03
   No Waiver; Cumulative Remedies      140
Section 10.04
   Expenses; Indemnity; Damage Waiver      140
Section 10.05
   Payments Set Aside      142
Section 10.06
   Successors and Assigns      142
Section 10.07
   Right of Setoff      148
Section 10.08
   Interest Rate Limitation      148
Section 10.09
   Counterparts; Integration; Effectiveness      149
Section 10.10
   Survival of Representations and Warranties      149
Section 10.11
   Severability      149
Section 10.12
   Replacement of Lenders      149
Section 10.13
   Governing Law; Jurisdiction; Etc.      150
Section 10.14
   Waiver of Jury Trial      151
Section 10.15
   No Advisory or Fiduciary Responsibility      152
 
  
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Section 10.16
   USA PATRIOT Act Notice      152  
Section 10.17
   Senior Indebtedness      153  
Section 10.18
   Liability of General Partners and Other Persons      153  
Section 10.19
   Authorization of Third Parties to Deliver Information and Discuss Affairs      153  
Section 10.20
   Treatment of Certain Information; Confidentiality      153  
Section 10.21
   No Fiduciary Duty      154  
Section 10.22
   Acknowledgement and Consent to Bail-In of Certain Financial Institutions      154  
Section 10.23
   Acknowledgement Regarding any Supported QFCs      154  
 
Schedule 1.01(a)
  
Guarantors
Schedule 1.01(b)
  
Excluded Assets
Schedule 1.01(c)
  
Affiliation Agreements
Schedule 1.01(d)
  
Sports Telecast Rights Agreements
Schedule 1.01(e)
  
Cablevision Spin Agreements
Schedule 1.01(f)
  
MSG Spin Agreements
Schedule 1.01(g)
  
Subsidiaries Excluded for Financial Statement Variance Purposes
Schedule 2.01
  
Commitments and Applicable Percentages
Schedule 2.03
  
Existing Letters of Credit
Schedule 6.02(i)
  
Restricted Subsidiaries
Schedule 6.02(ii)
  
Unrestricted Subsidiaries
Schedule 6.02(iii)
  
Excluded Subsidiaries
Schedule 6.03
  
Required Consents, League and Regulatory Approvals
Schedule 6.05
  
Existing Litigation
Schedule 6.14
  
Collective Bargaining Agreements
Schedule 6.15
  
Existing Investments
Schedule 7.14
  
Existing Indebtedness
Schedule 7.15
  
Existing Guarantees
Schedule 7.16
  
Existing Liens
Schedule 7.20
  
Transactions with Affiliates
Schedule 7.26
  
Negative Pledge
Schedule 10.02
  
Administrative Agent’s Office, Certain Addresses for Notices
EXHIBIT A-1
  
Form of Committed Revolving Loan Notice
EXHIBIT A-2
  
Form of Swing Line Loan Notice
EXHIBIT A-3
  
Form of Committed Term Loan Notice
EXHIBIT B-1
  
Form of Revolving Credit Note
EXHIBIT B-2
  
Form of Incremental Revolving Credit Note
EXHIBIT B-3
  
Form of Term Note
EXHIBIT B-4
  
Form of Incremental Term Loan Note
EXHIBIT C
  
Form of Compliance Certificate
EXHIBIT D-1
  
Form of Certificate as to Quarterly Financial Statements
EXHIBIT D-2
  
Form of Certificate as to Annual Financial Statements
EXHIBIT E
  
Form of Opinion of Internal Counsel for the Company and the Restricted Subsidiaries
EXHIBIT F
  
Form of Opinion of Sullivan & Cromwell LLP, Counsel to the Loan Parties
 
  
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EXHIBIT G
  
Form of Assignment and Assumption Agreement
EXHIBIT H-1
  
Form of Incremental Revolving Credit Supplement
EXHIBIT H-2
  
Form of Incremental Term Loan A Supplement (Term Loan A)
EXHIBIT H-3
  
Form of Incremental Term Loan B Supplement (Term Loan B)
EXHIBIT I
  
Master Subordinated Intercompany Note
 
  
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT (this “Credit Agreement”) is entered into as of October 11, 2019, among MSGN HOLDINGS, L.P., a Delaware limited partnership (the “Company”), the Restricted Subsidiaries (such term and each other capitalized term used but not defined in these recitals having the meaning ascribed thereto in Section 1.01 of this Credit Agreement) identified herein, as Guarantors, MSGN EDEN, LLC, a Delaware limited liability company (“MSGN Eden”), and REGIONAL MSGN HOLDINGS LLC, a Delaware limited liability company (together with MSGN Eden, the “Holdings Entities”, and individually each a “Holdings Entity”), the banks, financial institutions and other Persons which are parties hereto, together with their respective successors and assigns, as Lenders, the L/C Issuers from time to time party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and an L/C Issuer.
WHEREAS, the Company, certain of the Guarantors, the Holdings Entities, certain of the Lenders and the Administrative Agent are all parties to that certain Credit Agreement, dated as of September 28, 2015 (as amended, supplemented and otherwise modified prior to the date hereof, the “Existing Credit Agreement”); and
WHEREAS, the Company, the Guarantors, the Lenders and the Administrative Agent all desire to amend and restate the Existing Credit Agreement as of the Effective Date to, among other things, extend the maturity dates of the “Initial Facilities” (as defined in the Existing Credit Agreement), and to make such other changes to the Existing Credit Agreement as more fully set forth herein, subject to the conditions to effectiveness set forth in Sections 5.01 and 5.02 of this Credit Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01    Certain Defined Terms. As used herein, the following terms shall have the following meanings:
“Adjusted Operating Income” means for any period, the following for the Company and the Restricted Subsidiaries for such period, each component determined on a consolidated basis in accordance with GAAP: (i) aggregate revenues, minus (ii) aggregate operating expenses (including direct operating and selling, general administrative), such expenses to exclude impairments of property, equipment and intangible assets, depreciation and amortization and charges and credits relating to employee and director stock plans and restructuring charges and credits, and in each case without duplication to exclude expenses allocated to Affiliates that are not Restricted Subsidiaries; provided, however, that for purposes of determining Adjusted Operating Income for any period (A) there shall be included any dividends and distributions to the extent paid in cash by an Unrestricted Subsidiary to the Company or any Restricted Subsidiary to
 
  
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the extent such dividend or distribution relates to net income earned or cash realized from operating activities by such Unrestricted Subsidiary in the immediately preceding 12 month period, (B) there shall be excluded all management fees paid by any Unrestricted Subsidiary to the Company or any Restricted Subsidiary during such period other than any such amounts settled in cash to the extent not in excess of 5% of Adjusted Operating Income as determined without including any such fees, (C) Adjusted Operating Income for such period shall be increased or reduced, as the case may be, by the Adjusted Operating Income of assets or businesses acquired or disposed of (provided that in each case it has an impact on Adjusted Operating Income of at least $500,000) (including by means of any re-designation of any subsidiary) by the Company or any Restricted Subsidiary on or after the first day of such period, determined on a pro forma basis reasonably satisfactory to the Administrative Agent (it being agreed that it shall be satisfactory to the Administrative Agent that such pro forma calculations may be based upon GAAP as applied in the preparation of the financial statements for the Company, delivered or deemed delivered pursuant to Section 7.01 rather than as applied in the financial statements of the company whose assets were acquired and may include, in the Company’s discretion, a reasonable estimate of savings under existing contracts resulting from any such acquisitions), as though the Company or such Restricted Subsidiary acquired or disposed of such assets on the first day of such period, and (D) there shall be excluded any gains or losses on sales or dispositions of businesses by the Company or any of its Restricted Subsidiaries. For purposes of this definition, operating revenues and operating expenses may exclude the following, provided that all exclusions for cash items (whether representing a cash item in the period in question or in a future period) shall be limited to an aggregate of $40,000,000 per year (the “Annual Cash Basket Amount”) and an aggregate of $75,000,000 during the period from the Effective Date through the Maturity Date of the Initial Facilities (the “Cash Basket Amount”): (1) provisions for severance obligations; (2) losses resulting from any write-off or write-down of Investments by the Company or any of its Restricted Subsidiaries; (3) the effect of the loss of any currently held real estate tax exemptions; (4) costs and expenses incurred to implement the Spin-Off, (5) amortization of production and development costs associated with shows or other content or the costs resulting from the cancellation of shows or other content or abandonment of shows or other content under development or write-off of any deferred production costs associated with shows; (6) losses resulting from currency fluctuations and any unrealized losses from hedging transactions; (7) pension curtailment or settlements; (8) other non-recurring, non-cash items in excess of $1,000,000; and (9) changes to US GAAP that would cause a covenant default (provided that the Company shall provide reconciliations to demonstrate compliance under previous US GAAP and the parties shall agree to negotiate in good faith to amend covenants accordingly). In the case of clauses (1) through (3) above only, if the expense is required to be recognized in one period but paid in whole or in part in subsequent periods and the expense, when aggregated with all other expenses described in clauses (1) through (9) above relating to such initial period, exceeds the Annual Cash Basket Amount, (i) the expense in the period in which it is recognized shall be limited, when aggregated with all other expenses described in clauses (1) through (9) above relating to such initial period, to the Annual Cash Basket Amount, and (ii) the amount of expense in excess of the Annual Cash Basket Amount may be recognized or considered an expense (for purposes of clause (ii) of this definition) in any subsequent period in which such excess amount is paid, subject in any event to the Cash Basket Amount. In the event of any suspension of carriage by any party to an Affiliation Agreement during renewal negotiations of such Affiliation Agreement or expiration or termination of or disputes under such Affiliation Agreements, the Adjusted Operating Income calculation, for purposes of complying with the
 
  
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Financial Covenants (but not for any other purpose), may be adjusted (the “Carriage Suspension Adjustment”) to add back the Adjusted Operating Income attributable to the affected Affiliation Agreement from the corresponding period one year prior to each period during which such suspension of carriage continues, but in any event not to exceed six months; provided that the Carriage Suspension Adjustment shall be limited only to the Adjusted Operating Income attributable to one Affiliation Agreement during any period; provided, further, that with respect to any Carriage Suspension Adjustment, the Company shall provide reports with reasonably detailed supporting calculations showing the “lost” Adjusted Operating Income attributable to the affected Affiliation Agreement for each corresponding monthly period of the prior year, in each case certified by a financial officer of the Company.
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder and its successors in such capacity.
“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Company and the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affiliate” means, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that for purposes of this definition, in any event, any Person which owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person; and provided further that no individual shall be an Affiliate of a corporation or partnership solely by reason of his or her being an officer, director or partner of such entity, except in the case of a partner if his or her interests in such partnership shall qualify him or her as an Affiliate.
“Affiliated Lender” means the Parent or any Affiliate of the Parent, other than (a) the Company or (b) any Subsidiary of the Company.
“Affiliation Agreements” means the agreements listed on Schedule 1.01(c) and all other existing and future agreements of the Company or any Restricted Subsidiary for the distribution of the Program Services by distributors (e.g., Comcast, DirecTV, Verizon).
“Agent Parties” has the meaning set forth Section 10.02(c).
“Aggregate Commitments” means the Commitments of all the Lenders.
“Annual Cash Basket Amount” has the meaning specified in the definition of “Adjusted Operating Income”.
 
  
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“Anti-Corruption Laws” means all published laws, rules and regulations of any jurisdiction applicable to the Company or its Subsidiaries from time to time penalizing actions in connection with bribery, money-laundering or other corrupt actions.
“Applicable Commitment Fee Percentage” means (a) (i) initially, in respect of the Initial Revolving Credit Facility, 0.25% per annum, and (ii) following the delivery of the Compliance Certificate for the second full fiscal quarter of the Company following the Effective Date, as determined by the Company’s Total Leverage Ratio, as follows:
 
Level
  
Total Leverage Ratio
  
Applicable
Commitment Fee
Percentage
 
Level 6
   Greater than or equal to 5.50:1.00      0.30 % 
Level 5
   Greater than or equal to 4.50:1.00 but less than 5.50:1.00      0.30 % 
Level 4
   Greater than or equal to 3.50:1.00, but less than 4.50:1.00      0.25 % 
Level 3
   Greater than or equal to 2.50:1.00, but less than 3.50:1.00      0.25 % 
Level 2
   Greater than or equal to 1.50:1.00, but less than 2.50:1.00      0.25 % 
Level 1
   Less than 1.50:1.00      0.225 % 
“Applicable Percentage” means (a) in respect of the Initial Term Facility, with respect to any Term Lender at any time, the percentage (carried out to the ninth decimal place) of the Initial Term Facility represented by such Term Lender’s Term Commitment at such time (including any Incremental Term Commitments that increase the Term Commitments under the Initial Term Facility), (b) in respect of any Incremental Term Facility that is a separate tranche of Term Commitments and Term Loans, with respect to any Incremental Term Lender thereunder at any time, the percentage (carried out to the ninth decimal place) of such Incremental Term Facility represented by such Incremental Term Lender’s Incremental Term Commitment at such time, (c) in respect of the Initial Revolving Credit Facility, with respect to any Revolving Credit Lender at any time, the percentage (carried out to the ninth decimal place) of the Initial Revolving Credit Facility represented by such Revolving Credit Lender’s Revolving Credit Commitment at such time (including any Incremental Revolving Credit Commitments that increase the Revolving Credit Commitments under the Initial Revolving Credit Facility), and (d) in respect of any Incremental Revolving Credit Facility that is a separate tranche of Revolving Credit Commitments and Revolving Credit Loans, with respect to any Incremental Revolving Credit Lender thereunder at any time, the percentage (carried out to the ninth decimal place) of such Incremental Revolving
 
  
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Credit Facility represented by such Incremental Revolving Credit Lender’s Incremental Revolving Credit Commitment at such time. If the commitment of each Revolving Credit Lender to make Revolving Credit Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 8.02, or if the Revolving Credit Commitments have expired, then the Applicable Percentage of each Revolving Credit Lender in respect of a Revolving Credit Facility shall be determined based on the Applicable Percentage of such Revolving Credit Lender in respect of such Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender in respect of each Facility is set forth opposite the name of such Lender on Schedule 2.01 (or, in the case of any Incremental Lender, on Schedule I to the applicable Incremental Supplement, if any) or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.
“Applicable Rate” means (a) (i) initially, in respect of the Initial Term Facility and the Initial Revolving Credit Facility, 0.50% per annum for Base Rate Loans and 1.50% per annum for Eurodollar Rate Loans, and (ii) following the delivery of the Compliance Certificate for the second full fiscal quarter of the Company following the Effective Date, as determined by the Company’s Total Leverage Ratio, as follows:
 
         
Revolving Credit Facility and Term Facility
 
Level
  
Total Leverage Ratio
  
Eurodollar Rate Loans
Applicable Margin
   
Base Rate Loans
Applicable Margin
 
Level 6
   Greater than or equal to 5.50:1.00      2.25 %      1.25 % 
Level 5
   Greater than or equal to 4.50:1.00 but less than 5.50:1.00      2.00 %      1.00 % 
Level 4
   Greater than or equal to 3.50:1.00, but less than 4.50:1.00      1.75 %      0.75 % 
Level 3
   Greater than or equal to 2.50:1.00, but less than 3.50:1.00      1.50 %      0.50 % 
Level 2
   Greater than or equal to 1.50:1.00, but less than 2.50:1.00      1.375 %      0.375 % 
Level 1
   Less than 1.50:1.00      1.25 %      0.25 % 
(b) (i) initially, in respect of the Swing Line Sublimit, 1.50% per annum, and (ii) following the delivery of the Compliance Certificate for the second full fiscal quarter of the Company following the Effective Date, as determined by the Company’s Total Leverage Ratio as set forth in clause (a)(ii) above for Base Rate Loans, and (c) in respect of any Incremental Facility, the percentages per annum for Base Rate Loans and for Eurodollar Rate Loans that are agreed by the Company and the applicable Incremental Lenders and specified in the applicable Incremental Supplement with respect to such Incremental Facility.
 
  
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“Applicable Revolving Credit Percentage” means with respect to any Revolving Credit Lender at any time, such Revolving Credit Lender’s Applicable Percentage in respect of the applicable Revolving Credit Facility at such time.
“Appropriate Lender” means, at any time, (a) with respect to the Initial Term Facility, the Initial Revolving Credit Facility or an Incremental Facility, if any, a Lender that has a Commitment with respect to such Facility or holds a Term Loan, a Revolving Credit Loan or an Incremental Loan, respectively, at such time, (b) with respect to the Letter of Credit Sublimit, (i) each L/C Issuer and (ii) if any Letters of Credit have been issued pursuant to Section 2.03(a), the Revolving Credit Lenders, and (c) with respect to the Swing Line Sublimit, (i) any Swing Line Lender and (ii) if any other Revolving Credit Lender shall have made Swing Line Loans pursuant to Section 2.04 that are outstanding at such time, each such other Revolving Credit Lender.
“Approved Electronic Platform” has the meaning specified in Section 10.02(b).
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Article 55 BRRD” means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit G or any other form approved by the Administrative Agent.
“Availability Period” means (a) in respect of the Initial Revolving Credit Facility, the period from and including the Effective Date to the earliest of (i) the Maturity Date for the Initial Revolving Credit Facility, (ii) the date of termination of the Revolving Credit Commitments under the Initial Revolving Credit Facility pursuant to Section 2.06, and (iii) the date of termination of the commitment of each Revolving Credit Lender to make Revolving Credit Loans and of the obligation of each L/C Issuer to make L/C Credit Extensions under the Initial Revolving Credit Facility pursuant to Section 8.02, (b) in respect of any Incremental Revolving Credit Facility that is a separate tranche of Revolving Credit Commitments and Revolving Credit Loans, the period from and including the applicable Incremental Closing Date to the earliest of (i) the Maturity Date for such Incremental Revolving Credit Facility, (ii) the date of termination of the Revolving Credit Commitments under such Incremental Revolving Credit Facility pursuant to Section 2.06, and (iii) the date of termination of the commitment of each Incremental Revolving Credit Lender to make Revolving Credit Loans and of the obligation of each L/C Issuer to make L/C Credit Extensions under such Incremental Revolving Credit Facility pursuant to Section 8.02.
 
  
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“Bail-In Action” means the exercise of any Write-Down and Conversion Powers.
“Bail-In Legislation” means (a) with respect to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and (b) with respect to any state other than such an EEA Member Country or (to the extent that the United Kingdom is not such an EEA Member Country) the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-Down and Conversion Powers contained in that law or regulation.
“Bank of America” means Bank of America, N.A. and its successors.
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.
“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the New York Fed Bank Rate plus 1⁄2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its “prime rate,” and (c) one-month floating Eurodollar Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%; provided that the Eurodollar Rate for any day shall be based on the Eurodollar Base Rate at approximately 11:00 a.m. London time on such day, subject to the interest rate floor set forth in the definition of the term “Eurodollar Base Rate”. Any change in the Base Rate due to a change in the Prime Rate, the New York Fed Bank Rate or the Eurodollar Rate shall be effective from and including the effective date of such change in the Prime Rate, the New York Fed Bank Rate or the Eurodollar Rate, respectively. The “Prime Rate” is a rate set by the Administrative Agent based upon various factors including JPMorgan’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by JPMorgan shall take effect at the opening of business on the day specified in the public announcement of such change.
“Base Rate Loan” means a Term Loan, Revolving Credit Loan or an Incremental Loan that bears interest based on the Base Rate.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. § 1841(k)) of such party.
 
  
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“Borrowing” means a Term Borrowing, Revolving Credit Borrowing, a Swing Line Borrowing or an Incremental Borrowing, if any, as the context may require.
“Business” has the meaning specified in Section 7.19.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the State of New York and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.
“Cablevision Spin Agreements” means the agreements listed on Schedule 1.01(e).
“Capitalized Lease Obligations” means, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property, which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP and, for purposes of this Credit Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. Notwithstanding the foregoing or any other provision contained in this Credit Agreement or in any Loan Document, for purposes of this definition, GAAP shall mean GAAP as in effect prior to giving effect to the adoption of ASU No. 2016-02 “Leases (Topic 842)” and ASU No. 2018-11 “Leases (Topic 842)”.
“Carriage Suspension Adjustment” has the meaning specified in the definition of “Adjusted Operating Income.”
“Cash Basket Amount” has the meaning specified in the definition of “Adjusted Operating Income”.
“Cash Collateral” has the meaning specified in Section 2.03(g).
“Cash Collateralize” has the meaning specified in Section 2.03(g).
“Cash Equivalents” means any of the following types of Investments, to the extent owned by the Company or any of its Restricted Subsidiaries (and, where applicable, the Parent or any of its consolidated Subsidiaries) free and clear of all Liens (other than Liens created under the Collateral Documents and other Liens permitted hereunder):
(a)    marketable, direct obligations of the United States of America or United States government agencies;
(b)    bonds, notes and/or commercial paper outstanding at any time issued by any Person organized under the laws of any state of the United States of America;
(c)    fully collateralized repurchase agreements in such amounts and with such financial institutions, as the Company may select from time to time;
 
  
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(d)    bank deposits, certificates of deposit, banker’s acceptances and time deposits, which are issued by any Lender or by a United States national or state bank or foreign bank; and
(e)    money market funds that comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act.
Such Investments will be measured as of the date the Investment is acquired with the maximum maturity of any individual investment not exceeding 24 months, and a maximum portfolio average maturity of 12 months.
Such Investments will also bear at least two credit ratings, including (i) for commercial paper, minimum ratings of “A2” by S&P and “P2” by Moody’s, (ii) for longer term bonds and notes, average long-term equivalent ratings of “A+” by S&P and “A1” by Moody’s for the portfolio of this investment class, (iii) for repurchase agreements, bank deposits, certificates of deposit, banker’s acceptances and time deposits, a minimum rating of “BBB” by S&P and “Baa” by Moody’s is required, unless, with respect to U.S. bank deposits and U.S. certificates of deposit, the amount invested is less than $250,000. To the extent that S&P or Moody’s credit ratings for such instruments are not available, equivalent credit ratings from Fitch Ratings, Inc. are acceptable.
“Cash Management Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.
“Cash Management Bank” means any Person that, (i) at the time it enters into a Cash Management Agreement with a Loan Party, is a Lender or an Affiliate of a Lender or (ii) is a Lender or an Affiliate of a Lender as of the Effective Date and is a party to a Cash Management Agreement with a Loan Party on the Effective Date, in each case in its capacity as a party to such Cash Management Agreement.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.
“Change in Law” means the occurrence, after the date of this Credit Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything to the contrary herein, it is understood and agreed that any changes resulting from requests, rules, guidelines or directives (x) issued under, or in connection with, the Dodd-Frank Wall Street Reform and Consumer Protection Act or (y) promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall, for the purposes of this Credit Agreement, be deemed to be adopted subsequent to the Effective Date.
 
  
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“Change of Control” means an event or series of events by which:
(a)    (i) Dolan Family Interests or (ii) Persons Controlled by Dolan Family Interests (any such Person, a “Dolan Family Interest Controlled Person”) (so long as, in the case of this clause (ii), no “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) other than the Dolan Family Interests shall beneficially own (within the meaning of Rule 13d-3 (as in effect on the Effective Date) promulgated under the Securities Exchange Act of 1934, as amended), in the aggregate, more than fifty percent (50%) of the Equity Interests in such Dolan Family Interest Controlled Person(s)) shall cease at any time to have beneficial ownership (within the meaning of Rule 13d-3 (as in effect on the Effective Date) promulgated under the Securities Exchange Act of 1934, as amended) of shares of the capital stock of Parent, having sufficient votes to elect (or otherwise designate) at such time a majority of the members of the Board of Directors of Parent, or
(b)    Parent shall cease to own (free and clear of all Liens), directly or indirectly, 100% of the Equity Interests of the Company.
“Co-Documentation Agents” means Fifth Third Bank, SunTrust Robinson Humphrey, Inc. and TD Bank, N.A., in each case acting in its capacity as a co-documentation agent.
“Co-Syndication Agents” means BofA Securities, Inc., MUFG Bank, Ltd, The Bank of Nova Scotia, and Wells Fargo Bank, N.A., in each case acting in its capacity as a co-syndication agent.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means all of the “Collateral” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties and for the avoidance of doubt, shall exclude all Excluded Assets.
“Collateral Agent” means JPMorgan in its capacity as collateral agent for the Lenders under the Security Agreement and its successors in such capacity.
“Collateral Documents” means, collectively, the Security Agreement, the Intellectual Property Security Agreement, and each of the collateral assignments, Security Agreement Supplements, Intellectual Property Security Agreement Supplements, security agreements, pledge agreements or other similar agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.
“Committed Loan Notice” means a Committed Revolving Loan Notice or a Committed Term Loan Notice, as the context may require.
“Committed Revolving Loan Notice” means a notice of (a) a Revolving Credit Borrowing (including an Incremental Revolving Credit Borrowing), (b) a conversion of Revolving Credit Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A-1.
 
  
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“Committed Term Loan Notice” means a notice of (a) a Term Borrowing (including an Incremental Term Borrowing), (b) a conversion of Term Loans from one Type to another, or (c) a continuation of Eurodollar Rate Loans pursuant to Section 2.02(a), which, if in writing, shall be in substantially in the form of Exhibit A-3.
“Commitment” means a Term Loan Commitment, a Revolving Credit Commitment, a Letter of Credit Commitment, any Incremental Term Loan Commitment (if any) or any Incremental Revolving Commitment (if any) as the context may require.
“Commitment Fee” has the meaning given to such term in Section 2.09(a).
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
“Company” has the meaning given to such term in the preamble to this Credit Agreement.
“Company Materials” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or any L/C Issuer by means of electronic communications pursuant to Section 10.02, including through an Approved Electronic Platform.
“Compliance Certificate” means a certificate of a senior financial executive of the Company in substantially the form of Exhibit C.
“Consolidated Net Indebtedness” means, as of any date of determination, an amount equal to (a) the aggregate amount, without duplication, of all Indebtedness of the Holdings Entities, the Company and any Restricted Subsidiary that would be reflected as debt on a consolidated balance sheet of the Company (and, where applicable, of the applicable Holdings Entity) prepared in accordance with GAAP, minus (b) the amount of cash and Cash Equivalents in deposit or securities accounts of the Company and its Restricted Subsidiaries as of such date in an aggregate amount not to exceed the greater of (i) $175,000,000 and (ii) 50% of Adjusted Operating Income for the most recently completed four fiscal quarter period for which financial statements were required to have been delivered pursuant to Section 7.01, giving full pro forma effect to all Specified Transactions (as provided in such definition) that have occurred since the last day of the most recently completed Measurement Period for which financial statements were required to have been delivered pursuant to Section 7.01 and to the application of the proceeds of any proposed transaction, in each case without duplication; provided that to the extent that any calculation of “Consolidated Net Indebtedness” is used in determining pro forma compliance with a Total Leverage Ratio test and/or the Financial Covenants, under Section 2.14, 2.15 or 7.14(xii), then in no event shall any of the proceeds of the Indebtedness permitted to be incurred as a result of compliance with such test be included in the cash and Cash Equivalents pursuant to the preceding clause (b) when determining such compliance under such aforementioned sections.
 
  
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“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is legally bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Covered Entity” means any of the following:
(a)    a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(b)    a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(c)    a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” has the meaning assigned to it in Section 10.23.
“Credit Agreement” has the meaning given to such term in the preamble to this Credit Agreement.
“Credit Extension” means each of the following: (a) a Borrowing, or (b) an L/C Credit Extension.
“Cumulative AOI” means an amount, determined on the date of any proposed Restricted Payment equal to Adjusted Operating Income for the period from October 1, 2015 through the end of the most recently ended Quarter as to which financial statements have been delivered pursuant to Section 7.01.
“Cumulative Interest Expense” means for the period from October 1, 2015 through the end of the most recently ended quarter as to which financial statements have been delivered pursuant to Section 7.01, the aggregate of the interest expense of the Company and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Debt Instruments” means, collectively, the respective notes and debentures evidencing, and indentures and other agreements governing, any Indebtedness.
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
 
  
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“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Defaulting Lender” any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Company in writing that such failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any L/C Issuer, any Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in L/C Obligations or Swing Line Loans) within two Business Days of the date when due, (b) has notified the Company, the Administrative Agent or any L/C Issuer or Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s good faith determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), or (c) has (i) become the subject of a proceeding under any Debtor Relief Law or a Bail-In Action, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (c) above shall be made by the Administrative Agent in its reasonable discretion acting in good faith, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Company, each L/C Issuer, each Swing Line Lender and each Lender.
“Deposit Account Control Agreement” means an agreement, substantially in the form attached as Exhibit E to the Security Agreement or otherwise reasonably satisfactory to the Administrative Agent, among a Loan Party, a depository institution holding the funds of such Loan Party, and the Administrative Agent with respect to collection and control of the deposits and balances held in a deposit account maintained by such Loan Party.
 
  
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“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any Collateral (for purposes of Section 7.24, including (x) Related Documents and (y) agreements under which the Company or any Restricted Subsidiary has rights to content or rights to obtain content for distribution as part of the Program Services, in each case under clauses (x) and (y) that are not Collateral solely as a result of the application of clause (vi) of the definition of Excluded Assets whether in this Credit Agreement or through an equivalent provision in any other Loan Document) (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that the term Disposition specifically excludes (i) dispositions of property, whether now owned or hereafter acquired, that is obsolete, worn out, damaged, surplus or otherwise no longer used or useful in the ordinary course of business, (ii) dispositions of inventory (including advertising, sponsorship, tickets, air time, signage and similar items) in the ordinary course of business, (iii) dispositions of cash and Cash Equivalents in the ordinary course of business and the conversion of cash into Cash Equivalents and Cash Equivalents into cash, (iv) dispositions of property by any Subsidiary to the Company or to a Restricted Subsidiary (provided that in the case of this clause (iv) if the transferor of such property is a Loan Party, the transferee thereof must be a Loan Party), (v) sales or other dispositions without recourse and in the ordinary course of business of overdue accounts receivable of financially troubled debtors in connection with the compromise or collection thereof, (vi) the licensing or sublicensing of intellectual property rights and other transfers of copyrighted material in the ordinary course of business, (vii) the settlement of tort or other litigation claims in the ordinary course of business or determined by the Board of Directors or similar governing entity to be fair and reasonable in light of the circumstances, (viii) charitable contributions in amounts that in the aggregate are not material to the Company and its Restricted Subsidiaries taken as a whole, and (ix) the sale, transfer, license, lease or other disposition of property involving property or assets having a fair market value of less than $5,000,000 in a single transaction or a series of related transactions.
“Dolan” means Charles F. Dolan.
“Dolan Family Interests” means (i) any Dolan Family Member, (ii) any trusts for the benefit of any Dolan Family Members, (iii) any estate or testamentary trust of any Dolan Family Member for the benefit of any Dolan Family Members, (iv) any executor, administrator, trustee, conservator or legal or personal representative of any Person or Persons specified in clauses (i), (ii) and (iii) above to the extent acting in such capacity on behalf of any Dolan Family Member or Members and not individually and (v) any corporation, partnership, limited liability company or other similar entity, in each case 80% of which is owned and controlled by any of the foregoing or combination of the foregoing.
“Dolan Family Interest Controlled Person” has the meaning specified in the definition of “Change of Control”.
“Dolan Family Members” means Dolan, his spouse, his descendants and any spouse of any of such descendants.
“Dollars” and “$” means lawful money of the United States of America.
 
  
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“EEA Financial Institution” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in a EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Lichtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” means the first date all the conditions precedent in Section 5.01 are satisfied or waived in accordance with Section 10.01.
“Eligible Assignee” has the meaning specified in Section 10.06(b)(iii)(A); provided that, notwithstanding the foregoing, the term “Eligible Assignee” shall, solely with respect to an assignment of any Incremental Term Loan, include the Company, any Affiliated Lender or any of the Company’s Subsidiaries, provided, that:
(a)    none of the Company, any Affiliated Lender or any of the Company’s Subsidiaries holding Incremental Term Loans shall have any right to (i) attend (including by telephone) any meeting or discussions (or portion thereof) among the Administrative Agent and/or any Lenders to which representatives of the Company are not then present, or (ii) receive any information or material prepared by the Administrative Agent or any Lender or any communication by or among Administrative Agent and one or more Lenders, except to the extent such information or materials have been made available to the Company or its representatives;
(b)    notwithstanding anything in Section 10.01 or the definition of “Required Lenders” to the contrary, for purposes of determining whether the Required Lenders have (i) consented (or not consented) to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Loan Document or any departure by any Loan Party therefrom, or subject to clause (c) below, any plan of reorganization pursuant to the Bankruptcy Code, (ii) otherwise acted on any matter related to any Loan Document, or (iii) directed or required the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document, no Affiliated Lender shall have any right to consent (or not consent), otherwise act or direct or require the Administrative Agent or any Lender to take (or refrain from taking) any such action, and (x) all Term Loans held by any Affiliated Lender shall be deemed to be not outstanding for all purposes of calculating whether the Required Lenders have taken any actions and (y) all Term Loans held by Affiliated Lenders shall be deemed to be not outstanding for all purposes of calculating whether all Lenders have taken any action unless the action in question affects such Affiliated Lender in a disproportionately adverse manner than its effect on other Lenders;
 
  
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(c)    notwithstanding anything in this Credit Agreement or the other Loan Documents to the contrary, each Affiliated Lender, by its purchase of any Term Loans, hereby agrees that if a proceeding under any Debtor Relief Laws shall be commenced by or against the Company or any other Loan Party at a time when such Lender is an Affiliated Lender, such Affiliated Lender irrevocably authorizes and empowers the Administrative Agent to vote on behalf of such Affiliated Lender with respect to the Term Loans held by such Affiliated Lender in any manner in the Administrative Agent’s sole discretion, unless the Administrative Agent instructs such Affiliated Lender to vote, in which case such Affiliated Lender shall vote with respect to the Term Loans held by it as the Administrative Agent directs, provided that such Affiliated Lender shall be entitled to vote in accordance with its sole discretion (and not in accordance with the direction of the Administrative Agent) in connection with any plan of reorganization to the extent any such plan of reorganization proposes to treat any Obligations held by such Affiliated Lender in a disproportionately adverse manner than the proposed treatment of similar Obligations held by Term Lenders that are not Affiliated Lenders.
(d)    any purchase of Term Loans by the Company or any of its Subsidiaries shall (i) be effected by an offer to purchase Term Loans pro rata from each Term Lender under the applicable Term Facility in a manner reasonably acceptable to the Administrative Agent, (ii) result in such Term Loans being immediately retired upon such assignment, and (iii) not be funded with a borrowing of Revolving Credit Loans; and
(e)    the aggregate principal amount of all Term Loans under any Term Loan Facility purchased by assignment pursuant to Section 10.06 and held at any one time by all Affiliated Lenders shall not exceed 10% of the aggregate outstanding principal amount of all Term Loans under such Term Loan Facility.
“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Company, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Laws, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants,
 
  
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rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“ERISA Affiliate” means, when used with respect to a Plan, ERISA, the PBGC or a provision of the Code pertaining to employee benefit plans, any Person that is a member of any group of organizations within the meaning of Sections 414(b), (c), (m) or (o) of the Code of which the Company is a member.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Eurodollar Base Rate” means, for such Interest Period, the rate per annum equal to the London interbank offered rate as administered by the ICE Benchmark Administration (or any other Person that takes over the administration of such rate) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period as displayed on the Reuters Screen LIBOR01 Page or LIBOR02 Page (or, in the event such rate does not appear on any of such Reuters pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time, as selected by the Administrative Agent in its reasonable discretion). If such rate is not available at such time for any other reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by JPMorgan and with a term equivalent to such Interest Period would be offered by JPMorgan’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period; provided that if the Eurodollar Base Rate for any Interest Period would be a rate per annum of less than zero, then such rate shall be deemed to be 0.0% per annum.
“Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:
 
Eurodollar Rate =  
Eurodollar Base Rate
 
1.00 – Eurodollar Reserve Percentage
“Eurodollar Rate Loan” means a Term Loan or a Revolving Credit Loan that bears interest at a rate based on the Eurodollar Rate.
“Eurodollar Reserve Percentage” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such
 
  
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day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.
“Event of Default” means any of the events described in Article VIII hereof.
“Event of Loss” means, with respect to any property of the Company or a Restricted Subsidiary, (i) the actual or constructive total loss of such property or the use thereof, resulting from destruction, damage beyond repair, or the rendition of such property permanently unfit for normal use from any casualty or similar occurrence whatsoever, (ii) the destruction or damage of a material portion of such property from any casualty or similar occurrence whatsoever under circumstances in which such damage cannot reasonably be expected to be repaired, or such property cannot reasonably be expected to be restored to its condition immediately prior to such destruction or damage, within 180 days after the occurrence of such destruction or damage, (iii) the condemnation, confiscation or seizure of, or requisition of title to or use of, any property, or (iv) in the case of any property located upon a leasehold, the termination or expiration of such leasehold.
“Excluded Asset” means any and all of the following: (i) those assets set forth on Schedule 1.01(b), (ii) intellectual property that is necessary to or utilized in connection with an Excluded Asset as defined under clause (i), (iii), (iv) or (viii) of this definition, (iii) interests in Teams, (iv) Leases to the extent that such Leases require the consent of the lessor or any third party for the granting of a security interest therein, (v) motor vehicles and other assets subject to certificates of title, (vi) assets consisting of contract rights pursuant to contracts containing enforceable restrictions on the granting of security interests therein except to the extent such restrictions are rendered ineffective under Section 9-406, 9-407 or 9-408 of the UCC or other applicable law, (vii) voting stock of or other equity interests (A) in excess of 65% of the voting stock or other equity interests held by the Company or Guarantors in first tier non-US subsidiaries, (B) in non-wholly owned subsidiaries if the pledge of such stock or equity interest is prohibited by agreement, organizational documents or applicable law or regulation, (C) in Unrestricted Subsidiaries, (D) in Excluded Subsidiaries, or (E) in any other Subsidiary of the Company (1) existing as of the Effective Date, whose assets primarily consist of direct ownership interests in one or more Teams (or indirect ownership interests in one or more Teams, so long as the sole purpose of such indirect owner is to directly hold ownership interests in the direct owner of one or more Teams), or (2) that is formed after the Effective Date for the primary purpose of holding direct ownership interests in one or more Teams (or indirect ownership interests, so long as the sole purpose of such indirect owner is to hold ownership interests in the direct owner of one or more Teams) and whose assets primarily consist of ownership interests in one or more Teams, (viii) Real Property, (ix) Excluded Accounts; (x) any Affiliation Agreements, Sports Telecast Rights Agreements and Related Documents to the extent that the relevant agreement requires the consent of any entity other than an Affiliate of the Company for the pledge thereof, or if the pledge thereof is prohibited by, or constitutes a breach or default under any provision of, or results in the termination of, the relevant agreement existing prior to the Effective Date (or the date of acquisition of the Grantor party to such agreement, if applicable); provided, (i) in no event shall any Media Rights Agreement be excluded from the Collateral pursuant hereto and (ii) that all rights
 
  
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to payment, cash flow, proceeds, payments and products of such Affiliation Agreements, Sports Telecast Rights Agreements and Related Documents are considered Collateral hereunder, and (xi) those assets as to which the Administrative Agent and the Company agree that the cost of obtaining such a security interest or perfection thereof are excessive in relation to the benefit to the Lenders of the security to be afforded thereby.
“Excluded Consolidated Subsidiaries” has the meaning specified in the definition of “Financial Statement Variance”.
“Excluded Indebtedness” has the meaning given to such term in Section 8.01(e).
“Excluded Accounts” means (x) deposit or securities accounts maintained solely as tax accounts, payroll accounts, escrow accounts, trust accounts, operational disbursements accounts, petty cash accounts or flexible spending and other benefits and healthcare accounts (including healthcare claims funding accounts), and (y) other deposit or securities accounts so long as they contain less than $5,000,000 individually and $25,000,000 in the aggregate at any time.
“Excluded Subsidiary” means a Restricted Subsidiary that is not a Foreign Subsidiary and is not a Guarantor.
“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such related Swap Obligation.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Company hereunder, (a) any Taxes imposed on or measured by its overall net income (however denominated), branch profits taxes, and franchise taxes imposed on it (in lieu of net income taxes), as a result of a present or former connection between such Administrative Agent, Lender or L/C Issuer, as the case may be, and the jurisdiction of the Governmental Authority imposing such tax or any taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent, such Lender or such L/C Issuer having executed, delivered or performed its obligations or received a payment under, or enforced, any Loan Document), (b) any Tax imposed pursuant to FATCA, and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Company under Section 10.12), any U.S federal withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Company with respect to such withholding tax pursuant to Section 3.01(a) and (d) any Taxes attributable to the failure or inability of any Lender or any L/C Issuer to comply with Section 3.01(f).
 
  
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“Existing Credit Agreement” has the meaning specified in the introductory statements to this Credit Agreement.
“Existing Indebtedness” means Indebtedness of each Loan Party and its subsidiaries outstanding immediately before the occurrence of the Effective Date.
“Existing Letters of Credit” means those letters of credit listed on Schedule 2.03.
“Existing Maturity Date” has the meaning specified in Section 2.17.
“Extended Facility” has the meaning specified in Section 2.17(a).
“Extended Maturity Date” has the meaning specified in Section 2.17(a).
“Extended Revolving Credit Commitments” has the meaning specified in Section 2.17(a).
“Extended Revolving Credit Facility” has the meaning specified in Section 2.17(a).
“Extended Term Facility” has the meaning specified in Section 2.17(a).
“Extending Lender” has the meaning specified in Section 2.17.
“Extension” has the meaning specified in Section 2.17(a).
“Extension Amendment” has the meaning specified in Section 2.17(e).
“Extension Request” means a written request from the Company to the Administrative Agent requesting an extension of the Maturity Date pursuant to Section 2.17.
“Facility” means any Term Facility, Revolving Credit Facility, the Swing Line Sublimit or an Incremental Facility, if any, as the context may require.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Credit Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.
“Federal Funds Effective Rate” means, for any day, the rate calculated by the New York Fed based on such day’s federal funds transactions by depository institutions (as determined in such manner as the New York Fed shall set forth on its public website from time to time) and published on the next succeeding Business Day by the New York Fed as the federal funds effective rate.
 
  
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“Fee Letters” means, collectively, each letter agreement made between the Company and the Administrative Agent or a Joint Book Runner for the payment of fees in connection with this Credit Agreement.
“Financial Covenants” means the covenants contained in Sections 7.28 and 7.29.
“Financial Statement Variance” means, for any financial reporting period, a difference of (a) greater than 5.0% between the cumulative revenues of the Parent and its consolidated Subsidiaries for the most recently completed Measurement Period and the cumulative revenues of the Company and its Restricted Subsidiaries for the most recently completed Measurement Period; (b) greater than 5.0% between the total assets of the Parent and its consolidated Subsidiaries for the last reporting period and the total assets of the Company and its Restricted Subsidiaries for the last reporting period (for purposes of this clause (b) only, determined without taking into account any assets arising from intercompany Indebtedness between or among the Company (as lender) and the Parent and/or its direct and indirect equityholders (as borrowers)); or (c) greater than 10.0% between the Parent Adjusted Operating Income of the Parent and its consolidated Subsidiaries for the most recently completed Measurement Period and the Adjusted Operating Income of the Company and its Restricted Subsidiaries for the most recently completed Measurement Period. Notwithstanding anything to the contrary elsewhere in this Credit Agreement, references to “consolidated Subsidiaries” of the Parent in the immediately preceding sentence shall exclude (x) those consolidated Subsidiaries of the Parent listed on Schedule 1.01(g), and (y) such other consolidated Subsidiaries of the Parent that are not Restricted Subsidiaries whose assets primarily consist of investments in and/or loans to non-consolidated Affiliates so long as the aggregate assets of all consolidated Subsidiaries of the Parent excluded from the immediately preceding sentence pursuant this sentence does not exceed 20% of the aggregate assets of the Parent and its consolidated Subsidiaries (determined without giving effect to any exclusions pursuant to this sentence) (such consolidated Subsidiaries of the Parent excluded pursuant to this sentence at any time of determination being the “Excluded Consolidated Subsidiaries”).
“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Company is resident for tax purposes (including such a Lender when acting in the capacity of an L/C Issuer). For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“Foreign Subsidiary” means (i) any Subsidiary that is not a United States Person and (ii) any Subsidiary of an entity that is a Foreign Subsidiary under clause (i) of this definition.
“Form 10” means the SEC Form 10 General Form for Registration of Securities pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934.
“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such L/C Issuer other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to any Swing Line
 
  
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Lender, such Defaulting Lender’s Applicable Percentage of outstanding Swing Line Loans made by such Swing Line Lender other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Granting Lenders” has the meaning given to such term in Section 10.06(h).
“Grantor” has the meaning given to such term in the Security Agreement.
“Guarantee” has the meaning given to such term in Section 7.15.
“Guarantors” means the Persons set forth on Schedule 1.01(a), each Holdings Entity and New Restricted Subsidiary required to become a Guarantor pursuant to Section 7.10.
“Guaranty” means the Guaranty made by the Guarantors under Article IV in favor of the Secured Parties.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Laws.
“Hedge Bank” means any Person that, at the time it enters into a Secured Hedge Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Secured Hedge Agreement.
“Holdings Entities” has the meaning specified in the recital of parties to this Credit Agreement.
“Honor Date” has the meaning given to such term in Section 2.03(c)(i).
 
  
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“Incremental Borrowing” means an Incremental Term Borrowing or an Incremental Revolving Credit Borrowing, as the context may require.
“Incremental Closing Date” means, with respect to any Incremental Facility, the first date all of the conditions precedent set forth in the Incremental Supplement applicable to such Incremental Facility are satisfied or waived in accordance with Section 10.01.
“Incremental Facility” means an Incremental Term Facility or an Incremental Revolving Credit Facility, as the context may require.
“Incremental Lender” means an Incremental Term Lender or an Incremental Revolving Credit Lender, as the context may require.
“Incremental Loan” means an Incremental Term Loan or an Incremental Revolving Credit Loan, as the context may require.
“Incremental Note” means an Incremental Term Loan Note or an Incremental Revolving Credit Note, as the context may require.
“Incremental Revolving Credit Borrowing” means a borrowing consisting of simultaneous Incremental Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the applicable Incremental Revolving Credit Lenders pursuant to Section 2 of any Incremental Revolving Credit Supplement.
“Incremental Revolving Credit Commitment” means, subject to the terms and conditions of Section 2.14 as to each Incremental Revolving Credit Lender, its obligation to make Incremental Revolving Credit Loans to the Company pursuant to Section 2 of the applicable Incremental Revolving Credit Supplement in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule I to such Incremental Supplement under the caption “Incremental Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Incremental Revolving Credit Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Credit Agreement.
“Incremental Revolving Credit Facility” has the meaning specified in Section 2.14(a).
“Incremental Revolving Credit Lender” means at any time, (a) on or prior to the applicable Incremental Closing Date, any Lender that has Incremental Revolving Credit Commitments at such time, and (b) at any time after the applicable Incremental Closing Date, any Lender that holds Incremental Revolving Credit Commitments and/or Incremental Revolving Credit Loans at such time.
“Incremental Revolving Credit Loan” means an advance made by any Incremental Revolving Credit Lender under an Incremental Revolving Credit Facility.
“Incremental Revolving Credit Note” means a promissory note made by the Company in favor of an Incremental Revolving Credit Lender, evidencing Incremental Revolving Credit Loans made by such Incremental Revolving Credit Lender, substantially in the form of Exhibit B-2.
 
  
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“Incremental Revolving Credit Supplement” has the meaning specified in Section 2.14(b).
“Incremental Supplement” means an Incremental Term Supplement or an Incremental Revolving Credit Supplement, as the context may require.
“Incremental Term Borrowing” means a borrowing consisting of simultaneous Incremental Term Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period, made by each of the applicable Incremental Term Lenders pursuant to Section 2 of any Incremental Term Supplement.
“Incremental Term Commitment” means, subject to the terms and conditions of Section 2.15 as to each Incremental Term Lender, its obligation to make Incremental Term Loans to the Company on the applicable Incremental Closing Date, pursuant to Section 2 of the applicable Incremental Term Supplement in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Incremental Term Lender’s name on Schedule I to such Incremental Term Supplement under the caption “Incremental Term Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Incremental Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Credit Agreement.
“Incremental Term Facility” has the meaning specified in Section 2.15(a).
“Incremental Term Lender” means at any time, (a) on or prior to the applicable Incremental Closing Date, any Lender that has an Incremental Term Commitment at such time and (b) at any time after the applicable Incremental Closing Date, any Lender that holds Incremental Term Loans at such time.
“Incremental Term Loan” means an advance made by any Incremental Term Lender under an Incremental Term Facility.
“Incremental Term Loan Note” means a promissory note made by the Company in favor of an Incremental Term Lender, evidencing Incremental Term Loans made by such Incremental Term Lender, substantially in the form of Exhibit B-4.
“Incremental Term Supplement” has the meaning specified in Section 2.15(b).
“Indebtedness” means, as to any Person, Capitalized Lease Obligations of such Person and other indebtedness of such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for the deferred purchase or acquisition price of property or services in respect of which such Person is the purchaser, other than accounts payable (other than for borrowed money) incurred in the ordinary course of business of such Person. Without limiting the generality of the foregoing, for the avoidance of doubt, (a) such term shall include (1) when applied to the Parent, the Company and/or any
 
  
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Subsidiary of the Parent (other than an Unrestricted Subsidiary of the Company), all obligations of the Parent, the Company and/or any Subsidiary of the Parent (other than an Unrestricted Subsidiary of the Company) under Swap Contracts and (2) when applied to the Parent, the Company and/or any or any other Person, all Indebtedness of others Guaranteed by such Person and (b) such term shall exclude (1) deferred revenue (including advance ticket sales), (2) obligations to make or pay advances, deposits or deferred compensation to announcers, broadcasters, on-air talent, promoters, producers or other third parties in connection with the development, booking, production, broadcast, promotion, execution, staging or presentations of shows, events or other entertainment activities or related merchandising, concessions or licensing and (3) obligations to pay advances, deposits or deferred compensation to the holders of rights to content or intellectual property in connection with the development, broadcast, distribution or license of content or underlying intellectual property.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Company under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnitee” has the meaning specified in Section 10.04(b).
“Information” has the meaning specified in Section 10.20.
“Initial L/C Issuer” has the meaning specified in the definition of “L/C Issuer.”
“Initial Facilities” means the Initial Revolving Credit Facility and the Initial Term Facility.
“Initial Revolving Credit Facility” means, initially, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments on the Effective Date, and hereafter on any date of determination, the aggregate amount of the Revolving Credit Commitments of the Revolving Credit Lenders on such date.
“Initial Term Facility” means, initially, the aggregate amount of the Term Lenders’ Term Commitments on the Effective Date, and hereafter on any date of determination, the aggregate principal amount of the Term Loans made on the Effective Date outstanding on such date.
“Intellectual Property Security Agreement” means the Intellectual Property Security Agreement, duly executed by each Loan Party.
“Intellectual Property Security Agreement Supplement” has the meaning specified in Section 13(b) of the Security Agreement.
“Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Adjusted Operating Income to (b) Net Interest Expense for the most recently completed Measurement Period.
“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such
 
  
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Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan or Swing Line Loan, the last Business Day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made.
“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one week, or one, two, three or six months thereafter, as selected by the Company in its Committed Loan Notice; provided that:
(a)    any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(b)    any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(c)    no Interest Period shall extend beyond the Maturity Date of the applicable Facility.
“Investments” has the meaning given to such term in Section 7.17.
“ISP” means the International Standby Practices (ISP98) International Chamber of Commerce Publication No. 590, as the same may be amended and as in effect from time to time.
“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by any L/C Issuer and the Company or any Subsidiary or in favor of any L/C Issuer and relating to any such Letter of Credit.
“JPMorgan” means JPMorgan Chase Bank, N.A. and its successors.
“Joint Book Runners” means JPMorgan, BofA Securities, Inc., MUFG Bank, Ltd., The Bank of Nova Scotia, Wells Fargo Bank, N.A., Fifth Third Bank, SunTrust Robinson Humphrey, Inc. and TD Bank, N.A., in each case acting in its capacity as a joint book runner.
“Labor Controversy” means any strike, lock-out or other labor controversy, including (i) any work stoppage or other actions or proceedings involving any teams or unions representing any employees or agents of the Company or any of its Subsidiaries, MSG or any of its Subsidiaries or any teams or (ii) any individual disputes with employees or agents (including players, coaches or scouts) of the Company or any of its Subsidiaries, MSG or any of its Subsidiaries or any teams, whether (1) in negotiating extensions or renewals of contracts or (2) related to any such employee or agent seeking an improvement in such individual’s arrangements with the Company or any of its Subsidiaries, MSG or any of its Subsidiaries or any team in advance of scheduled contract extensions or renewals.
 
  
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“Labor Controversy Step Up” has the meaning specified in Section 7.28.
“Labor Dispute” means any strike, lockout, work stoppage, or other similar action involving any labor organization representing any employees of the Company or any of its Restricted Subsidiaries. For the avoidance of doubt, “Labor Dispute” does not include any individual disputes with employees or agents (including players, coaches or scouts) of the Company or any of its Restricted Subsidiaries.
“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directives, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Revolving Credit Percentage.
“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.
“L/C Issuer” means JPMorgan and Bank of America, N.A. (each, an “Initial L/C Issuer”), any Eligible Assignee to which a portion of the Letter of Credit Commitment under this Credit Agreement has been assigned pursuant to Section 10.06, or any other Lender that is a bank and that agrees to act as an L/C Issuer hereunder, so long as (1) such Initial L/C Issuer, Eligible Assignee or other Lender is not a Defaulting Lender, and (2) such Eligible Assignee or other Lender expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Credit Agreement are required to be performed by it as an L/C Issuer and notifies the Administrative Agent of its Letter of Credit Commitment and Lending Office, for so long as such Initial L/C Issuer, Eligible Assignee or other Lender, as the case may be, shall have a Letter of Credit Commitment.
“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. For all purposes of this Credit Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“LCA Election” has the meaning given to such term in Section 1.10.
 
  
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“LCA Test Date” has the meaning given to such term in Section 1.10.
“League” means (i) an organization governing, administering or regulating the participation of teams or participants in any professional sport, including the National Basketball Association, the National Hockey League and the Women’s National Basketball Association and any minor league teams associated therewith, including, in each case, the Commissioner, management council, executive committee or similar governing body of each such organization and (ii) any entity through which each such organization conducts business or that may be formed generally by the member clubs of such organization.
“League Rules” means (a) the constitution and by-laws of each League, (b) the governing documents of each League, (c) all present and future rules, regulations, interpretations, memoranda, procedures, resolutions, directives, policies and guidelines of each League, (d) any agreements and arrangements to which the Company or any of its subsidiaries is (or after the Effective Date may become) subject or by which it or its assets are (or may become) bound with or in favor of any League, (e) any agreements and arrangements to which any League’s teams generally are (or after the Effective Date may become) subject or by which they or their assets are (or may become) bound, in each case as such agreements or arrangements may be amended or adopted from time to time and including the custom and practice thereunder, including, but not limited to, League Rules relating to membership relocation, indebtedness and ownership transfers, territorial rights and limitations, the telecast or broadcast, by over-the-air television, non-broadcast television, radio or any other means, whether on a local, regional, national or international basis, of team games and the use of League or team logos, names or other intellectual property and (f) any conditions that the League may impose with respect to transactions in which the Teams may engage.
“League-wide Labor Controversy” means any Labor Controversy affecting any entire League involving Teams with respect to which the Company or any Restricted Subsidiaries has one or more Media Rights Agreements and/or Sports Telecast Rights Agreements.
“Leases” means those leases and subleases pursuant to which any of the Loan Parties has been granted or holds the right to use and occupy Real Property demised thereunder, together with all amendments, modifications, extensions, renewals and restatements thereof.
“Lenders” means the banks or other financial institutions which are parties hereto, as well as any Persons that become a “Lender” hereunder pursuant to Section 10.06 and, as the context requires, includes any Incremental Lender and Swing Line Lender, together with their respective successors and assigns.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Company and the Administrative Agent.
“Letter of Credit” means (i) any letter of credit issued hereunder and (ii) any Existing Letter of Credit issued by an issuer that is also a Lender hereunder. A Letter of Credit may be a Trade Letter of Credit or a Standby Letter of Credit.
 
  
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“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by an L/C Issuer.
“Letter of Credit Commitment” means, as to any L/C Issuer, (a) the amount set forth opposite such L/C Issuer’s name on Schedule 2.01 under the caption “Letter of Credit Commitment” or (b) if such L/C Issuer has entered into one or more Assignment and Assumptions, the amount set forth for such L/C Issuer in the Register as such L/C Issuer’s “Letter of Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.06(a); provided that if any L/C Issuer shall become a Defaulting Lender, the Company may use its commercially reasonable efforts to reallocate the Letter of Credit Commitment of such Defaulting Lender among other Lenders; provided, further that if, after 20 Business Days of the Company attempting to reallocate such Letter of Credit Commitments (or such longer period as the Company may decide in its sole discretion), the Letter of Credit Commitments of such Defaulting Lender have not been fully reallocated among other Lenders, then at the option of the Company (which shall be exercised by a written notice thereof to the Administrative Agent), the Letter of Credit Commitment of each other L/C Issuer (but excluding any L/C Issuer who shall have only become an L/C Issuer as a result of the Company’s reallocation efforts) that is not a Defaulting Lender shall be increased by a pro rata amount of the remaining unallocated amount of such Defaulted Lender’s Letter of Credit Commitment, such that the aggregate Letter of Credit Commitments are not reduced as a result thereof, or the Company shall be permitted to replace such L/C Issuer in accordance with Section 10.12.
“Letter of Credit Expiration Date” means (1) initially, the day that is seven days prior to the Maturity Date then in effect for the Initial Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day) and (2) after the consummation of any Incremental Revolving Credit Facility with a Maturity Date that is later than the Maturity Date of the Initial Revolving Credit Facility, if an Incremental Revolving Credit Lender thereunder agrees to be an L/C Issuer and issue a Letter of Credit with a Letter of Credit Expiration Date that is the day that is seven days prior to the Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day) with the latest Maturity Date, the day that is seven days prior to the Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day) with the latest Maturity Date.
“Letter of Credit Fee” has the meaning specified in Section 2.03(i).
“Letter of Credit Sublimit” means an amount equal to the lesser of (a) $35,000,000 and (b) the aggregate amount of the L/C Issuers’ Letter of Credit Commitments at such time, as such amount may be reduced pursuant to Section 2.06(a). The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.
“Liens” has the meaning given to such term in Section 7.16.
“Limited Condition Acquisition” means an acquisition (or similar material investment) by any Loan Party of any assets, business or Person permitted to be acquired by such Loan Party under the terms of this Credit Agreement, in each case the consummation of which is not conditioned on the availability of, or on obtaining, third-party financing.
 
  
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“Liquidity” means at any time the sum of unrestricted cash and Cash Equivalents on the balance sheet of the Company and the unused commitments under the Revolving Credit Facility at such time.
“Loan” means an extension of credit by a Lender to the Company under Article II in the form of a Term Loan, a Revolving Credit Loan or a Swing Line Loan (including Incremental Loans, if any).
“Loan Documents” means, collectively, (a) this Credit Agreement, (b) the Notes, (c) the Collateral Documents, (d) the Fee Letters, (e) each Issuer Document, (f) each Incremental Supplement, if any and (g) solely for purposes of the Collateral Documents (including in the term “Obligations” as used in the definition of “Secured Obligations” in the Security Agreement and in the Intellectual Property Security Agreement) and Article IV hereof, each Secured Hedge Agreement and each Secured Cash Management Agreement.
“Loan Parties” means, collectively, the Company and each Guarantor.
“Mandatory Prepayment Disposition” has the meaning given to such term in Section 2.05(b)(i).
“Margin Stock” means “margin stock” as defined in Regulation U.
“Master Agreement” has the meaning specified in the definition of “Swap Contract.”
“Master Subordinated Intercompany Note” means an intercompany note substantially in the form of Exhibit I.
“Material Adverse Effect” means a materially adverse effect upon (i) the property, business, assets, condition (financial or otherwise), liabilities or operations of the Company and its Restricted Subsidiaries taken as a whole on a combined basis in accordance with GAAP, (ii) the Facility or Collateral (with respect to clauses (i) and (ii), other than changes resulting from industry wide developments affecting companies in similar businesses that do not have a disproportionate impact on the Company and its Restricted Subsidiaries, suspension of carriage during negotiation of Affiliation Agreements, or changes resulting from a League-wide Labor Controversy; provided that any Labor Controversy shall not, in and of itself, be deemed to constitute a Material Adverse Effect), (iii) the ability of the Company and the Restricted Subsidiaries taken as a whole to perform the Obligations hereunder, or (iv) the legality, validity, binding nature or enforceability of this Credit Agreement or any other Loan Document or the validity, perfection, priority or enforceability of the security interest created, or purported to be created, by the Security Agreement.
“Maturity Date” means (a) with respect to the Initial Facilities, October 11, 2024, (b) with respect to each Incremental Facility, the maturity date for such Incremental Facility set forth in the applicable Incremental Supplement (provided, that the maturity date of any Incremental Term Facility shall be subject to the provisions of Section 2.15(b)) and (c) with respect to Swing Line Loans, the latest Maturity Date of the Initial Revolving Credit Facility.
“Maximum Rate” has the meaning specified in Section 10.08.
 
  
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“Measurement Period” means, as of each date of determination, the period of four consecutive fiscal quarters of the Company (or Parent, where applicable), then most recently ended for which financial statements are required to have been delivered by the Company pursuant to Section 7.01.
“Media Rights Agreement” means, with respect to the New York Knicks and the New York Rangers, each written telecast rights agreement made between the Company, on the one hand, and such Team, on the other hand, (a) pursuant to which the Company has been granted exclusive local telecast rights to exhibit games of such Team (as was originally required in the Existing Credit Agreement), as such Media Rights Agreement may be terminated, amended or otherwise modified in accordance with Section 7.21, (b) which has been pledged as Collateral, and (c) having a term that expires no earlier than 180 days after the latest Maturity Date (after giving effect to all then-completed extensions to such Media Rights Agreement).
“Merge” has the meaning specified in Section 7.23.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“MSG” means The Madison Square Garden Company, a Delaware corporation, or any other Person owning any Team owned by The Madison Square Garden Company on the Effective Date.
“MSG Form 10” means the Form 10, dated September 11, 2015, that MSG SpinCo filed with the SEC, as such filing has been amended, modified or otherwise supplemented prior to the Original Closing Date.
“MSG Spin Agreements” means the agreements listed on Schedule 1.01(f).
“MSG SpinCo” means MSG SpinCo, Inc., a Delaware corporation, which, in connection with the Spin-Off, will change its name to The Madison Square Garden Company.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net Cash Proceeds” means proceeds received by the Company or any of the Restricted Subsidiaries in cash as and when received from (x) any Disposition or the incurrence or issuance of Indebtedness of the Company or any of the Restricted Subsidiaries, in each case after deduction of (i) the costs of selling, recovery or other transaction expenses payable by the Company or any of the Restricted Subsidiaries in connection with obtaining such proceeds (including banking, professional or other fees, commissions, discounts and expenses, transfer and similar taxes incurred in connection with such Disposition, incurrence or issuance, and the Company’s good faith reasonable estimate of any income, franchise, transfer or other tax liability and reserves for indemnification) arising from, such Disposition, incurrence or issuance and (ii) the principal amount of, and the premium or penalty, if any, plus the interest and other amounts on any Indebtedness that is secured by the applicable asset and that is required to be repaid by the terms of such Indebtedness (unless permitted by such terms to be reinvested) in connection with such transaction (other than Indebtedness under the Loan Documents) or (y) any casualty insurance or condemnation awards with respect to an Event of Loss, after deduction of (i) the costs
 
  
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of obtaining such award with respect to an Event of Loss (including fees and costs of experts, consultants and/or attorneys), and any income, franchise, transfer or other tax liability arising therefrom and (ii) the principal amount of, and the premium or penalty, if any, plus the interest and other amounts on any financing permitted under this Credit Agreement that is secured by the applicable assets and is required to be repaid by the terms of such Indebtedness (unless permitted by such terms to be reinvested) in connection with such Event of Loss. If any amount payable to the Company or any such Restricted Subsidiary in respect of any such incurrence or issuance shall be or become evidenced by any promissory note or other negotiable or non-negotiable instrument, the cash proceeds received on any such note or instrument shall constitute Net Cash Proceeds as and when received.
“Net Interest Expense” means, for any Measurement Period, the sum of (a) all interest expense, premium payments, debt discount, fees, charges and related expenses incurred in connection with (x) borrowed money (including capitalized interest) or (y) the deferred purchase price of assets, and in each case to the extent treated as interest in accordance with GAAP during such Measurement Period (including all interest paid or payable with respect to discontinued operations only to the extent the revenues and expenses of such operations are included in the Adjusted Operating Income) and (b) the portion of rent under Capitalized Lease Obligations that is treated as interest in accordance with GAAP during such Measurement Period, in the case of each of clauses (a) and (b), of the Holdings Entities, the Company and its Restricted Subsidiaries determined on a consolidated basis without duplication and in accordance with GAAP for the most recently completed Measurement Period; provided, however, that there shall be deducted from Net Interest Expense all interest income (without taking into account any interest income arising from intercompany Indebtedness between or among the Company (as lender) and the Parent and/or its direct and indirect equityholders (as borrowers)) for such Measurement Period of the Holdings Entities, the Company and its Restricted Subsidiaries determined on a consolidated basis without duplication and in accordance with GAAP.
“Network Assets” means all assets of the Company and its Restricted Subsidiaries, including but not limited to the Affiliation Agreements, the Media Rights Agreements and the Sports Telecast Rights Agreements, used or necessary to the operation of the Network Business (other than the Excluded Assets under clauses (i) through (v) and (vii) through (ix) of the definition of Excluded Assets).
“Network Business” means the business of providing Program Services pursuant to the Affiliation Agreements.
“New Restricted Subsidiary” means any Unrestricted Subsidiary designated as a Restricted Subsidiary pursuant to Section 7.08(b) or any New Subsidiary who is required to become a Guarantor or Restricted Subsidiary pursuant to Section 7.10.
“New Subsidiary” means any Person which becomes a Subsidiary of the Company after the Effective Date.
“New York Fed” means the Federal Reserve Bank of New York.
 
  
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“New York Fed Bank Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if both such rates are not so published for any day that is a Business Day, the term “New York Fed Bank Rate” means the rate quoted for such day for a federal funds transaction at 11:00 a.m. on such day received by the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Credit Agreement.
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“Non-Extending Lender” has the meaning specified in Section 2.17(a).
“Non-Financial Entity” has the meaning specified in Section 10.06(b).
“Non-Required Consents” means the consent of any counterparty to a Contractual Obligation to the grant of a security interest in the agreement constituting the Contractual Obligation.
“Note” means Term Loan Note, a Revolving Credit Note, an Incremental Term Loan Note, if any, or an Incremental Revolving Credit Note, if any, as the context may require.
“Obligations” means all advances to, and debts, liabilities, obligations (but, with respect to any Guarantor at any time, excluding all Excluded Swap Obligations with respect to such Guarantor at such time), covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Restricted Subsidiary thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“Original Closing Date” means September 28, 2015.
“Other Connection Taxes” means, with respect to the Administrative Agent, any Lender or any L/C Issuer, Taxes imposed as a result of a present or former connection between such Administrative Agent, Lender or L/C Issuer and the jurisdiction imposing such Tax (other than connections arising from such Administrative Agent, Lender or L/C Issuer having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary taxes, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06(b)).
 
  
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“Outstanding Amount” means (a) with respect to Term Loans, Revolving Credit Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans, Revolving Credit Loans and Swing Line Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Company of Unreimbursed Amounts.
“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.–managed banking offices of depository institutions (as such composite rate shall be determined by the New York Fed as set forth on its public website from time to time) and published on the next succeeding Business Day by the New York Fed as an overnight bank funding rate (from and after such date as the New York Fed shall commence to publish such composite rate).
“Parent” means MSG Networks Inc., a Delaware corporation or its successor.
“Parent Adjusted Operating Income” means for any period, the following for the Parent and its consolidated Subsidiaries for such period, each component determined on a consolidated basis in accordance with GAAP: (i) aggregate revenues, minus (ii) aggregate operating expenses (including direct operating and selling, general administrative), such expenses to exclude impairments of property, equipment and intangible assets, depreciation and amortization and charges and credits relating to employee and director stock plans and restructuring charges and credits, and in each case without duplication to exclude expenses allocated to Parent Affiliates; provided, however, that for purposes of determining Parent Adjusted Operating Income for any period (A) there shall be included any dividends and distributions to the extent paid in cash by any Parent Affiliate to the Parent or any of its consolidated Subsidiaries to the extent such dividend or distribution relates to net income earned or cash realized from operating activities by such Parent Affiliate in the immediately preceding 12 month period, (B) there shall be excluded all management fees paid by any Parent Affiliate to the Parent or any of its consolidated Subsidiaries during such period other than any such amounts settled in cash to the extent not in excess of 5% of Parent Adjusted Operating Income as determined without including any such fees, (C) Parent Adjusted Operating Income for such period shall be increased or reduced, as the case may be, by the Parent Adjusted Operating Income of assets or businesses acquired or disposed of (provided that in each case it has an impact on Parent Adjusted Operating Income of at least $500,000) by the Parent or any of its consolidated Subsidiaries on or after the first day of such period, determined on a pro forma basis reasonably satisfactory to the Administrative Agent (it being agreed that it shall be satisfactory to the Administrative Agent that such pro forma calculations may be based upon GAAP as applied in the preparation of the financial statements for the Parent, delivered or deemed delivered pursuant to Section 7.01 rather than as applied in the financial statements of the company whose assets were acquired and may include, in the Parent’s discretion, a reasonable estimate of savings under existing contracts resulting from any such acquisitions), as though the Parent or such consolidated Subsidiary acquired or disposed of such
 
  
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assets on the first day of such period, and (D) there shall be excluded any gains or losses on sales or dispositions of businesses by the Parent or any of its consolidated Subsidiaries. For purposes of this definition, operating revenues and operating expenses may exclude the following, provided that all exclusions for cash items (whether representing a cash item in the period in question or in a future period) shall be limited to an aggregate of $40,000,000 per year (the “Parent Annual Cash Basket Amount”) and an aggregate of $75,000,000 during the entire term of the Facility (the “Parent Cash Basket Amount”): (1) provisions for severance obligations; (2) losses resulting from any write-off or write-down of Investments by the Parent or any of its consolidated Subsidiaries; (3) the effect of the loss of any currently held real estate tax exemptions; (4) costs and expenses incurred to implement the Spin-Off, (5) amortization of production and development costs associated with shows or other content or the costs resulting from the cancellation of shows or other content or abandonment of shows or other content under development or write-off of any deferred production costs associated with shows; (6) losses resulting from currency fluctuations and any unrealized losses from hedging transactions; (7) pension curtailment or settlements; (8) other non-recurring, non-cash items in excess of $1,000,000; and (9) changes to US GAAP that would cause a covenant default (provided that the Parent shall provide reconciliations to demonstrate compliance under previous US GAAP and the parties shall agree to negotiate in good faith to amend covenants accordingly). In the case of clauses (1) through (3) above only, if the expense is required to be recognized in one period but paid in whole or in part in subsequent periods and the expense, when aggregated with all other expenses described in clauses (1) through (9) above relating to such initial period, exceeds the Parent Annual Cash Basket Amount, (i) the expense in the period in which it is recognized shall be limited, when aggregated with all other expenses described in clauses (1) through (9) above relating to such initial period, to the Parent Annual Cash Basket Amount, and (ii) the amount of expense in excess of the Parent Annual Cash Basket Amount may be recognized or considered an expense (for purposes of clause (ii) of this definition) in any subsequent period in which such excess amount is paid, subject in any event to the Parent Cash Basket Amount.
“Parent Affiliate” means an Affiliate of the Parent that is not a Subsidiary of the Parent.
“Parent Annual Cash Basket Amount” has the meaning specified in the definition of “Parent Adjusted Operating Income”.
“Parent Cash Basket Amount” has the meaning specified in the definition of “Parent Adjusted Operating Income”.
“Participant” has the meaning given to such term in Section 10.06(d).
“Participant Register” has the meaning given to such term in Section 10.06(d).
“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Permitted Investments” means (a) Investments in cash and Cash Equivalents; (b) accounts receivable arising in the ordinary course of business, (c) accounts receivable owing to the Company or any Restricted Subsidiary from any Unrestricted Subsidiary for management
 
  
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or other services or other overhead or shared expenses allocated in the ordinary course of business provided by the Company or any Restricted Subsidiary to such Unrestricted Subsidiary, (d) any Investment constituting Indebtedness permitted under Section 7.14(v), Guarantees permitted under Section 7.15, Restricted Payments permitted under Section 7.18, or any sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) that is not a Disposition or that is a Disposition permitted under Section 7.24, (e) any Investment constituting a Permitted Parent Payment, (f) any Permitted Restricted Subsidiary Transaction, (g) Investments in existence as of the Effective Date and set forth on Schedule 6.15, (h) Investments received in settlement of overdue amounts or amounts owed by a Person that is insolvent or distributions in insolvency proceedings of any such Person or received by foreclosure or enforcement of any Lien in favor of the Company or any Restricted Subsidiary, (i) any Investment under any of the Cablevision Spin Agreements and the MSG Spin Agreements, (j) Investments consisting of advances, deposits or deferred compensation to (i) announcers, broadcasters, on-air talent, promoters, producers or other third parties in connection with the development, booking, production, broadcast, promotion, execution, staging or presentations of shows, events or other entertainment activities or related merchandising, concessions or licensing, or (ii) holders of rights to content or intellectual property in connection with the development, broadcast, distribution or license of content or underlying intellectual property, (k) Investments in one or more Unrestricted Subsidiaries, Excluded Subsidiaries or joint ventures; provided that the aggregate amount of all such Investments, when combined with the aggregate amount of Guarantees permitted pursuant to Section 7.15(xii), does not exceed the greater of (A) $105,000,000 and (B) 30% of Adjusted Operating Income for the most recently completed four fiscal quarter period for which financial statements were required to have been delivered pursuant to Section 7.01, (l) advances of payroll payments to employees in the ordinary course of business, and (m) Investments consisting of notes, other similar instruments or non-cash consideration received in connection with any disposition not prohibited by Section 7.24.
“Permitted Liens” means, with respect to any Person: (i) (A) pledges or deposits of cash to secure obligations of such Person under workers’ compensation laws, unemployment insurance laws or similar legislation, or (B) good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or Leases to which such Person is a party, or (C) deposits of cash to secure public or statutory obligations of such Person or (D) deposits of cash or U.S. Government bonds to secure surety or appeal bonds to which such Person is a party, or (E) deposits as security for contested taxes or import, customs or similar duties or for the payment of rent or royalties; (ii) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, setoff and recoupment rights or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be prosecuting appeal or other proceedings for review (and as to which all foreclosures and other enforcement proceedings shall have been fully bonded or otherwise effectively stayed); (iii) Liens for (x) Taxes (other than property taxes), assessments, charges or other governmental levies not overdue by more than 30 days or which if more than 30 days overdue, (1) the period of grace, if any, related thereto has not expired or which are being contested in good faith by appropriate proceeding (provided that a reserve or other appropriate provision shall have been made therefor as appropriate in accordance with GAAP) or (2) the aggregate principal outstanding amount of the obligations secured thereby does not exceed $5,000,000, and (y) property taxes not yet subject to penalties for non-payment or which are being contested in good faith and by appropriate proceedings (and as to which all foreclosures and other enforcement proceedings shall have been fully bonded or otherwise
 
  
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effectively stayed); (iv) Liens in favor of issuers of performance bonds issued pursuant to the request of and for the account of such Person in the ordinary course of its business; (v) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness or other extensions of credit and which do not in the aggregate materially detract from the value of said properties or materially impair their use in the operation of the business of such Person; (vi) Liens on cash created in the ordinary course of business and customary in the Business consisting of pledges to, deposits with or advances to announcers, broadcasters, on-air talent, promoters, producers or other third parties in connection with the development, booking, production, broadcast, promotion, execution, staging or presentations of shows, events or other entertainment activities or related merchandising, concessions or licensing; (vii) Liens on cash created in the ordinary course of business and customary in the Business consisting of obligations to pay advances, deposits or deferred compensation to the holders of rights to content or intellectual property in connection with the development, broadcast, distribution or license of content or underlying intellectual property; or (viii) Liens created in the ordinary course of business and customary in the relevant industry securing obligations of any of the Company and its Restricted Subsidiaries not to exceed, in the aggregate, the greater of (A) $35,000,000 and (B) 10% of Adjusted Operating Income for the most recently completed four fiscal quarter period for which financial statements were required to have been delivered pursuant to Section 7.01.
“Permitted Parent Payments” means (a) payments consisting of the issuance of common equity interests in the Company, (b) payments sufficient to permit Parent to pay dividends unpaid to equity holders of Parent but declared within the 60 days preceding such payment and permitted to be paid under this Credit Agreement at time of such declaration, (c) tax payments under customary intercompany tax sharing arrangements for payment, not to exceed the lesser of (x) the amount of taxes that would have been paid by the Company had the Company been a taxpayer and (y) the amount of taxes actually owed by Parent as a result of its ownership of the Company, (d) payments under equity and other compensation incentive programs to employees and directors of the Company or any of its current or former Affiliates in the ordinary course of business; provided that, in the case of employees or directors of former Affiliates, such payments relate to awards granted prior to the consummation of the Spin-Off, (e) payment of overhead of Parent (including the salaries, bonuses, and incentive and other compensation payable to officers and employees of Parent), directors’ fees and other out of pocket fees, costs, expenses and indemnities incurred by Parent on behalf of or in managing the business of the Company or any of its Restricted Subsidiaries, or otherwise in connection with Parent’s status as a public company and a parent holding company; and (f) payments due and payable under the Cablevision Spin Agreements and the MSG Spin Agreements.
“Permitted Restricted Subsidiary Transaction” means any transaction by which any Restricted Subsidiary shall (i) pay dividends or make any distribution on its capital stock or other equity securities or pay any of its Indebtedness owed to the Company or any other Restricted Subsidiaries, (ii) make any loans or advances to the Company or any other Restricted Subsidiaries or (iii) transfer any of its properties or assets to, merge or consolidate with or into, or liquidate or dissolve into the Company or any other Restricted Subsidiaries; provided that if the Restricted Subsidiary making such payment, loan, advance or transfer is a Guarantor, then the Restricted Subsidiary receiving the same shall be the Company or a Guarantor as well.
 
  
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“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means, at any time, an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and is maintained by the Company or an ERISA Affiliate.
“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.
“Pledged Account” means a deposit account subject to a Deposit Account Control Agreement or a securities account that is the subject of a Securities Account Control Agreement.
“Pledged Equity Interests” has the meaning given to such term in the Security Agreement.
“Proceedings” has the meaning given to such term in Section 7.01(g).
“Program Services” means, collectively, the program services currently known as MSG, MSG Plus, MSG HD and MSG Plus HD and all substitutions, replacements, extensions and expansions thereof and “Program Service” means any of them.
“Prohibited Transaction” means a transaction that is prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt under Section 4975 of the Code or Section 408 of ERISA.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Lender” has the meaning given to such term in Section 7.01.
“QFC” has the meaning given to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. § 5390(c)(8)(D).
“QFC Credit Support” has the meaning given to the term in Section 10.23.
“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section la(l8)(A)(v)(II) of the Commodity Exchange Act.
“Quarter” means a fiscal quarterly period of the Company.
 
  
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“Real Property” means all real property and all rights benefiting such real property, specifically including (without intending to limit the generality of the foregoing) the following, whether now or hereafter existing, except to the extent that any of the following or the foregoing constitutes personal property relating primarily to, pertaining primarily to, used primarily in, or necessary for, the Network Business including, without limitation, the Related Documents (1) all buildings, structures and other improvements erected or located on such real property (collectively, the “Real Property Improvements”); (2) all easements, rights-of-way or use, air rights and development rights, and other estates, right, title, interest, privileges and appurtenances of any nature whatsoever, in any way belonging, relating or pertaining to or benefiting such real property or the Improvements (collectively, the “Real Property Other Interests”); (3) fixtures located in or upon such real property, Real Property Improvements or Real Property Other Interests; (4) all leases, subleases, licenses, concessions or other agreements with respect to all or any portion of such real property, Real Property Improvements or Real Property Other Interests, and all other rights, powers, privileges, options and benefits thereunder; (5) all agreements, contracts, certificates, permits, approvals, guaranties, supporting obligations, warranties, instruments, plans, specifications and other records and documents with respect to all or any part of such real property, Real Property Improvements or Real Property Other Interests, and all rights, powers, privileges, options and benefits thereunder; (6) all rights to appear in and defend, and to commence, any action or proceeding with respect to all or any portion of such real property, Real Property Improvements or Real Property Other Interests; (7) all right, title and interest in or to (i) insurance proceeds, (ii) all awards with by reason of any condemnation, eminent domain or other taking (or any disposition made in lieu thereof) of all or any portion of such real property, Real Property Improvements or Real Property Other Interests (in the case of such Real Property Other Interests, excluding any personal property not constituting (x) licenses or (y) rights of ingress or egress), or (iii) any causes of action, awards, damages, claims, payments, proceeds and other compensation, rights, benefits, and advantages on account of any other event with respect to all or any portion of such real property, Real Property Improvements or Real Property Other Interests (in the case of such Real Property Other Interests, excluding any personal property not constituting (x) licenses or (y) rights of ingress or egress); and (8) all refunds, rebates, reimbursements, reserves, deferred payments, deposits, cost savings, credits, waivers and payments, whether in cash or in kind, due or payable by any governmental or quasi-governmental entity or any insurance or utility company relating to or arising out of such real property, Real Property Improvements or Real Property Other Interests, or in connection with any taxes, assessments, charges or levies with respect to such real property, Real Property Improvements or Real Property Other Interests.
“Receipts” means cash, cash equivalents, funds, instruments, securities, securities entitlements, financial assets, and other similar items or property.
“Reduction Amount” has the meaning set forth in Section 2.05(b)(iv).
“Refinancing” has the meaning given to such term in Section 7.09.
“Register” has the meaning given to such term in Section 10.06(c).
“Registered Public Accounting Firm” has the meaning specified by the Securities Laws and shall be independent of the Company as prescribed by the Securities Laws.
 
  
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“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time.
“Related Documents” means all Affiliation Agreements, Sports Telecast Rights Agreements and Media Rights Agreements.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Removal Effective Date” has the meaning specified in Section 9.06(b).
“Replacement Lender” has the meaning specified in Section 2.17(c).
“Reportable Event” means (i) any of the events set forth in Section 4043(c) (other than a Reportable Event as to which the provision of 30 days’ notice to the PBGC is waived).
“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Term Loans or Revolving Credit Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.
“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Lender’s risk participation, funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition) and (b) aggregate unused Commitments; provided that the unused Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.
“Required Revolver Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) the Total Revolving Credit Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Revolving Credit Lender for purposes of this definition), and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolver Lenders.
“Resolution Authority” means any body which has authority to exercise any Write-Down and Conversion Powers, including any EEA Resolution Authority.
“Response Date” has the meaning specified in Section 2.17(a).
“Restricted Payments” means direct or indirect distributions, dividends or other payments by the Company or any Restricted Subsidiary on account of (including, without limitation, sinking fund or other payments on account of the redemption, retirement, purchase or acquisition of) any general or limited partnership or joint venture interest in, or any capital stock
 
  
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of, the Company or such Restricted Subsidiary, as the case may be (whether made in cash, property or other obligations), other than any such distributions, dividends and other payments made by a Restricted Subsidiary to the Company or a Guarantor in respect of such interest in or stock of the former held by the latter.
“Restricted Subsidiaries” means the Persons set forth on Schedule 6.02(i) and any New Restricted Subsidiary, provided that any Restricted Subsidiary designated as an Unrestricted Subsidiary pursuant to and in compliance with Section 7.08(a) shall cease to be a Restricted Subsidiary.
“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Revolving Credit Lenders pursuant to Section 2.01, including any Incremental Revolving Credit Borrowing.
“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans to the Company pursuant to Section 2.01, and (b) purchase participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Credit Agreement, including any Incremental Revolving Credit Commitment.
“Revolving Credit Exposure” means, as to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Revolving Credit Lender’s participation in L/C Obligations and Swing Line Loans at such time.
“Revolving Credit Facility” means the Initial Revolving Credit Facility, an Incremental Revolving Credit Facility or, collectively, the Initial Revolving Credit Facility and the Incremental Revolving Credit Facilities, as the context may require.
“Revolving Credit Lender” means, at any time, any Lender that has a Revolving Credit Commitment at such time, including any Incremental Revolving Credit Lender.
“Revolving Credit Loan” has the meaning specified in Section 2.01(b) and shall include any Incremental Revolving Credit Loan.
“Revolving Credit Note” means a promissory note made by the Company in favor of a Revolving Credit Lender evidencing Revolving Credit Loans made by such Revolving Credit Lender under the Initial Revolving Credit Facility, substantially in the form of Exhibit B-1.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.
“Sanctioned Country” means, at any time, a country or territory which is the target of any Sanctions.
 
  
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“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any EU member state, (b) any Person organized under the laws of or resident in a Sanctioned Country, (c) any Person 50% or more owned or controlled by any such Person, or (d) any Person otherwise the target of any Sanctions.
“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.
“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Secured Cash Management Agreement” means any Cash Management Agreement that is entered into by and between any Loan Party and any Cash Management Bank and which provides by its terms that it is intended to be secured as an Obligation hereunder.
“Secured Hedge Agreement” means any Swap Contract permitted under Article VII that is entered into by and between the Company and any Hedge Bank and which provides by its terms that (x) it is intended to be secured as an Obligation hereunder and (y) the counterparty to such agreement has expressly agreed to be bound by the provisions of Article IX as if it were a Lender.
“Secured Parties” means, collectively, the Administrative Agent, the Lenders, the L/C Issuers, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05, and the other Persons the Obligations owing to which are or are stated to be secured by the Collateral under the terms of the Collateral Documents.
“Securities Account Control Agreement” means an agreement, substantially in the form attached as Exhibit F to the Security Agreement or otherwise reasonably satisfactory to the Administrative Agent, among the Company or a Guarantor, a financial institution holding certain securities of the Company or such Guarantor, and the Administrative Agent with respect to collection and control of securities held in a securities account maintained by the Company or such Guarantor.
“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board.
“Security Agreement” means that certain Security Agreement, dated as of September 28, 2015, made by and among the Company, the other Loan Parties and the Collateral Agent, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Credit Agreement.
 
  
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“Security Agreement Supplement” has the meaning specified in Section 22(b) of the Security Agreement.
“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“Solvency Certificate” means a certificate of a senior financial executive of the Company in form and substance satisfactory to the Administrative Agent in its sole discretion.
“SPC” has the meaning specified in Section 10.06(h).
“Specified Event of Default” means any Event of Default under Section 8.01(b), (g) or (h).
“Specified Transaction” means any acquisition or disposition of an asset or business by the Company or any of its Restricted Subsidiaries, in each case only to the extent that such acquisition or disposition has the effect of increasing or decreasing the Company’s Adjusted Operating Income by at least $500,000 when such acquisition or disposition is given full pro forma effect for the most recently completed Measurement Period, assuming that such acquisition or disposition had occurred on the first day of such Measurement Period.
“Spin-Off” means a series of transactions in which the entertainment and sports businesses were contributed to MSG SpinCo and the interests in MSG SpinCo were then distributed through a series of transactions to the Parent and then distributed by the Parent to its then existing shareholders, on substantially the same terms and subject to the conditions described in the MSG Form 10 (with any differences not being, in the aggregate, materially adverse to the interests of the Lenders).
“Sports Telecast Rights Agreements” means the agreements listed on Schedule 1.01(d) and all other existing and future agreements of the Company or any Restricted Subsidiary for the exhibition by the Program Services of live games of the New York Islanders, New Jersey Devils, Buffalo Sabres or any other Major League Baseball, National Basketball Association (other than the New York Knicks), National Hockey League (other than the New York Rangers) or National Football League team.
 
  
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“Spot Rate” has the meaning specified in Section 1.07.
“Standby Letter of Credit” means any Letter of Credit issued hereunder, other than a Trade Letter of Credit.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares or securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Company.
“Subsidiary Redesignation” has the meaning specified in Section 7.08(b).
“Supplemental Collateral Documents” means Security Agreement Supplements, Intellectual Property Security Agreement Supplements and other security and pledge agreements securing payment of the Obligations of a newly-formed or newly-acquired Guarantor under the Loan Documents and constituting Liens as required pursuant to the terms of Section 7.10, in each case covering the types of property constituting Collateral, subject to exclusions for Excluded Assets.
“Supported QFC” has the meaning given to the term in Section 10.23.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.
 
  
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“Swing Line Lender” means JPMorgan in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.
“Swing Line Loan” has the meaning specified in Section 2.04(a).
“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b) which, if in writing, shall be substantially in the form of Exhibit A-2.
“Swing Line Sublimit” means an amount equal to the lesser of (a) $15,000,000 and (b) the Revolving Credit Facility. The Swing Line Sublimit is part of, and not in addition to, the Revolving Credit Facility.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees, or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Teams” means a member club or team of any League, including The New York Knicks, The New York Rangers, The New York Liberty, the Westchester Knicks and The Hartford Wolf Pack.
“Term Borrowing” means a borrowing consisting of simultaneous Term Loans of the same type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01(a), including any Incremental Term Borrowing.
“Term Commitment” means, as to each Term Lender, its obligation to make Term Loans to the Company pursuant to Section 2.01, as such amount may be adjusted from time to time in accordance with this Credit Agreement, including any Incremental Term Commitment.
“Term Facility” means the Initial Term Facility, an Incremental Term Facility or, collectively, the Initial Term Facility and the Incremental Term Facilities, as the context may require.
“Term Lender” means, (a) at any time on or prior to the Effective Date, any Lender that has a Term Commitment at such time and (b) at any time after the Effective Date, any Lender that holds Term Loans at such time.
“Term Loan” means an advance made by any Term Lender under any Term Facility and shall include any Incremental Term Loan.
“Term Loan Note” means a promissory note made by the Company in favor of a Term Lender evidencing Term Loans made by such Term Lender under the Initial Term Facility, substantially in the form of Exhibit B-3.
“Termination Event” means (i) a Reportable Event, (ii) the termination of a Plan, or the filing of a notice of intent to terminate a Plan, or the treatment of a Plan amendment as a termination under Section 4041(c) of ERISA, (iii) the institution of proceedings to terminate a Plan under Section 4042 of ERISA or (iv) the appointment of a trustee to administer any Plan under Section 4042 of ERISA.
 
  
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“Total Leverage Ratio” means, at any date of determination, the ratio of Consolidated Net Indebtedness at such date to Adjusted Operating Income of the Company and its Restricted Subsidiaries for the most recently completed Measurement Period. Notwithstanding the foregoing, for purposes of calculating the Total Leverage Ratio, there shall be excluded from Indebtedness, to the extent otherwise included as Indebtedness, (A) any deferred or contingent obligation of the Company to pay the consideration for an Investment not prohibited by Section 7.17; (B) any deferred purchase price in connection with any acquisition not prohibited by Section 7.17; (C) all obligations under any Swap Contract; and (D) all obligations under any Guarantee not prohibited by Section 7.15; in each of clauses (A), (B) and (D) above, such exclusion to apply only to the extent that such obligation can be satisfied with the delivery of common stock of the Parent or other common equity interests of the Parent (and the Company hereby covenants and agrees that such obligation shall be satisfied solely by the delivery of such common stock or other common equity interests).
“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.
“Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/C Obligations.
“Trade Letter of Credit” means any Letter of Credit issued hereunder for the benefit of a supplier of inventory to the Company or any of its Subsidiaries to effect payment for such inventory.
“Transactions” means, collectively, (a) the entering into by the Loan Parties and their applicable Subsidiaries of the Loan Documents to which they are or are intended to be a party, (b) the payment of all fees and expenses incurred in connection with the Loan Documents and (c) the Refinancing.
“Type” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.
“UCP” means the Uniform Customs and Practice for Documentary Credits, 2007 revision, International Chamber of Commerce Publication No. 600, as the same may be amended and in effect from time to time.
“UK Bail-In Legislation” means (to the extent the United Kingdom is not an EEA Member Country which has implemented, or implements, Article 55 BRRD) Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable to the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration of other insolvency proceedings).
“United States Person” means a corporation, partnership or other entity created, organized or incorporated under the laws of the United States of America or a State thereof (including the District of Columbia).
“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).
 
  
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“Unrestricted Subsidiaries” means the Persons set forth on Schedule 6.02(ii) and any Subsidiary of the Company designated by the Company as an Unrestricted Subsidiary pursuant to and in compliance with Section 7.08.
“U.S. Special Resolution Regimes” has the meaning assigned to it in Section 10.23.
“Write-Down and Conversion Powers” means:
(a)    with respect to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
(b)    in relation to any UK Bail-In Legislation:
(i)    any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a Person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a Person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and
(ii)    any similar or analogous powers under that UK Bail-In Legislation; and
(c)    in relation to any other applicable Bail-In Legislation:
(i)    any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a Person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a Person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
(ii)    any similar or analogous powers under that Bail-In Legislation.
Section 1.02    Other Interpretive Provisions. With reference to this Credit Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
(a)    The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes”
 
  
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and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any organization document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” (except when used as accounting terms, in which case GAAP shall apply) shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
(b)    In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”
(c)    Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Credit Agreement or any other Loan Document.
Section 1.03    Accounting Terms. (a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Credit Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein.
(b)    Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Company or in the case of any financial ratio, the Administrative Agent or the Required Lenders, shall so request, the Administrative Agent, the applicable Lenders and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders, as applicable); provided that, in the event of a request for an amendment, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Company shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Credit Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
 
  
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(c)    Capitalized Lease Obligations. Notwithstanding anything to the contrary contained in Section 1.03(a), whether a lease shall be treated as operating lease and not a capital lease or finance lease will be determined in accordance with the principles set forth in the definition of Capitalized Lease Obligations.
Section 1.04    Rounding. Any financial ratios required to be maintained by the Company pursuant to this Credit Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
Section 1.05    Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
Section 1.06    Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.
Section 1.07     Currency Equivalents Generally. Any amount specified in this Credit Agreement (other than in Articles II, IV and IX) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this Section 1.07, the “Spot Rate” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.
Section 1.08    Interest Rates; LIBOR Notification. The interest rate on Eurodollar Rate Loans is determined by reference to the Eurodollar Rate, which is derived from the London interbank offered rate. The London interbank offered rate is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. In July 2017, the U.K. Financial Conduct Authority announced that, after the end of 2021, it would no longer persuade or compel contributing banks
 
  
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to make rate submissions to the ICE Benchmark Administration (together with any successor to the ICE Benchmark Administrator, the “IBA”) for purposes of the IBA setting the London interbank offered rate. As a result, it is possible that commencing in 2022, the London interbank offered rate may no longer be available or may no longer be deemed an appropriate reference rate upon which to determine the interest rate on Eurodollar Rate Loans. In light of this eventuality, public and private sector industry initiatives are currently underway to identify new or alternative reference rates to be used in place of the London interbank offered rate. In the event that the London interbank offered rate is no longer available or in certain other circumstances as set forth in Section 3.03(b) of this Credit Agreement, such Section 3.03(b) provides a mechanism for determining an alternative rate of interest. The Administrative Agent will notify the Company, pursuant to Section 3.03, in advance of any change to the reference rate upon which the interest rate on Eurodollar Rate Loans is based. However, the Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the London interbank offered rate or other rates in the definition of “Eurodollar Rate” or with respect to any alternative or successor rate thereto, or replacement rate thereof, including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate, as it may or may not be adjusted pursuant to Section 3.03(b), will be similar to, or produce the same value or economic equivalence of, the Eurodollar Rate or have the same volume or liquidity as did the London interbank offered rate prior to its discontinuance or unavailability.
Section 1.09    Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its Equity Interests at such time.
Section 1.10    Limited Condition Acquisitions. In connection with any action being taken solely in connection with a Limited Condition Acquisition, for purposes of (i) determining compliance with any provision of the Loan Documents which requires the calculation of the Total Leverage Ratio or the Interest Coverage Ratio; (ii) determining (A) the accuracy of representations and warranties in Article VI (other than customary “specified representations” and those representations of the seller or target company (as applicable) included in the acquisition agreement for the relevant Limited Condition Acquisition that are material to the interests of the Lenders and only to the extent that the relevant acquirer has the right to terminate its obligations under such acquisition agreement as a result of such representations (which representations, notwithstanding anything herein to the contrary, shall be required to be accurate on the basis set forth in the acquisition agreement as of the date of the consummation of any Limited Condition Acquisition)), and/or (B) whether a Default or Event of Default (other than a Specified Event of Default (the absence of which, notwithstanding anything herein to the contrary, shall be required on the date of the consummation of such Limited Condition Acquisition)) has occurred and is continuing or would result therefrom; or (iii) testing availability under baskets set forth in the Loan Documents; in
 
  
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each case, at the option of the Company (the Company’s election to exercise such option in connection with any Limited Condition Acquisition, an “LCA Election”), the date of determination of whether any such action is permitted under the Loan Documents, shall be deemed to be the date the definitive agreement for such Limited Condition Acquisition is entered into (the “LCA Test Date”), and if, on a pro forma basis after giving effect to the Limited Condition Acquisition and the other transactions to be entered into in connection therewith as if they had occurred at the beginning of the most recent Measurement Period ending prior to the LCA Test Date, the Company could have taken such action on the relevant LCA Test Date in compliance with such ratio or basket, such ratio or basket shall be deemed to have been complied with. For the avoidance of doubt, if the Company has made an LCA Election for any Limited Condition Acquisition and any of the ratios or baskets for which compliance was determined or tested as of the LCA Test Date are exceeded or otherwise non-compliant as a result of fluctuations in any such ratio or basket, including due to fluctuations in Adjusted Operating Income of the Company or the Person subject to such Limited Condition Acquisition or any applicable currency exchange rate, at or prior to the consummation of the relevant transaction or action, such baskets, ratios, metrics or thresholds will not be deemed to have been exceeded or non-compliant as a result of such fluctuations solely for purposes of determining compliance of the relevant transaction or action with such provisions, baskets or thresholds. If the Company has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio or basket availability with, on or following the relevant LCA Test Date and prior to the earlier of (i) the date on which such Limited Condition Acquisition is consummated or (ii) the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation of such Limited Condition Acquisition, any such ratio or basket shall be calculated on (A) a pro forma basis assuming such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated until such time as the Limited Condition Acquisition has been consummated or the definitive agreement with respect thereto has been terminated or expires and (B) on a standalone basis without giving effect to such Limited Condition Acquisition and the other transactions in connection therewith.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
Section 2.01    The Loans.
(a)    The Term Borrowing. Subject to the terms and conditions hereof, each Term Lender severally agrees to make a single loan in Dollars to the Company on the Effective Date in a principal amount not to exceed its Term Commitment under the Initial Term Facility on the Effective Date. The Term Borrowing under the Initial Term Facility shall consist of Term Loans made simultaneously by the Term Lenders in accordance with their respective Applicable Percentage of the Initial Term Facility. Any Term Lender that is also a “Term Lender” under the Existing Credit Agreement may make, in whole or in part, its respective Term Loan by means of a dollar-for-dollar, cashless exchange of all or a portion of the “Term Loan” (as defined in the Existing Credit Agreement) it holds under the Existing Credit Agreement immediately prior to the occurrence of the Effective Date into a Term Loan hereunder pursuant to cashless settlement
 
  
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mechanisms reasonably approved by the Company, the Administrative Agent and such Term Lender. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed. Term Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
(b)    Revolving Credit Borrowings. Subject to the terms and conditions set forth herein, each Revolving Credit Lender severally agrees to make loans in Dollars (each such loan, a “Revolving Credit Loan”) to the Company from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Revolving Credit Commitment; provided, however, that after giving effect to any Revolving Credit Borrowing, (i) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility, and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Revolving Credit Lender’s Revolving Credit Commitment. Within the limits of each Revolving Credit Lender’s Revolving Credit Commitment, and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
Section 2.02    Borrowings, Conversions and Continuations of Loans. (a) Each Term Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Company’s irrevocable notice to the Administrative Agent, which may be given by telephone (a “Committed Loan Notice”). Each such notice must be received by the Administrative Agent not later than (i) 11:00 a.m. three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) 11:00 a.m. on the requested date of any Borrowing of Base Rate Loans; provided, however, that notice of (x) the initial Borrowing of Base Rate Loans may be received by the Administrative Agent at such time as agreed by the Administrative Agent on the requested date of Borrowing and (y) any conversion of such initial Borrowing to Eurodollar Rate Loans may be received by the Administrative Agent no later than 11:00 a.m. on the third Business Day prior to the requested date of conversion. Each telephonic notice by the Company pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a senior executive of the Company. In the case of any discrepancies between telephonic and written notices received by the Administrative Agent, the telephonic notice shall be effective as understood in good faith by the Administrative Agent. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c) each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Company is requesting a Term Borrowing, Revolving Credit Borrowing, an Incremental Borrowing, if available, a conversion of Term Loans or Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar
 
  
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Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Company fails to specify a Type of Loan in a Committed Loan Notice or if the Company fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Company requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a Eurodollar Rate Loan.
(b)    Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage under the applicable Facility of the applicable Term Loans, Revolving Credit Loans or Incremental Loans, if any, and if no timely notice of a conversion or continuation is provided by the Company, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in Section 2.02(a). In the case of a Term Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than (i) one hour after receipt of notice from the Administrative Agent on the Effective Date in the case of the initial Borrowing of Base Rate Loans (as long as such notice is received prior to 1:30 p.m. on such day) or (ii) 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 5.02 (and, (x) if such Borrowing is the initial Credit Extension on the Effective Date, Section 5.01 and (y) if such Borrowing is an Incremental Borrowing, the applicable conditions set forth in the Incremental Supplement), the Administrative Agent shall make all funds so received available to the Company in like funds as received by the Administrative Agent either by (i) crediting the account of the Company on the books of JPMorgan with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Company; provided, however, that if, on the date a Committed Loan Notice with respect to a Revolving Credit Borrowing is given by the Company, there are L/C Borrowings outstanding, then the proceeds of such Revolving Credit Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the Company as provided above.
(c)    Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, the Administrative Agent may notify the Company that Loans may only be converted into or continued as Loans of certain specified Types and, thereafter, until no Default shall continue to exist, Loans may not be converted into or continued as Loans of any Type other than one or more of such specified Types.
(d)    The Administrative Agent shall promptly notify the Company and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon
 
  
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determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Company and the Lenders of any change in JPMorgan’s prime rate used in determining the Base Rate promptly following the public announcement of such change.
(e)    After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than twelve (12) Interest Periods in effect in respect of the Facilities.
Section 2.03    Letters of Credit. (a) The Letter of Credit Commitment. (i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the Revolving Credit Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Effective Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Company or its Subsidiaries, and to amend Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Letters of Credit issued by it; and (B) the Revolving Credit Lenders severally agree to participate in Letters of Credit issued for the account of the Company or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (w) the Total Revolving Credit Outstandings shall not exceed the aggregate Revolving Credit Commitments, (x) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Revolving Credit Commitment, (y) the aggregate amount available to be drawn under all Letters of Credit issued by the applicable L/C Issuer issuing such Letter of Credit shall not exceed either of (I) such L/C Issuer’s Letter of Credit Commitment (provided, that any L/C Issuer may, following a request from the Company, in its sole discretion, issue Letters of Credit in an aggregate available amount in excess of such L/C Issuer’s Letter of Credit Commitment so long as the Outstanding Amount of all L/C Obligations shall not exceed the Letter of Credit Sublimit) and (II) the aggregate amount of such L/C Issuer’s unused Revolving Credit Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Company for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Company that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Company’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Company may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii)    No L/C Issuer shall issue any Letter of Credit if:
(A)    the expiry date of such requested Letter of Credit would occur more than (x) in the case of Standby Letters of Credit, twelve months after the date of issuance or (y) in the case of Trade Letters of Credit, 180 days after the date of issuance, unless the Required Revolver Lenders have approved such expiry date;
 
  
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(B)    the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date; or
(C)    such Letter of Credit is to be denominated in a currency other than Dollars;
(iii)    No L/C Issuer shall be under any obligation to issue any Letter of Credit if:
(A)    any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which such L/C Issuer in good faith deems material to it;
(B)    the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer generally applicable to the issuance of letters of credit;
(C)    except as otherwise agreed by the Administrative Agent and such L/C Issuer, such Letter of Credit is in an initial stated amount less than $50,000;
(D)    such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(E)    a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender, unless such L/C Issuer has entered into arrangements satisfactory to such L/C Issuer with the Company or such Lender to eliminate such L/C Issuer’s risk with respect to such Lender.
(iv)    No L/C Issuer shall amend any Letter of Credit if such L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.
(v)    No L/C Issuer shall be under any obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
 
  
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(vi)    Each L/C Issuer shall act on behalf of the Revolving Credit Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included such L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such L/C Issuer.
(b)    Procedures for Issuance and Amendment of Letters of Credit. (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Company delivered to any L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a senior executive of the Company. Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission as provided in Section 10.02(b), by personal delivery or by any other means acceptable to the L/C Issuer. Such Letter of Credit Application must be received by the applicable L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the applicable L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the applicable L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the applicable L/C Issuer may require. Additionally, the Company shall furnish to each L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as any L/C Issuer or the Administrative Agent may require.
(ii)    Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Company and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the applicable L/C Issuer has received written notice from any Revolving Credit Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article V shall not then be satisfied, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Company (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each
 
  
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case in accordance with such L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the applicable L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such Letter of Credit.
(iii)    Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the Company and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(c)    Drawings and Reimbursements; Funding of Participations. (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable L/C Issuer shall notify the Company and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by such L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the Company shall reimburse such L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Company fails to so reimburse the applicable L/C Issuer by such time, the Administrative Agent shall promptly notify each Revolving Credit Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Revolving Credit Lender’s Applicable Revolving Credit Percentage thereof. In such event, the Company shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Revolving Credit Commitments and the conditions set forth in Section 5.02 (other than the delivery of a Committed Loan Notice). Any notice given by any L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(ii)    Each Revolving Credit Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the applicable L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Revolving Credit Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the applicable L/C Issuer.
(iii)    With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 5.02 cannot be satisfied or for any other reason, the Company shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.
 
  
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In such event, each Revolving Credit Lender’s payment to the Administrative Agent for the account of such L/C Issuer pursuant to
Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.
(iv)    Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Revolving Credit Percentage of such amount shall be solely for the account of such L/C Issuer.
(v)    Each Revolving Credit Lender’s obligation to make Revolving Credit Loans to the Company or L/C Advances to reimburse any L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the applicable L/C Issuer, the Company or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 5.02 (other than delivery by the Company of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Company to reimburse any L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.
(vi)    If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of any L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the greater of the New York Fed Bank Rate and a rate determined by such L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by such L/C Issuer in connection with the foregoing. A certificate of the applicable L/C Issuer submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.
(d)    Repayment of Participations. (i) At any time after any L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the applicable L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Company or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Revolving Credit Percentage
 
  
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thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.
(ii)    If any payment received by the Administrative Agent for the account of any L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the applicable L/C Issuer in its discretion), each Revolving Credit Lender shall pay to the Administrative Agent for the account of the applicable L/C Issuer its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the New York Fed Bank Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Credit Agreement.
(e)    Obligations Absolute. The obligation of the Company to reimburse each L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Credit Agreement under all circumstances, including the following:
(i)    any lack of validity or enforceability of such Letter of Credit, this Credit Agreement, or any other Loan Document;
(ii)    the existence of any claim, counterclaim, setoff, defense or other right that the Company or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), any L/C Issuer or any other Person, whether in connection with this Credit Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;
(iii)    any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;
(iv)    any payment by the applicable L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the applicable L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;
 
  
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(v)    waiver by the L/C Issuer of any requirement that exists for the L/C Issuer’s protection and not the protection of the Company or any waiver by the L/C Issuer which does not materially prejudice the Company;
(vi)    honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft; or
(vii)    any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Company or any of its Subsidiaries.
The Company shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Company’s instructions or other irregularity, the Company will immediately notify the L/C Issuers. The Company shall be conclusively deemed to have waived any such claim against any L/C Issuer and its correspondents unless such notice is given as aforesaid.
(f)    Role of L/C Issuer. Each Lender and the Company agree that, in paying any drawing under a Letter of Credit, no L/C Issuer shall have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of any L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Credit Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Company hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Company’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of any L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Company may have a claim against an L/C Issuer, and an L/C Issuer may be liable to the Company, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Company which the Company proves were caused by such L/C Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, an L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and no L/C Issuer shall be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. The L/C Issuer may send a Letter of Credit or conduct any
 
  
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communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.
(g)    Cash Collateral. Upon the request of the Administrative Agent, (i) if an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Company shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations. In addition, if any Revolving Credit Lender shall become a Defaulting Lender, then upon a request of the Administrative Agent (made on behalf of itself or at the direction of any L/C Issuer), the Company shall immediately Cash Collateralize all of such Defaulting Lender’s Pro Rata Share of the then Outstanding Amount of all L/C Obligations (in an amount equal to such Defaulting Lender’s Pro Rata Share of such Outstanding Amount, determined as of the date of such request from the Administrative Agent. Section 2.05 and Section 8.02 set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this Section 2.03, Section 2.05 and Section 8.02, “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuers (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Company hereby grants to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at JPMorgan. If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the Company will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate Outstanding Amount over (y) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable Laws, to reimburse the L/C Issuers.
(h)    Applicability of ISP and UCP. Unless otherwise expressly agreed by the applicable L/C Issuer and the Company when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each Standby Letter of Credit, and (ii) the rules of the UCP, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each Trade Letter of Credit.
(i)    Letter of Credit Fees. The Company shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Applicable Revolving Credit Percentage a Letter of Credit Fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate for Revolving Credit Loans maintained as Eurodollar Rate Loans times the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit
 
  
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shall be determined in accordance with Section 1.06. Letter of Credit Fees shall be (A) computed on a quarterly basis in arrears and (B) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.
(j)    Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers. The Company shall pay directly to each L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued by it, at the rate of 1⁄4 of 1.00% per annum (but in no event less than $500 per annum for each Letter of Credit) (i) with respect to each Trade Letter of Credit, computed on the amount of such Letter of Credit, and payable upon the issuance thereof, (ii) with respect to any amendment of a Trade Letter of Credit increasing the amount of such Trade Letter of Credit, computed on the amount of such increase, and payable upon the effectiveness of such amendment (provided, that the $500 per annum minimum set forth in the previous parenthetical shall not apply to an amendment of a Trade Letter of Credit), and (iii) with respect to each Standby Letter of Credit, computed on the daily amount available to be drawn under such Standby Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06. In addition, the Company shall pay directly to each L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.
(k)    Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.
(l)    Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, or states that a Subsidiary is the “account party,” “applicant,” “customer,” “instructing party,” or the like of or for such Letter of Credit, and without derogating from any rights of the applicable L/C Issuer (whether arising by contract, law, in equity or otherwise) against such Subsidiary in respect of such Letter of Credit, the Company (i) shall be obligated to reimburse, indemnify and compensate any L/C Issuer hereunder for any and all drawings under such Letter of Credit as if such Letter of Credit had been issued solely for the account of the Company and (ii) irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit. The Company hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Company, and that the Company’s business derives substantial benefits from the businesses of such Subsidiaries.
 
  
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Section 2.04    Swing Line Loans. (a) The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.04, to make loans (each such loan, a “Swing Line Loan”) to the Company from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit; provided, however, that after giving effect to any Swing Line Loan, (i) the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility at such time, (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Revolving Credit Lender (including the Swing Line Lender) at such time, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all L/C Obligations at such time, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Swing Line Loans at such time shall not exceed such Lender’s Revolving Credit Commitment and (iii) the aggregate Outstanding Amount under the Swingline Facility shall not exceed the aggregate amount of Swingline Lender’s unused Revolving Credit Commitment, and provided further that the Company shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall bear interest only at a rate based on the Base Rate. Immediately upon the making of a Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such Swing Line Loan. Notwithstanding anything to the contrary contained in this Section 2.04 or elsewhere in this Credit Agreement, the Swing Line Lender shall not be obligated to make any Swing Line Loan at a time when a Revolving Credit Lender is a Defaulting Lender unless the Swing Line Lender has entered into arrangements satisfactory to it to eliminate the Swing Line Lender’s risk with respect to the Defaulting Lender’s or Defaulting Lenders’ participation in such Swing Line Loans.
 
  
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(b)    Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Company’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone (a “Swing Line Loan Notice”). Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 11:00 a.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $500,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a senior executive of the Company. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Revolving Credit Lender) prior to 12:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article V is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Company.
(c)    Refinancing of Swing Line Loans. (i) The Swing Line Lender at any time in its sole and absolute discretion may request and no less frequently than weekly shall request, in each case, on behalf of the Company (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount equal to such Lender’s Applicable Revolving Credit Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the Revolving Credit Facility and the conditions set forth in Section 5.02. The Swing Line Lender shall furnish the Company with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent. Each Revolving Credit Lender shall make an amount equal to its Applicable Revolving Credit Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds for the account of the Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.
(ii)    If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Revolving Credit Lenders fund its risk participation in the relevant Swing Line Loan and each Revolving Credit Lender’s payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.
 
  
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(iii)    If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the New York Fed Bank Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.
(iv)    Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Company or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 5.02. No such funding of risk participations shall relieve or otherwise impair the obligation of the Company to repay Swing Line Loans, together with interest as provided herein.
(d)    Repayment of Participations. (i) At any time after any Revolving Credit Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Revolving Credit Lender its Applicable Revolving Credit Percentage thereof in the same funds as those received by the Swing Line Lender.
(ii)    If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Revolving Credit Lender shall pay to the Swing Line Lender its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the New York Fed Bank Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Credit Agreement.
 
  
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(e)    Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Company for interest on the Swing Line Loans. Until each Revolving Credit Lender funds its Base Rate Loan or risk participation pursuant to this Section 2.04 to refinance such Revolving Credit Lender’s Applicable Revolving Credit Percentage of any Swing Line Loan, interest in respect of such Applicable Revolving Credit Percentage shall be solely for the account of the Swing Line Lender.
(f)    Payments Directly to Swing Line Lender. The Company shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.
(g)    Replacement of Swing Line Lender. Any Swing Line Lender may be replaced at any time by written agreement among the Company, the Administrative Agent, the replaced Swing Line Lender and the successor Swing Line Lender. The Administrative Agent shall notify the Lenders of any such replacement of a Swing Line Lender. At the time any such replacement shall become effective, the Company shall pay all unpaid interest accrued for the account of the replaced Swing Line Lender pursuant to Section 2.08(a). From and after the effective date of any such replacement, (x) the successor Swing Line Lender shall have all the rights and obligations of the replaced Swing Line Lender under this Credit Agreement with respect to Swing Line Loans made thereafter and (y) references herein to the term “Swing Line Lender” shall be deemed to refer to such successor or to any previous Swing Line Lender, or to such successor and all previous Swing Line Lenders, as the context shall require. After the replacement of a Swing Line Lender hereunder, the replaced Swing Line Lender shall remain a party hereto and shall continue to have all the rights and obligations of a Swing Line Lender under this Credit Agreement with respect to Swing Line Loans made by it prior to its replacement, but shall not be required to make additional Swing Line Loans.
(h)    Resignation of Swing Line Lender. Subject to the appointment and acceptance of a successor Swing Line Lender, any Swing Line Lender may resign as a Swing Line Lender at any time upon thirty days’ prior written notice to the Administrative Agent, the Company and the Lenders, in which case, such Swing Line Lender shall be replaced in accordance with Section 2.04(g) above.
Section 2.05    Prepayments. (a) Optional. (i) The Company may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Term Loans and Revolving Credit Loans in whole or in part without premium or penalty; provided that (x) such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans, and (B) one Business Day prior to any date of prepayment of Base Rate Loans; (y) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof; and (z) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment, the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment. If such notice is given by the Company, the
 
  
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Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Each prepayment of the outstanding Loans pursuant to this Section 2.05(a) shall be applied to the principal repayment installments thereof as directed by the Company (and if not so directed, on a pro-rata basis), and, subject to Section 2.16, each such prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages in the relevant Facility.
(ii)    The Company may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and (B) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Company, the Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.
(b)    Mandatory. (i) If (A) the Company or any of its Subsidiaries Disposes of any Collateral other than (x) Dispositions under Section 7.24(i) or Section 7.24(ii); (y) any Disposition of Equity Interests in a Restricted Subsidiary that hold only Excluded Assets, or (z) as a result of the consummation of the Spin-Off (a “Mandatory Prepayment Disposition”), or (B) the Company or any of its Restricted Subsidiaries suffers an Event of Loss, which in each case, together with all other Mandatory Prepayment Dispositions made and Events of Loss suffered at any time since the Original Closing Date, result in the realization by the Loan Parties, collectively, of Net Cash Proceeds from Mandatory Prepayment Dispositions and Events of Loss in an aggregate amount in excess of $75,000,000 (for the avoidance of doubt, excluding any Net Cash Proceeds excluded under the preceding subclause (i)(A)(x)), the Company shall in each case prepay, within three Business Days after receipt thereof by such Person, an aggregate principal amount of Loans equal to 100% of such Net Cash Proceeds; provided that if the Company’s Total Leverage Ratio, as determined by the Compliance Certificate most recently delivered pursuant to Section 7.01(e), is (x) greater than or equal to 2.00:1.00 but less than 2.50:1.00, such percentage shall be reduced to 75% of such Net Cash Proceeds, or (y) less than 2.00:1.00, such percentage shall be reduced to 50% of such Net Cash Proceeds; provided, further, that (x) with respect to all or a portion of any Net Cash Proceeds realized under a Disposition described in this Section 2.05(b)(i)(A), at the election of the Company (as notified by the Company to the Administrative Agent on or prior to such third Business Day following receipt of such Net Cash Proceeds of Dispositions of Collateral), and so long as no Default shall have occurred and be continuing, the Company or such Subsidiary may reinvest Net Cash Proceeds arising from such Disposition in operating assets which constitute Collateral within 365 days after the receipt of such Net Cash Proceeds and (y) with respect to any Net Cash Proceeds of casualty insurance or condemnation awards realized due to an Event of Loss described in this Section 2.05(b)(i)(B), at the election of the Company (as notified by the Company to the Administrative Agent on or prior to such third Business Day following receipt of such Net Cash Proceeds of casualty insurance or condemnation awards), and so long as no Default shall have occurred and be continuing, the Company or such Subsidiary may apply within 365 days (or, if such replacement or repair could
 
  
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not reasonably completed within 365 days, such period shall be extended for a reasonable period of time to permit completion of such replacement and repair so long as the replacement or repair of the asset or assets that suffered the Event of Loss is being diligently pursued by the Company or such Subsidiary) after the receipt of such Net Cash Proceeds to replace or repair the equipment, fixed assets or real property in respect of which such Net Cash Proceeds were received; and provided further, that any Net Cash Proceeds not so reinvested shall be immediately applied to the prepayment of the Loans.
(ii)    Upon the incurrence or issuance by the Company or any of its Restricted Subsidiaries of any Indebtedness (other than Indebtedness permitted under Section 7.14), the Company shall prepay an aggregate principal amount of Loans equal to 100% of all Net Cash Proceeds received therefrom immediately upon receipt thereof by the Company or such Restricted Subsidiary.
(iii)    If for any reason the Total Revolving Credit Outstandings at any time exceed the Revolving Credit Facility at such time, the Company shall immediately prepay Revolving Credit Loans, Swing Line Loans and L/C Borrowings and/or Cash Collateralize the L/C Obligations (other than the L/C Borrowings) in an aggregate amount equal to such excess.
(iv)    Prepayments made pursuant to this Section 2.05(b), first, except to the extent that the Incremental Term Lenders under an Incremental Term Facility have otherwise agreed, shall be applied ratably to the outstanding Loans under the Initial Term Facility and each Incremental Term Facility, if any, second, shall be applied ratably to the L/C Borrowings and the Swing Line Loans, third, except to the extent that the Incremental Revolving Credit Lenders under an Incremental Revolving Credit Facility have otherwise agreed, shall be applied ratably to the outstanding Loans under the Initial Revolving Credit Facility and each Incremental Revolving Credit Facility, if any, and, fourth, shall be used to Cash Collateralize the remaining L/C Obligations; and, in the case of prepayments required pursuant to clause (i) through (iii) of this Section 2.05(b), the amount remaining, if any, after the prepayment in full of all L/C Borrowings, Swing Line Loans and Loans outstanding at such time and the Cash Collateralization of the remaining L/C Obligations in full (the sum of such prepayment amounts, cash collateralization amounts and remaining amount being, collectively, the “Reduction Amount”) may be retained by the Company for use in the ordinary course of its business, and the Revolving Credit Facility and any Incremental Revolving Credit Facility shall be automatically and permanently reduced on a pro rata basis by the Reduction Amount as set forth in Section 2.06(b)(i). Upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from the Company or any other Loan Party) to reimburse the L/C Issuers or the Revolving Credit Lenders, as applicable.
Section 2.06    Termination or Reduction of Commitments. (a) Optional. The Company may, upon notice to the Administrative Agent, terminate any Revolving Credit Facility, the Letter of Credit Sublimit or the Swing Line Sublimit, or from time to time permanently reduce any Revolving Credit Facility, Letter of Credit Sublimit or the Swing Line Sublimit; provided that (i) any such notice shall be received by the Administrative
 
  
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Agent not later than 11:00 a.m. three Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Company shall not terminate or reduce (A) any Revolving Credit Facility if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Credit Outstandings would exceed the Revolving Credit Facility, (B) the Letter of Credit Sublimit if, after giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder would exceed the Letter of Credit Sublimit, or (C) the Swing Line Sublimit if, after giving effect thereto and to any concurrent prepayments hereunder, the Outstanding Amount of Swing Line Loans would exceed the Swing Line Sublimit, and (iv) to the extent practicable, each partial reduction in the Letter of Credit Sublimit shall be allocated ratably among the L/C Issuers in accordance with their respective Letter of Credit Commitments.
(b)    Mandatory. (i) The aggregate Term Commitments under the Initial Term Facility and any Incremental Term Facility shall be automatically and permanently reduced to zero on the date of the applicable Term Borrowing.
(ii)    The Revolving Credit Facility and any Incremental Revolving Credit Facility shall be automatically and permanently reduced on each date on which the prepayment of Loans outstanding thereunder would be required to be made pursuant to Section 2.05(b)(i) through (iii), whether or not any Loans or L/C Obligations are then outstanding, by an amount equal to the applicable Reduction Amount.
(iii)    If after giving effect to any reduction or termination of Revolving Credit Commitments under this Section 2.06, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the Revolving Credit Facility at such time, the Letter of Credit Sublimit or the Swing Line Sublimit, as the case may be, shall be automatically reduced by the amount of such excess.
(c)    Application of Commitment Reductions; Payment of Fees. The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Letter of Credit Sublimit, Swing Line Sublimit or the Revolving Credit Commitments under this Section 2.06. Upon any reduction of the Revolving Credit Commitments, the Revolving Credit Commitment of each Revolving Credit Lender under the Revolving Credit Facility and any Incremental Revolving Credit Facility shall be reduced by such Revolving Credit Lender’s Applicable Percentage of such reduction amount with respect to each such Revolving Credit Facility. All fees in respect of any Revolving Credit Facility accrued until the effective date of any termination of such Facility shall be paid on the effective date of such termination.
 
  
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Section 2.07    Repayment of Loans. (a) Initial Term Facility. The Company shall, on each date set forth below, pay a principal amount of the Initial Term Facility in an aggregate amount equal to the percentage set forth below for such date of the original principal amount of the Initial Term Facility:
 
Date
  
Principal
Amortization
Payment
  
Date
  
Principal
Amortization
Payment
March 31, 2020
  
0.625%
  
September 30, 2022
  
1.125%
June 30, 2020
  
0.625%
  
December 31, 2022
  
1.125%
September 30, 2020
  
0.625%
  
March 31, 2023
  
1.875%
December 31, 2020
  
0.625%
  
June 30, 2023
  
1.875%
March 31, 2021
  
1.125%
  
September 30, 2023
  
1.875%
June 30, 2021
  
1.125%
  
December 31, 2023
  
1.875%
September 30, 2021
  
1.125%
  
March 31, 2024
  
1.875%
December 31, 2021
  
1.125%
  
June 30, 2024
  
1.875%
March 31, 2022
  
1.125%
  
September 30, 2024
  
1.875%
June 30, 2022
  
1.125%
  
Maturity Date
  
Outstanding Principal Amount
(b)    Revolving Credit Loans and Incremental Revolving Credit Loans. The Company shall repay to the Revolving Credit Lenders and Incremental Revolving Credit Lenders on the Maturity Date applicable to each such Facility, the aggregate principal amount of all Revolving Credit Loans and Incremental Revolving Credit Loans, as applicable, outstanding on such date.
(c)    Swing Line Loans. The Company shall repay each Swing Line Loan on the earlier to occur of (i) the date that is five Business Days after such Loan is made, and (ii) the Maturity Date applicable to the Revolving Credit Facility with the latest Maturity Date.
(d)    Incremental Term Loans. The Company shall repay to the Incremental Term Lenders the principal amount of the Incremental Term Loans in such amounts and at such times as shall be set forth in the applicable Incremental Term Supplement.
Section 2.08    Interest. (a) Subject to the provisions of Section 2.08(b), (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate for such Facility; (ii) each Base Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for such Facility; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for the applicable Revolving Credit Facility.
(b)    (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii)    If any amount (other than principal of any Loan) payable by the Company under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
 
  
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(iii)    Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c)    Interest on each (x) Base Rate Loan shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter, (y) Eurodollar Rate Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto.
(d)    Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
Section 2.09    Fees. In addition to certain fees described in Section 2.03(i) and (j):
(a)    Commitment Fee. The Company shall pay to the Administrative Agent for the account of each Revolving Credit Lender that is not a Defaulting Lender in accordance with its Applicable Revolving Credit Percentage, a commitment fee (the “Commitment Fee”) on the actual daily amount by which the Initial Revolving Credit Facility exceeds the Total Outstandings under the Initial Revolving Credit Facility, at a rate equal to the then-applicable Applicable Commitment Fee Percentage; provided, however, that any Commitment Fee accrued with respect to any of the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Company so long as such Lender shall be a Defaulting Lender except to the extent that such Commitment Fee shall otherwise have been due and payable by the Company prior to such time, and provided, further, that no Commitment Fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender. The Commitment Fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article V is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Effective Date, and on the last day of the Availability Period for the Revolving Credit Facility. The Commitment Fee shall be calculated quarterly in arrears. For the purposes of calculating the Commitment Fee, outstanding Swing Line Loans shall be disregarded as a utilization of the Revolving Credit Facility.
(b)    Other Fees. The Company shall pay to the Administrative Agent, the Joint Book Runners and the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
Section 2.10    Computation of Interest and Fees. All computations of interest for Base Rate Loans, when the Base Rate is determined by JPMorgan’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
 
  
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Section 2.11    Evidence of Debt. (a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Company and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Company hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Company shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.
(b)    In addition to the accounts and records referred to in Section 2.11(a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.
Section 2.12    Payments Generally; Administrative Agent’s Clawback. (a) General. All payments to be made by the Company shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Company hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Company shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected on computing interest or fees, as the case may be.
(b)    (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with
 
  
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Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Company a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Company severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Company to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the New York Fed Bank Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by the Company, the interest rate applicable to Base Rate Loans. If the Company and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Company the amount of such interest paid by the Company for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Company shall be without prejudice to any claim the Company may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii)    Payments by Company; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Company prior to the time at which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuers hereunder that the Company will not make such payment, the Administrative Agent may assume that the Company has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Appropriate Lenders or the L/C Issuers, as the case may be, the amount due. In such event, if the Company has not in fact made such payment, then each of the Appropriate Lenders or the L/C Issuers, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the New York Fed Bank Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
A notice of the Administrative Agent to any Lender or the Company with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
(c)    Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Company by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article V are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.
 
  
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(d)    Obligations of Lenders Several. The obligations of the Lenders hereunder to make Term Loans and Revolving Credit Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c).
(e)    Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
(f)    Insufficient Funds. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties.
Section 2.13    Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations in respect of any of the Facilities due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of such Facility due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations in respect of such Facility due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations in respect of such Facility owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of such Facility owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payments on account of the Obligations in respect of such Facility owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans or other Obligations and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations in respect of the Facilities then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:
 
  
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(i)    if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii)    the provisions of this Section shall not be construed to apply to (A) any payment made by the Company pursuant to and in accordance with the express terms of this Credit Agreement or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than to the Company or any Subsidiary thereof (as to which the provisions of this Section shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation or subparticipation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation or subparticipation.
Section 2.14    Incremental Revolving Credit Facilities.
(a)    Request for an Incremental Revolving Credit Facility. At the request of the Company to the Administrative Agent and without the consent of any Lender, an increase in the Revolving Credit Commitments or a separate tranche of revolving credit commitments and revolving loans under this Credit Agreement (an “Incremental Revolving Credit Facility”) shall be established; provided that at the time of such request, upon the effectiveness of any increase or any Incremental Revolving Credit Supplement referred to below, and at the time any Incremental Revolving Credit Loan is made (and after giving full pro forma effect thereto), the aggregate principal amount of all Incremental Facilities shall not exceed the sum of (x) the greater of (A) $300,000,000 and (B) 100% of Adjusted Operating Income for the most recently completed four fiscal quarter period for which financial statements were required to have been delivered pursuant to Section 7.01, plus (y) an aggregate additional amount of Indebtedness such that, after giving pro forma effect to such incurrence or issuance, the Company shall have a Total Leverage Ratio of no greater than 5.00:1.00; provided, further, that at the time of such request, upon the effectiveness of any increase or any Incremental Revolving Credit Supplement referred to below, and at the time any Incremental Revolving Credit Loan is made (and after giving full pro forma effect thereto), (i) no Default or Event of Default shall exist, and (ii) the Company shall be in pro forma compliance with the Financial Covenants (and compliance with the preceding clauses (y) and (ii) shall be determined (A) assuming that the full amounts of all Revolving Credit Facilities (including the proposed Incremental Revolving Credit Facility and all other then-existing Incremental Revolving Credit Facilities) have been drawn, (B) utilizing the financial statements most recently delivered or deemed delivered pursuant to Section 7.01, (C) giving full pro forma effect to (1) all Specified Transactions (as provided in such definition) that have occurred since the last day of the most recently completed Measurement Period for which financial statements have been delivered or deemed delivered pursuant to Section 7.01 (including, for the avoidance of doubt, but without duplication, any acquisitions constituting Specified Transactions that are to be consummated contemporaneously with the closing of, and using the proceeds of, such proposed Incremental Revolving Credit Facility), and (2) the application of the proceeds of the proposed
 
  
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Incremental Revolving Credit Facility, and (D) otherwise in accordance with the applicable definitions therein); provided, that with respect to a Limited Condition Acquisition, the requirements of the preceding clauses (y), (i) and (ii) shall be modified as provided in Section 1.10 of this Credit Agreement.
(b)    Conditions to Effectiveness of an Incremental Revolving Credit Facility. As a condition precedent to the establishment of any Incremental Revolving Credit Facility, the Company, the Administrative Agent and the Incremental Revolving Credit Lenders thereunder shall enter into a supplement to this Credit Agreement in substantially the form of Exhibit H-1 (an “Incremental Revolving Credit Supplement”), duly completed such that such Incremental Revolving Credit Supplement shall set forth the terms and conditions relating to the Incremental Revolving Credit Facility; provided that, in any event, each Incremental Revolving Credit Facility shall (i) be Guaranteed only by the Guarantors under this Credit Agreement and (ii) rank pari passu in right of both payment and of security with the Initial Facilities and each other Incremental Facility. Upon the effective date of such Incremental Revolving Credit Supplement, each lender thereunder shall become an Incremental Revolving Credit Lender hereunder and such Incremental Revolving Credit Supplement shall be deemed part of this Credit Agreement for all purposes thereafter. Each Incremental Revolving Credit Supplement may, without the consent of any Lender (other than the applicable Incremental Revolving Credit Lenders thereunder and the Administrative Agent), effect such amendments to this Credit Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Company, to effect the provisions of this Section 2.14.
(c)    Incremental Revolving Credit Lenders. The Revolving Credit Lenders shall initially have the right, but not the obligation, to commit up to their pro rata portion of any Incremental Revolving Credit Facility; provided that, if after giving full pro forma effect to such proposed Incremental Revolving Credit Facility (assuming that the full amount of the Initial Revolving Credit Facility, the full amount of each then-existing Incremental Revolving Credit Facility, and the full amount of the proposed Incremental Revolving Credit Facility, have all been drawn), the Company would be in pro forma compliance with the Financial Covenants, then such Incremental Revolving Credit Commitments may, at the election of the Company, be offered to new lenders, subject to the consent of the Administrative Agent (which consent shall not be unreasonably withheld), if such Administrative Agent consent would be required under Section 10.06(b)(iii) for an assignment of Loans or Commitments to such Incremental Revolving Credit Lender.
Section 2.15    Incremental Term Facilities.
(a)    Request for an Incremental Term Facility. At the request of the Company to the Administrative Agent, and without the consent of any Lender, on one or more occasions, an increase in the aggregate principal amount of any existing Term Facility or a separate tranche of term loan commitments and term loans may be established under this Credit Agreement; provided that at the time of such request, upon the effectiveness of any Incremental Term Supplement referred to below, and at the time any Incremental Term Loan is made (and after giving full pro forma effect to the incurrence thereof and the application of proceeds thereof), the aggregate principal amount of all Incremental Facilities shall not exceed the sum of (x) the greater of (A) $300,000,000 and (B) 100% of Adjusted Operating Income for the most recently completed
 
  
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four fiscal quarter period for which financial statements were required to have been delivered pursuant to Section 7.01, plus (y) an aggregate additional amount of Indebtedness such that, after giving pro forma effect to such incurrence or issuance, the Company shall have a Total Leverage Ratio of no greater than 5.00:1.00; provided, further, that at the time of such request, upon the effectiveness of any Incremental Term Supplement referred to below, and at the time any Incremental Term Loan is made (and after giving full pro forma effect to the incurrence thereof and the application of proceeds thereof), (i) no Default or Event of Default shall then exist, and (ii) the Company shall be in pro forma compliance with the Financial Covenants (and compliance with the preceding clauses (y) and (ii) shall be determined (A) assuming that the full amounts of all Revolving Credit Facilities (including all then-existing Incremental Revolving Credit Facilities) have all been drawn, (B) utilizing the financial statements most recently most recently delivered or deemed delivered pursuant to Section 7.01, (C) giving full pro forma effect to (1) all Specified Transactions (as provided in such definition) that have occurred since the last day of the most recently completed Measurement Period for which financial statements have been delivered or deemed delivered pursuant to Section 7.01 (including, for the avoidance of doubt, but without duplication, any acquisitions constituting Specified Transactions that are to be consummated contemporaneously with the closing of, and using the proceeds of, such proposed Incremental Term Facility), and (2) the application of the proceeds of the proposed Incremental Term Facility, and (D) otherwise in accordance with the applicable definitions therein); provided, that with respect to a Limited Condition Acquisition, the requirements of the preceding clauses (y), (i) and (ii) shall be modified as provided in Section 1.10 of this Credit Agreement.
(b)    Conditions to Effectiveness of an Incremental Term Facility. As a condition precedent to the establishment of any Incremental Term Facility, the Company, the Administrative Agent and the Incremental Term Lenders thereunder shall enter into a supplement to this Credit Agreement in substantially the form of either Exhibit H-2 or Exhibit H-3 (an “Incremental Term Supplement”), duly completed, and with such provisions (including changes to the provisions set forth therein) as may be agreed to by the Company and the Incremental Term Lenders (provided, that notwithstanding anything to the contrary set forth in this sentence, (A) the prior written consent of the Administrative Agent shall be required for any changes to Section 12 (Conditions Precedent) of any form of Incremental Term Supplement, other than completing the required information in clause (e) (Opinions of Counsel to the Company) thereof, (B) in no event shall any form of Incremental Term Supplement be changed to provide any additional, preferential or non-pro rata repayment or prepayment rights to any of Incremental Term Lenders thereunder (unless such Incremental Facility is to receive less than its ratable share of any repayment or prepayment) and (C) if the Administrative Agent reasonably determines that any proposed change to any form of Incremental Term Supplement would be contrary to, or conflict with, the provisions of this Credit Agreement or any other Loan Document, and the Administrative Agent provides written notice of such determination to the Company, then such proposed change shall be revised or removed in a manner reasonably satisfactory to the Administrative Agent), such that such Incremental Term Supplement shall set forth the terms and conditions relating to the Incremental Term Facility, which shall be reasonably acceptable to the Administrative Agent (except to the extent that they are consistent with the following provisos to this clause (b)); provided that, in any event, each Incremental Term Facility shall (i) not have (A) a final maturity date earlier than the later of (x) the “Maturity Date” then applicable to the Initial Facilities and (y) the latest “Maturity Date” then applicable to any then-outstanding Incremental Term Facility, or (B) a weighted average life to maturity shorter than the “Maturity Date” then applicable to the Initial Facilities; (ii) be
 
  
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Guaranteed only by the Guarantors under this Credit Agreement; (iii) rank pari passu in right of both payment and of security with the Initial Facilities and each other Incremental Facility; (iv) except as to pricing and amortization, have terms and documentation that are, when taken as a whole, no more restrictive than the terms applicable to the existing Facilities, unless such terms are reasonably acceptable to the Administrative Agent; (v) be in a minimum principal amount of $50,000,000, and any whole multiple of $5,000,000 in excess thereof; and (vi)(A) in the case of any Incremental Term Facility in substantially the form of Exhibit H-2, or (B) in the case of any Incremental Term Facility in substantially the form of Exhibit H-3 entered into within 18 months after the Effective Date, not have total yield greater than 0.50% higher than the total yield for the Term Loans then in place unless (x) the Applicable Rate applicable to the Initial Term Facility (and, if applicable, each other then-existing Incremental Term Facility) shall be increased (to the extent such higher yield is in the form of interest rates) and (y) the Company shall pay to the Administrative Agent for the account of each of the Initial Term Lenders (and each other Incremental Term Lender (as applicable)) a fee (to the extent such higher yield is in the form of fees or original issue discount) so as to cause the total yield of the Initial Term Facility and each other then-existing Incremental Term Facility (if applicable) to be no more than 0.50% per annum lower than the total yield in respect of the new Incremental Term Facility. Upon the effective date of the Incremental Term Supplement, each lender thereunder shall become an Incremental Term Lender hereunder and such Incremental Term Supplement shall be deemed part of this Credit Agreement for all purposes thereafter. Each Incremental Term Supplement may, without the consent of any Lender (other than the applicable Incremental Term Lenders thereunder and the Administrative Agent), effect such amendments to this Credit Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Company, to effect the provisions of this Section 2.15.
(c)    Incremental Term Lenders. The Company shall be entitled to elect, in its own discretion, Incremental Term Lenders from among the existing Lenders, and any additional banks, financial institutions and other institutional lenders or investors, subject to the consent of the Administrative Agent (which consent shall not be unreasonably withheld), if such Administrative Agent consent would be required under Section 10.06(b)(iii) for an assignment of Loans to such Incremental Term Lender. Notwithstanding the foregoing, no Lender shall be required to provide any Incremental Term Loans.
Section 2.16    Defaulting Lenders.
(a)    Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Credit Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i)    Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Credit Agreement shall be restricted as set forth in the definition of Required Lenders.
(ii)    Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
 
  
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Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.07 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any L/C Issuer or Swing Line Lender hereunder; third, to Cash Collateralize the L/C Issuers’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.03(g); fourth, as the Company may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Credit Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Company, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Credit Agreement and (y) Cash Collateralize the L/C Issuers’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Credit Agreement, in accordance with Section 2.03(g); sixth, to the payment of any amounts owing to the Lenders, the L/C Issuers or Swing Line Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuers or Swing Line Lenders against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Credit Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Company as a result of any judgment of a court of competent jurisdiction obtained by the Company against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Credit Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Advances in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Advances owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Advances owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments under the applicable Facility without giving effect to Section 2.16(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.16(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii)    Certain Fees. (A) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.03(g).
 
  
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(B)    With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A) above, the Company shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to each L/C Issuer and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer’s or Swing Line Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.
(iv)    Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 5.02 are satisfied at the time of such reallocation (and, unless the Company shall have otherwise notified the Administrative Agent at such time, the Company shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.
(v)    Cash Collateral, Repayment of Swing Line Loans. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Company shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swing Line Loans in an amount equal to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 2.03(g).
(b)    Defaulting Lender Cure. If the Company, the Administrative Agent, each Swing Line Lender and each L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held pro rata by the Lenders in accordance with the Commitments under the applicable Facility (without giving effect to Section 2.16(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf
 
  
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of the Company while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
(c)    New Swing Line Loans/Letters of Credit. So long as any Lender is a Defaulting Lender, (i) no Swing Line Lender shall be required to fund any Swing Line Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swing Line Loan and (ii) no L/C Issuer shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.
Section 2.17    Extension of Maturity Date.
(a)    The Company may, by delivering an Extension Request to the Administrative Agent (who shall promptly deliver a copy to each of the Lenders), not less than 60 days in advance of the applicable Maturity Date with respect to any Facility, as in effect at such time (an “Existing Maturity Date”) for such Facility, request that the Lenders extend such Existing Maturity Date (each, an “Extension”) to any date that it shall select so long as such date is no more than the fifth anniversary of such Existing Maturity Date (such date, the “Extended Maturity Date”; any Term Facility so extended, an “Extended Term Facility,” any Revolving Credit Facility so extended, an “Extended Revolving Credit Facility” and, together with any Extended Term Facility, an “Extended Facility”; and any Revolving Credit Commitments so extended, “Extended Revolving Credit Commitments”). Each Lender, acting in its sole discretion, shall, by written notice to the Administrative Agent given not later than the date that is the 20th day after the date of the Extension Request, or if such date is not a Business Day, the immediately following Business Day (the “Response Date”), advise the Administrative Agent in writing whether or not such Lender agrees to the requested extension. Each Lender that advises the Administrative Agent that it will not extend an Existing Maturity Date is referred to herein as a “Non-Extending Lender”; provided, that any Lender that does not advise the Administrative Agent of its consent to such requested extension by the Response Date and any Lender that is a Defaulting Lender on the Response Date shall be deemed to be a Non-Extending Lender. The Administrative Agent shall notify the Company, in writing, of the Lenders’ elections promptly following the Response Date. The election of any Lender to agree to such an Extension shall not obligate any other Lender to so agree. Each applicable Maturity Date may be extended no more than two times pursuant to this Section 2.17.
(b)    If, by the Response Date, any Lenders shall have agreed to extend an Existing Maturity Date (each such consenting Lender, an “Extending Lender”), then effective as of such Existing Maturity Date, the Maturity Date for such Extending Lenders only shall be extended to the Extended Maturity Date (subject to satisfaction of the conditions set forth in Section 2.17(d)). In the event of any Extension, (i) the outstanding principal balance of all Loans and other amounts payable hereunder to any Non-Extending Lender shall become due and payable on such Existing Maturity Date and (ii) with respect to any Revolving Credit Facility, the Revolving Credit Commitment of each Non-Extending Lender shall terminate on the Existing Maturity Date in effect for such Non-Extending Lender prior to such Extension and, subject to Section 2.17(c) below, the total Revolving Credit Commitments for the applicable Revolving Credit Facility shall be reduced by the Revolving Credit Commitments of the Non-Extending Lenders so terminated for such Revolving Credit Facility on such Existing Maturity Date.
 
  
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(c)    If (and only if), by the Response Date, Lenders holding Loans and/or Commitments that aggregate more than 50% of the total outstanding Loans and Commitments shall constitute Extending Lenders, then the Company shall have the right on or before the applicable Existing Maturity Date, at its own expense, to require any Non-Extending Lender to transfer and assign without recourse (in accordance with and subject to the restrictions contained in Section 10.06) all its interests, rights (other than its rights to payments pursuant to Section 3.01, Section 3.04, Section 3.05 or Section 10.04 arising prior to the effectiveness of such assignment) and obligations under this Credit Agreement with respect to the applicable Facility to one or more banks or other financial institutions identified to the Non-Extending Lender by the Company, which may include any existing Lender (each a “Replacement Lender”); provided that (i) such Replacement Lender, if not already a Lender hereunder, shall be subject to the approval of the Administrative Agent (and, if a Revolving Credit Facility, each L/C Issuer) (such approvals to not be unreasonably withheld or conditioned) to the extent the consent of the Administrative Agent (or the L/C Issuers, if applicable) would be required to effect an assignment under Section 10.06(b), (ii) such assignment shall become effective as of a date specified by the Company (which shall not be later than the applicable Existing Maturity Date in effect for such Non-Extending Lender prior to the effective date of the requested extension) and (iii) each Replacement Lender shall pay to such Non-Extending Lender in immediately available funds on the effective date of such assignment the principal of and interest accrued to the date of payment on the outstanding principal amount Loans made by it hereunder and all other amounts accrued and unpaid for its account or otherwise owed to it hereunder on such date.
(d)    As a condition precedent to each such Extension of an Existing Maturity Date pursuant to Section 2.17(b), the Company shall (i) deliver to the Administrative Agent a certificate of the Company dated as of the applicable Existing Maturity Date, signed by a senior executive of the Company certifying that, as of such date, both before and immediately after giving effect to such Extension, (A) the representations and warranties of the Company set forth in this Credit Agreement shall be true and correct in all material respects and as of such date to the same extent as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case they were true and correct, in all material respects, as of such earlier date; provided that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects on such date or on such earlier date, as the case may be (after giving effect to such qualification); and (B) no Default or Event of Default shall have occurred and be continuing and (ii) first make such prepayments of the outstanding Loans and second provide such cash collateral (or make such other arrangements satisfactory to the applicable L/C Issuer) with respect to the outstanding Letters of Credit as shall be required such that, after giving effect to the termination of the Commitments of the Non-Extending Lenders pursuant to Section 2.17(b) and any assignment pursuant to Section 2.17(c), the aggregate Revolving Credit Exposure less the face amount of any Letter of Credit supported by any such cash collateral (or other satisfactory arrangements) so provided does not exceed the aggregate amount of Commitments being extended.
(e)    The terms of each Extended Facility shall be determined by the Administrative Agent, the Company and the applicable Extending Lenders and set forth in an
 
  
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amendment to this Credit Agreement (an “Extension Amendment”); provided, that (i) the final maturity date of any Extended Facility shall be no earlier than the Existing Maturity Date for such Facility, (ii) the weighted average life to maturity of the Extended Facility shall be no shorter than the weighted average life to maturity of the Facility being extended, (iii) (A) there shall be no scheduled amortization of the loans or reductions of commitments under any Extended Revolving Credit Facility and (B) any scheduled amortization with respect to an Extended Term Facility shall, until the Existing Maturity Date for such Term Facility, be in amounts equal to or less (but not greater) than the scheduled amortization under the Term Facility being extended, (iv) any Extended Facility shall rank pari passu in right of payment and with respect to security with the Facilities not being extended, and the borrower and guarantors of the Extended Facility shall be the same as the borrower and Guarantors with respect to the Facilities not being extended, (v) the interest rate margin, rate floors, fees, original issue discount and premium applicable to any Extended Facility shall be determined by the Company and the applicable Extending Lenders, (vi) (A) any Extended Term Facility may participate on a pro rata or less than pro rata (but not greater than pro rata) basis in voluntary or mandatory prepayments with the Term Facility being extended and (B) borrowing and prepayment under any Extended Revolving Credit Facility, or reductions of Extended Revolving Credit Commitments, and participations in Letters of Credit and Swing Line Loans, shall be on a pro rata basis with the Revolving Credit Loans or Revolving Credit Commitments not being extended (other than upon the maturity of the non-extended Revolving Credit Loans and Revolving Credit Commitments), and (vii) the terms of any Extended Facility shall be substantially identical to the terms set forth herein (except as set forth in clauses (i) through (v) above). For the avoidance of doubt, (i) no consent of any Lender (other than the existing Lenders participating in the Extension) shall be required for any Extension pursuant to this Section 2.17 and (ii) neither the operation of this Section 2.17 in accordance with its terms nor any Extension Amendment shall constitute an amendment subject to Section 10.01.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01    Taxes. (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Company hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Taxes, provided that if the Company shall be required by applicable law to withhold or deduct any Taxes from such payments, then (i) if such Taxes are Indemnified Taxes, the sum payable shall be increased as necessary so that after making all required withholdings or deductions (including withholdings or deductions applicable to additional sums payable under this Section) the Administrative Agent, any Lender or any L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such withholdings or deductions been made, (ii) the Company shall make such withholdings or deductions and (iii) the Company shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with applicable law.
(b)    Payment of Other Taxes by the Company. Without limiting the provisions of subsection (a) above, the Company shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
 
  
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(c)    Indemnification by the Company. The Company shall indemnify the Administrative Agent, each Lender and each L/C Issuer, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority; provided that the Company shall not indemnify the Administrative Agent, any Lender or any L/C Issuer for any penalties or interest that are imposed solely as a result of gross negligence or willful misconduct of the Administrative Agent, any Lender or any L/C Issuer. A certificate as to the amount of such payment or liability delivered to the Company by a Lender or an L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest error. If, in the reasonable discretion of the Company, any Indemnified Taxes are incorrectly or not legally imposed or asserted by the relevant Governmental Authority, the Administrative Agent, each Lender or each L/C Issuer, as the case may be, shall, at the expense of the Company, use commercially reasonable efforts to cooperate with the Company to recover and promptly remit such Indemnified Taxes to the Company in accordance with subsection (f) of this Section. Nothing contained herein shall derogate from the right of any Lender, the Administrative Agent or any L/C Issuer to arrange its tax affairs in whatever manner it sees fit nor shall require any Lender, the Administrative Agent or any L/C Issuer to disclose any information relating to its tax affairs that it deems confidential other than as required under Section 3.01(f). For the avoidance of doubt, the Administrative Agent, a Lender and an L/C Issuer may not recover more than once with respect to the same amount of Taxes to which the Administrative Agent, Lender or L/C Issuer is entitled to indemnification under this Section.
(d)    Indemnification by the Lenders. Each Lender and each L/C Issuer shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender and L/C Issuer (but only to the extent that the Company has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Company to do so), (ii) any Taxes attributable to such Lender’s or L/C Issuer’s failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender or L/C Issuer, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender or L/C Issuer by the Administrative Agent shall be conclusive absent manifest error. Each Lender and each L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or L/C Issuer under any Loan Document or otherwise payable by the Administrative Agent to the Lender or L/C Issuer from any other source against any amount due to the Administrative Agent under this paragraph (d).
(e)    Evidence of Payments. As soon as practicable after any payment of Taxes by the Company to a Governmental Authority pursuant to this Section 3.01, the Company shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
 
  
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(f)    Status of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments hereunder or under any other Loan Document shall deliver to the Company (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Company or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the Company or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Company or the Administrative Agent as will enable the Company or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in paragraphs (f)(i)-(iv) of this Section) shall not be required if in the Foreign Lender’s reasonable judgment such completion, execution or submission would subject such Foreign Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Foreign Lender.
Without limiting the generality of the foregoing, if the Company is resident for tax purposes in the United States, any Foreign Lender shall deliver to the Company and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Credit Agreement (and from time to time thereafter upon the request of the Company or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:
(i)      duly executed copies of Internal Revenue Service Form W-8BEN or Form W-8BEN-E claiming eligibility for benefits of an income tax treaty to which the United States is a party,
(ii)     duly executed copies of Internal Revenue Service Form W-8ECI,
(iii)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (A) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Company within the meaning of section 871(h)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly executed copies of Internal Revenue Service Form W-8BEN or Form W-8BEN-E, or
(iv)    any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Company to determine the withholding or deduction required to be made (including, for the avoidance of doubt, documentation necessary for the Company or the Administrative Agent to comply with its obligations under FATCA, to determine whether any recipient of amounts arising under this Credit Agreement has or has not complied with such recipient’s obligations under FATCA, or to determine the amount to deduct and/or withhold from such amounts under FATCA). Solely for the purposes of this clause (iv), “FATCA” shall include any amendments made to FATCA after the date of this Credit Agreement.
 
  
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Each Foreign Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Company and the Administrative Agent in writing of its legal inability to do so.
(g)    Treatment of Certain Refunds. If any party determines, in its good faith discretion, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section, it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that such indemnifying party, upon the request of such indemnified party, agrees to repay the amount (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such indemnified party in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g), the payment of which would place the indemnified party in a less favorable net after-tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This subsection shall not be construed to require any indemnified party to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the indemnifying party or any other Person.
(h)    Survival. Each party’s obligations under this Section shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
Section 3.02    Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Company through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Company that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Company shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, and pay any amounts payable to such Lender under Section 3.04(e), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Company shall also pay accrued interest on the amount so prepaid or converted.
 
  
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Section 3.03    Inability to Determine Rates. (a) If, for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof, (i) the Administrative Agent is advised by the Required Lenders that Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (ii) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan (including because the Eurodollar Base Rate is not available or published on a current basis), or (iii) the Administrative Agent is advised by the Required Lenders that the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Company and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Company may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.
(b)    If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in clause (a)(ii) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(ii) have not arisen but either (w) the supervisor for the administrator of the Eurodollar Base Rate has made a public statement that the administrator of the Eurodollar Base Rate is insolvent (and there is no successor administrator that will continue publication of the Eurodollar Base Rate), (x) the administrator of the Eurodollar Base Rate has made a public statement identifying a specific date after which the Eurodollar Base Rate will permanently or indefinitely cease to be published by it (and there is no successor administrator that will continue publication of the Eurodollar Base Rate), (y) the supervisor for the administrator of the Eurodollar Base Rate has made a public statement identifying a specific date after which the Eurodollar Base Rate will permanently or indefinitely cease to be published or (z) the supervisor for the administrator of the Eurodollar Base Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the Eurodollar Base Rate may no longer be used for determining interest rates for loans, then the Administrative Agent and the Company shall promptly endeavor to establish an alternate rate of interest to the Eurodollar Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Credit Agreement to reflect such alternate rate of interest and such other related changes to this Credit Agreement as may be applicable (but for the avoidance of doubt, such related changes shall not include a reduction of the Applicable Rate); provided that, if such alternate rate of interest as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Credit Agreement. Notwithstanding anything to the contrary in Section 10.01, such amendment shall become effective without any further action or consent of any other party to this Credit Agreement so long as the Administrative Agent shall not have received, within five Business Days of the date a copy of such amendment is provided to the Lenders, a written notice from the Required Lenders stating that such Required Lenders object to such amendment. Until an alternate rate of interest shall be determined in accordance with this
 
  
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clause (b) (but, (A) in the case of the circumstances described in clause (ii)(w), clause (ii)(x) or clause (ii)(y) of the first sentence of this Section 3.03(b), only to the extent the Eurodollar Base Rate for such Interest Period is not available or published at such time on a current basis and (B) in the case of the circumstances described in clause (ii)(z) of the first sentence of this Section 3.03(b), only to the extent the specific date referred to in such clause has occurred), (x) any Committed Loan Notice that requests the conversion of any Revolving Credit Borrowing to, or continuation of any Revolving Credit Borrowing as, Eurodollar Rate Loans shall be ineffective and (y) if any Committed Loan Notice requests a Borrowing of Eurodollar Rate Loans, such Borrowing shall be made as a Base Rate Loan.
Section 3.04    Increased Costs; Reserves on Eurodollar Rate Loans.
(a)    Increased Costs Generally. If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurodollar Rate contemplated by Section 3.04(e)) or any L/C Issuer;
(ii)    subject any Lender or any L/C Issuer to any tax of any kind whatsoever with respect to this Credit Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender or such L/C Issuer in respect thereof (except for Indemnified Taxes and any Excluded Tax); or
(iii)    impose on any Lender or any L/C Issuer or the London interbank market any other condition, cost or expense affecting this Credit Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making, continuing, converting to or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or such L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or such L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or such L/C Issuer, the Company will pay to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or such L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered. Notwithstanding the foregoing, a Lender or an L/C Issuer shall be entitled to request compensation for increased costs or expenses described in this Section 3.04(a) only to the extent it is the general practice or policy of such Lender or such L/C Issuer to request such compensation from other borrowers under comparable facilities under similar circumstances; provided, that in no event shall such Lender or L/C Issuer be required to disclose any confidential or proprietary information regarding any such other borrower or comparable facility. For the avoidance of doubt, if a Lender or an L/C Issuer recovers an amount under this Section, such Lender or such L/C Issuer may not recover the same amount under Section 3.01; similarly, if a Lender or an L/C Issuer recovers an amount under Section 3.01, such Lender or such L/C Issuer may not recover the same amount under this Section.
 
  
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(b)    Capital Requirements. If any Lender or any L/C Issuer determines that any Change in Law affecting such Lender or such L/C Issuer or any Lending Office of such Lender or such Lender’s or such L/C Issuer’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such L/C Issuer’s capital or on the capital of such Lender’s or such L/C Issuer’s holding company, if any, as a consequence of this Credit Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by such L/C Issuer, to a level below that which such Lender or such L/C Issuer or such Lender’s or such L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such L/C Issuer’s policies and the policies of such Lender’s or such L/C Issuer’s holding company with respect to capital adequacy and liquidity), then from time to time the Company will pay to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or such L/C Issuer or such Lender’s or such L/C Issuer’s holding company for any such reduction suffered.
(c)    Certificates for Reimbursement. A certificate of a Lender or an L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or such L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Company shall be conclusive absent manifest error. The Company shall pay such Lender or such L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d)    Delay in Requests. Failure or delay on the part of any Lender or any L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or such L/C Issuer’s right to demand such compensation, provided that the Company shall not be required to compensate a Lender or an L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or such L/C Issuer, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
(e)    Reserves on Eurodollar Rate Loans. The Company shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided the Company shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10 days from receipt of such notice.
 
  
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Section 3.05    Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Company shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a)    any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b)    any failure by the Company (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Company; or
(c)    any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Company pursuant to Section 10.12;
including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Company shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Company to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining the Eurodollar Rate. Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.
Section 3.06    Mitigation Obligations; Replacement of Lenders. (a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Company is required to pay any additional amount to any Lender, any L/C Issuer, or any Governmental Authority for the account of any Lender or any L/C Issuer pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender or such L/C Issuer shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender or such L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or Section 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender or such L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or such L/C Issuer, as the case may be. The Company hereby agrees to pay all reasonable costs and expenses incurred by any Lender or any L/C Issuer in connection with any such designation or assignment.
(b)    Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Company is required to pay any additional amount to any Lender or any
 
  
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Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, the Company may replace such Lender in accordance with Section 10.12.
Section 3.07    Survival. All of the Company’s obligations under this Article III shall survive termination of the Aggregate Commitments, the assignment by a Lender of all or any portion of its Loans or Commitments hereunder, repayment of all other Obligations hereunder and resignation of the Administrative Agent.
ARTICLE IV
GUARANTY
Section 4.01    Guaranty. Each of the Guarantors hereby, jointly and severally, absolutely and unconditionally guarantees, as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all of the Obligations, whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of the Company to the Secured Parties, arising hereunder and under the other Loan Documents (including all renewals, extensions, amendments, refinancings and other modifications thereof and all costs, attorneys’ fees and expenses incurred by the Secured Parties in connection with the collection or enforcement thereof). The Administrative Agent’s books and records showing the amount of the Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon each Guarantor, and conclusive for the purpose of establishing the amount of the Obligations, absent manifest error. This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or any instrument or agreement evidencing any Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Obligations which might otherwise constitute a defense to the obligations of any Guarantor under this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing.
Section 4.02    Rights of Lenders. Each Guarantor consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Obligations; (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent, the L/C Issuers and the Lenders in their sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Obligations. Without limiting the generality of the foregoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of such Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of such Guarantor.
 
  
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Section 4.03    Certain Waivers. Each Guarantor waives (a) any defense arising by reason of any disability, change in corporate existence or structure or other defense of the Company or any other Guarantor, or the cessation from any cause whatsoever (including any act or omission of any Secured Party) of the liability of the Company or any other Guarantor; (b) any defense based on any claim that such Guarantor’s obligations exceed or are more burdensome than those of the Company or any other Guarantor; (c) the benefit of any statute of limitations affecting such Guarantor’s liability hereunder; (d) any right to proceed against the Company, proceed against or exhaust any security for the Obligations, or pursue any other remedy in the power of any Secured Party whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by any Secured Party; (f) any defense based on any claim that any Obligations are invalid or unenforceable; (g) the amendment or waiver of any Obligations; (g) any defense based on any allegation of non-perfection or release of Collateral in the context of a secured transaction; and (h) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating the Company, the Guarantors or any other guarantors or sureties. Each Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Obligations.
Section 4.04    Obligations Independent. The obligations of each Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Obligations and the obligations of any other Guarantor, and a separate action may be brought against such Guarantor to enforce this Guaranty whether or not the Company or any other person or entity is joined as a party.
Section 4.05    Subrogation. Each Guarantor shall not exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guaranty until all of the Obligations and any amounts payable under this Guaranty have been indefeasibly paid and performed in full and the Commitments and the Facilities are terminated. If any amounts are paid to any Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to reduce the amount of the Obligations, whether matured or unmatured.
Section 4.06    Termination; Reinstatement. This Guaranty is a continuing and irrevocable guaranty of all Obligations now or hereafter existing and shall remain in full force and effect until all Obligations and any other amounts payable under this Guaranty are indefeasibly paid in full in cash and the Commitments and the Facilities with respect to the Obligations are terminated. Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Company or any Guarantor is made, or any of the Secured Parties exercises its right of setoff, in respect of the Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Secured Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any
 
  
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proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction. The obligations of each Guarantor under this paragraph shall survive termination of this Guaranty.
Section 4.07    Subordination. Each Guarantor hereby subordinates the payment of all obligations and indebtedness of the Company owing to such Guarantor, whether now existing or hereafter arising, including but not limited to any obligation of the Company to such Guarantor as subrogee of the Secured Parties or resulting from such Guarantor’s performance under this Guaranty, to the indefeasible payment in full in cash of all Obligations. If the Secured Parties so request, any such obligation or indebtedness of the Company to any Guarantor shall be enforced and performance received by such Guarantor as trustee for the Secured Parties and the proceeds thereof shall be paid over to the Secured Parties on account of the Obligations, but without reducing or affecting in any manner the liability of such Guarantor under this Guaranty.
Section 4.08    Stay of Acceleration. If acceleration of the time for payment of any of the Obligations is stayed, in connection with any case commenced by or against any Guarantor or the Company under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by such Guarantor immediately upon demand by the Secured Parties.
Section 4.09    Condition of Company. Each Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Company and any other Guarantor such information concerning the financial condition, business and operations of the Company and any such other Guarantor as such Guarantor requires, and that none of the Secured Parties has any duty, and such Guarantor is not relying on the Secured Parties at any time, to disclose to such Guarantor any information relating to the business, operations or financial condition of the Company or any other Guarantor (such Guarantor waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same).
Section 4.10    Limitation on Guaranty. It is the intention of the Guarantors, the Lenders and the Company that the obligations of each Guarantor hereunder shall be in, but not in excess of, the maximum amount permitted by applicable law. To that end, but only to the extent such obligations would otherwise be avoidable, the obligations of each Guarantor hereunder shall be limited to the maximum amount that, after giving effect to the incurrence thereof, would not render such Guarantor insolvent or unable to make payments in respect of any of its indebtedness as such indebtedness matures or leave such Guarantor with an unreasonably small capital. The need for any such limitation shall be determined, and any such needed limitation shall be effective, at the time or times that such Guarantor is deemed, under applicable law, to incur the Obligations hereunder. Any such limitation shall be apportioned amongst the Obligations pro rata in accordance with the respective amounts thereof. This paragraph is intended solely to preserve the rights of the Lenders under this Credit Agreement to the maximum extent permitted by applicable law, and neither the Guarantors, the Company nor any other Person shall have any right under this paragraph that it would not
 
  
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otherwise have under applicable law. The Company and each Guarantor agree not to commence any proceeding or action seeking to limit the amount of the obligation of such Guarantor under this Article IV by reason of this paragraph. For the purposes of this paragraph, “insolvency”, “unreasonably small capital” and “unable to make payments in respect of any of its indebtedness as such indebtedness matures” shall be determined in accordance with applicable law.
Section 4.11    Keepwell. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Guaranty in respect of Obligations that are Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 4.11 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 4.11, or otherwise under this Guaranty, as it relates to such other Loan Party, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect in accordance with Section 4.06. Each Qualified ECP Guarantor intends that this Section 4.11 constitute, and this Section 4.11 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01    Conditions of Credit Extensions on the Effective Date. The obligation of each L/C Issuer and each Lender to make the Credit Extensions hereunder on the Effective Date is subject to the satisfaction of the following conditions precedent on or prior to the Effective Date:
(a)    Execution of Loan Documents and Notes. The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles or delivered by means of other electronic communication (including e-mail and Internet or intranet websites) (followed promptly by originals) unless otherwise specified, each properly executed by a senior executive of the signing Loan Party, each dated the Effective Date (or, in the case of certificates of governmental officials, a recent date before the Effective Date) and each in form and substance reasonably satisfactory to the Administrative Agent and each of the Lenders:
(i)    this Credit Agreement, duly executed and delivered by each of the Company, the Guarantors, the Lenders, the L/C Issuers and the Administrative Agent; and
(ii)    a Note executed by the Company in favor of each Lender requesting a Note.
 
  
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(b)    Good Standing and Organizational Documents. The Administrative Agent shall have received a copy of a certificate of the Secretary of State of the jurisdiction of organization of each Loan Party (except with respect to an entity of the type for which good standing certificates are not provided by the Secretary of State in the jurisdiction in which it is formed), dated on or about the Effective Date certifying (A) as to a true and correct copy of the charter, certificate of limited partnership, limited liability company agreement or other organizational document of such Loan Party and each amendment thereto on file in such Secretary’s office and (B) that (1) such amendments are the only amendments to such Loan Party’s charter, certificate of limited partnership, limited liability company agreement or other organizational document on file in such Secretary’s office, (2) such Loan Party has paid all franchise taxes due and payable to the date of such certificate, and (3) such Loan Party is duly organized or formed and in good standing or presently subsisting (or the equivalent thereof) under the laws of the State of the jurisdiction of its organization.
(c)    Proof of Action. The Administrative Agent shall have received certified copies of all necessary action taken by each of the Company and the Loan Parties to authorize the execution, delivery and performance of each Loan Document to which it is a party.
(d)    Secretary’s Certificate. The Administrative Agent shall have received a certificate of each Loan Party signed by its Secretary or Assistant Secretary, dated as of the Effective Date, certifying as to (A) the absence of any amendments to the charter, certificate of limited partnership, limited liability company agreement or other organizational document of such Loan Party since the date of the Secretary of State’s (or local equivalent’s) certificate referred to in Section 5.01(b), (B) a true and correct copy of the organizational documents of such Loan Party as in effect on the date on which the resolutions or other proof of actions referred to in Section 5.01(c) were adopted and on the Effective Date, (C) the due organization and good standing or valid existence of such Loan Party organized under the laws of the jurisdiction of its organization and the absence of any proceeding for the dissolution or liquidation of such Loan Party, and (D) certifying the names and true signatures of the officers of such Loan Party authorized to sign each Loan Document to which it is or is to be a party and the other documents to be delivered hereunder or thereunder.
(e)    Opinions of Counsel to the Company and the Restricted Subsidiaries. The Lenders shall have received favorable opinions of:
(i)    Lawrence J. Burian, Executive Vice President and General Counsel, as counsel for the Company and the Restricted Subsidiaries, substantially in the form of Exhibit E; and
(ii)    Sullivan & Cromwell LLP, counsel to the Loan Parties, substantially in the form of Exhibit F;
and covering such other matters as any Lender or Lenders or special New York counsel to the Administrative Agent, may reasonably request (and for purposes of such opinions such counsel
 
  
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may rely upon opinions of counsel in other jurisdictions, provided that such other counsel are reasonably satisfactory to special counsel to the Administrative Agent and such other opinions state that the Lenders are entitled to rely thereon).
(f)    Solvency Certificate. The Lenders shall have received a certificate attesting to the Solvency of the Loan Parties (taken as a whole) on the Effective Date and after giving effect to the Transactions, from the senior financial executive of the Company.
(g)    Material Agreements. The Lenders shall have: (i) received a certificate from an officer of the Company stating that true and correct copies of all (A) Related Documents (excluding Affiliation Agreements which are not individually or in the aggregate material to the interests of the Lenders), and (B) other material agreements that the Administrative Agent may reasonably request (including, without limitation, a Media Rights Agreement with each of the New York Rangers and the New York Knicks), have been made available to counsel to the Administrative Agent (including all amendments and other modifications thereto as of the date of the certificate) and that no such agreements have been terminated and (ii) been given a reasonable opportunity to review, at the offices of counsel to the Administrative Agent, copies of each of the agreements and documents referred to in (A) and (B) above, redacted as to economic terms and related other proprietary terms and subject to non-disclosure arrangements reasonably acceptable to the Company.
(h)    Know Your Customer and Other Documents. (i) The Administrative Agent and the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA PATRIOT Act, and such other documents, filings, instruments and papers relating to the documents referred to herein and the transactions contemplated hereby as any Lender or the Administrative Agent shall reasonably require and (ii) to the extent any Loan Party qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, any Lender that has requested a Beneficial Ownership Certification in relation to such Loan Party shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Credit Agreement, the condition set forth in this clause (ii) shall be deemed to be satisfied), in each case at least three Business Days prior to the Effective Date to the extent the request for such documentation, Beneficial Ownership Certification or other information was made at least five Business Days prior to the Effective Date.
(i)    Certain Fees. All fees required to be paid to the Administrative Agent, the Joint Book Runners, the Initial Lenders and the other Lenders on or before the Effective Date shall have been paid. Unless waived by the Administrative Agent, the Company shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (including, without limitation, Shearman & Sterling LLP) to the extent properly invoiced prior to the Effective Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Company and the Administrative Agent.
 
  
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Without limiting the generality of the provisions of Section 9.04, for purposes of determining compliance with the conditions specified in this Section 5.01, each Lender that has signed this Credit Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or reasonably satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Effective Date specifying its objection thereto.
Section 5.02    Conditions to all Credit Extensions. The obligation of each L/C Issuer and each Lender to make each Credit Extension hereunder (which shall not include any conversion or continuation of any outstanding Loan) is subject to the additional conditions precedent that:
(a)    no Default or Event of Default shall have occurred and be continuing or would result from such proposed Credit Extension or from the application of proceeds thereof;
(b)    the representations and warranties of the Company and each other Loan Party in Article VI hereof or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct, in all material respects, on and as of the date of the making of, and after giving effect to, such Credit Extension with the same force and effect as if made on and as of such date, except to the extent that such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct, in all material respects, as of such earlier date; provided that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects on the date of such Credit Extension or on such earlier date, as the case may be (after giving effect to such qualification); and except that for purposes of this Section 5.02, the representations and warranties contained in Section 6.04(a)(i) and (ii) shall be deemed to refer to the most recent statements furnished pursuant to Section 7.01(a) and (b), respectively;
(c)    to the extent requested by the Administrative Agent or any Lender, a senior executive of the Company shall have certified compliance with clauses (a) and (b) above to the Administrative Agent; and
(d)    the Administrative Agent and, if applicable, the L/C Issuers or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.
The Company shall be deemed to have made a representation and warranty hereunder as of the time of each Credit Extension hereunder that the conditions specified in such clauses have been fulfilled as of such time.
 
  
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Section 5.03    Effectiveness of Amendment and Restatement. Until this Credit Agreement becomes effective in accordance with the requirements of Section 5.01, the Existing Credit Agreement shall remain in full force and effect and shall not be affected hereby. On the Effective Date, the Existing Credit Agreement will be automatically amended and restated to read as set forth in this Credit Agreement. The rights and obligations of the parties hereto shall be governed (i) prior to the Effective Date, by the Existing Credit Agreement and (ii) on and after the Effective Date, by this Credit Agreement. Once the Effective Date has occurred, all references to the “Credit Agreement” in any Loan Document or any other document, instrument, agreement or writing shall be deemed to refer to the Credit Agreement as amended and restated hereby. Each Loan Party acknowledges and agrees that the execution and delivery of this Credit Agreement shall not serve to effect a novation of the Obligations.
Section 5.04    Acknowledgement and Reaffirmation of Security Interests.
(a)    Each Loan Party hereby acknowledges that it has reviewed the terms and provisions of this Credit Agreement and consents to the amendment of the Existing Credit Agreement effected pursuant to this Credit Agreement. Each Loan Party hereby confirms that each Loan Document to which it is a party or otherwise bound (including, for the avoidance of doubt, the Guaranty hereunder and the Security Agreement) and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Loan Documents, the payment and performance of all “Obligations” under each of the Loan Documents to which it is a party (in each case as such terms are defined in the applicable Loan Document).
(b)    Each Loan Party acknowledges and agrees that (i) any of the Loan Documents to which it is a party or is otherwise bound (including, for the avoidance of doubt, the Guaranty hereunder and the Security Agreement) shall continue in full force and effect and that all of its obligations thereunder shall be valid, enforceable, ratified and confirmed in all respects and shall not be impaired or limited by the execution or effectiveness of this Credit Agreement, and (ii) all security interests created under any of the Collateral Documents shall continue in full force and effect pursuant to the terms of such Collateral Document. Each Loan Party represents and warranties that all representations and warranties contained in this Credit Agreement and the other Loan Documents to which it is a party or is otherwise bound are true and correct in all material respects and as of the Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties expressly relate to an earlier date, in which case they were true and correct, in all material respects, as of such earlier date; provided that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects on the Effective Date or on such earlier date, as the case may be (after giving effect to such qualification).
(c)    Each Loan Party acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Credit Agreement, such Loan Party (other than the Company) is not required by the terms of the Existing Credit Agreement or any other Loan Document to consent to the amendments to the Existing Credit Agreement effected pursuant to this Credit Agreement and (ii) nothing in the Existing Credit Agreement, this Credit Agreement or any other Loan Document shall be deemed to require the consent of such Loan Party (other than the Company) to any future amendments to the Existing Credit Agreement or this Credit Agreement.
 
  
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Administrative Agent and the Lenders as follows:
Section 6.01    Existence, Qualification and Power. Each Holdings Entity and the Company and each of its Restricted Subsidiaries is a limited or general partnership, limited liability company or corporation duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and is duly qualified to transact business and is in good standing in all jurisdictions in which such qualification is necessary in view of the properties and assets owned and presently intended to be owned and the business transacted and presently intended to be transacted by it except for qualifications the lack of which, singly or in the aggregate, have not had and are not likely to have a Material Adverse Effect, and each of the Holdings Entities, the Company and the Restricted Subsidiaries has full power, authority and legal right to perform its obligations under this Credit Agreement, the Notes and the other Loan Documents to which it is a party.
Section 6.02    Subsidiaries; Loan Parties. Schedules 6.02(i), 6.02(ii) and 6.02(iii) contain a complete and correct list, as at the Effective Date, of all Restricted Subsidiaries, Unrestricted Subsidiaries and Excluded Subsidiaries of the Company, respectively, and a description of the legal nature of such Subsidiaries (including, (x) with respect to each Subsidiary, the jurisdiction of its organization, the address of its principal place of business and its U.S. taxpayer identification number, the nature of the ownership interests (shares of stock or general or limited partnership or other interests) in such Subsidiaries and the holders of such interests and, except as disclosed to the Lenders in writing prior to the Effective Date, the Company and each of its Subsidiaries owns all of the ownership interests of its Subsidiaries indicated in such Schedules as being owned by the Company or such Subsidiary, as the case may be, free and clear of all Liens except those created under the Collateral Documents, and all such ownership interests are validly issued and, in the case of shares of stock, fully paid and non-assessable, and (y) with respect to each Excluded Subsidiary and Unrestricted Subsidiary, a list of its material assets and a description of its business activities).
Section 6.03    Authority; No Conflict. The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party or by which it is bound, and each Credit Extension hereunder, have been duly authorized by all necessary corporate or other organizational action and do not and will not: (a) subject to the consummation of the action described in Section 6.12, violate any Law or League Rule currently in effect (other than violations that, singly or in the aggregate, have not had and are not likely to have a Material Adverse Effect), or any provision of any of the Loan Parties’ respective partnership agreements, charters or by-laws certificate of limited partnership, limited liability company agreement, by-laws or other organizational documents presently in effect; (b) conflict with or result in the breach of, or constitute a default or require any consent (except
 
  
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for the consents described on Schedule 6.03, each of which has been duly obtained) under, or require any payment to be made under (i) any Contractual Obligation or League Rule to which any Loan Party is a party or by which their respective properties may be bound or affected, or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Loan Parties or their respective properties are subject (in each case under subclause (i) and/or (ii) above, other than any conflict, breach, default or required consent that, singly or in the aggregate, have not had and are not likely to have a Material Adverse Effect); or (c) except as provided under any Loan Document, result in, or require, the creation or imposition of any Lien upon or with respect to any of the properties or assets now owned or hereafter acquired by the Loan Parties.
Section 6.04    Financial Condition; Absence of Material Adverse Effect. (a) The Company has furnished to each Lender the consolidated balance sheet of the Parent and its consolidated Subsidiaries as at June 30, 2019, and the related consolidated statements of operations and stockholders’ equity for the fiscal year ended on said date, said financial statements having been certified by an independent Registered Public Accounting Firm of nationally recognized standing reasonably acceptable to the Required Lenders. Such financial statements are complete and correct in all material respects (subject, in the case of the unaudited financial statements referred to above, to year-end and audit adjustments), were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein and fairly present the financial condition of the respective entity or groups of entities which is or are the subject of such financial statements (as stated above), on a consolidated basis, as at the respective dates of the balance sheets included in such financial statements and the results of operations of such entity or groups of entities for the respective periods ended on said dates.
(b)    None of the Holdings Entities or the Company or its Restricted Subsidiaries had any material contingent liabilities, liabilities for Taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments or operations which are substantial in amount, except as referred to or reflected or provided for in said financial statements of the Company and its consolidated Subsidiaries as at said respective dates or as disclosed to the Lenders in writing prior to the Effective Date.
(c)    Since June 30, 2019, there has been no event, change, condition, occurrence or circumstance which either individually or in the aggregate, has or would reasonably be expected to have a Material Adverse Effect.
Section 6.05    Litigation, Compliance with Laws. Except as disclosed to the Lenders on Schedule 6.05, there are no actions, suits, proceedings, claims or disputes pending, or to the knowledge of the Company or any Restricted Subsidiary threatened, against the Company or any Restricted Subsidiary or any of their respective properties or assets, before any court or arbitrator or by or before any Governmental Authority that, singly or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Restricted Subsidiary is in default under or in violation of or with respect to any Laws or any writ, injunction or decree of any court, arbitrator or Governmental Authority except for such violations or defaults which, singly or in the aggregate, are not likely to have a Material Adverse Effect.
 
  
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Section 6.06    Titles and Liens. Each of the Loan Parties has good title to the Collateral, free and clear of all Liens except in the case of the Holdings Entities, Permitted Liens, and in the case of the Company and its Restricted Subsidiaries, those permitted by Section 7.16.
Section 6.07    Regulation U; Investment Company Act. (a) None of the proceeds of any of the Credit Extensions shall be used to purchase or carry, or to reduce or retire or refinance any credit incurred to purchase or carry, any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock; except that up to $10,000,000 in the aggregate of such proceeds may be used for such purposes; provided that both at the time of such use and thereafter compliance with Regulation U is maintained. The Company will notify the Administrative Agent promptly if any Loan Party purchases Margin Stock and, if requested by any Lender, the Company will furnish to the Lenders statements in conformity with the requirements of Regulation U.
(b)    None of the Company, any Person Controlling the Company, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.
Section 6.08    Taxes. Each of the Company and the Restricted Subsidiaries has filed all Federal, state and other material tax returns which are required to be filed under any law applicable thereto except such returns as to which the failure to file, singly or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, and has paid, or made provision for the payment of, all Taxes shown to be due pursuant to said returns or pursuant to any assessment received by the Company or any of the Restricted Subsidiaries, except such Taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided or as to which the failure to pay, singly or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.
Section 6.09    Other Credit Agreements. Schedule 7.14 (Existing Indebtedness), Schedule 7.15 (Existing Guarantees) and Schedule 7.16 (Existing Liens) contain complete and correct lists, as at June 30, 2019, of all credit agreements, indentures, purchase agreements, obligations in respect of letters of credit, guarantees and other instruments presently in effect (including Capitalized Lease Obligations) providing for, evidencing, securing or otherwise relating to any Indebtedness of the Company and the Restricted Subsidiaries in a principal or face amount equal to $1,000,000 or more and such lists correctly set forth the names of the debtor or lessee and creditor or lessor with respect to the Indebtedness outstanding or to be outstanding thereunder, the rate of interest or rentals, a description of any security given or to be given therefor, and the maturity or maturities or expiration date or dates thereof.
Section 6.10    Full Disclosure(a). (a) None of the financial statements referred to in Section 6.04 or delivered or deemed delivered from time to time pursuant to this Credit Agreement, certificates or any other written statements delivered or deemed delivered by or on behalf of the Company or any Restricted Subsidiary to the Administrative Agent or any Lender contains, as of the date of this Credit Agreement, any untrue statement of a material fact nor do such financial statements, certificates and such other written statements, taken as a whole, omit to state a material fact necessary to make the statements contained therein not misleading.
 
  
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(b)    As of the Effective Date, to the best knowledge of the Company, the information included in each Beneficial Ownership Certification provided on or prior to the Effective Date to any Lender in connection with this Credit Agreement is true and correct in all respects.
Section 6.11    No Default. None of the Company and the Restricted Subsidiaries is in default in the payment or performance or observance of any Contractual Obligation which default, either alone or in conjunction with all other such defaults, has had or is likely to have a Material Adverse Effect.
Section 6.12    Approval of Government, Regulatory Authorities and Third Parties. Except as set forth on Schedule 6.03 and other than any Non-Required Consents, no approval or consent of, or filing or registration with, (x) any Governmental Authority, (y) any League or (z) any other third party, in the case of this clause (z) pursuant to any Contractual Obligation governing Indebtedness for borrowed money or any other Contractual Obligation that is material to the Business of the Company or any of its Restricted Subsidiaries, is required in connection with (a) the execution, delivery and performance by, or enforcement against, any Loan Party of any Loan Document to which it is a party, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (c) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof) or (d) other than applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the exercise of creditors’ rights generally or principles of equity (which shall exclude any law, rule or regulation that is applicable to the Company and its Subsidiaries or the Loan Documents solely because such law, rule or regulation is part of a regulatory regime applicable to the Company or any of its Restricted Subsidiaries due to their specific assets or business), the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents. All approvals, consents, filings, registrations or other actions described in Schedule 6.03 have been duly obtained, taken, given or made and are in full force and effect (other than as set forth in Schedule 6.03).
Section 6.13    Binding Agreements. This Credit Agreement constitutes, and each other Loan Document when executed and delivered will constitute, the legal, valid and binding obligations of each of the Loan Parties which is a party thereto, enforceable in accordance with their respective terms (except for limitations on enforceability under bankruptcy, reorganization, insolvency and other similar laws affecting creditors’ rights generally and limitations on the availability of the remedy of specific performance imposed by the application of general equitable principles).
Section 6.14    Collective Bargaining Agreements Except as set forth in Schedule 6.14, as of the Effective Date, there are no collective bargaining agreements between the Company or the Restricted Subsidiaries and any trade or labor union or other employee collective bargaining agent.
 
  
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Section 6.15    Investments. Schedule 6.15 contains a complete and correct list, as of the Effective Date, of all Investments of the Company and the Restricted Subsidiaries (other than any Investments in other Restricted Subsidiaries) in excess of $5,000,000, showing the respective amounts of each such Investment and the respective entity (or group thereof) in which each such Investment has been made.
Section 6.16    Solvency. The Company and its Restricted Subsidiaries, taken as a whole, are Solvent.
Section 6.17    Collateral Documents. The provisions of the Collateral Documents are effective to create in favor of the Administrative Agent (or the Collateral Agent as applicable) for the benefit of the Secured Parties a legal, valid and enforceable first priority Lien (subject to Liens permitted by Section 7.16) on all right, title and interest of the respective Loan Parties in the Collateral described therein. Except for filings completed as contemplated hereby and by the Collateral Documents, no filing or other action is necessary to perfect or to continue the perfection of such Liens.
Section 6.18    Maintenance of Insurance. The Company and its Restricted Subsidiaries shall maintain with financially sound and reputable insurance companies that are not Affiliates of the Company, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.
Section 6.19    Subordinated Debt. The Loan Documents and all Obligations evidenced thereby constitute the “Senior Debt” and the “Designated Senior Debt” with respect to all subordinated Indebtedness of the Company and its Restricted Subsidiaries.
Section 6.20    ERISA Compliance. (a) Each Plan is in compliance with the applicable provisions of ERISA, the Code and other Federal or state Laws, except where such non-compliance would not result or reasonably be expected to result in a Material Adverse Effect. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the actual knowledge of a senior executive of the Company, nothing has occurred which would prevent, or cause the loss of, such qualification, except, in each case, where the absence or loss of such qualification would not result or reasonably be expected to result in a Material Adverse Effect. The Company and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan, except where any failure to make the required contributions would not result or reasonably be expected to result in a Material Adverse Effect.
(b)    There are no pending or, to the actual knowledge of a senior executive of the Company, threatened in writing claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that would reasonably be expected to have a Material Adverse Effect. There has been no Prohibited Transaction or violation of the fiduciary responsibility rules of ERISA or the Code with respect to any Plan that has resulted or would reasonably be expected to result in a Material Adverse Effect.
 
  
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(c)    (i) No Termination Event has occurred or is reasonably expected to occur; (ii) neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iii) to the knowledge of the Company or its ERISA Affiliates, neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (iv) neither the Company nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA, which, in each case under this Section 6.20(c), such event or condition, together with all other such events or conditions, if any, has resulted or would reasonably be expected to result in a Material Adverse Effect.
Section 6.21    Environmental Compliance. The Company and its Restricted Subsidiaries are in compliance with all applicable Environmental Laws and the Company has no knowledge of any environmental claims, except to the extent that any potential non-compliance with Environmental Laws or any such claims would not individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 6.22    Intellectual Property, Licenses, Etc. As of the Effective Date, the Company and its Restricted Subsidiaries own or have the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights and other intellectual property rights that are reasonably necessary for the operation of their business, in each case other than those the absence of which would not reasonably be expected to have a Material Adverse Effect.
Section 6.23    Compliance Matters. As of the Effective Date, (a) after giving effect to the Transactions, the Company is in compliance with the provisions of this Credit Agreement (including, without limitation the Financial Covenants) on a pro forma basis, and (b) no Default or Event of Default has occurred and is continuing.
Section 6.24    Anti-Corruption Laws and Sanctions. The Company has implemented and maintains in effect policies and procedures designed to ensure compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Company, its Subsidiaries, and, to the knowledge of the Company, their respective officers, employees, directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. The Company and its Subsidiaries have conducted their businesses in compliance in all material respects with all applicable Anti-Corruption Laws and Sanctions. The Company has not requested any Borrowing or Letter of Credit, and will not use, and has used its reasonable best efforts to provide that its Subsidiaries and its or their respective directors, officers, employees and agents will not use, the proceeds of any Borrowing or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with
 
  
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any Sanctioned Person, or in any Sanctioned Country, or (C) in any other manner that would result in the violation of any Sanctions applicable to any party hereto. None of (a) the Company or any Subsidiary or (b) to the knowledge of the Company, any of their respective directors, officers or agents that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by the Credit Agreement will result in a violation by the Loan Parties of Anti-Corruption Laws or applicable Sanctions.
Section 6.25    EEA Financial Institutions. No Loan Party is an EEA Financial Institution.
ARTICLE VII
COVENANTS OF THE COMPANY
AND THE RESTRICTED SUBSIDIARIES
From the Effective Date and so long as the Commitments of the Lenders shall be in effect and until the payment in full of all Obligations hereunder, the expiration or termination of all Letters of Credit and the performance of all other Obligations of the Company under the Loan Documents, each of the Loan Parties (other than the Holdings Entities) and, with respect to Sections 7.10 and 7.30, each of the Holdings Entities, agrees that:
A.    Informational Covenants:
Section 7.01    Financial Statements and Other Information. The Company will deliver to the Administrative Agent and each Lender:
(a)    Commencing on the Effective Date, as soon as available and in any event within 60 days after the end of each of the first three Quarters of each fiscal year of the Company: (A) consolidated statements of operations of (x) the Parent and its consolidated Subsidiaries, taken together, and (y) if there exists any Financial Statement Variance for such Quarter or if the Parent and the Company do not have the same fiscal year at such time, the Company and the Restricted Subsidiaries, taken together, in each case for such Quarter and for the period from the beginning of such fiscal year to the end of such Quarter (all prepared in accordance with GAAP), (B) the related consolidated balance sheets and consolidated cash flow statements of (x) the Parent and its consolidated Subsidiaries, taken together, and (y) if there exists any Financial Statement Variance for such Quarter or if the Parent and the Company do not have the same fiscal year at such time, the Company and the Restricted Subsidiaries, taken together, in each case as at the end of such Quarter (which financial statements (other than statements of cash flows) shall set forth in comparative form the corresponding figures as at the end of and for the corresponding preceding fiscal year) (all prepared in accordance with GAAP), (C) if the Parent is no longer filing periodic reports with the SEC, an accompanying management’s discussion and analysis, (D) commencing with the Quarter ending December 31, 2019, hold quarterly informational conference calls with the Lenders; provided that such conference calls shall not be required as long as the Parent has registered or publicly traded equity securities outstanding; and (E) a certificate in the form of Exhibit D-1 of a senior financial executive of the Company
 
  
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certifying such financial statements as fairly presenting the financial condition and results of operations of the respective entities covered thereby in accordance with GAAP, excluding accompanying footnotes to the consolidated financial statements and subject, however, to year-end and audit adjustments, which certificate shall include (i) a statement that the senior financial executive signing the same has no knowledge, except as specifically stated, that any Default has occurred and is continuing and (ii) if the Company’s financial statements are not being delivered pursuant to clauses (A)(y) and (B)(y) above, a statement of the senior financial executive that no Financial Statement Variance exists for such Quarter.
(b)    As soon as available and in any event within 120 days after the end of each fiscal year of the Company commencing with the fiscal year ending June 30, 2020: (A) consolidated statements of operations of (x) the Parent and its consolidated Subsidiaries, taken together, and (y) if there exists any Financial Statement Variance for such fiscal year or if the Parent and the Company do not have the same fiscal year at such time, the Company and the Restricted Subsidiaries, taken together, in each case for such fiscal year (all prepared in accordance with GAAP), (B) the related consolidated balance sheets and cash flow statements of (x) the Parent and its consolidated Subsidiaries, taken together, and (y) if there exists any Financial Statement Variance for such fiscal year or if the Parent and the Company do not have the same fiscal year at such time, the Company and the Restricted Subsidiaries, taken together, in each case as at the end of such fiscal year (which financial statements (other than cash flow statements) shall set forth in comparative form the corresponding figures as at the end of and for the preceding fiscal year) (all prepared in accordance with GAAP), (C) if the Parent is no longer filing periodic reports with the SEC, an accompanying management’s discussion and analysis, (D) commencing with the year ending June 30, 2020, hold annual informational conference calls with Lenders; provided that such conference calls shall not be required as long as the Parent has registered or publicly traded equity securities outstanding; (E) an opinion of a Registered Public Accounting Firm of nationally recognized standing selected by the Parent or the Company, as applicable, and reasonably acceptable to the Required Lenders as to said consolidated financial statements of the Parent and its consolidated Subsidiaries or the Company and the Restricted Subsidiaries, as applicable, and a certificate of such accountants stating that, in making the examination necessary for said opinion, they obtained no knowledge, except as specifically stated, of any failure by the Company or any Restricted Subsidiaries to comply with the covenants set forth in the Financial Covenants, (F) a certificate in the form of Exhibit D-2 of a senior financial executive of the Company certifying that such financial statements fairly present the financial condition and results of operations of the respective entities covered thereby as of the end of and for such fiscal year, respectively, in accordance with GAAP, which certificate shall include (i) a statement that the senior financial executive signing the same has no knowledge, except as specifically stated, that any Default has occurred and is continuing and (ii) if the Company’s financial statements are not being delivered pursuant to clauses (A)(y) and (B)(y) above, a statement of the senior financial executive of the Company that no Financial Statement Variance exists for such fiscal year.
(c)    As soon as available, and in any event no later than 90 days after the commencement of each fiscal year of the Company (beginning with fiscal year 2020), the
 
  
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budget of the Parent and its Subsidiaries by fiscal quarter for the following fiscal year in the form approved by the Board of Directors together with the reconciliation identifying material variances, if any, between the Parent and its consolidated Subsidiaries and the Company and its consolidated Subsidiaries.
(d)    Promptly after their becoming available, copies of all financial statements and reports which the Parent, any Holdings Entity, the Company or any Restricted Subsidiary shall have sent to public shareholders generally (other than tax returns unless specifically requested under Section 7.01(h)), copies of financial statements and reports which the Company shall have sent to the holders of any Indebtedness specified in Schedule 7.14, to the extent such statements and reports contain information relating to the designation of the Company’s Subsidiaries as “restricted subsidiaries” under the Debt Instruments governing any such Indebtedness, and to the calculation of financial ratios thereunder and copies of all regular and periodic reports, if any, which the Parent, any Holdings Entity, the Company or any Restricted Subsidiary shall have filed with the SEC, or any governmental agency substituted therefor, or with any national securities exchange.
(e)    Within seven days of the delivery of the financial statements referred to in Section 7.01(a) and (b), a Compliance Certificate, duly completed signed by a senior financial executive of the Company and setting out the Adjusted Operating Income calculation for each quarter in any Measurement Period.
(f)    As soon as practicable and in any event within ten days after any senior executive of the Company or any Restricted Subsidiary or of any general partner of any Restricted Subsidiary shall have obtained knowledge of the occurrence of a Default, a statement describing such Default and the action which is proposed to be taken with respect thereto.
(g)    As soon as practicable and in any event within ten days after any senior executive of the Company or any Restricted Subsidiary or of any general partner of any Restricted Subsidiary shall have obtained knowledge of (x) the occurrence of, or any material development in respect of, any action, suit, proceeding, claim or dispute before any courts, arbitrators or Governmental Authority (collectively, “Proceedings”) against it or, to its knowledge, otherwise affecting it or any of its respective properties or assets, except Proceedings which are not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect and (y) any material Labor Dispute affecting the Company or a Restricted Subsidiary, a statement describing such Proceeding or Labor Dispute, as the case may be.
(h)    From time to time, with reasonable promptness, such further information regarding the business, affairs and financial condition of the Company or any of the Restricted Subsidiaries as the Administrative Agent or any Lender, through the Administrative Agent, may reasonably request.
(i)    Within seven days of the delivery of the financial statements referred to in Section 7.01(a) and (b), a list of any new, or redesignation with respect to, Restricted Subsidiaries and Unrestricted Subsidiaries.
 
  
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(j)    Promptly, notice of any change in the information provided in any Beneficial Ownership Certification delivered to any Lender that would result in a change to the list of beneficial owners identified in such certification.
(k)    At any time that the Company is not Controlled by a Person that files reports with the SEC, promptly following any reasonable request therefor, copies of any detailed audit reports of the Company or any Restricted Subsidiary by independent accountants in connection with an audit of the accounts or books of the Company or such Restricted Subsidiary, in each case to the extent previously delivered to the Company or such Restricted Subsidiary and in each case to the extent that the Company or such Restricted Subsidiary is not prohibited from providing such report by applicable Laws or previously existing obligations to a third party.
Documents or information required to be delivered pursuant to this Section 7.01 (to the extent any such documents or information are included in materials otherwise filed with the SEC) shall be deemed to have been delivered on the date on which (x) the Parent files quarterly reports on Form 10-Q and annual reports on Form 10-K, as applicable, with the SEC, or on the date on which the Company or Parent provides a link thereto on the Company’s or the Parent’s website on the Internet at the website address listed on Schedule 10.02, and (y) if there exists any Financial Statement Variance for such financial reporting period or if the Parent and the Company do not have the same fiscal year, the Company delivers unaudited consolidating balance sheets and statements of operations reflecting the results of the Company and its consolidated Restricted Subsidiaries on a stand-alone basis certified by a senior financial executive of the Company; provided that: (A) the Company shall deliver electronic copies of such documents to the Administrative Agent and any Lender that requests such and the Company will deliver paper copies upon a written request given by the Administrative Agent or such Lender and (B) the Company shall notify the Administrative Agent, each Lender (by facsimile or electronic mail) of the filing of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents, and the requirement that the Company hold quarterly informational conference calls with Lenders pursuant to Section 7.01(a) and (b) shall be satisfied by a public quarterly earnings call by the Parent. Notwithstanding anything contained herein, in every instance the Company shall be required to provide electronic copies of the Compliance Certificates required by Section 7.01(e) to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Company with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
The Company represents and warrants that it, its controlling Person and any Subsidiary, in each case, if any, either (i) has no registered or publicly traded securities outstanding or (ii) files its financial statements with the SEC and/or makes its financial statements available to potential holders of its Rule 144A securities, and, accordingly, the Company hereby (i) authorizes the Administrative Agent to make the financial statements to be provided under Section 7.01 above, along with the Loan Documents, available to Public Lenders and (ii) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Company will not request that any other material be posted to Public
 
  
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Lenders without expressly representing and warranting to the Administrative Agent in writing that such materials do not constitute material non-public information within the meaning of the federal securities laws or that the Company has no outstanding publicly traded securities, including Rule 144A securities. Notwithstanding anything herein to the contrary, in no event shall the Company request that the Administrative Agent make available to Public Lenders budgets or any certificates, reports or calculations with respect to the Company’s compliance with the covenants contained herein.
B.    Affirmative Covenants:
Section 7.02    Taxes and Claims. Each of the Company and the Restricted Subsidiaries will pay and discharge all Taxes imposed upon it or upon its income or profits, or upon any properties or assets belonging to it, and all other lawful claims which, if unpaid, could be reasonably expected to become a Lien (other than Permitted Liens) upon the property of the Company or any of the Restricted Subsidiaries except where a failure to do so, singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, provided that none of the Company and the Restricted Subsidiaries shall be required to pay any such Tax, fee or other claim as to which the Company and the Restricted Subsidiaries have a good faith basis to believe is not due and owing and, to the extent then appropriate, the payment thereof is being contested in good faith and by proper proceedings, provided that it maintains adequate reserves in accordance with GAAP with respect thereto.
Section 7.03    Insurance. Each of the Company and the Restricted Subsidiaries will maintain insurance issued by financially sound and reputable insurance companies with respect to its properties and business in such amounts and against such risks as is usually carried by owners of similar businesses and properties in the same general areas in which the Company or such Restricted Subsidiary operates. The Company will furnish to any Lender, upon the request of such Lender from time to time, full information as to the insurance maintained in accordance with this Section 7.03.
Section 7.04    Maintenance of Existence; Conduct of Business. Each of the Company and the Restricted Subsidiaries will preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization, and all of its rights, privileges, permits, licenses approvals and franchises, except (i) where a failure to do so, singly or in the aggregate, is not likely to have a Material Adverse Effect or (ii) pursuant to a Permitted Restricted Subsidiary Transaction.
Section 7.05    Maintenance of and Access to Collateral. Each of the Company and the Restricted Subsidiaries will maintain, preserve and protect the Collateral in good working order and condition, ordinary wear and tear excepted, except where a failure to do so, singly or in the aggregate, is not likely to be materially adverse to the interests of the Lenders, and will permit representatives of the Lenders to visit and inspect such properties, and to examine and make extracts from its books and records, during normal business hours.
Section 7.06    Compliance with Applicable Laws. (a) Each of the Company and the Restricted Subsidiaries will comply with the requirements of all applicable Laws (including but not limited to Environmental Laws and ERISA) and all orders, writs,
 
  
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injunctions and decrees of any Governmental Authority a breach of which is likely to have, singly or in the aggregate, a Material Adverse Effect, except where contested in good faith and by proper proceedings if it maintains adequate reserves in accordance with GAAP with respect thereto.
(b)    Each Loan Party will, and will cause each of their respective Subsidiaries to, conduct their businesses in compliance in all material respects with all applicable Anti-Corruption Laws and Sanctions. The Company will maintain in effect and enforce policies and procedures reasonably designed to ensure compliance by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
Section 7.07    [Intentionally Omitted.]
Section 7.08    Subsidiaries. As of the Effective Date, all Subsidiaries of the Company (other than those set forth on Schedule 6.02(ii)) shall be deemed to be Restricted Subsidiaries. Any New Subsidiary acquired or formed by the Company shall be deemed an Unrestricted Subsidiary unless the provisions of Section 7.17 would not permit the Investment in such Unrestricted Subsidiary at the time of its acquisition or formation.
(a)    The Company may, at any time, designate any Restricted Subsidiary as an Unrestricted Subsidiary by prior written notice to the Administrative Agent; provided that the Company shall only be permitted to so designate a Subsidiary as an Unrestricted Subsidiary after the Effective Date so long as (i) no Default or Event of Default exists or would result therefrom, (ii) the Company is in pro forma compliance with the Financial Covenants, (iii) such Subsidiary does not own any Collateral or Network Assets, and (iv) such Unrestricted Subsidiary shall be capitalized (to the extent capitalized by the Company or any of its Restricted Subsidiaries) through Investments permitted by, and in compliance with, Section 7.17 with any assets owned by such Unrestricted Subsidiary at the time of the initial designation thereof to be treated as Investments pursuant to Section 7.17.
(b)    The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary for purposes of this Credit Agreement (each, a “Subsidiary Redesignation”); provided that (i) no Default or Event of Default then exists or would occur as a consequence of any such Subsidiary Redesignation, (ii) the Company is and will be in compliance with the Financial Covenants for the most recently completed Measurement Period giving pro forma effect to such redesignation, and (iii) the Company shall have delivered to the Administrative Agent an officer’s certificate executed by a senior executive, certifying to the best of such officer’s knowledge, compliance with the requirements of preceding clauses (i) through (iii).
Section 7.09    Use of Proceeds. The Company shall (a)(i) use the proceeds of the Term Facility to (A) repay any and all outstanding indebtedness under the Existing Credit Agreement (the “Refinancing”), and (B) pay fees, costs and expenses incurred in connection with the Refinancing and the transactions contemplated herein, and (ii) retain any proceeds of the Term Facility not applied pursuant to the preceding clause (a)(i) to be used for working capital and other general corporate purposes of the Company; and (b) use the proceeds of the Revolving Credit Facility (i) to the extent not repaid from the proceeds of the Term
 
  
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Facility or available cash, to repay any Revolving Credit Loans outstanding under the Existing Credit Agreement as of the Effective Date, (ii) to pay fees, costs and expenses incurred in connection with the Transactions and (iii) for working capital and other general corporate purposes of the Company.
Section 7.10    Covenant to Guarantee Obligations and Give Security. Upon (x) the formation or acquisition of any new Holdings Entity or any direct or indirect wholly-owned Subsidiary (other than an Unrestricted Subsidiary, any Foreign Subsidiary or a Subsidiary that is held directly or indirectly by a Foreign Subsidiary) by any Loan Party, (y) the acquisition of any property not constituting an Excluded Asset by any Loan Party (including Equity Interests in a first-tier Foreign Subsidiary) if such property, in the reasonable judgment of the Administrative Agent, shall not already be subject to a perfected first priority security interest in favor of the Administrative Agent for the benefit of the Secured Parties or the acquisition of any Network Assets by any Excluded Subsidiary or (z) the designation of any Unrestricted Subsidiary as a Restricted Subsidiary, then the Company shall, at the Company’s expense:
(a)    at the time of delivery of the compliance certificate set forth in Section 7.01(e), cause such Holdings Entity or Subsidiary (if it has not already done so), to duly execute and deliver to the Administrative Agent a guaranty or guaranty supplement, in form and substance reasonably satisfactory to the Administrative Agent, guaranteeing the Company’s obligations under the Loan Documents,
(b)    at the time of delivery of the compliance certificate set forth in Section 7.01(e), furnish to the Administrative Agent a description of the personal properties of such Holdings Entity or Subsidiary or such newly-acquired property, in detail reasonably satisfactory to the Administrative Agent,
(c)    at the time of delivery of the compliance certificate set forth in Section 7.01(e), cause such Holdings Entity or Subsidiary (if it has not already done so) to duly execute and deliver to the Administrative Agent Supplemental Collateral Documents, as specified by and in form and substance reasonably satisfactory to the Administrative Agent (or in substantially the form attached to the Security Agreement, if applicable) (including delivery of all Pledged Equity Interests in and of the Company or such Subsidiary (limited to 65% of voting equity interests of any Foreign Subsidiary), and other instruments of the type specified in Section 5.01(a)(iii)), and
(d)    at the time of delivery of the compliance certificate set forth in Section 7.01(e), cause such Holdings Entity or Subsidiary (if it has not already done so) to take any actions required under the Security Agreement (including the filing of UCC financing statements) as may be reasonably requested by the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the properties subject to the Supplemental Collateral Documents delivered pursuant to this Section 7.10;
provided, that with respect to after-acquired property of any Loan Party as to which an effective Uniform Commercial Code financing statement is on file in the appropriate jurisdiction and which does not constitute deposit or securities accounts (as to which the provisions above shall be applicable), such Loan Party may satisfy the requirements of this Section 7.10 at the time of delivery of the next certificate required pursuant to Section 7.01(b).
 
  
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Section 7.11    Books and Records. The Company and the Restricted Subsidiaries shall maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP consistently applied.
Section 7.12    [Intentionally Omitted.]
Section 7.13    Further Assurances and Post-Closing Matters.
(a)    The Company shall, promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, (i) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (w) carry out more effectively the purposes of the Loan Documents, (x) to the fullest extent permitted by applicable Law, subject any Loan Party’s properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (y) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (z) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries, to the extent applicable, to do so.
(b)    To the extent any such items have not been delivered as of the Effective Date, within 30 days after the Effective Date (as such time period may be extended from time to time by the Administrative Agent without any requirement for Lender consent), the applicable Loan Party shall deliver to the Collateral Agent, the Securities Account Control Agreements and the Deposit Account Control Agreements, as referred to in the Security Agreement, duly executed by the applicable parties thereto.
C.    Negative Covenants:
Section 7.14    Indebtedness. Neither the Company nor any of its Restricted Subsidiaries will create, incur or suffer to exist any Indebtedness except:
(i)    Indebtedness hereunder;
(ii)    [intentionally omitted];
(iii)    obligations under or in respect of (A) interest rate Swap Contracts up to an aggregate notional principal amount not to exceed at any time an amount equal to the Commitments of all the Lenders in the aggregate at such time, and (B) Swap Contracts entered into to hedge existing or anticipated foreign exchange or commodity price exposure not for speculative purposes;
 
  
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(iv)    Guarantees and letters of credit permitted by Section 7.15;
(v)    (A) Indebtedness of the Company owed to any Guarantor and Indebtedness of any Guarantor owed to the Company or any other Guarantor, and (B) Indebtedness of the Company or any Restricted Subsidiary owed to any Restricted Subsidiary which is not a Guarantor; provided that such Indebtedness under this clause (B) shall be subordinated to the Obligations pursuant to the Master Subordinated Intercompany Note;
(vi)    Indebtedness issued and outstanding on the Effective Date to the extent set forth on Schedule 7.14 and any renewals, extensions or refundings thereof in a principal amount not to exceed the amount so renewed, extended or refunded;
(vii)    other Indebtedness of the Company or any Restricted Subsidiary in an aggregate amount at any time outstanding of up to the greater of (A) $250,000,000 and (B) 70% of Adjusted Operating Income for the most recently completed four fiscal quarter period for which financial statements were required to have been delivered pursuant to Section 7.01;
(viii)    Indebtedness constituting an Investment permitted under Section 7.17 provided that any Indebtedness of a Loan Party owed to any Subsidiary that is not a Loan Party shall be subordinated to the Obligations pursuant to the Master Subordinated Intercompany Note;
(ix)    [intentionally omitted];
(x)    Indebtedness of the Company and its Restricted Subsidiaries incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capitalized Lease Obligations and purchase money security interests, and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and any extension or renewal thereof; provided that (A) such Indebtedness is incurred prior to, or within 180 days after, such acquisition or the completion of such construction or improvement (provided, that the Administrative Agent shall, without any requirement for Lender consent, extend such original 180 day period by an additional 180 days upon its receipt of a written extension request from the Company), and (B) the aggregate principal amount of outstanding Indebtedness permitted by this paragraph (x) shall not at any time exceed $50,000,000;
(xi)    Indebtedness arising from netting services, overdraft protection, cash management services, endorsements or instruments and other items for deposit in the ordinary course of business;
 
  
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(xii)     Indebtedness of the Company or its Restricted Subsidiaries (including, for the avoidance of doubt, Guarantees of Indebtedness of the Parent); provided, that:
 
  (1) no Default or Event of Default shall have occurred and be continuing both immediately before and immediately after giving pro forma effect to such incurrence of Indebtedness and the application of the proceeds thereof;
 
  (2) the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants, both immediately before and immediately after giving pro forma effect to such incurrence of Indebtedness and the application of the proceeds thereof;
 
  (3) if such Indebtedness is subordinated in right of payment to the Indebtedness under this Credit Agreement, then such Indebtedness shall be subject to subordination provisions that are reasonably acceptable to the Administrative Agent;
 
  (4) if such Indebtedness is secured Indebtedness that is junior in right of security to the Indebtedness under this Credit Agreement, then such Indebtedness shall be subject to an intercreditor agreement that is reasonably acceptable to the Administrative Agent; and
 
  (5)
if such Indebtedness is secured Indebtedness that is pari passu in right of security and payment with the Indebtedness under this Credit Agreement, then such Indebtedness shall only be incurred pursuant to Section 2.14 or Section 2.15.
(xiii)    Indebtedness secured by mortgages on Real Property; provided that the aggregate principal amount of outstanding Indebtedness permitted by this paragraph (xiii) shall not at any time exceed $50,000,000;
(xiv)    Indebtedness consisting of the financing of insurance premiums or (ii) take-or-pay obligations of the Company or any of the Restricted Subsidiaries contained in supply arrangements, in each case, in the ordinary course of business;
(xv)    Indebtedness of a Person existing at the time such Person became a Restricted Subsidiary or property was acquired from such Person to the extent such Indebtedness was not incurred in connection with or in contemplation of, such Person becoming a Restricted Subsidiary or the acquisition of such property, not to exceed in an aggregate principal amount at any time outstanding $100,000,000 and any renewals, extensions or refundings thereof in a principal amount not to exceed the amount so renewed, extended or refunded (it being understood that any accrued but unpaid interest and the amount of all expenses and premiums incurred in connection therewith added to any principal amount shall not constitute an increment in principal for purposes of this
 
  
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paragraph); provided that the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants, both immediately before and immediately after giving pro forma effect to such incurrence of such Indebtedness and after giving pro forma effect to the related acquisition; and
(xvi)    any earnout obligation that comprises a portion of the consideration for an acquisition permitted hereunder.
Section 7.15    Contingent Liabilities. Neither the Company nor any Restricted Subsidiary will, directly or indirectly (including by means of causing a bank to open a letter of credit), guarantee, endorse, contingently agree to purchase or to furnish funds for the payment or maintenance of, or otherwise be or become contingently liable upon or with respect to, the Indebtedness, other obligations, net worth, working capital or earnings of any Person, or guarantee the payment of dividends or other distributions upon the stock or other ownership interests of any Person, or agree to purchase, sell or lease (as lessee or lessor) property, products, materials, supplies or services primarily for the purpose of enabling a debtor to make payment of its obligations or to assure a creditor against loss (all such transactions being herein called “Guarantees”, and each individually a “Guarantee” ), except:
(i)    the Guarantees in Article IV;
(ii)    endorsements of negotiable instruments for deposit or collection in the ordinary course of business;
(iii)    the Guarantees described in Schedule 7.15;
(iv)    Guarantees by the Company or one or more of the Guarantors of Indebtedness or other obligations (such other obligations incurred in the ordinary course of business) of the Company or another Guarantor, but only if such Indebtedness or other obligations are not prohibited by this Credit Agreement;
(v)    other Guarantees, including, without duplication, surety bonds, by the Company or one or more Guarantors, provided that the outstanding aggregate amount of the obligations guaranteed does not exceed $100,000,000 at any time;
(vi)    Capitalized Lease Obligations to the extent they constitute Guarantees by reason of having been assigned by the lessor to a lender to such lessor (provided that the obligors in respect of such Capitalized Lease Obligations do not increase their liability by reason of such assignment);
(vii)    the Letters of Credit;
(viii)    Guarantees which would constitute Investments which are not prohibited by Section 7.17 or which if incurred directly by the Company or any Restricted Subsidiary would constitute Indebtedness permitted by Section 7.14;
(ix)    obligations under contracts providing for the acquisition of or provision of goods or services (including leases or licenses of property) incurred in the
 
  
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ordinary course of business for which the Company or any of its Restricted Subsidiaries may be jointly and severally liable with other Subsidiaries of the Company as to which costs are allocated (as among the Company and its Subsidiaries) based on cost, usage or other reasonable method of allocation; provided that the undertaking of such liabilities are not intended as a guaranty or other credit support of such obligations;
(x)    any Guarantee by the Company of any obligation to the extent such obligation can be satisfied (at the option of the Company) by the delivery of common stock of the Parent;
(xi)    obligations under agreements to indemnify Persons who have issued bid or performance bonds or letters of credit issued in lieu of such bonds in the ordinary course of business of the Company or any Restricted Subsidiary securing performance by such Person of activities otherwise permissible hereunder;
(xii)    any Guarantee by the Company or a Restricted Subsidiary of the obligations or Indebtedness of any Unrestricted Subsidiary, any Excluded Subsidiary or joint venture; provided that the aggregate amount of all such Guarantees, when combined with the aggregate amount of Investments in Unrestricted Subsidiaries, Excluded Subsidiaries and joint ventures made pursuant to clause (k) of the definition of Permitted Investments does not exceed $75,000,000; and
(xiii)    Guarantees by the Company of Indebtedness of the Parent, to the extent permitted as Indebtedness of the Company under Section 7.14(xii); provided that in no event shall such Guarantees be secured by any mortgage on, pledge of or grant of a security interest in any assets of the Company or any of its Subsidiaries.
Section 7.16    Liens. Neither the Company nor any Restricted Subsidiary will create or suffer to exist, any mortgage, pledge, security interest, conditional sale or other title retention agreement, lien, charge or encumbrance upon any of its assets constituting Collateral or Network Assets, in each case now owned or hereafter acquired, securing any Indebtedness or other obligation (all such security being herein called “Liens”), except:
(i)    Liens on property securing Indebtedness owed to the Company or any Guarantor;
(ii)    purchase money mortgages or Liens, Liens securing Capitalized Lease Obligations or other Indebtedness for the deferred acquisition price of property or services to the extent such Liens attach solely to the property acquired with or subject to such Indebtedness and Liens consisting of precautionary filings by lessors under operating leases to the extent such Liens attach solely to (and such filings solely cover) leased property;
 
  
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(iii)    Liens securing all of the Obligations of the Company and the Restricted Subsidiaries hereunder (including, for the avoidance of doubt, Liens in favor of a Hedge Bank in connection with a Secured Hedge Agreement and Liens in favor of a Cash Management Bank in connection with a Secured Cash Management Agreement) and Liens on cash to Cash Collateralize Letters of Credit pursuant to Section 2.03(g);
(iv)    Permitted Liens;
(v)    other Liens on property in effect on the Effective Date to the extent set forth on Schedule 7.16;
(vi)    Liens on shares of the capital stock of, or partnership interest in, any Unrestricted Subsidiary or Excluded Subsidiary;
(vii)    Liens on cash consisting of pledges to, deposits with or advances to announcers, broadcasters, on-air talent, promoters, producers or other third parties in connection with the development, booking, production, broadcast, promotion, execution, staging or presentations of shows, events or other entertainment activities or related merchandising, concessions or licensing;
(viii)    [intentionally omitted];
(ix)    [intentionally omitted];
(x)    Liens on cash, Cash Equivalents, and other funds or securities on deposit or maintained with a depository institution, broker-dealer, securities or commodities broker or other financial intermediary, in each case arising in the ordinary course of business;
(xi)    Liens to secure Indebtedness permitted by Section 7.14(vii) or Section 7.14(xii), subject to the provisions thereof with respect to secured Indebtedness (and for the avoidance of doubt, other than in the case of any Guarantees of Indebtedness of the Parent); provided that, after giving pro forma effect to the incurrence of such secured Indebtedness and granting of such Liens and the application of proceeds thereof, the Company shall have a Total Leverage Ratio of no greater than 5.00:1.00; and
(xii)    other Liens not otherwise permitted by this Section 7.16 securing obligations permitted under this Credit Agreement, so long as the aggregate outstanding principal amount of the obligations secured by such Liens do not exceed (as to the Company and all Restricted Subsidiaries) at any one time outstanding the greater of (A) $90,000,000 and (B) 25% of Adjusted Operating Income for the most recently completed four fiscal quarter period for which financial statements were required to have been delivered pursuant to Section 7.01.
Notwithstanding anything to the contrary in this Credit Agreement, neither the Company nor any Restricted Subsidiary will create, permit or suffer to exist any mortgage, pledge, security interest, conditional sale or other title retention agreement, lien, charge or encumbrance, in each case, securing Indebtedness upon or with respect to any telecast agreement, license or other contractual
 
  
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right to the local telecast rights to exhibit any games of any Team, in each case to the extent not constituting Collateral, other than (1) Permitted Liens and (2) purchase money obligations in an aggregate principal amount of up to $50,000,000.
Section 7.17    Investments. Neither the Company nor any Restricted Subsidiary will, directly or indirectly, (i) make any advances, loans, accounts receivable (other than (x) accounts receivable arising in the ordinary course of business of the Company or such Restricted Subsidiary and (y) accounts receivable owing to the Company or any Restricted Subsidiary from any Unrestricted Subsidiary for management or other services or other overhead or shared expenses allocated in the ordinary course of business provided by the Company or any Restricted Subsidiary to such Unrestricted Subsidiary) or other extensions of credit (excluding, however, accrued and unpaid interest in respect of any advance, loan or other extension of credit) or capital contributions to (by means of transfers of property to others, or payments for property or services for the account or use of others, or otherwise) any Person (other than the Company or any Guarantor)), (ii) purchase or own any stocks, bonds, notes, debentures or other securities (including any interests in any partnership, joint venture or any similar enterprise) of, or any bank accounts with any Person (other than the Company or any Guarantor), or (iii) purchase or acquire (in one transaction or a series of transactions) assets of another Person that constitute a business unit or all or a substantial part of the business of, such Person (other than the Company or any Guarantor) (all such transactions referred to in clauses (i), (ii) and (iii) being herein called “Investments”), except for (a) Investments in Excluded Subsidiaries in the ordinary course of business solely for the purposes of repairing, replacing or otherwise maintaining operating assets, (b) Permitted Investments, and (c) other Investments (which shall include the formation of any New Subsidiary unless such New Subsidiary is designated as a Restricted Subsidiary, with the capital contributions by the Company or any Restricted Subsidiary to such Unrestricted Subsidiary at such time being counted as an Investment hereunder) so long as (i) the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants, both immediately before and immediately after giving effect to such Investment, (ii) no Default shall have occurred and be continuing both immediately before and immediately after giving effect to such Investment, and (iii) during any time that the Total Leverage Ratio is greater than or equal to 4.50:1.00 on a pro forma basis after giving effect to such Investment (such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 7.01(a) or (b)), and at the time of such Investment after giving effect to the making thereof, the aggregate amount of Investments made pursuant to this clause (iii), together with the aggregate amount of Restricted Payments made pursuant to Section 7.18(iii) and not repaid or otherwise returned, shall not exceed the sum of (a) $50,000,000 plus (b) the net proceeds from any sale or issuance of Equity Interests by the Company to any Person (other than the Company or any of its Restricted Subsidiaries) after September 30, 2015 (with non-cash proceeds to be valued by the Company in good faith) plus (c) an amount equal to (1) Cumulative AOI minus (2) 1.4 multiplied by Cumulative Interest Expense; provided, that any Investment constituting a transfer of property or assets other than cash and Cash Equivalents shall only be permitted to the extent that such transfer could be effected pursuant to Section 7.24.
Section 7.18    Restricted Payments. Neither the Company nor any Restricted Subsidiary will, directly or indirectly, make or declare any Restricted Payment (other
 
  
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than any Permitted Parent Payment) at any time, except that, such restriction shall not apply so long as: (i) no Default shall have occurred and be continuing at the time such Restricted Payment is made or would result from the making or declaration of such Restricted Payment, (ii) the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants both before and immediately after giving effect to such Restricted Payment, and (iii) during any time that the Total Leverage Ratio is greater than or equal to 4.50:1.00 on a pro forma basis after giving effect to such Restricted Payment (such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 7.01(a) or (b)), and at the time of such Restricted Payment after giving effect to the making thereof, the aggregate amount of Restricted Payments made pursuant to this clause (iii), together with the aggregate amount of Investments made pursuant to Section 7.17(iii) and not repaid or otherwise returned, shall not exceed the sum of (a) $50,000,000 plus (b) the net proceeds from any sale or issuance of Equity Interests by the Company to any Person (other than the Company or any of its Restricted Subsidiaries) after September 30, 2015 (with non-cash proceeds to be valued by the Company in good faith) plus (c) an amount equal to (1) Cumulative AOI minus (2) 1.4 multiplied by Cumulative Interest Expense.
Section 7.19    Business. Neither the Company nor any Restricted Subsidiary (but excluding any other Affiliate of the Company) shall directly engage in any material line of business substantially different from those lines of business conducted by the Company and its Restricted Subsidiaries on the Effective Date, other than any business reasonably related or incidental, complementary or ancillary thereto or a reasonable extension thereof (including any sports, media, advertising, internet or entertainment business) (collectively, the “Business”).
Section 7.20    Transactions with Affiliates. Neither the Company nor any Restricted Subsidiary will effect any transaction with any of its Affiliates that is not a Restricted Subsidiary on a basis less favorable to the Company or such Restricted Subsidiary than would at the time be obtainable for a comparable transaction in arms-length dealing with an unrelated third party other than (a) overhead and other ordinary course allocations of costs and services, in each case under this clause (a), on a reasonable basis, (b) allocations of tax liabilities and other tax-related items among the Company and its Affiliates based in all material respects upon the financial income, taxable income, credits and other amounts directly related to the respective parties, to the extent that the share of such liabilities and other items allocable to the Company and its Restricted Subsidiaries shall not exceed the amount that such Persons would have been responsible for as a direct taxpayer, (c) Cablevision Spin Agreements, MSG Spin Agreements and agreements and arrangements set forth on Schedule 7.20 and amendments, renewals and extensions thereof on terms not materially less favorable in the aggregate to the interests of the Lenders than those in existence as of the date of this Credit Agreement, (d) Permitted Parent Payments, (e) Permitted Restricted Subsidiary Transactions, (f) Restricted Payments not prohibited under Section 7.18, (g) Guarantees of Indebtedness of the Parent by the Company that are not prohibited under Sections 7.14 and 7.15, and (h) transactions involving property or assets having an aggregate fair market value of no greater than $2,500,000 during the entire term of the Facilities.
 
  
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Section 7.21    Amendments of Certain Instruments. Neither the Company nor any Restricted Subsidiary will (a) modify or supplement, or consent to any waiver of any of the provisions of, any Debt Instrument governing any Indebtedness permitted under Section 7.14(vi), except to the extent, after giving effect thereto, that such Indebtedness could be incurred on such modified or supplemented terms by the Company or a Restricted Subsidiary on the effective date of the modification, supplement or consent, (b) amend, modify or supplement any of the provisions of its certificate of incorporation or by-laws or other constitutive documents other than amendments that would not be materially adverse to the interests of the Lenders, or (c)(i) terminate any Media Rights Agreement (if any) or enter into or consent to any amendment, modification or arrangement, in each case, having the effect of terminating or shortening the tenor of any such agreement to less than 180 days after the latest Maturity Date then in effect, or (ii) amend, or otherwise agree in any manner to any other amendment, modification or change, in each case, of the terms or conditions of any Media Rights Agreement having the effect of making such terms or conditions not arms-length, in each case under this clause (c) if doing so, taken as a whole, would be materially adverse to the interests of the Lenders.
Section 7.22    Issuance of Stock. The Company will not permit any Restricted Subsidiary to issue any shares of stock or other ownership interests in such Restricted Subsidiary if, after giving effect thereto, the percentage of the ownership interests in such Restricted Subsidiary held by the Company and the Restricted Subsidiaries immediately prior to such issuance would be decreased unless such issuance is in connection with the designation of such Restricted Subsidiary as an Unrestricted Subsidiary in accordance with Section 7.08(a) or such issuance would be permitted to have been effected as a Disposition pursuant to Section 7.24.
Section 7.23    Fundamental Changes. Neither the Company nor any Restricted Subsidiary shall merge, dissolve, liquidate, consolidate with or into another Person (collectively “Merge”), or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of the assets (whether now owned or hereafter acquired) of the Company and its Restricted Subsidiaries, taken as a whole, to or in favor of any Person, except that, (a) the Company may Merge into the Parent or Dispose of all or substantially all of its assets to the Parent so long as (i) both the Company and the Parent would be in pro forma compliance with the Financial Covenants both before and after giving effect to the merger, and (ii) the Parent assumes all obligations of the Company under the Loan Documents and (b) any Restricted Subsidiary may enter into a Permitted Restricted Subsidiary Transaction.
Section 7.24    Dispositions. Neither the Company nor any Restricted Subsidiary shall make any Disposition or enter into any agreement to make any Disposition except:
(i)    Dispositions to Excluded Subsidiaries by the Company or any Guarantor in the ordinary course of business for the purposes of maintenance, repair or replacement of operating assets;
(ii)    Dispositions between and among the Loan Parties;
 
  
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(iii)    any Disposition that results in the concurrent or substantially concurrent repayment in full and termination of this Credit Agreement; and
(iv)    other Dispositions; provided that (A) the Company and its Restricted Subsidiaries are in pro forma compliance with the Financial Covenants, both immediately before and immediately after giving effect to such Disposition, (B) no Default shall have occurred and be continuing both immediately before and immediately after giving effect to such Disposition, and (C) such Disposition is not and does not include a transfer or assignment of the Related Documents; provided, however, that any Disposition pursuant to this Section 7.24(iv) shall be for fair market value.
Section 7.25    Accounting Changes. Make any change in (a) accounting policies or reporting practices, except as required or permitted by GAAP, or (b) the fiscal quarter or fiscal year, except that upon not less than 10 Business Days’ prior notice, the Company may change its fiscal year end from June 30 to December 31.
Section 7.26    Negative Pledge. The Company shall not enter into or suffer to exist, or permit any of its Restricted Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of the Collateral except (i) agreements in favor of the Secured Parties, (ii) agreements governing Indebtedness secured by Liens permitted under Section 7.16(ii) so long as such restrictions extend only to the property acquired with or subject to such Indebtedness, (iii) agreements in existence on the Effective Date and set forth on Schedule 7.26 including any renewals, extensions or replacements of such agreements on terms not materially less favorable to the interests of the Lenders than those in effect on the date of this Credit Agreement, and (iv) Contractual Obligations solely to the extent that the lessor, licensor or counterparty imposes a negative pledge with respect to the Contractual Obligation.
Section 7.27    Anti-Corruption Laws and Sanctions. The Company will not request any Borrowing or Letter of Credit, and the Company shall not use, and shall use its reasonable best efforts to provide that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (C) in any other manner that would result in the violation of any Sanctions applicable to any party hereto.
D.    Financial Covenants:
Section 7.28    Total Leverage Ratio. The Holdings Entities, the Company and the Restricted Subsidiaries (on a consolidated basis) shall not permit the Total Leverage Ratio at any time to exceed 5.50:1.00. Notwithstanding the foregoing, in the event of any League-wide Labor Controversy that continues for a minimum of five consecutive weeks, the then-applicable maximum Total Leverage Ratio shall, at the option of the Company, step up by 0.50:1.00 (the “Labor Controversy Step Up”). The Labor Controversy Step Up shall (a) commence at a time determined by the Company upon written notice to the Administrative
 
  
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Agent so long as the Measurement Period for which such step-up applies includes at least one quarter during which, or during any part of which, there was a League-wide Labor Controversy, and (b) continue for a number of consecutive fiscal quarters determined by the Company, not to exceed five consecutive fiscal quarters, and in any case only for so long as the Measurement Period being tested includes at least one quarter during which, or during any part of which, there was a League-wide Labor Controversy.
Section 7.29    Interest Coverage Ratio. The Holdings Entities, the Company and the Restricted Subsidiaries (on a consolidated basis) shall maintain as at the end of each Measurement Period an Interest Coverage Ratio of not less than 2.00:1.00.
E.    Holdings Entities Covenants:
Section 7.30    Holdings Entities Covenants. The Holdings Entities shall not engage in any business or activity other than (a) the ownership of outstanding Equity Interests in the Company, (b) maintaining their corporate existence, (c) participating in tax, accounting and other administrative activities as the parent of the consolidated group of companies including the Loan Parties, (d) the execution and delivery of documents (including the Loan Documents, the Cablevision Spin Agreements, the MSG Spin Agreements and other agreements) permitted under this Credit Agreement to which they are party and the performance of their obligations thereunder (including the Guarantees and pledge of Equity Interests under the Loan Documents), (e) issuing or incurring unsecured Indebtedness permitted to be issued or incurred by the Company or its Restricted Subsidiaries pursuant to Section 7.14(xii) of this Credit Agreement, and (f) incidental to the businesses or activities described in clauses (a) through (e) of this Section.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01    Events of Default. Each of the following shall constitute an “Event of Default”:
(a)    Any representation or warranty in this Credit Agreement or any other Loan Document or in any certificate, statement or other document furnished to the Lenders or the Administrative Agent pursuant hereto (including, without limitation, any amendment thereto), or any certification made or deemed to have been made by the Company or any Restricted Subsidiary to any Lender or the Administrative Agent hereunder, shall prove to have been incorrect, or shall be breached, in any material respect when made or deemed made; provided that any representation made pursuant to Section 5.02 in respect of the absence of any Default shall not constitute an Event of Default if (i) at the time of such representation, such Default was not known to a senior executive and (ii) prior to such Default, the absence of which is the subject of such representation, becoming an Event of Default, such Default has been cured or waived in accordance with this Credit Agreement; or
 
  
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(b)    (i) Default in (x) the payment when due of any principal of any Loan or L/C Obligation or default in the deposit when due of funds as Cash Collateral in respect of L/C Obligations, or (y) default in the payment when due of interest on any Loan or on any L/C Obligation, or any fee due hereunder or any other amount payable to any Lender hereunder, and the failure to pay such interest, fee or such other amount within two Business Days after the same becomes due or (ii) Default in (x) the payment when due of any principal of any Incremental Loan, or (y) default in the payment when due of interest on any Incremental Loan, or any fee due hereunder or any other amount payable to any Incremental Lender or the Administrative Agent hereunder, and the failure to pay such interest or such other amount within two Business Days after the same becomes due; or
(c)    (i) Default by the Company or any of the Restricted Subsidiaries in the performance or observance of any of its agreements in Article VII hereof (other than Section 7.01 (excluding Section 7.01(f)), Section 7.02, Section 7.03, Sections 7.05 through 7.13 (inclusive), Section 7.17, Section 7.19, Section 7.20, and Section 7.24 or (ii) default by any of the Holdings Entities in the performance or observance of the requirements set forth in Section 7.30; or
(d)    Default by the Company or any of the Restricted Subsidiaries in the performance or observance of any of its other agreements herein (other than those specified in Section 8.01(c)) or in any other Loan Document, which in each case shall remain unremedied for 30 days after notice thereof shall have been given to the Company by any Lender or the Administrative Agent (provided that such period shall be five days in the case of a default under Section 7.17); or
(e)    Any Indebtedness of any of the Holdings Entities or the Company (including any Indebtedness hereunder) or any of the Restricted Subsidiaries in an aggregate principal amount of $25,000,000 or more, excluding (i) any Indebtedness owing solely to the Company or a Restricted Subsidiary and (ii) any Indebtedness for the deferred purchase price of property or services owed to the Person providing such property or services as to which the Company or such Restricted Subsidiary has a good faith basis to believe is not due and owing and, to the extent then appropriate, is contesting its obligation to pay the same in good faith and by proper proceedings and for which the Company or such Restricted Subsidiary has established appropriate reserves (such Indebtedness under clauses (i) and (ii) above herein called “Excluded Indebtedness”), shall (i) become due before stated maturity by the acceleration of the maturity thereof by reason of default or (ii) become due by its terms and shall not be promptly paid or extended; or
(f)    Any default under any indenture, credit agreement or loan agreement or other agreement or instrument under which Indebtedness of any of the Holdings Entities or the Company or any of the Restricted Subsidiaries constituting indebtedness for borrowed money in an aggregate principal amount of $25,000,000 or more is outstanding (other than Excluded Indebtedness), or by which any such Indebtedness is evidenced, shall have occurred and shall continue for a period of time sufficient to permit the holder or holders of any such Indebtedness (or a trustee or agent on its or their behalf) to accelerate the maturity thereof or to enforce any Lien provided for by any such indenture, agreement or instrument, as the case may be, unless such default shall have been permanently waived by the respective holder of such Indebtedness; or
 
  
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(g)    Any of the Holdings Entities or the Company or any of the Restricted Subsidiaries shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated as bankrupt or insolvent, (v) commence a voluntary case under any Debtor Relief Law (as now or hereafter in effect), (vi) file a petition seeking to take advantage of any Debtor Relief Law, (vii) acquiesce in writing to, or fail to controvert in a timely and appropriate manner, any petition filed against the Company or any Restricted Subsidiary in any involuntary case under any such Debtor Relief Law, or (viii) take any action for the purpose of effecting any of the foregoing; or
(h)    A case or other proceeding shall be commenced, without the application, approval or consent of any of the Holdings Entities or the Company or any of the Restricted Subsidiaries, in any court of competent jurisdiction, seeking the liquidation, reorganization, dissolution, winding up, or composition or readjustment or debts of any of the Holdings Entities or the Company or any Restricted Subsidiary, the appointment of a trustee, receiver, custodian, liquidator or the like of the Company or such Restricted Subsidiary or of all or any substantial part of its assets, or any other similar action with respect to such Holdings Entity or the Company or such Restricted Subsidiary under any Debtor Relief Law, and such case or proceeding shall continue undismissed, or unstayed and in effect, for any period of 30 consecutive days, or an order for relief against the Company or any Restricted Subsidiary shall be entered in an involuntary case under any Debtor Relief Law (as now or hereafter in effect); or
(i)    (i) A judgment for the payment of money in excess of $25,000,000 shall be rendered against the Company or any Restricted Subsidiary and such judgment shall remain unsatisfied and in effect for any period of 30 consecutive days without a stay of execution or (if a stay is not provided for by applicable law) without having been fully bonded, (ii) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any Restricted Subsidiary and either (x) an enforcement proceeding shall have been commenced by any creditor upon such judgment or (y) such judgment remains undischarged and unbonded for a period (during which execution shall not be effectively stayed) of 60 days, provided that, the aggregate of all judgments exceeds $50,000,000 or (iii) any one or more non-monetary final judgments shall be rendered against the Company or any Restricted Subsidiary that, individually or in the aggregate, have or would reasonably be expected to have a Material Adverse Effect; or
(j)    Except as would not have a Material Adverse Effect, (i) Any Termination Event shall occur; (ii) any Person shall engage in any Prohibited Transaction involving any Plan; (iii) the Company or any ERISA Affiliate is in “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan resulting from the Company’s or any ERISA Affiliate’s complete or partial withdrawal (as described
 
  
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in Section 4203 or 4205 of ERISA) from such Plan; (iv) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to a Plan; (v) a determination that any Plan is in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA) or that any Multiemployer Plan to which the Company or any ERISA Affiliate contributes is in “endangered” or “critical status” within the meaning of Section 432 of the Code or Section 305 of ERISA; (vi) the Company or any ERISA Affiliate shall fail to pay when due an amount which is payable by it to the PBGC or to a Plan under Title IV of ERISA; (vii) a proceeding shall be instituted by a fiduciary of any Plan against the Company or any ERISA Affiliate to enforce Section 515 of ERISA and such proceeding shall not have been dismissed within 30 days thereafter; or (viii) the assumption of, or any material increase in, the contingent liability of the Company or any Restricted Subsidiary with respect to any post-retirement welfare liability; or
(k)    There occurs any Change of Control; or
(l)    Any Collateral Document after delivery thereof pursuant to Sections 5.01 or 7.10 shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by Section 7.16) on a material portion of the Collateral covered thereby other than as a result of any action or inaction by the Administrative Agent, and such condition shall remain unremedied for a period of 30 days after the earlier of (i) knowledge of such Default by a senior executive of the Company and (ii) notice in writing thereof being given to the Company by any Lender or the Administrative Agent; or
(m)    Any Holdings Entity or the Company or any Restricted Subsidiary asserts or any Person obtains a judgment establishing that (i) any provision of the Loan Documents is invalid, not binding or unenforceable or (ii) the Lien created, or purported to be created, by the Loan Documents is not a valid and perfected first priority security interest in the property in which such Lien is created, or purported to be created, pursuant to the Loan Documents.
Section 8.02    Remedies upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:
(i)    declare the commitment of each Lender to make Loans and any obligation of each L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;
(ii)    declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable to any Lender hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company;
(iii)    require that the Company Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and
 
  
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(iv)    exercise on behalf of itself, the Lenders, and the L/C Issuers all rights and remedies available to it and such Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Company under the Bankruptcy Code, the obligation of each Lender to make Loans and any obligation of each L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Company to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.
Section 8.03    Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuers (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuers and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations, to the extent due and payable, ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, L/C Borrowings and amounts owing under Secured Hedge Agreements and Secured Cash Management Agreements, and which have become due and owing, ratably among the Lenders, the L/C Issuers, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them;
Fifth, to the Administrative Agent for the account of the L/C Issuers, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been paid in full, to the Company or as otherwise required by Law.
 
  
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Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.
Notwithstanding the foregoing, no amounts received from any Guarantor shall be applied to any Excluded Swap Obligation of such Guarantor.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Section 9.01    Appointment and Authority. (a) Each of the Lenders and the L/C Issuers hereby irrevocably appoints JPMorgan to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuers, and neither the Company nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.
(b)    The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (in its capacities as a Lender, potential Hedge Bank and potential Cash Management Bank) and the L/C Issuers hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and such L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.
Section 9.02    Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Company or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
 
  
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Section 9.03    Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:
(a)    shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(b)    shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and
(c)    shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 10.01 and Section 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Company, a Lender or an L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Credit Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Credit Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
Section 9.04    Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying
 
  
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upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or such L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or such L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
Section 9.05    Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
Section 9.06    Resignation of Administrative Agent. (a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuers and the Company. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Company, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Company and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuers under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and
 
  
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duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Company to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After the retiring Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
(b) If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (c) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Company and such Person remove such Person as Administrative Agent and, in consultation with the Company, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.
(c) Any resignation by, or removal of, JPMorgan as Administrative Agent pursuant to this Section shall also constitute its resignation or removal as an L/C Issuer and Swing Line Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of such retiring L/C Issuer and Swing Line Lender, (ii) such retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) such successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to such retiring L/C Issuer to effectively assume the obligations of such retiring L/C Issuer with respect to such Letters of Credit.
Section 9.07    Non-Reliance on Administrative Agent and Other Lenders. Each Lender and each L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Credit Agreement. Each Lender and each L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Credit Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
Section 9.08    No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Joint Book Runners, Co-Syndication Agents or Co-Documentation Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Credit Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.
 
  
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Section 9.09    Administrative Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Company) shall be entitled and empowered, by intervention in such proceeding or otherwise
(a)    to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel) and all other amounts due the Lenders, the L/C Issuers and the Administrative Agent under Section 2.03(i) and (j), Section 2.09 allowed in such judicial proceeding; and
(b)    to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each L/C Issuer to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuers, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 2.09.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or any L/C Issuer or to authorize the Administrative Agent to vote in respect of the claim of any Lender or any L/C Issuer or in any such proceeding.
Section 9.10    Collateral and Guaranty Matters. Each Lender, each L/C Issuer and each of the other Secured Parties irrevocably authorizes the Administrative Agent and the Collateral Agent to, and the Administrative Agent and the Collateral Agent each hereby agrees with the Company:
(a)    to release any Lien on any Collateral and any other property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination or Cash Collateralization in accordance with Section 2.03(g) of all Letters of Credit, (ii) that is the subject of a Disposition or other transfer permitted under and accomplished in accordance with the terms of this Credit Agreement, or (iii) if approved, authorized or ratified in writing in accordance with Section 10.01; and
 
  
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(b)    to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.
Upon request by the Company or the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10. In each case as specified in this Section 9.10, the Administrative Agent will, at the Company’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.10.
Section 9.11    Credit Bidding. The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Loan Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase). In connection with any such bid, (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles, (ii) each of the Secured Parties’ ratable interests in the Obligations which were credit bid shall be deemed without any further action under this Credit Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Credit Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Credit Agreement and without giving
 
  
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effect to the limitations on actions by the Required Lenders contained in Section 10.01 of this Credit Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests, whether as equity, partnership interests, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of Obligations credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties pro rata with their original interest in such Obligations and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.
Section 9.12    Certain ERISA Matters. (a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Company or any other Loan Party, that at least one of the following is and will be true:
(i)    such Lender is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments,
(ii)    the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Credit Agreement,
(iii)    (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B)
 
  
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such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Credit Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Credit Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Credit Agreement, or
(iv)    such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.
(c)    In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Company or any other Loan Party, that none of the Administrative Agent, any Co-Syndication Agent, any Co-Documentation Agent or any of their respective Affiliates is a fiduciary with respect to the Collateral or the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Credit Agreement, any Loan Document or any documents related to hereto or thereto).
(d)    The Administrative Agent, and each Co-Syndication Agent and Co-Documentation Agent hereby informs the Lenders that each such Person is not undertaking to provide investment advice or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments, this Credit Agreement and any other Loan Documents (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.
 
  
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ARTICLE X
MISCELLANEOUS
Section 10.01    Amendments, Etc. Except as provided in Section 3.03(b), no amendment or waiver of any provision of this Credit Agreement or any other Loan Document, and no consent to any departure by the Company or any other Loan Party therefrom, shall be effective unless in writing signed by the Company or the applicable Loan Party, as the case may be, and the Required Lenders, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:
(a)    waive any condition set forth in Section 5.01, or, in the case of the initial Credit Extension on the Effective Date, Section 5.02, without the written consent of each Lender;
(b)    without limiting the generality of clause (a) above, waive any condition set forth in Section 5.02 as to any Credit Extension after the Effective Date under a Facility without the written consent of the Lenders holding more than 50% of the sum of the (i) Total Outstandings under such Facility (with the aggregate amount of each Lender’s risk participation, funded participation in L/C Obligations and Swing Line Loans under a Revolving Credit Facility being deemed “held” by such Lender under such Facility for purposes of this clause (b)) and (ii) aggregate unused Commitments under such Facility;
(c)    extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;
(d)    postpone any date fixed by this Credit Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment;
(e)    reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Company to pay interest or Letter of Credit Fees at the Default Rate;
(f)    change (i) Section 2.13 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each affected Lender or (ii) the order of application of any reduction in the Commitments or any prepayment of Loans among the Facilities from the application thereof set forth in the applicable provisions of Section 2.05(b) or Section 2.06(b), respectively, in any manner that materially and adversely affects the Lenders under a Facility without the written consent of each affected Lender, or (iii) Section 8.03, without the written consent of each Lender;
 
  
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(g)    change (i) any provision of this Section 10.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder (other than the definitions specified in clauses (ii) and (iii) of this Section 10.01(g)), without the written consent of each Lender, or (ii) the definition of “Required Revolver Lenders” without the written consent of each Revolving Credit Lender;
(h)    release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender;
(i)    release or remove all or substantially all of the value of the Guaranty, without the written consent of each Lender;
(j)    impose any greater restriction on the ability of any Lender under a Facility to assign any of its rights or obligations hereunder without the written consent of the Lenders holding more than 50% of the sum of the (i) Total Outstandings under such Facility (with the aggregate amount of each Lender’s risk participation, funded participation in L/C Obligations and Swing Line Loans under a Revolving Credit Facility being deemed “held” by such Lender under such Facility for purposes of this clause (j)) and (ii) aggregate unused Commitments under such Facility;
(k)    waive a Change of Control, without the written consent of Lenders holding Commitments or Outstanding Amounts representing 662/3% of the Aggregate Commitments and Total Outstandings under the Facilities; or
(l)    change the definition of “Applicable Percentage” without the written consent of each Lender;
provided, further, that (i) no amendment, waiver or consent shall, unless in writing and signed by each applicable L/C Issuer in addition to the Lenders required above, affect the rights or duties of such L/C Issuer under this Credit Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Credit Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Credit Agreement or any other Loan Document; and (iv) the Fee Letters may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that (w) the Commitment of such Lender may not be increased or extended without the consent of such Lender, (x) the principal amount owed to such Lender may not be decreased or forgiven without the consent of such Lender unless such decrease or forgiveness also applies on a pro rata basis to all of the other Loans under the relevant Facility, (y) the rate of interest applicable to the Loans of such Lender may not be decreased without the consent of such Lender unless such interest rate decrease also applies to all of the other Loans under the relevant Facility, and (z) the Maturity Date applicable to any Loans of such Lender under any Facility may not be extended unless such extension also applies to all of the other Loans under the relevant Facility.
 
  
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If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender or each affected Lender and that has been approved by the Required Lenders, the Company may (i) replace such non-consenting Lender in accordance with Section 10.12; provided that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Company to be made pursuant to this paragraph) or (ii) with the prior written consent of the Required Lenders, terminate the Commitments of such Lender and repay all Obligations of the Company owing to such Lender relating to the Loans and participations (and Cash Collateralize all of the unfunded participations) held by such Lender as of the termination date.
If the Administrative Agent and the Company, acting together, identify any ambiguity, omission, mistake, typographical error or other defect in any provision of this Credit Agreement or any other Loan Document, then the Administrative Agent and the Company shall be permitted to amend, modify or supplement such provision to cure such ambiguity, omission, mistake, typographical error or other defect, and such amendment shall become effective without any further action or consent of any other party to this Credit Agreement; provided that the Administrative Agent shall post such amendment to the Lenders (which may be posted to the Approved Electronic Platform) reasonably promptly after the effectiveness thereof.
Section 10.02    Notices; Effectiveness; Electronic Communications. (a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or electronic transmission as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i)    if to the Company, the Guarantors, the Administrative Agent or the L/C Issuers or the Swing Line Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and
(ii)    if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire.
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).
 
  
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(b)    Electronic Communications. Notices and other communications to the Lenders and the L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or any L/C Issuer pursuant to Article II if such Lender or such L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Company may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. The Company agrees that the Administrative Agent may, but shall not be obligated to, make any notices or other communications available to the Lenders and the L/C Issuers by posting such notices or other communications on IntraLinksTM, DebtDomain, SyndTrak, ClearPar or any other electronic platform chosen by the Administrative Agent to be its electronic transmission system (the “Approved Electronic Platform”).
Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the Effective Date, a user ID/password authorization system) and the Approved Electronic Platform is secured through a per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders, each of the L/C Issuers and the Company acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure, that the Administrative Agent is not responsible for approving or vetting the representatives or contacts of any Lender that are added to the Approved Electronic Platform, and that there may be confidentiality and other risks associated with such distribution. Each of the Lenders, each of the L/C Issuers and the Company hereby approves distribution of notices and other communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
(c)    Approved Electronic Platform. THE APPROVED ELECTRONIC PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMPANY MATERIALS OR THE ADEQUACY OF THE APPROVED ELECTRONIC PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE COMPANY MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
 
  
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FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE COMPANY MATERIALS OR THE APPROVED ELECTRONIC PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Company, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Company’s or the Administrative Agent’s transmission of Company Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Company, any Lender, any L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
Each Lender and each L/C Issuer agrees that notice to it (as provided in the next sentence) specifying that notices or other communications have been posted to the Approved Electronic Platform shall constitute effective delivery of notices or other communications to such Lender for purposes of the Loan Documents. Each Lender and L/C Issuer agreed (i) to notify the Administrative Agent in writing (which could be in the form of electronic communication) from time to time of such Lender’s or L/C Issuer’s (as applicable) email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.
Each of the Lenders, each of the L/C Issuers and the Company agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store notices and other communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally applicable document retention procedures and policies.
Nothing herein shall prejudice the right of the Administrative Agent, any Lender or any L/C Issuer to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.
(d)    Change of Address, Etc. Each of the Company, the Administrative Agent, the L/C Issuers and the Swing Line Lender may change its address, electronic mail address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, electronic mail address, facsimile or telephone number for notices and other communications hereunder by notice to the Company, the Administrative Agent, the L/C Issuers and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.
(e)    Reliance by Administrative Agent, L/C Issuers and Lenders. The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of the Company even if (i) such notices were not made in a manner specified
 
  
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herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Company shall indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Company. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
Section 10.03    No Waiver; Cumulative Remedies. No failure on the part of the Administrative Agent, any L/C Issuer or any Lender to exercise, and no delay by any such Person in exercising, and no course of dealing with respect to, any right, remedy, power or privilege under this Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege under this Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The right, remedy, power or privilege provided herein, and provided under any other Loan Document, are cumulative and not exclusive of any right, remedy, power or privilege provided by law.
Section 10.04    Expenses; Indemnity; Damage Waiver. (a) Costs and Expenses. The Company shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facility provided for herein, the preparation, negotiation, execution, delivery and administration of this Credit Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by any L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all expenses incurred by the Administrative Agent, any Lender or any L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or any L/C Issuer) in connection with the enforcement or protection of its rights (A) in connection with this Credit Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b)    Indemnification by the Company. The Company shall indemnify the Administrative Agent (and any sub-agent thereof), the Collateral Agent, each Co-Documentation Agent, each Co-Syndication Agent, each Senior Managing Agent, each Lender, each L/C Issuer and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Company or any other Loan Party arising out of, in connection with, or as a result of (i) the
 
  
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execution or delivery of this Credit Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Credit Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by any L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Company or any of its Subsidiaries, or any Environmental Liability related in any way to the Company or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Company or any other Loan Party or any of the Company’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or (y) result from a claim brought by the Company or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Company or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.
(c)    Reimbursement by Lenders. To the extent that the Company for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), any L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or any L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or any L/C Issuer in connection with such capacity, other than, as to any Indemnitee, to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).
(d)    Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no Loan Party shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Credit Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
 
  
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proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Credit Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
(e)    Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.
(f)    Survival. The agreements in this Section 10.04 shall survive the resignation of the Administrative Agent, any L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.
Section 10.05    Payments Set Aside. To the extent that any payment by or on behalf of the Company is made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, any L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and each L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the New York Fed Bank Rate from time to time in effect. The obligations of the Lenders and the L/C Issuers under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Credit Agreement.
Section 10.06    Successors and Assigns. (a) Successors and Assigns Generally. The provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Company nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of Section 10.06(b), (ii) by way of participation in accordance with the provisions of Section 10.06(d), (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.06(f), or (iv) to an SPC in accordance with the provisions of Section 10.06(h) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Credit Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Credit Agreement.
 
  
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(b)    Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Credit Agreement (including all or a portion of its Commitment and Letter of Credit Commitments, and the Loans (including for purposes of this Section 10.06(b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i)    Minimum Amounts.
(A)    in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it under such Facility or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B)    in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Company otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;
(ii)    Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Credit Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not (A) apply to the Swing Line Lender’s rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis;
(iii)    Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A)    the consent of the Company (such consent not to be unreasonably withheld or delayed) shall be required for an assignment to any Person unless (1) an Event of Default has occurred and is continuing at the time of
 
  
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such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender, an Approved Fund, or solely with respect to the assignment of a Term Loan, the Company, an Affiliated Lender or a Subsidiary of the Company (each Person with respect to whom such Company consent has been received, or is not required under clause (1) or clause (2) of this sentence, an “Eligible Assignee”); provided that if a prospective assignee (x) is not a commercial bank, finance company, insurance company, financial institution or fund (a “Non-Financial Entity”), the Company shall be deemed to be acting reasonably in withholding its consent if such person is a direct or indirect competitor of the Company as notified by the Company to the Administrative Agent within five Business Days after being informed of the identity of such Non-Financial Entity or (y) is a Lender that is a non-consenting Lender that the Company is at such time permitted to replace pursuant to Section 10.01 or otherwise is a Lender that the Company is at such time permitted to replace pursuant to Section 10.12, the Company shall be deemed to be acting reasonably in withholding its consent; provided, further, that solely with respect to an assignment of any Term Loans, the Company shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten Business Days after having received notice thereof;
(B)    the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) any Commitment if such assignment is to a Person that is not a Lender with a Commitment in respect of the applicable Facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender; provided that the Administrative Agent shall be deemed to be acting reasonably in withholding its consent to a prospective assignee that is a Defaulting Lender;
(C)    the consent of each L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and
(D)    the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Swing Line Loans (whether or not then outstanding).
(iv)    Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee in the amount of $3,500; provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of
 
  
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determining the processing and recordation fee; provided, further, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
(v)    No Assignment to Certain Persons. No such assignment shall be made to (A) the Company or any of the Company’s Affiliates or Subsidiaries, except in accordance with the definition of “Eligible Assignee” set forth in Section 1.01 or (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof.
(vi)    No Assignment to Natural Persons. No such assignment shall be made to a natural person (or holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural person).
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Credit Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Credit Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Credit Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Credit Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 3.01, Section 3.04, Section 3.05 and Section 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, the Company (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Credit Agreement that does not comply with this subsection shall be treated for purposes of this Credit Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.06(d).
(c)    Register. The Administrative Agent, acting solely for this purpose as an agent of the Company, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Company, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Credit Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Company and any Lender at any reasonable time and from time to time upon reasonable prior notice.
(d)    Participations. Any Lender may at any time, without the consent of, or notice to, the Company, the Administrative Agent or any L/C Issuer, sell participations to any Person (other than a natural person or the Company or any of the Company’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations
 
  
145
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under this Credit Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Credit Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Company, the Administrative Agent, the Lenders and the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Credit Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Credit Agreement and to approve any amendment, modification or waiver of any provision of this Credit Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant. Subject to subsection (e) of this Section, the Company agrees that each Participant shall be entitled to the benefits of Section 3.01, Section 3.04 and Section 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.06(b). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.07 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Participant agrees to be subject to an agreement containing provisions substantially the same as those of Section 10.20 herein. Each Lender that sells a participation, acting solely for this purpose as a non-fiduciary agent of the Company, shall maintain a register analogous to the Register (a “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of a Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in the rights and/or obligations under this Credit Agreement) except to the extent that such disclosure is necessary to establish that such interest is in registered form under Treasury Regulations Section 5f.103-1(c). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Credit Agreement notwithstanding any notice to the contrary.
(e)    Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 3.01 or Section 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Company’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Company, to comply with Section 3.01(f) as though it were a Lender.
(f)    Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Credit Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g)    Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to
 
  
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include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
(h)    Special Purpose Funding Vehicles. Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Company (an “SPC”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Credit Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.12(b)(ii). Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Company under this Credit Agreement (including its obligations under Section 3.04), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Credit Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Credit Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof. Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of the Company and the Administrative Agent and with the payment of a processing fee in the amount of $3,500 (which processing fee may be waived by the Administrative Agent in its sole discretion), assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.
(i)    Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time JPMorgan or any other L/C Issuer assigns all of its Revolving Credit Commitments and Revolving Credit Loans pursuant to Section 10.06(b), (i) such L/C Issuer may upon 30 days’ notice to the Company and the Lenders, resign as an L/C Issuer and/or (ii) JPMorgan may upon 30 days’ notice to the Company resign as Swing Line Lender. In the event of any such resignation as an L/C Issuer or Swing Line Lender, the Company shall be entitled to appoint from among the Lenders a successor L/C Issuer (so long as such appointee agrees to act as an L/C Issuer hereunder) or Swing Line Lender hereunder; provided, however, that no failure by the Company to appoint any such successor shall affect the
 
  
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resignation of JPMorgan or any other L/C Issuer as an L/C Issuer or Swing Line Lender, as the case may be. If any L/C Issuer resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuers hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If JPMorgan resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment and acceptance of a successor L/C Issuer or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) in the case of the appointment and acceptance of a successor L/C Issuer, the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of such retiring L/C Issuer with respect to such Letters of Credit.
Section 10.07    Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, each L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, such L/C Issuer or any such Affiliate to or for the credit or the account of the Company or any other Loan Party against any and all of the obligations of the Company or such Loan Party now or hereafter existing under this Credit Agreement or any other Loan Document to such Lender or such L/C Issuer, irrespective of whether or not such Lender or such L/C Issuer shall have made any demand under this Credit Agreement or any other Loan Document and although such obligations of the Company or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or such L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender, each L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such L/C Issuer or their respective Affiliates may have. Each Lender and each L/C Issuer agrees to notify the Company and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.
Section 10.08    Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Company. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or
 
  
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premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
Section 10.09    Counterparts; Integration; Effectiveness. This Credit Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Credit Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 5.01, this Credit Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Credit Agreement by facsimile or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Credit Agreement.
Section 10.10    Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
Section 10.11    Severability. If any provision of this Credit Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Credit Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10.12    Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Company is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, or if any Lender is a Defaulting Lender, or if otherwise permitted under Section 10.01, then the Company may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.05), all of its interests, rights and obligations under this Credit Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(a)    the Company shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);
 
  
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(b)    such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts);
(c)    in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and
(d)    such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply. Neither the Administrative Agent nor any Lender shall have any obligation to the Company to find a replacement Lender or other such Person.
Each party hereto agrees that (i) an assignment required pursuant to this Section may be effected pursuant to an Assignment and Assumption executed by the Company, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and (ii) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender; provided, further, that any such documents shall be without recourse to or warranty by the parties thereto.
Section 10.13    Governing Law; Jurisdiction; Etc. (a) GOVERNING LAW. THIS CREDIT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b)    SUBMISSION TO JURISDICTION. EACH OF THE PARTIES TO THIS CREDIT AGREEMENT IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA SITTING IN THE BOROUGH OF MANHATTAN, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
 
  
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FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS CREDIT AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE COMPANY OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c)    WAIVER OF VENUE. EACH OF THE PARTIES TO THIS CREDIT AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d)    SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS CREDIT AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
Section 10.14    Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
  
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Section 10.15    No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby, the Company acknowledges and agrees that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Company and its Affiliates, on the one hand, and the Administrative Agent, Joint Book Runners and Lenders on the other hand, and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent, Joint Book Runners and Lenders each are and have been acting solely as a principal and are not the financial advisor, agent or fiduciary, for the Company or any of its Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent, Joint Book Runners nor any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Company with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent, Joint Book Runners or any Lender has advised or is currently advising the Company or any of its Affiliates on other matters) and neither the Administrative Agent, Joint Book Runners nor any Lender has any obligation to the Company or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent, Joint Book Runners and Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and its Affiliates, and neither the Administrative Agent, Joint Book Runners nor any Lender has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent, Joint Book Runners and Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent, Joint Book Runners and the Lenders with respect to any breach or alleged breach of agency, advisory or fiduciary duty.
Section 10.16    USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Company and the Guarantors that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the Act. The Company shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.
 
  
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Section 10.17    Senior Indebtedness. The Obligations shall constitute “Senior Indebtedness” as such term is defined in all debt instruments to which the Company or any Restricted Subsidiary is a party and which contains such a definition.
Section 10.18    Liability of General Partners and Other Persons. No general partner of any Restricted Subsidiary that is a partnership, joint venture or joint adventure shall have any personal liability in respect of such Restricted Subsidiary’s obligation under this Credit Agreement or the Notes by reason of his, her or its status as such general partner. In addition, no limited partner, officer, employee, director, stockholder or other holder of an ownership interest of or in the Company or any Restricted Subsidiary or any partnership, corporation or other entity which is a stockholder or other holder of an ownership interest of or in the Company or any Restricted Subsidiary shall have any personal liability in respect of such obligations by reason of his, her or its status as such limited partner, officer, employee, director, stockholder or holder.
Section 10.19    Authorization of Third Parties to Deliver Information and Discuss Affairs. The Company hereby confirms that it has authorized and directed each Person whose preparation or delivery to the Administrative Agent or the Lenders of any opinion, report or other information is a condition or covenant under this Credit Agreement (including under Article V and Article VII) to so prepare or deliver such opinions, reports or other information for the benefit of the Administrative Agent and the Lenders. The Company agrees to confirm such authorizations and directions provided for in this Section 10.19 from time to time as may be requested by the Administrative Agent.
Section 10.20    Treatment of Certain Information; Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives on a need to know basis (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Credit Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section (other than in the case of a pledge to any Federal Reserve Bank), to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Credit Agreement, (ii) any pledgee referred to in Section 10.06(f), or (iii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Company and its obligations, (g) with the written consent of the Company or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a non-confidential basis from a source other than the Company or any other Loan Party.
 
  
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For purposes of this Section, “Information” means all information received from any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a non-confidential basis prior to disclosure by any Loan Party or any Subsidiary thereof, provided that, in the case of information received from a Loan Party or any such Subsidiary after the Effective Date, such information is not marked “PUBLIC” or otherwise identified at the time of delivery as confidential.
Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public information concerning the Company or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including Securities Laws.
Section 10.21    No Fiduciary Duty. The Company hereby acknowledges that neither the Administrative Agent nor any Lender has any fiduciary relationship with or fiduciary duty to the Company arising out of or in connection with this Credit Agreement or any of the other Loan Documents, and the relationship between the Administrative Agent and the Lenders, on the one hand, and the Company, on the other hand, in connection herewith or therewith is solely that of debtor and creditor.
Section 10.22    Acknowledgement and Consent to Bail-In of Certain Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges and accepts that any liability of any Lender under or in connection with this Credit Agreement may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
(a)    the application of any Write-Down and Conversion Powers by a Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender party hereto that is subject to the Write-Down and Conversion Powers of any Resolution Authority; and
(b)    the effects of any Bail-In Action on any such liability, including, if applicable:
(i)    a reduction in full or in part or cancellation of any such liability;
(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Credit Agreement or any other Loan Document; or
(iii)    the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any Resolution Authority.
Section 10.23    Acknowledgement Regarding any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for
 
  
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Secured Hedging Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
[SIGNATURE PAGES FOLLOW]
 
  
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be duly executed as of the day and year first above written.
MSGN HOLDINGS, L.P., as the Company
 
By:   
      MSGN EDEN, LLC, as its General Partner
By:   /s/  BRET RICHTER
Name:    Bret Richter
Title:      Executive Vice President, Chief Financial
Officer and Treasurer
 
MSGN EDEN, LLC, as a Guarantor
By:    /s/  BRET RICHTER
Name:    Bret Richter
Title:      Executive Vice President, Chief Financial
Officer and Treasurer
 
REGIONAL MSGN HOLDINGS LLC, as a
Guarantor
By:    /s/  BRET RICHTER
Name:    Bret Richter
Title:      Executive Vice President, Chief Financial
Officer and Treasurer
 
MSGN INTERACTIVE, LLC,
MSGN PUBLISHING, LLC,
MSGN SONGS, LLC,
SPORTSCHANNEL ASSOCIATES,
THE 31ST STREET COMPANY, L.L.C.,
as Guarantors
By:   
     MSGN EDEN, LLC, as the General Partner
of MSGN Holdings, L.P.
By:    /s/  BRET RICHTER
Name:    Bret Richter
Title:      Executive Vice President, Chief Financial
Officer and Treasurer




JPMORGAN CHASE BANK, N.A., as
Administrative Agent and Collateral Agent
 
By:    /s/  PETER B. THAUER
Name:    Peter B. Thauer
Title:      Managing Director
JPMORGAN CHASE BANK, N.A.,
as L/C Issuer, Swing Line Lender and Lender
 
By:    /s/  PETER B. THAUER
Name:    Peter B. Thauer
Title:      Managing Director




Bank of America N.A.,
as L/C Issuer and Lender
 
By:    /s/  LAURA OLSON
Name:    Laura Olson
Title:      Vice President




MUFG Bank, Ltd.,
as Lender
 
By:    /s/  GIROLAMO PARISI
Name:    Girolamo Parisi
Title:      Managing Director




MUFG Union Bank, N.A.,
as Lender
 
By:    /s/  GIROLAMO PARISI
Name:    Girolamo Parisi
Title:      Managing Director




THE BANK OF NOVA SCOTIA,
as L/C Issuer and Lender
 
By:    /s/  MICHAEL GRAD
Name:    Michael Grad
Title:      Director




Wells Fargo Bank, N.A.,
as Lender
 
By:    /s/  CRAIG DESOUSA
Name:    Craig DeSousa
Title:      Senior Vice President




FIFTH THIRD BANK,
as Lender
 
By:    /s/  JOE ALEXANDER
Name:    Joe Alexander
Title:      Principal




SUNTRUST BANK,
as Lender
 
By:    /s/  CYNTHIA W. BURTON
Name:    Cynthia W. Burton
Title:      Director




TD Bank N.A.,
as Lender
 
By:    /s/  SHIVANI AGARWAL
Name:    Shivani Agarwal
Title:      Senior Vice President




U.S. Bank National Association,
as Lender
 
By:    /s/  PAUL WEISSENBERGER
Name:    Paul Weissenberger
Title:      Senior Vice President




City National Bank,
as Lender
 
By:    /s/  EDWIN VANDERHOOF
Name:    Edwin Vanderhoof
Title:      SVP, Relationship Manager




GOLDMAN SACHS BANK USA,
as Lender
 
By:    /s/  REBECCA KRATZ
Name:    Rebecca Kratz
Title:      Authorized Signatory




Morgan Stanley Bank, N.A.,
as Lender
 
By:    /s/  MICHAEL KING
Name:    Michael King
Title:      Authorized Signatory




Citizens Bank, N.A.,
as Lender
 
By:    /s/  KARMYN PAUL
Name:    Karmyn Paul
Title:      Vice President




CREDIT SUISSE AG, CAYMAN ISLANDS
BRANCH,
as Lender
 
By:    /s/  JUDITH E. SMITH
Name:    Judith E. Smith
Title:      Authorized Signatory
 
By:    /s/  NICOLAS THIERRY
Name:    Nicolas Thierry
Title:      Authorized Signatory




Crédit Industriel et Commercial, New York Branch,
as Lender
 
By:    /s/  BRIAN MORIARTY
Name:    Brian Moriarty
Title:      Vice President
 
By:    /s/  CLIFFORD ABRAMSKY
Name:    Clifford Abramsky
Title:      Managing Director




BankUnited, N.A.,
as Lender
 
By:    /s/  CHRISTINE GERULA
Name:    Christine Gerula
Title:      SVP




TriState Capital Bank,
as Lender
 
By:    /s/  ELLEN FRANK
Name:    Ellen Frank
Title:      Senior Vice President




VALLEY NATIONAL BANK,
as Lender
 
By:    /s/  ROBERT MCKENNA
Name:    Robert McKenna
Title:      Vice President




WOODFOREST NATIONAL BANK,
as Lender
 
By:    /s/  SEAN WALKER
Name:    Sean Walker
Title:      Senior Vice President



 
EXECUTION VERSION
Exhibit 10.76
SECURITY AGREEMENT
Dated as of September 28, 2015
by and among
MSG HOLDINGS, L.P. (to be renamed MSGN HOLDINGS, L.P.),
MSGN EDEN, LLC,
REGIONAL MSGN HOLDINGS LLC,
and
THE OTHER GRANTORS REFERRED TO HEREIN,
as Grantors,
and
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent




T A B L E    O F    C O N T E N T S
 
Section       
Page
 
Section 1.  
General Grant of Security
     2   
Section 2.  
Holdings Grant of Security
     5   
Section 3.  
Excluded Assets
     6   
Section 4.  
Security for Obligations
     6   
Section 5.  
Grantors Remain Liable
     6   
Section 6.  
Delivery and Control of Security Collateral
     6   
Section 7.  
Maintaining the Account Collateral
     7   
Section 8.  
Investing of Amounts in the Cash Collateral Account
     8   
Section 9.  
Release of Amounts
     8   
Section 10.  
Representations and Warranties
     8   
Section 11.  
Further Assurances
     9   
Section 12.  
Post-Closing Changes
     9   
Section 13.  
As to Intellectual Property Collateral
     10   
Section 14.  
Voting Rights; Dividends; Etc
     10   
Section 15.  
As to Certain Pledged Agreements
     11   
Section 16.  
As to Letter-of-Credit Rights
     11   
Section 17.  
Additional Shares
     12   
Section 18.  
Collateral Agent Appointed Attorney-in-Fact
     12   
Section 19.  
Collateral Agent May Perform
     12   
Section 20.  
The Collateral Agent’s Duties
     13   
Section 21.  
Remedies
     13   
Section 22.  
Amendments; Waivers; Additional Grantors; Etc
     15   
Section 23.  
Notices, Etc
     15   
Section 24.  
Continuing Security Interest; Assignments Under the Credit Agreement
     15   
Section 25.  
Release; Termination
     16   
Section 26.  
Execution in Counterparts
     16   
Section 27.  
Governing Law
     16   
 
Schedules          
Schedule I    -    Investment Property
Schedule II    -    Pledged Deposit Accounts; Securities Accounts





Schedule III    -    Intellectual Property
Schedule IV    -    Legal Name, Location, Chief Executive Office, Type Of Organization, Jurisdiction Of Organization And Organizational Identification Number
Exhibits          
Exhibit A    -    Form of Security Agreement Supplement
Exhibit B    -    Form of Intellectual Property Security Agreement
Exhibit C    -    Form of Intellectual Property Security Agreement Supplement
Exhibit D    -    Form of Consent and Agreement
Exhibit E    -    Form of Deposit Account Control Agreement
Exhibit F    -    Form of Securities Account Control Agreement
 
2




SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of September 28, 2015 (this “ Agreement ”), is made by and among MSG HOLDINGS, L.P. (to be renamed MSGN HOLDINGS, L.P.), a Delaware limited partnership (the “ Company ”), MSGN EDEN, LLC, a Delaware limited liability company (“ MSGN Eden ”), REGIONAL MSGN HOLDINGS LLC, a Delaware limited liability company (together with MSGN Eden, the “ Holdings Grantors ” and individually each a “ Holdings Grantor ”), the other parties listed as “ Subsidiary Grantors ” on the signature pages hereof (the Company, the Holdings Grantors and such Persons so listed being, collectively, the “ Grantors ”), and JPMORGAN CHASE BANK, N.A., as collateral agent (in such capacity, together with any successor collateral agent appointed pursuant to Article IX of the Credit Agreement (as hereinafter defined), the “ Collateral Agent ”), for the benefit of the Lenders and the other Secured Parties (each as defined in the Credit Agreement, as defined below).
PRELIMINARY STATEMENTS:
(1) The Company has entered into a Credit Agreement, dated as of September 28, 2015 (such Credit Agreement, as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time, being the “ Credit Agreement ”), with the Lenders (as defined therein), the subsidiaries of the Company party thereto as guarantors, the Administrative Agent (as defined therein), the Collateral Agent and the other agents party thereto. Capitalized terms not otherwise defined in this Agreement have the same meanings as specified in the Credit Agreement.
(2) The Grantors (other than the Company) have guaranteed the obligations of the Company under the Credit Agreement pursuant to the Guaranty (as defined in the Credit Agreement).
(3) As of the Closing Date, each Grantor is the owner of the shares of stock or other Equity Interests (the “ Initial Pledged Equity ”) set forth opposite such Grantor’s name on and as otherwise described in Part I of Schedule I hereto and issued by the Persons named therein and the creditor with respect to the indebtedness (the “ Initial Pledged Debt ”) owed to the Grantor set forth opposite the Grantor’s name on and as otherwise described in Part II of Schedule I hereto and issued by the obligors named therein.
(4) As of the Closing Date, each Grantor is the owner of the deposit accounts set forth opposite such Grantor’s name on Schedule II hereto, as to which such Grantor is required to comply with the requirements of Section 7(a ) (together with any such accounts as may be created and required under the Credit Agreement to be pledged after the Closing Date, excluding the Excluded Non-Pledged Accounts, the “ Pledged Deposit Accounts ”).
(5) In accordance with the terms of the Credit Agreement, upon the written request of the Collateral Agent, the Company shall open a blocked, non-interest bearing deposit account in which the balance may be zero at JPMorgan Chase Bank, N.A. (in such capacity, the “ Cash Collateral Account Bank ”), to the extent set forth in the Credit Agreement or in this Agreement, for the purposes of holding funds transferred from a Pledged Account into such account upon the occurrence and continuation of an Event of Default, in connection with a Defaulting Lender or for the Cash Collateralization of any Obligations under the Credit Agreement at a time when Letters of Credit remain outstanding (the “ Cash Collateral Account ”).
(6) As of the Closing Date, each Grantor is the owner of the securities accounts set forth opposite such Grantor’s name on Schedule II hereto, as to which such Grantor is required to comply with the requirements of Section 6(a ) (together with any such accounts as exist after the Closing Date, the “ Securities Accounts ”).
 
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(7) It is a condition precedent to the making of the Loans by the Lenders and the issuance of Letters of Credit by the L/C Issuers under the Credit Agreement that the Grantors shall have granted the security interest contemplated by this Agreement. Each Grantor will derive substantial direct and indirect benefit from the transactions contemplated by the Loan Documents.
(8) Terms defined in the Credit Agreement and not otherwise defined in this Agreement are used in this Agreement as defined in the Credit Agreement. Further, unless otherwise defined in this Agreement or in the Credit Agreement, terms defined in Article 8 or 9 of the UCC (as defined below) are used in this Agreement as such terms are defined in such Article 8 or 9. “ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “ UCC ” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
NOW, THEREFORE, in consideration of the premises and in order to induce the Lenders to make the Loans and issue Letters of Credit under the Credit Agreement and to induce the Hedge Banks to enter into Secured Hedge Agreements and the Cash Management Banks to enter into Secured Cash Management Agreements from time to time, each Grantor hereby agrees with the Collateral Agent for the ratable benefit of the Secured Parties as follows:
Section 1. General Grant of Security . The Company and each Subsidiary Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in such Grantor’s right, title and interest in and to the following, in each case, other than Excluded Assets, in each case, as to each type of property described for such Grantor below, whether now owned or hereafter acquired by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the “ General Collateral ”):
(a) all equipment in all of its forms, including, without limitation, all machinery, tools, furniture and fixtures, and all parts thereof and all accessions thereto, including, without limitation, computer programs and supporting information that constitute equipment within the meaning of the UCC (any and all such property being the “ Equipment ”);
(b) all inventory in all of its forms, including, without limitation, (i) all raw materials, work in process, finished goods and materials used or consumed in the manufacture, production, preparation or shipping thereof, (ii) goods in which such Grantor has an interest in mass or a joint or other interest or right of any kind (including, without limitation, goods in which such Grantor has an interest or right as consignee) and (iii) goods that are returned to or repossessed or stopped in transit by such Grantor, and all accessions thereto and products thereof and documents therefor, including, without limitation, computer programs and supporting information that constitute inventory within the meaning of the UCC (any and all such property being the “ Inventory ”);
(c) all accounts, chattel paper (including, without limitation, tangible chattel paper and electronic chattel paper), instruments (including, without limitation, promissory notes), deposit accounts, letter-of-credit rights, general intangibles (including, without limitation, payment intangibles) and other obligations of any kind, whether or not arising out of or in connection with the sale or lease of goods or the rendering of services and whether or not earned by performance, and all rights now or hereafter existing in and to all supporting obligations and in and to all security agreements, mortgages, Liens, leases, letters of credit and other contracts securing or otherwise relating to the foregoing property (any and all of such accounts, chattel paper, instruments, deposit
 
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accounts, letter-of-credit rights, general intangibles and other obligations, to the extent not referred to in clauses (d) , (e)  or (f)  below, being the “ Receivables ,” and any and all such supporting obligations, security agreements, mortgages, Liens, leases, letters of credit and other contracts being the “ Related Contracts ”);
(d) the following (the “ General Security Collateral ”):
(i) the Initial Pledged Equity owned by the Company and each Subsidiary Grantor and the certificates, if any, representing such Initial Pledged Equity, and all dividends, distributions, return of capital, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Initial Pledged Equity and all warrants, rights or options issued thereon or with respect thereto;
(ii) the Initial Pledged Debt and the instruments, if any, evidencing the Initial Pledged Debt, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Initial Pledged Debt;
(iii) all additional shares of stock and other Equity Interests from time to time acquired by such Grantor in any manner (such shares and other Equity Interests, together with the Initial Pledged Equity owned by the Company and the Subsidiary Grantors, being the “ General Pledged Equity ”), and the certificates, if any, representing such additional shares or other Equity Interests, and all dividends, distributions, return of capital, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares or other Equity Interests and all warrants, rights or options issued thereon or with respect thereto;
(iv) all additional indebtedness from time to time owed to such Grantor (such indebtedness, together with the Initial Pledged Debt, being the “ Pledged Debt ”) and the instruments, if any, evidencing such indebtedness, and all interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such indebtedness;
(v) the Securities Accounts, all security entitlements with respect to all financial assets from time to time credited to the Securities Accounts, and all financial assets, and all dividends, distributions, return of capital, interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such security entitlements or financial assets and all warrants, rights or options issued thereon or with respect thereto; and
(vi) all other investment property (including, without limitation, all (A) securities, whether certificated or uncertificated, (B) security entitlements, (C) securities accounts, (D) commodity contracts and (E) commodity accounts) and the certificates or instruments, if any, representing or evidencing such investment property, and all dividends, distributions, return of capital, interest, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such investment property and all warrants, rights or options issued thereon or with respect thereto;
(e) each Affiliation Agreement, Media Rights Agreement, Sports Telecast Rights Agreement, and other Related Document, in each case to which such Grantor is now or may hereafter become a party, in each case as such agreements may be amended, amended and restated,
 
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supplemented or otherwise modified from time to time (collectively, the “ Pledged Agreements ”), including, without limitation, (A) all rights of such Grantor to receive moneys due and to become due (including all rights to payment and rights to enforce payments, payments, cash flow, proceeds and products) under or pursuant to the Pledged Agreements, (B) all rights of such Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to the Pledged Agreements, (C) claims of such Grantor for damages arising out of or for breach of or default under the Pledged Agreements and (D) the right of such Grantor to terminate the Pledged Agreements, to perform thereunder and to compel performance and otherwise exercise all remedies thereunder (all such Collateral, including the Pledged Agreements, the “ Agreement Collateral ”), in each case subject to the limitations contained in clause (x ) of the definition of Excluded Asset;
(f) the following (collectively, the “ Account Collateral ”):
(i) all Pledged Deposit Accounts, the Cash Collateral Account and all funds and financial assets from time to time credited thereto (including, without limitation, all Cash Equivalents), and all certificates and instruments, if any, from time to time representing or evidencing the Pledged Deposit Accounts or the Cash Collateral Account;
(ii) all promissory notes, certificates of deposit, checks and other instruments from time to time delivered to or otherwise possessed by the Collateral Agent or an Affiliate of the Collateral Agent on its behalf, for or on behalf of such Grantor in substitution for or in addition to any or all of the then existing Account Collateral; and
(iii) all interest, dividends, distributions, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the then existing Account Collateral;
(g) the following (collectively, the “ Intellectual Property Collateral ”):
(i) all patents, patent applications, utility models and statutory invention registrations, all inventions claimed or disclosed therein and all improvements thereto (“ Patents ”);
(ii) all trademarks, service marks, domain names, trade dress, logos, designs, slogans, trade names, business names, corporate names and other source identifiers, whether registered or unregistered ( provided that no security interest shall be granted in United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein could impair the validity or enforceability, or result in the cancellation, of such intent-to-use trademark applications under applicable law), together, in each case, with the goodwill symbolized thereby (“ Trademarks ”);
(iii) all copyrights, including, without limitation, such copyrights in Computer Software (as hereinafter defined), and internet website content, whether registered or unregistered and mask works (“ Copyrights ”); Computer Software shall mean all computer software, programs and databases (including, without limitation, source code, object code and all related copyrightable applications and data files);
(iv) all confidential and proprietary information, including, without limitation, confidential know-how, trade secrets, confidential manufacturing and production processes and techniques, confidential research and development information and confidential customer and supplier lists (collectively, “ Trade Secrets ”), and all other intellectual property of any type, to the extent legal protection therefore exists under U.S. intellectual property law;
 
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(v) all registrations and applications for registration for any of the foregoing, including, without limitation, those material registrations and applications for registration set forth in Schedule III hereto, together with all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations thereof;
(vi) all rights in the foregoing provided by international treaties or conventions, if any, and all rights corresponding thereto throughout the world;
(vii) all written agreements granting to any third party the right to use any Intellectual Property Collateral or granting to any Grantor any right to use any Trademark, Copyright, Patent or Trade Secret now or hereafter owned by any third party, to which such Grantor, now or hereafter, is a party (other than those that by their terms prohibit assignment or a grant of security interest by such Grantor thereunder) (“ IP Agreements ”); and
(viii) any and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, breach or other violation with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise recover proceeds arising from such damages;
(h) all books and records (including, without limitation, credit files, printouts and other computer output materials and records) of such Grantor pertaining to any of the property described in the preceding clauses of this Section 1 , that constitute Collateral; and
(i) all proceeds of, collateral for, income, royalties and other payments now or hereafter due and payable with respect to, and supporting obligations relating to, any and all of the property described in the preceding clauses of this Section 1 , other than Excluded Assets (including, without limitation, proceeds, collateral and supporting obligations that constitute property of the types described in clauses (a ) through (h)  and this clause (i) of this Section 1 ) and, to the extent not otherwise included, all (A) payments under insurance (whether or not the Collateral Agent is the loss payee thereof), or any indemnity, warranty or guaranty, in each case, payable by reason of loss or damage to or otherwise with respect to any of the foregoing property, and (B) cash.
Section 2. Holdings Grant of Security . Each Holdings Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, automatically effective at 12:01 a.m. on the day immediately following the date of the consummation of the Spin-Off, a security interest in such Holdings Grantor’s right, title and interest in and to the following, in each case, other than Excluded Assets, in each case, as to each type of property described for such Holdings Grantor below, whether now owned or hereafter acquired by such Holdings Grantor, wherever located, and whether now or hereafter existing or arising (collectively, the “ Holdings Collateral ” and, together with the General Collateral, the “ Collateral ”):
(a) the following (the “ Holdings Security Collateral ” and, together with the General Security Collateral, the “ Security Collateral ”):
(i) the Initial Pledged Equity in the Company owned by each Holdings Grantor and the certificates, if any, representing such Initial Pledged Equity, and all dividends, distributions, return of capital, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Initial Pledged Equity and all warrants, rights or options issued thereon or with respect thereto;
 
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(ii) all additional shares of stock and other Equity Interests in the Company from time to time acquired by such Holdings Grantor in any manner (such shares and other Equity Interests, together with the Initial Pledged Equity in the Company owned by each Holdings Grantor, being the “ Holdings Pledged Equity ” and, together with the General Pledged Equity, the “ Pledged Equity ”), and the certificates, if any, representing such additional shares or other Equity Interests in the Company, and all dividends, distributions, return of capital, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares or other Equity Interests in the Company and all warrants, rights or options issued thereon or with respect thereto, and
(b) all books and records (including, without limitation, printouts and other computer output materials and records) of such Holdings Grantor pertaining to any property described in the preceding clause (a)  of this Section 2 , that constitute Collateral; and
(c) all proceeds of, collateral for, income, royalties and other payments now or hereafter due and payable with respect to, and supporting obligations relating to, any and all of the property described in the preceding clause of this Section 2 , other than Excluded Assets (including, without limitation, proceeds, collateral and supporting obligations that constitute property of the types described in clause (a ) and (b) , and this clause (c) of this Section 2 ).
Section 3. Excluded Assets . Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary, no Grantor shall be required to pledge, and does not pledge hereby or otherwise, and none of the defined terms “ Collateral ”, “ Security Collateral ”, “ Intellectual Property Collateral ”, “ IP Agreements ”, “ Patents ”, “ Trademarks ”, Copyrights ”, “ Trade Secrets ”, Account Collateral ”, “ Pledged Agreements ”, “ Agreement Collateral ”, “ Pledged Debt ”, “ Pledged Equity ”, “ Equipment ”, “ Inventory ”, “ Receivables ” or “ Related Contracts ” used in this Agreement shall include any Excluded Asset.
Section 4. Security for Obligations . This Agreement secures, in the case of each Grantor, the payment of all Obligations from time to time of such Grantor (all such Obligations being the “ Secured Obligations ”). Without limiting the generality of the foregoing, this Agreement secures, as to each Grantor, the payment of all amounts that constitute part of the Secured Obligations and would be owed by such Grantor to any Secured Party under the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving a Loan Party.
Section 5. Grantors Remain Liable . Anything herein to the contrary notwithstanding, (a) each Grantor shall remain liable under the contracts and agreements included in such Grantor’s Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Collateral Agent of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral and (c) no Secured Party shall have any obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement or any other Loan Document, nor shall any Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.
Section 6. Delivery and Control of Security Collateral .
(a) All certificates or instruments representing or evidencing Security Collateral (if certificated) shall be delivered to and held by or on behalf of the Collateral Agent pursuant to the
 
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terms of and to the extent required under the Credit Agreement and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to the Collateral Agent; provided that no Grantor shall be required to deliver any instrument representing (x) Pledged Debt if the face amount of such Pledged Debt is less than $15,000,000, or (y) Pledged Debt other than indebtedness (i) for borrowed money (whether by loan or the issuance and sale of debt securities) or (ii) for the deferred purchase or acquisition price of property or services of which such Grantor is the seller (other than accounts receivable (other than for borrowed money) in the ordinary course of business) owed to a Grantor. After the occurrence and during the continuance of an Event of Default, the Collateral Agent shall have the right to exchange certificates or instruments representing or evidencing Security Collateral for certificates or instruments of smaller or larger denominations.
(b) With respect to (i) the Securities Accounts, (ii) the Cash Collateral Account and (iii) any Security Collateral that constitutes a security entitlement as to which the financial institution acting as Collateral Agent hereunder is not the securities intermediary, the relevant Grantor will cause the securities intermediary with respect to each such account or security entitlement pursuant to the terms of and to the extent required under the Credit Agreement either (A) to identify in its records the Collateral Agent as the entitlement holder thereof or (B) to agree with such Grantor and the Collateral Agent that such securities intermediary will comply with entitlement orders originated by the Collateral Agent without further consent of such Grantor, such agreement to be in form and substance reasonably satisfactory to the Collateral Agent (a “ Securities Account Control Agreement ”); provided , however , this Section 6(b ) shall not apply to Excluded Non-Pledged Accounts; provided further that the Collateral Agent will not give any such orders except after the occurrence and during the continuance of an Event of Default.
(c) Upon the request of the Collateral Agent following the occurrence and during the continuance of an Event of Default, each Grantor will notify each issuer of Security Collateral (other than any other Loan Party) granted by it hereunder that such Security Collateral is subject to the security interest granted hereunder.
Section 7. Maintaining the Account Collateral . So long as any Loan or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender shall have any Commitment:
(a) Subject to Section 7.13(b) of the Credit Agreement, each Grantor (other than the Holdings Grantors) will maintain deposit accounts only with the financial institution acting as Collateral Agent hereunder or with a bank (a “ Pledged Account Bank ”) that has entered into an agreement with such Grantor and the Collateral Agent to comply with instructions originated by the Collateral Agent directing the disposition of funds in such deposit account without the further consent of such Grantor, such agreement to be in form and substance reasonably satisfactory to the Collateral Agent (a “ Deposit Account Control Agreement ”); provided , however , that this Section 7(a ) shall not apply to Excluded Non-Pledged Accounts. The Collateral Agent agrees not to issue any instructions to any Pledged Account Bank except after the occurrence and during the continuance of an Event of Default.
(b) After the occurrence and during the continuance of an Event of Default, upon the written request of the Collateral Agent, each Grantor (other than the Holdings Grantors) will promptly instruct each Person obligated at any time to make any payment to such Grantor for any reason (an “ Obligor ”) to make such payment to a Pledged Deposit Account or the Cash Collateral Account, except that such Grantor shall not be under such obligation with respect to Persons (i) making payments to a Pledged Deposit Account or the Cash Collateral Account as of the Closing Date, (ii) making payments to such Grantor of less than $5,000,000 a year in the aggregate, or (iii) making payments to accounts not purported to be subject to the security interest of the Secured Parties in accordance with the Credit Agreement, if any.
 
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(c) After the occurrence and during the continuance of an Event of Default under Section 8.01(b), (g) or (h) of the Credit Agreement, the Collateral Agent may, at any time and without consent from the Grantor, transfer, or direct the transfer of, funds from the Pledged Deposit Accounts or the Cash Collateral Account to satisfy the Grantor’s Obligations. The Collateral Agent agrees to give notice to such Grantor of such transfer or direction; provided , however that any failure by the Collateral Agent to give such notice shall not invalidate such transfer or direction.
Section 8. Investing of Amounts in the Cash Collateral Account . The Collateral Agent will, subject to the provisions of Sections 7 , 9 and 21 , from time to time (a) invest, or direct the Cash Collateral Account Bank to invest, amounts received with respect to the Cash Collateral Account in such Cash Equivalents credited to the Cash Collateral Account as the Company may select so long as no Event of Default has occurred and is continuing (or, if an Event of Default has occurred and is continuing, as the Collateral Agent may select, which may include not investing such amounts), and (b) invest interest paid on the Cash Equivalents referred to in clause (a) above, and reinvest other proceeds of any such Cash Equivalents that may mature or be sold, in each case in such Cash Equivalents credited in the same manner. Interest and proceeds that are not invested or reinvested in Cash Equivalents as provided above shall be deposited and held in the Cash Collateral Account. In addition, the Collateral Agent shall have the right at any time to exchange, or direct the applicable Cash Collateral Account Bank to exchange, such Cash Equivalents for similar Cash Equivalents of smaller or larger determinations, or for other Cash Equivalents, credited to the Cash Collateral Account.
Section 9. Release of Amounts . So long as no Event of Default shall have occurred and be continuing, the Grantors shall have the sole and exclusive right to direct the applicable Pledged Account Bank to pay and release, to the applicable Grantor or at its order or, at the request of such Grantor, to the Administrative Agent to be applied to the Obligations of the Grantors under the Loan Documents, such amount, if any, as is then on deposit in the Cash Collateral Account and the Pledged Deposit Accounts, in each case to the extent not prohibited from being released under the terms of the Credit Agreement.
Section 10. Representations and Warranties . Each Grantor (other than with respect to a Holdings Grantor where indicated below) represents and warrants as follows:
(a) As of the Closing Date, such Grantor’s exact legal name, location, chief executive office, type of organization, jurisdiction of organization and organizational identification number is as set forth in Schedule IV hereto. As of the Closing Date, such Grantor has no trade names other than as listed on Schedule III hereto.
(b) Such Grantor is the record and beneficial owner of the Collateral granted by it free and clear of any Lien of others, except for the security interest created under this Agreement or Liens permitted under the Credit Agreement. No effective financing statement or other instrument similar in effect covering any part of such Collateral or listing such Grantor or any trade name of such Grantor as debtor is on file in any recording office, except such as may have been filed in favor of the Collateral Agent relating to the Loan Documents, filings which have not been authorized by the applicable Grantor or filings which are not prohibited by the Credit Agreement.
(c) If such Grantor is an issuer of Security Collateral, such Grantor confirms that it has received notice of the security interest granted hereunder.
 
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(d) If such Grantor is an issuer of Pledged Equity by another Grantor hereunder, such Pledged Equity constituting common equity stock issued to such Grantor on the Closing Date has been duly authorized and validly issued and is fully paid and non-assessable.
(e) As of the Closing Date, the Initial Pledged Equity pledged by such Grantor constitutes the percentage of the issued and outstanding Equity Interests of the issuers thereof indicated on Schedule I hereto.
(f) As of the Closing Date, the Initial Pledged Debt constitutes all of the outstanding indebtedness owed to such Grantor (other than with respect to a Holdings Grantor) by the issuers thereof and is outstanding in the principal amount indicated on Schedule I hereto.
(g) Such Grantor (other than with respect to a Holdings Grantor) has no investment property, other than the investment property listed on Schedule I hereto and additional investment property as to which such Grantor has complied with the requirements of Section 6 .
(h) True and complete redacted copies of the Cablevision Affiliation Agreement and each Media Rights Agreement have been made available for review by the Lenders, and as of the Closing Date, neither the Cablevision Agreement nor any Media Rights Agreement has been terminated, cancelled, amended, modified or changed nor has any default thereunder or breach thereof been waived.
(i) Such Grantor (other than with respect to a Holdings Grantor) has no deposit accounts, other than the deposit accounts as to which such Grantor has complied with the requirements of Section 7 .
(j) This Agreement creates in favor of the Collateral Agent for the benefit of the Secured Parties a valid security interest in the Collateral granted by such Grantor (to the extent such matter is governed by the laws of the United States, or a jurisdiction located therein), securing the payment of the Secured Obligations; all filings and other actions necessary to perfect the security interest in the Collateral granted by such Grantor have been made or taken, to the extent required hereunder (to the extent perfection can be accomplished by such filing or action), and (iii) such security interest is perfected absent the failure of the Collateral Agent to (i) file the financing statements and other filings in appropriate form in the relevant filing offices or (ii) take possession or control of the Collateral with respect to which a security interest may be perfected only through possession or control. Such perfected security interest is first priority except for Liens permitted by the Credit Agreement which have priority over the Liens granted hereunder and Liens permitted by Section 7.16 of the Credit Agreement and automatically having priority over the Collateral Agent’s lien without the requirement of affirmative action by the Grantor.
Section 11. Further Assurances . Each Grantor hereby authorizes the Collateral Agent to file one or more financing or continuation statements, and amendments thereto, including, without limitation, one or more financing statements indicating that such financing statements cover the Collateral, in each case without the signature of such Grantor. A photocopy or other reproduction of this Agreement shall be sufficient as a financing statement where permitted by law. Each Grantor ratifies its authorization for the Collateral Agent to have filed such financing statements, continuation statements or amendments filed prior to the Closing Date.
Section 12. Post-Closing Changes . No Grantor will change its name, type of organization, jurisdiction of organization, organizational identification number or chief executive office from those set forth in Section 10(a) of this Agreement without first giving at least 30 days’ prior written
 
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notice to the Collateral Agent unless such change is in connection with (x) a Disposition not prohibited by the Credit Agreement (y) a Permitted Restricted Subsidiary Transaction or (z) a change of name by the Company to “MSGN Holdings, L.P.” occurring less than 30 days after the Closing Date, in which case under this clause (z) the Company shall provide the Collateral Agent such written notice promptly after the date of such name change. If any Grantor does not have an organizational identification number and later obtains one, it will forthwith notify the Collateral Agent of such organizational identification number.
Section 13. As to Intellectual Property Collateral .
(a) With respect to the registered Intellectual Property Collateral owned by such Grantor (other than a Holdings Grantor), each such Grantor agrees to execute or otherwise authenticate an agreement, in substantially the form set forth in Exhibit B hereto or otherwise in form and substance as reasonably agreed to by the Grantors and the Collateral Agent and requested by the Collateral Agent (an “ Intellectual Property Security Agreement ”), for recording the security interest granted hereunder to the Collateral Agent in such Intellectual Property Collateral with the U.S. Patent and Trademark Office and the U.S. Copyright Office to perfect the security interest hereunder in such Intellectual Property Collateral, to the extent perfection may be achieved by making such recordings
(b) Each Grantor (other than the Holdings Grantors) agrees that, should it obtain an ownership interest in or a license to property of the type included in the definition of any Intellectual Property Collateral that is not on the Closing Date a part of the Intellectual Property Collateral, and that does not constitute an Excluded Asset, and otherwise would be part of the Intellectual Property Collateral if such Grantor had an ownership interest in or license to such item on the Closing Date (“ After-Acquired Intellectual Property ”) (i) the provisions of this Agreement shall automatically apply thereto, and (ii) any such After-Acquired Intellectual Property and, in the case of Trademarks, the goodwill symbolized thereby, shall automatically become part of the Intellectual Property Collateral, subject to the terms and conditions of this Agreement with respect thereto (provided that no security interest shall be granted in United States intent to use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein could impair the validity or enforceability, or result in the cancellation, of such intent to use trademark applications under applicable law). Whenever such Grantor files for registration of any Material After-Acquired Intellectual Property with the U.S. Patent and Trademark Office and/or the U.S. Copyright Office, such Grantor shall give written notice to the Collateral Agent at the time financial statements are delivered or deemed delivered to the Administrative Agent pursuant to Section 7.01(a) and (b) of the Credit Agreement for the fiscal quarter in which such filing occurs, and, at the reasonable written request of the Collateral Agent, such Grantor shall execute and deliver, or otherwise authenticate, an agreement substantially in the form of Exhibit C hereto or otherwise in form and substance as reasonably agreed to by the Grantors and the Collateral Agent and requested by the Collateral Agent (an “ IP Security Agreement Supplement ”) covering such Material After-Acquired Intellectual Property for recording the security interest granted hereunder to the Collateral Agent in such Material After-Acquired Intellectual Property with the U.S. Patent and Trademark Office and/or the U.S. Copyright Office, as applicable, to perfect the security interest hereunder in such Material After-Acquired Intellectual Property, to the extent perfection may be achieved by making such recordings. “ Material After-Acquired Intellectual Property ” shall mean After-Acquired Intellectual Property owned by or licensed to a Grantor, the loss or impairment of which would reasonably be expected to have a Material Adverse Effect.
Section 14. Voting Rights; Dividends; Etc .
(a) So long as no Event of Default shall have occurred and be continuing:
 
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(i) Each Grantor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Security Collateral of such Grantor or any part thereof for any purpose.
(ii) Each Grantor shall be entitled to receive and retain any and all dividends, interest and other distributions paid in respect of the Security Collateral of such Grantor if and to the extent that the payment thereof is not otherwise prohibited by the terms of the Loan Documents; provided , however , that any such distributions in the form of certificates or instruments will be delivered (with any necessary indorsement) to the Collateral Agent, within 30 days of such distribution, as Security Collateral.
(iii) The Collateral Agent will execute and deliver (or cause to be executed and delivered) to each Grantor all such proxies and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and other rights that it is entitled to exercise pursuant to paragraph (i ) above and to receive the dividends or interest payments that it is authorized to receive and retain pursuant to paragraph (ii ) above.
(b) Upon the occurrence and during the continuance of an Event of Default:
(i) All rights of each Grantor (x) to exercise or refrain from exercising the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to Section 14(a)(i) shall, upon written notice to such Grantor by the Collateral Agent, cease and (y) to receive the dividends, interest and other distributions that it would otherwise be authorized to receive and retain pursuant to Section 14(a)(ii) shall automatically cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights and to receive and hold as Security Collateral such dividends, interest and other distributions.
(ii) All dividends, interest and other distributions that are received by any Grantor contrary to the provisions of paragraph (i) of this Section 14(b) shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other funds of such Grantor and shall be forthwith paid over to the Collateral Agent as Security Collateral in the same form as so received (with any necessary indorsement).
Section 15. As to Certain Pledged Agreements . Each Grantor hereby consents to the assignment for security purposes and pledge to the Collateral Agent for the benefit of the Secured Parties of each Pledged Agreement to which it is a party by any other Grantor hereunder.
Section 16. As to Letter-of-Credit Rights .
(a) Each Grantor (other than the Holdings Grantors), by granting a security interest in its Receivables consisting of letter-of-credit rights to the Collateral Agent, intends to (and hereby does) assign to the Collateral Agent its rights (including its contingent rights) to the proceeds of all letters of credit of which such Grantor is or hereafter becomes a beneficiary or assignee other than with respect to Letters of Credit that constitute Excluded Assets; provided , that the Collateral Agent agrees that such proceeds are to be paid to the applicable Grantor unless an Event of Default has occurred and is continuing. Upon the occurrence and during the continuance of an Event of Default, if requested by the Collateral Agent, each Grantor will promptly use commercially reasonable efforts to cause the issuer of such letter of credit and each nominated person (if any) with respect thereto to consent to such Grantor’s assignment of the proceeds thereof pursuant to a consent in form and substance reasonably satisfactory to the Collateral Agent and deliver written evidence of such consent to the Collateral Agent.
 
11




(b) Upon the occurrence and during the continuance of an Event of Default, each Grantor (other than the Holdings Grantors) will, promptly upon written request by the Collateral Agent, (i) notify (and such Grantor hereby authorizes the Collateral Agent to notify) the issuer and each nominated person with respect to each of the letters of credit of which such Grantor is or hereafter becomes a beneficiary or assignee that the proceeds thereof have been assigned to the Collateral Agent hereunder and any payments due or to become due in respect thereof are to be made directly to the Collateral Agent or its designee and (ii) arrange for the Collateral Agent to become the transferee beneficiary of letter of credit.
Section 17. Additional Shares . Each Grantor agrees that it will (i) cause each issuer of the Pledged Equity pledged by such Grantor (a) to the extent that such issuer is a wholly-owned subsidiary of such Grantor, not to issue any Equity Interests or other securities in addition to or in substitution for the Pledged Equity issued by such issuer, except to such Grantor or except in each case as would not be prohibited as a Disposition or would constitute a Permitted Parent Payment or Permitted Restricted Subsidiary Transaction under the Credit Agreement and (b) to the extent that such issuer is a Subsidiary that is not a wholly-owned Subsidiary of such Grantor except as would not be prohibited as a Disposition or would constitute a Permitted Parent Payment or Permitted Restricted Subsidiary Transaction under the Credit Agreement, issue any Equity Interests or other securities in addition to or in substitution for the Pledged Equity issued by such issuer no less than ratably to such Grantor, and (ii) pledge hereunder, promptly upon its acquisition (directly or indirectly) thereof, any and all such additional Equity Interests or other securities to the extent that they would not constitute Excluded Assets.
Section 18. Collateral Agent Appointed Attorney-in-Fact . Each Grantor hereby irrevocably appoints the Collateral Agent such Grantor’s attorney-in-fact solely with respect to the Collateral (such appointment to cease upon the payment in full of all the Secured Obligations) with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time, upon the occurrence and during the continuation of an Event of Default, in the Collateral Agent’s reasonable discretion, to take any action and to execute any instrument that the Collateral Agent may deem reasonably necessary or advisable to accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other instruments, documents and chattel paper, in connection with clause (a) above, and
(c) to file any claims or take any action or institute any proceedings that the Collateral Agent may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce compliance with the terms and conditions of any Pledged Agreement or the rights of the Collateral Agent with respect to any of the Collateral.
Section 19. Collateral Agent May Perform . If any Grantor fails to perform any agreement contained herein and the Collateral Agent requests in writing that such Grantor perform such agreement, in the event that the Grantor continues to fail to perform such agreement within a reasonable time following the Collateral Agent’s request, the Collateral Agent may, as the Collateral Agent reasonably deems necessary to protect the security interest granted hereunder in the Collateral or to protect the value thereof, but without any obligation to do so and so long as an Event of Default shall have occurred and be continuing, itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be payable by such Grantor under
 
12




Section 10.04 of the Credit Agreement. The Collateral Agent agrees to give notice to such Grantor of such performance; provided , however that any failure by the Collateral Agent to give such notice shall not invalidate such performance or the Collateral Agent’s authority to so perform or the Collateral Agent’s entitlement to reimbursement of the related expenses.
Section 20. The Collateral Agent’s Duties .
(a) The powers conferred on the Collateral Agent hereunder are solely to protect the Secured Parties’ interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the exercise of reasonable care in the safe custody of any Collateral in its possession or in the possession of an Affiliate of the Collateral Agent or any designee (including without limitation, a Subagent) of the Collateral Agent acting on its behalf and the accounting for moneys actually received by it or its Affiliates hereunder, the Collateral Agent shall have no duty as to any Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral, whether or not any Secured Party has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve rights against any parties or any other rights pertaining to any Collateral. The Collateral Agent and any of its Affiliates or any designee (including without limitation, a Subagent) on its behalf shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession or in the possession of an Affiliate or any designee (including without limitation, a Subagent) on its behalf if such Collateral is accorded treatment substantially equal to that which it accords its own property.
(b) Anything contained herein to the contrary notwithstanding, the Collateral Agent may from time to time, when the Collateral Agent deems it to be necessary, appoint one or more subagents (each, a “ Subagent ”) acceptable to the Company acting reasonably for the Collateral Agent hereunder with respect to all or any part of the Collateral. In the event that the Collateral Agent so appoints any Subagent with respect to any Collateral, (i) the assignment and pledge of such Collateral and the security interest granted in such Collateral by each Grantor hereunder shall be deemed for purposes of this Security Agreement to have been made to such Subagent, in addition to the Collateral Agent, for the ratable benefit of the Secured Parties, as security for the Secured Obligations of such Grantor, (ii) such Subagent shall automatically be vested, in addition to the Collateral Agent, with all rights, powers, privileges, interests and remedies of the Collateral Agent hereunder and pursuant to the terms hereof, with respect to such Collateral, and (iii) the term “Collateral Agent,” when used herein in relation to any rights, powers, privileges, interests and remedies of the Collateral Agent with respect to such Collateral, shall include such Subagent; provided , however , that no such Subagent shall be authorized to take any action with respect to any such Collateral unless and except to the extent expressly authorized in writing by the Collateral Agent.
Section 21. Remedies . If any Event of Default shall have occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party upon default under the UCC (whether or not the UCC applies to the affected Collateral) and also may: (i) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place and time to be designated by the Collateral Agent that is reasonably convenient to both parties; (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or
 
13




private sale, at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Collateral Agent may in its reasonable discretion deem commercially reasonable; (iii) occupy any premises owned or leased by any of the Grantors where the Collateral or any part thereof is assembled or located for a reasonable period in order to effectuate its rights and remedies hereunder or under law, without obligation to such Grantor in respect of such occupation; and (iv) exercise any and all rights and remedies of any of the Grantors under or in connection with the Collateral, or otherwise in respect of the Collateral, including, without limitation, (A) any and all rights of such Grantor to demand or otherwise require payment of any amount under, or performance of any provision of, the Pledged Agreements, the Receivables, the Related Contracts and the other Collateral, (B) withdraw, or cause or direct the withdrawal, of all funds with respect to the Account Collateral and (C) exercise all other rights and remedies with respect to the Pledged Agreements, the Receivables, the Related Contracts and the other Collateral, including, without limitation, those set forth in Section 9-607 of the UCC. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten Business Days’ notice to such Grantor of the time and place of any sale shall constitute reasonable notification of any such sale. The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.
(b) Any cash held by or on behalf of the Collateral Agent and all cash proceeds received by or on behalf of the Collateral Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Collateral Agent, be held by the Collateral Agent as collateral for, and then or at any time thereafter applied in whole or in part by the Collateral Agent for the ratable benefit of the Secured Parties against, all or any part of the Secured Obligations, in the order of priority specified in Section 8.03 of the Credit Agreement. Any surplus of such cash or cash proceeds held by or on the behalf of the Collateral Agent and remaining after payment in full of all the Secured Obligations shall be paid over with reasonable promptness to the applicable Grantor or to whomsoever may be lawfully entitled to receive such surplus.
(c) All payments received by any Grantor under or in connection with any Pledged Agreement or otherwise in respect of the Collateral shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other funds of such Grantor and shall be forthwith paid over to the Collateral Agent in the same form as so received (with any necessary indorsement).
(d) The Collateral Agent may, without notice to any Grantor except as required by law and at any time or from time to time, charge, set-off and otherwise apply all or any part of the Secured Obligations then due and owing against any funds held with respect to the Account Collateral or in any other deposit account.
(e) The Collateral Agent may send to each bank, securities intermediary or issuer party to any Deposit Account Control Agreement, Securities Account Control Agreement or Uncertificated Security Control Agreement a “Notice of Exclusive Control” as defined in and under such Agreement.
(f) In the event of any sale or other disposition of any of the Intellectual Property Collateral of any Grantor, the goodwill symbolized by any Trademarks subject to such sale or other disposition shall be included therein.
The Collateral Agent agrees that it shall not take any of the actions specified in this Section 21 except during the continuance of an Event of Default.
 
14




Section 22. Amendments; Waivers; Additional Grantors; Etc .
(a) No amendment or waiver of any provision of this Agreement, and no consent to any departure by any Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Collateral Agent and such Grantor, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Collateral Agent, any other Secured Party or any Grantor to exercise, and no delay in exercising any right hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.
(b) Upon the execution and delivery by any Person of a security agreement supplement in substantially the form of Exhibit A hereto (each a “ Security Agreement Supplement ”), such Person shall be referred to as an “ Additional Grantor ” and shall be and become a Grantor and a Subsidiary Grantor or Holdings Grantor, as applicable, hereunder, and each reference in this Agreement and the other Loan Documents to “Grantor” and “Holdings Grantor” or “Subsidiary Grantor”, as applicable, shall also mean and be a reference to such Additional Grantor, each reference in this Agreement and the other Loan Documents to the “Collateral” shall also mean and be a reference to the Collateral granted by such Additional Grantor and each reference in this Agreement to a Schedule shall also mean and be a reference to the schedules attached to such Security Agreement Supplement.
Section 23. Notices, Etc . All notices and other communications provided for hereunder shall be in writing (including telecopier) and mailed, telecopied or otherwise delivered, in the case of the Company or the Collateral Agent, addressed to it at its address specified in the Credit Agreement and, in the case of each Grantor other than the Company, addressed to it at its address set forth opposite such Grantor’s name on the signature pages hereto or on the signature page to the Security Agreement Supplement pursuant to which it became a party hereto (and with a copy to the Company); or, as to any party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and other communications shall, when mailed, telegraphed or telecopied, be effective upon receipt. Delivery by telecopier of an executed counterpart of a signature page to any amendment or waiver of any provision of this Agreement of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof. As agreed to by the Company, including as set forth in Section 10.02(b) of the Credit Agreement, the Collateral Agent and the applicable Secured Parties from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable Person provided from time to time by such Person.
Section 24. Continuing Security Interest; Assignments Under the Credit Agreement . This Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the latest of (i) the payment in full in cash of the Secured Obligations (other than contingent indemnification obligations as to which (x) no claim has been made or (y) if a claim has been made such claim is in a determinable amount and has been Cash Collateralized), and (ii) the expiration or termination or Cash Collateralization in accordance with Section 2.03(g) of the Credit Agreement of all Letters of Credit, (b) be binding upon each Grantor, its successors and assigns and (c) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Secured Parties and their respective successors, transferees and assigns.
 
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Section 25. Release; Termination .
(a) Upon any sale, lease, transfer or other disposition of any item of Collateral of any Grantor in accordance with the terms of the Loan Documents or otherwise as specified in Section 9.10 of the Credit Agreement, the Collateral Agent will, at such Grantor’s expense, execute and deliver to such Grantor such documents as such Grantor or the applicable transferee shall reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted hereby; provided , however , that (i) at the time of such request and such release no Event of Default shall have occurred and be continuing, (ii) such Grantor shall have delivered to the Collateral Agent, at least five days prior to the date of the proposed release (or such later date as may be reasonably acceptable to the Collateral Agent), a written request for release in reasonable detail describing the item of Collateral, together with a form of release for execution by the Collateral Agent and a certificate of such Grantor to the effect that the transaction is in compliance with the Loan Documents, (iii) the proceeds of any such sale, lease, transfer or other disposition required to be applied, or any payment to be made in connection therewith, in accordance with Section 2.05 of the Credit Agreement shall, to the extent so required, be paid or made to, or in accordance with the instructions of, the Collateral Agent when and as required under Section 2.05 of the Credit Agreement, and (iv) with respect to sales, leases, transfers or the dispositions of Equipment and Inventory in the ordinary course of business and other sales, leases, transfers or other dispositions and dispositions that are not prohibited by the Credit Agreement, the Liens granted herein shall, to the extent contemplated by Section 9.10 of the Credit Agreement, be deemed to be released with no further action on the part of any Person.
(b) Upon the latest of (i) the payment in full in cash of the Secured Obligations (other than contingent indemnification obligations as to which (x) no claim has been made or (y) if a claim has been made such claim is in a determinable amount and has been Cash Collateralized) and (ii) the expiration or termination or Cash Collateralization in accordance with Section 2.03(g) of the Credit Agreement of all Letters of Credit, the pledge and security interest granted hereby shall terminate and all rights to the Collateral shall revert to the applicable Grantor. Upon any such termination, the Collateral Agent will, at the applicable Grantor’s expense, execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.
Section 26. Execution in Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier or electronic mail shall be effective as delivery of an original executed counterpart of this Agreement.
Section 27. Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.
The Grantors:
 
MSG HOLDINGS, L.P.,
as a Grantor
By: MSGN EDEN, LLC , as the General Partner of MSG Holdings, L.P.
By:       /s/ DONNA COLEMAN
  Name: Donna Coleman
  Title: Interim Chief Financial Officer
MSGN EDEN, LLC,
as a Grantor
By:       /s/ DONNA COLEMAN
  Name: Donna Coleman
  Title: Chief Financial Officer
REGIONAL MSGN HOLDINGS LLC,
as a Grantor
By:       /s/ DONNA COLEMAN
  Name: Donna Coleman
  Title: Chief Financial Officer
MSGN INTERACTIVE, LLC,
MSGN PUBLISHING, LLC,
MSGN SONGS, LLC,
SPORTSCHANNEL ASSOCIATES,
THE 31ST STREET COMPANY, L.L.C.,
as Grantors,
By: MSGN EDEN, LLC, as the General Partner of MSG Holdings, L.P.
By:       /s/ DONNA COLEMAN
  Name: Donna Coleman
  Title: Interim Chief Financial Officer





Accepted and agreed to as of the date first above written.
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
By:       /s/ JOHN G. KOWALCZUK
  Name: John G. Kowalczuk
  Title: Executive Director




Madison Square Garden Entertainment Corp.
Subsidiaries
Exhibit 21.1

ENTITY NAME STATE/COUNTRY
FORMED
11th Street Hospitality LLC NY
289 Hospitality, LLC NY
29th Street Club Brands LLC DE
29th Street F&B/Hotel Brands LLC DE
5 Chinese Brothers LLC DE
5 Chinese Sisters LLC DE
55th Street Hospitality Holdings, LLC NY
57th Street Hospitality Group, LLC NY
632 N. Dearborn Operations, LLC DE
6th and Island Investments, LLC CA
7th & C Investments, LLC CA
ALA Hospitality LLC DE
Asia Chicago Management LLC DE
Asia Five Eight LLC NY
Asia Las Vegas LLC DE
Asia Los Angeles LLC DE
Asia MS LLC DE
Asia One Six LLC NY
Avenue Hospitality Group, LLC NY
B&E Los Angeles LLC DE
Bayside Hospitality Group LLC NY
BD Stanhope, LLC NY
Bijou, LLC NV
Boston Calling Events LLC DE
Bowery Hospitality Associates LLC NY
Buddha Beach LLC DE
Buddha Entertainment LLC DE
Chelsea Hospitality Associates LLC NY
Chelsea Hospitality Partners, LLC NY
China Management, LLC NY
Chrysan Limited UK
City Lounge LLC NV
Dancing Monkey, LLC NV
DDD Holdings, LLC DE
Dearborn Ventures LLC DE
Hakkasan Restaurant L.L.C. UNITED ARAB EMIRATES
Eden Insurance Company, Inc. NY
Entertainment Ventures, LLC DE
Genco Land Development Corp. NY
Guapo Bodega Las Vegas LLC DE
Guapo Bodega LLC NY
Hakkasan Fabric Stingaree Holding LLC NV
Hakkasan Holdings LLC NV
1


Madison Square Garden Entertainment Corp.
Subsidiaries
Exhibit 21.1

ENTITY NAME STATE/COUNTRY
FORMED
Hakkasan Limited UK
Hakkasan LV LLC NV
Hakkasan NYC LLC NY
Hakkasan SF LLC CA
H-FSD Holding, LLC NV
HHH Holdings, LLC DE
HK Management FZ-LLC UNITED ARAB EMIRATES
HKCCIP, LLC NV
IP BISC LLC NY
Las Vegas Eats LLC NV
Level Up 2 LLC NV
Lion Bar, LLC NV
LJ Eats, LLC CA
Lower East Side Hospitality LLC NY
Madison Entertainment Associates LLC DE
Madison Square Garden Investments, LLC DE
Marquee Brand Holdings, LLC DE
Miami Hospitality IP Group, LLC DE
Miami Hospitality Operating Group, LLC DE
MSG Aircraft Leasing, L.L.C. DE
MSG Arena Holdings, LLC DE
MSG Arena, LLC DE
MSG Aviation, LLC DE
MSG BBLV, LLC DE
MSG BCE, LLC DE
MSG Beacon, LLC DE
MSG Chicago, LLC DE
MSG Eden Realty, LLC DE
MSG Entertainment Group, LLC DE
MSG Entertainment Holdings, LLC DE
MSG Holdings Music, LLC DE
MSG Immersive Ventures, LLC DE
MSG Interactive, LLC DE
MSG Las Vegas, LLC DE
MSG LV Construction, LLC DE
MSG National Properties LLC DE
MSG Networks Inc. DE
MSG Publishing, LLC DE
MSG Songs, LLC DE
MSG Sphere Studios, LLC DE
MSG TE, LLC DE
MSG TG, LLC DE
MSG Theatrical Ventures, LLC DE
2


Madison Square Garden Entertainment Corp.
Subsidiaries
Exhibit 21.1

ENTITY NAME STATE/COUNTRY
FORMED
MSG Vaudeville, LLC DE
MSG Ventures Holdings, LLC DE
MSG Ventures, LLC DE
MSG Winter Productions, LLC DE
MSGN Eden, LLC DE
MSGN Enterprises, LLC DE
MSGN Holdings, L.P. DE
MSGN Interactive, LLC DE
MSGN Publishing, LLC DE
MSGN Songs, LLC DE
Ninth Avenue Hospitality LLC NY
NLDL Holdings LLC NV
NMP Holding LLC NV
Obscura Digital, LLC DE
Overtime Sports, Inc. DE
Radio City Productions LLC DE
Radio City Trademarks, LLC DE
Rainbow Garden Corp. DE
Regional MSGN Holdings LLC DE
RMC Licensing LLC NY
RMNJ Licensing LLC DE
Roof Deck Australia LLC DE
Roof Deck Entertainment LLC DE
RPC Licensing LLC NY
Sake No Hana Ltd UK
Santa Monica Eats, LLC NV
Seventh Avenue Hospitality, LLC NY
SportsChannel Associates NY
Stay in Your Lane Holdings, LLC DE
Strategic Dream Lounge, LLC NY
Strategic Dream Midtown BL, LLC NY
Strategic Dream Midtown LL, LLC NY
Strategic Dream Midtown RT, LLC NY
Strategic Dream Restaurant, LLC NY
Strategic Dream Rooftop, LLC NY
Stratford Garden Development Limited UK
Stratford Garden Property (UK) Limited UK
Stratford Garden Property Holdings (UK) Limited UK
Strip View Entertainment LLC DE
Suite Sixteen, LLC DE
TAO Entertainment Singapore Pte. Ltd. SINGAPORE
TAO Group Holdings LLC DE
TAO Group Intermediate Holdings LLC DE
3


Madison Square Garden Entertainment Corp.
Subsidiaries
Exhibit 21.1

ENTITY NAME STATE/COUNTRY
FORMED
TAO Group Management LLC DE
TAO Group Operating LLC DE
TAO Group Sub-Holdings LLC DE
TAO Licensing LLC DE
TAO Park Hospitality, LLC DE
TG 29 Hospitality, LLC DE
TG Hospitality Group LLC CA
TG Hospitality Licensing, LLC DE
TGPH Nightclub, LLC DE
TGPH Restaurant, LLC DE
The 31st Street Company, L.L.C. DE
The Grand Tour, LLC NY
The Light Group, LLC NV
TLG Acquisition LLC DE
Touch, LLC NV
TSPW Managers LA, LLC DE
Venue Driver, LLC NV
VIP Event Management LLC DE
Waikiki Eats, LLC NV
Walter Prod Co, LLC DE
WEHO Hospitality, LLC DE
WEHO Ventures, LLC DE
Womens Club Holdings, LLC DE
Womens Club IP, LLC DE
WPTS Restaurant, LLC DE
WPTS, LLC DE
Yauatcha Waikiki LLC NV
4

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We consent to the incorporation by reference in Registration Statement Nos. 333-257817 and 333-237718 on Form S-8 of our reports dated August 23, 2021, relating to the financial statements of Madison Square Garden Entertainment Corp. and the effectiveness of Madison Square Garden Entertainment Corp.'s internal control over financial reporting appearing in this Annual Report on Form 10-K for the year ended June 30, 2021.


/s/ Deloitte & Touche LLP

New York, New York
August 23, 2021






Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the registration statements (No. 333-257817 and 333-237718) on Form S-8 of our report dated August 28, 2020, with respect to the consolidated and combined financial statements and financial statement schedule II of Madison Square Garden Entertainment Corp.

/s/ KPMG LLP

New York, New York
August 23, 2021


Exhibit 31.1
Certification
I, James L. Dolan, certify that:

1.I have reviewed this Annual Report on Form 10-K of Madison Square Garden Entertainment Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 23, 2021
/s/ JAMES L. DOLAN
James L. Dolan
Executive Chairman and Chief Executive Officer




Exhibit 31.2
Certification
I, Mark H. FitzPatrick, certify that:

1.I have reviewed this Annual Report on Form 10-K of Madison Square Garden Entertainment Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: August 23, 2021
/s/ MARK H. FITZPATRICK
Mark H. FitzPatrick
Executive Vice President and Chief Financial Officer



Exhibit 32.1
Certification

Pursuant to 18 U.S.C. §1350, the undersigned officer of Madison Square Garden Entertainment Corp. (the “Company”), hereby certifies, to such officer's knowledge, that the Company's Annual Report on Form 10-K for the year ended June 30, 2021 (the “Report”) fully complies with the requirements of §13(a) or §15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 23, 2021
/s/ JAMES L. DOLAN
James L. Dolan
Executive Chairman and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.




Exhibit 32.2
Certification

    Pursuant to 18 U.S.C. §1350, the undersigned officer of Madison Square Garden Entertainment Corp. (the “Company”), hereby certifies, to such officer's knowledge, that the Company's Annual Report on Form 10-K for the year ended June 30, 2021 (the “Report”) fully complies with the requirements of §13(a) or §15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 23, 2021
/s/ MARK H. FITZPATRICK
Mark H. FitzPatrick
Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.